We are not aware of any laws that prohibit your bank from requiring employees to establish an account, but we recommend that you consult with bank counsel before implementing such a requirement.

As you point out, there are payroll deposit restrictions in state and federal law. Illinois law prohibits employers from designating a particular bank at which employees must deposit their paychecks. Under Regulation E, employers may designate a particular bank for employees to receive direct deposits, provided that the employer offers employees the choice of receiving their salary through other means, such as by check or cash.

Under these laws, you may require your employees to have an account at your bank, but you may not require them to deposit their paychecks into that account unless you also offer an alternative method of payment. We are not aware of any other laws that impede you from requiring employees to establish accounts, but we note that both the state law and federal regulation implicitly acknowledge the importance of permitting people to bank where they choose. Consequently, we recommend that you consult with bank counsel to ensure your policy does not expose you to liability under state or federal employment law.

For resources related to our guidance, please see:

• Illinois Wage Payment and Collection Act, 820 ILCS 115/4 (“No employer may designate a particular financial institution, bank, savings bank, savings and loan, or currency exchange for the exclusive payment or deposit of a check for wages.”)

• Regulation E, 12 CFR 1005.10(e)(2) (“No financial institution or other person may require a consumer to establish an account for receipt of electronic fund transfers with a particular institution as a condition of employment or receipt of a government benefit.”)

• Official Interpretations, Regulation E, 12 CFR 1005, Paragraph 10(e)(2), Comment 1 (“An employer (including a financial institution) may not require its employees to receive their salary by direct deposit to any particular institution. An employer may require direct deposit of salary by electronic means if employees are allowed to choose the institution that will receive the direct deposit. Alternatively, an employer may give employees the choice of having their salary deposited at a particular institution (designated by the employer) or receiving their salary by another means, such as by check or cash.”)