PRINTER'S NO. 2561
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1855
Session of
2017
INTRODUCED BY BLOOM, McGINNIS, RYAN, ORTITAY, KNOWLES, GROVE AND
WHEELAND, OCTOBER 11, 2017
REFERRED TO COMMITTEE ON COMMERCE, OCTOBER 11, 2017
AN ACT
Amending the act of December 19, 1975 (P.L.604, No.173),
entitled "An act to facilitate the use of electronic funds
transfer systems by providing that credits to accounts in
financial institutions designated by recipients shall satisfy
legal requirements for payments by cash or checks," providing
for short title; further providing for electronic funds
transfers, for consumer protections and for payroll card
accounts; and making editorial changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of December 19, 1975 (P.L.604, No.173),
entitled "An act to facilitate the use of electronic funds
transfer systems by providing that credits to accounts in
financial institutions designated by recipients shall satisfy
legal requirements for payments by cash or checks," is amended
by adding a section to read:
Section 1. Short title.
This act shall be known and may be cited as the Credits to
Accounts in Financial Institutions Act.
Section 2. Section 1 of the act, amended November 4, 2016
(P.L.1210, No.161), is renumbered to read:
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Section [1.] 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"ATM." An automated teller machine.
"Financial institution." A bank or savings association as
those terms are defined in section 1813 of the Federal Deposit
Insurance Act (64 Stat. 873, 12 U.S.C. § 1813) or credit union
eligible for insurance of member accounts under the Federal
Credit Union Act (48 Stat. 1216, 12 U.S.C. § 1751 et seq.).
"Payroll card account." An account that is directly or
indirectly established through an employer, to which transfers
of the employee's wages, salary, commissions or other
compensation are made.
Section 3. Sections 1.1, 2 and 2.1 of the act, amended
November 4, 2016 (P.L.1210, No.161), are renumbered and amended
to read:
Section [1.1.] 3. Electronic funds transfers.
For the purposes of any statute, rule or regulation requiring
any payment to be made in lawful money or by check, whether for
wages, salaries, commissions or other claims of any kind, the
payment may be made by credit to an account in a financial
institution, including a payroll card account, authorized to
accept deposits or payments if the recipient has [authorized]
been notified of the method of payment in writing or
electronically and has been given a reasonable opportunity to
specify the account to which the payment will be credited.
Section [2.] 4. Consumer protections.
When wages, salaries, commissions or other payments are
transferred to an account at a financial institution as
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described in section [1.1] 3:
(1) the financial institution holding the account to
which transfers are made shall provide the employee or other
payee with the disclosures, notices of transfer, change in
term notices, access to account information and other
consumer protections to the extent required by 12 CFR Part
1005 (relating to electronic fund transfers (Regulation E));
and
(2) an employer shall provide an employee with a written
or electronic statement of earnings and deductions each pay
period in accordance with applicable law.
Section [2.1.] 5. Payroll card accounts.
In addition to any other requirements under this act, all of
the following provisions apply when payment of wages, salaries,
commissions or other compensation is made through transfers to a
payroll card account:
(1) The employee shall be issued a payroll card in
accordance with 12 CFR Part 1005 (relating to electronic fund
transfers (Regulation E)).
(2) The payroll card account shall be established at a
financial institution whose funds are insured by the Federal
Deposit Insurance Corporation or the National Credit Union
Administration.
(3) No employer may make the payment of wages, salary,
commissions or other compensation by means of a payroll card
account a condition of employment or a condition for the
receipt of any benefit or other form of remuneration for any
employee[.], except that an employee who has been notified
under section 3 may be enrolled in a payroll card account
without the employee's authorization if the employee has not
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selected an account to accept payment of wages, salary,
commission or other compensation.
(4) Prior to [obtaining an employee's authorization]
enrolling an employee in a payroll card account, the employer
shall provide the employee with clear and conspicuous notice,
in writing or electronically, of all of the following:
(i) All of the employee's wage payment options[.]
and a notice that the employee may be enrolled in a
payroll card account if the employee has not selected an
account to accept payment of wages, salary, commission or
other compensation.
(ii) The terms and conditions of the payroll card
account option, including the fees that may be deducted
from the employee's payroll card account by the card
issuer.
(iii) A notice that third parties may assess fees in
addition to the fees assessed by the card issuer.
(iv) The methods available to the employee for
accessing wages without fees.
(5) The payroll card account shall provide the employee
with the ability without charge to make:
(i) At least one withdrawal each pay period for any
amount up to and including the full amount of the
employee's net wages for that period or one such
withdrawal weekly if the employee is paid more frequently
than weekly.
(ii) One in-network ATM withdrawal each pay period
or one such withdrawal weekly if the employee is paid
more frequently than weekly.
(6) The payroll card account shall provide the employee
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with a means of ascertaining the balance in the employee's
payroll card account through an automated telephone system or
other electronic means without cost to the employee.
(7) In addition to the fees prohibited under paragraphs
(5) and (6), an employer may not use a payroll card account
that charges fees to the employee for any of the following:
(i) The application, initiation or privilege of
participating in the payroll card program.
(ii) The issuance of the initial payroll card.
(iii) The issuance of one replacement card per
calendar year upon request of the employee.
(iv) The transfer of wages, salary, commissions or
other compensation from the employer to the payroll card
account.
(v) Purchase transactions at the point of sale.
(vi) Nonuse or inactivity in a payroll card account
consisting of the failure to withdraw funds from an
account, deposit funds into an account, transfer funds to
another person or use an account for purchase
transactions, if the nonuse or inactivity is less than 12
months in duration.
(8) The funds in a payroll card account shall not
expire. If a payroll card has an expiration date during the
period when wages, salary or other compensation are applied
to the payroll card account by the employer and for 60 days
after the last transfer of wages, salary, commissions or
other compensation to the account, the employee shall be
provided a replacement card without cost prior to the
expiration date, unless prior to that date the account
becomes subject to the custody and control of the
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Commonwealth under Article XIII.1 of the act of April 9, 1929
(P.L.343, No.176), known as The Fiscal Code, or pursuant to
the unclaimed property or escheat law of another state, the
District of Columbia or a territory of the United States.
(9) The employer shall honor an employee's written or
electronic request to change the employee's method of
receiving wages from a payroll card account to direct deposit
[or negotiable check]. The change shall take effect as soon
as practicable, but no later than the first payday after 14
days from receipt by the employer of the employee's request
and any information necessary to implement the change.
(10) Nothing in this section may be construed to preempt
or override the terms of any collective bargaining agreement
with respect to the methods by which an employer provides
payment of wages, salary, commissions or other compensation
to employees.
Section 4. Sections 3 and 4 of the act, amended November 4,
2016 (P.L.1210, No.161), are renumbered to read:
Section [3.] 6. Construction.
This act shall supersede any inconsistent provision of any
other statute, rule or regulation.
Section [4.] 7. Effective date.
This act shall take effect immediately.
Section 5. This act shall take effect in 60 days.
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