Answer:
The bank can encourage its employees to open and maintain accounts with the bank. That can serve two purposes. First, it can get employees to share in the customer experience (although most employee accounts have fees waived, and I'd argue that doesn't give the employee the "full picture" of the customer experience). Second, it can provide a convenient place for direct deposit of the employee's pay.
Direct deposit of pay, however, cannot be mandatory unless the employee gets to decide which bank gets the deposit. That provision is found in the Electronic Fund Transfer Act, specifically at 15USC1693k.
No person may--
(1) condition the extension of credit to a consumer on such consumer's repayment by means of preauthorized electronic fund transfers; or
(2) require a consumer to establish an account for receipt of electronic fund transfers with a particular financial institution as a condition of employment or receipt of a government benefit.
It's also found in Reg E, at Section 205.10(e)(2).
First published on BankersOnline.com 2/20/06
print
share