Governor Pat Quinn signed a new bill into law today that strengthens protections for Illinois workers that receive their wages on payroll cards. The new law will limit costs and establish better
rules in the process of enrollment.
Going forward, employers will be prevented from automatically signing up their employees to a payroll card without their consent. In turn, they will also be responsible to give those workers an itemized list of price disclosures for the cards. But it goes further and also puts restrictions on what kinds of fees can be charged. No longer will cards be able to ding account holders with declined transactions fees, inactivty fees, point-of-sale fees, and account balance fees. The accounts cannot have credit products and overdraft services.
This is a difference maker in my opinion. These kinds of practices are all too prevalent on payroll cards. In fact, I would argue that no one should use a payroll card. Without exception, there is always going to be a better general purpose reloadable prepaid card. Beyond that, it is also true that payroll cards suffer from a lack of portability.
The Skylight Card (operated by NetSpend, "a TSYS company") is a case in point. The current iteration of the Skylight Card runs a foul of a number of the new standards in Illinois' new law.
It can be hard to find a terms and conditions for a payroll card. Very often a consumer has to sign in through a password-protected portal. That is the case with the Skylight Card. However, I was able to get one from my local government. Their Skylight Card is issued by SunTrust. It includes a number of fees that will not comply with Illinois' law:
- The card charges a one dollar transaction fee for PIN point-of-sale purchases.
- It charges a monthly $7.50 inactivity fee. Inactivity is defined as any period after 30 days without account activity.
- It charges a $1.60 fee for purchase declines.
- It has an optional over-draft service that charges $25 dollars when a customer goes into the red as a result of a one-time debit or an ATM withdrawal.
Measured by number of accounts, Skylight is probably one of the largest payroll card programs in the country.