Viewpoint: Payroll: Proof of Prepaid Power in Numbers

By Kirsten Trusko, Network Branded Prepaid Card Association

People often say to me: “Participating in the political and media wrangling is a waste of time and … what effect can I really have?”

Answer: Plenty!

Right now, the challenge to prepaid payroll is still here. The threat is alive, and is focused on one of the most useful and beneficial forms of prepaid. It’s important to many constituencies that prepaid payroll remains a valid option for those who offer, use and need it, AND to industry in our commercial relationships and businesses.

So how can you get involved? The fight isn’t over—and it’s not a fight, it’s standing up in a thoughtful, objective informed way, to make a great case for payroll cards. If we don’t do this, others—who have an agenda of their own—will fill the space. And what they say then will become the accepted credo in the legislative and regulatory circles that have the power to influence the future of payroll cards, and more broadly, all of prepaid. Together, we can do more than any one company can on its own. There is power in numbers. Consider how your company can help power the proactive initiatives in prepaid payroll.

The Background

Last summer, a group of like-minded companies came together to address the recent melee in payroll cards. Their activity points to the power of pooling resources and relationships for real progress and impact.

While payroll cards bubble as an on-and-off-again target for federal and state governments and the media, a big burst came in July with the New York Times article that highlighted the complaint of a McDonald’s employee who accused her former employer of unfair dealings with her payroll card. At best, the Times article was short on facts and long on anecdote; at worst, the article was flat out misleading and missing information.

The article was followed almost immediately by a letter from 16 U.S. senators to the Consumer Financial Protection Bureau (CFPB) and the Department of Labor (DOL). The senators referenced the article and asked that the CFPB and DOL investigate the claims, with the goal of assuring that employees are given options and that employers are following all payroll laws.

While there is much debate about who is driving this assault on payroll, all seem to agree: Industry lacks the fact-filled studies and tools for a fully armed response and to be proactively ready for the next round.

Coming Together … Again

Enter the NBPCA’s Payroll Group. This group formed in 2011 when payroll was in the crosshairs of the state of California. If California’s legislation passed, it would have been disastrous for payroll card businesses—and it threatened to quickly spread to other states. This team mobilized to work with those who already had effective boots-on-the-ground in Sacramento to ask what was needed to fuel success. The new assets, developed and funded by the NBPCA Payroll Group, were delivered by group members directly to those in Sacramento with the most influence. These partners on the ground said the new tools were instrumental to securing the demise of the California payroll bill.

Flash forward to July 2013: The payroll battle comes to the forefront at the national level. With the Times article and the 16-senator letter, suddenly there’s a maelstrom hitting payroll.

The NBPCA Payroll Group rallied and grew dramatically in size, now including virtually all key payroll card players, with impressive engagement across all sizes and links in the value chain. This team addressed industry-level topics—to the benefit of all involved, including across competitors—correcting misinformation, gathering the voice of the consumer and presenting payroll card facts.

So, what did the industry-leading members of the NPBCA Payroll Group do? Why did their efforts matter? And, how do you, your business and your industry benefit?

The NBPCA Payroll Group developed and is executing an impressive multifaceted battle plan:

• Collaborate across companies representing different segments of the value chain to develop 11 new artifacts and tools to educate broadly. (Visit www.nbpca.org and search “payroll” for access to many of these.)
• Leverage existing relationships on the Hill, with regulators, in media and with consumer advocates to exponentialize the positive message in a way that cannot be accomplished by any one company alone.
• Reach across experts in payroll legal and regulatory compliance to update the Payroll Leading Practices, showing those on the outside that industry can set a high bar for itself.
• Tap several small groups of company leaders to meet with the CFPB and Senate offices who signed the letter, and host a prepaid breakfast briefing in D.C. with six major news outlets. This helped to build relationships and increase education for prepaid overall, especially payroll.
• Collaborate across other trade organizations, including those with offices in Chicago, to prepare for a payroll card hearing planned in that city. These groups mobilized to prepare a thorough message and hearing testimony. (At press time, the hearing had been pushed back from Oct. 11 to a date still to be determined.)

The Fight Isn’t Over

With 2014 being an election year, experts tell us to be ready for battles in financial services across many fronts. For those of us in prepaid and at the table at the NBPCA, we are leveraging the energy, engagement, resources and relationships across the top players in our industry to proactively outreach to help quell the next potential ill-informed attack on prepaid AND to have the ammunition ready for those that may hit.

Garnering the power of the top prepaid players, we can proactively educate, protect and promote prepaid.

Kirsten Trusko is president of the Network Branded Prepaid Card Association. The NBPCA is the cross-industry, nonprofit trade organization that works to educate, advocate, protect and promote the unique platforms of prepaid products to government, media, industry and consumers. The NBPCA works actively across industry and with legislators and regulators for informed rulemaking; with law enforcement to prevent fraudulent use of prepaid cards; and with consumer advocates in financial literacy and access. She may be reached at [email protected].

Prior to the NBPCA, Trusko was with KPMG Consulting in payments, banking and insurance. She co-founded two management and technology consulting practices, in prepaid and consumer-driven health care (health/banking/insurance). Prior to that, her experience included leading divisions in secured and unsecured lending, consumer and commercial lending, payments and cards for Fortune 500 companies.