Can a financial institution require its employees to open an account with that institution for their direct deposit payroll, or can they have payroll checks directly deposited to another financial institution?
Employers, even banks, can require that you have direct deposit, but may not require where that deposit account is. If they do offer direct deposit to only one bank, than they must offer an alternative means of payment. Regulation E is specific on this and states:
"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 of receiving their salary by another means, such as by check or cash."
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Employers, even banks, can require that you have direct deposit, but may not require where that deposit account is. If they do offer direct deposit to only one bank, than they must offer an alternative means of payment. Regulation E is specific on this and states: