Consumer Banking and Payments Law: 7.4.2.2 Regulation E’s Ban on Compulsory Use of Specific Accounts for Government Benefits
One provision of the EFTA and Regulation E that has particular application to government benefit prepaid cards is the rule providing that “[n]o 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.”905 This provision is a parallel to the provision prohibiting compulsory use of preauthorized electronic fund transfers as a condition of credit.