Earned Wage Access Consumer Protection Act
This bill addresses the regulation of earned wage access products. Earned wage access products provide consumers with access to their earned wages before their scheduled pay day.
The bill specifies that earned wage access products are not consumer credit products for purposes of regulation under the Truth in Lending Act (TILA). TILA requires consumer credit products to disclose borrowing costs, finance charges, and the total cost of the loan.
The bill requires providers to inform consumers of their rights under an agreement for an earned wage access product and to disclose all associated fees before the consumer enters into an agreement. Providers must also inform consumers of any material changes to the terms or conditions before implementing those changes.
Under the bill, providers of earned wage access products
Providers are prohibited from sharing proceeds, fees, or gratuities with the consumer’s employer. The bill also limits the form of payment providers may accept from consumers and limits certain additional fees for failure to pay.
If a provider solicits, charges, or receives a tip, gratuity, or other donation from a consumer, the provider must disclose the voluntary nature of such tip, gratuity, or donation.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7428 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 7428
To regulate the business of offering and providing earned wage access
services to consumers, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 20, 2024
Mr. Steil (for himself and Mr. Hill) introduced the following bill;
which was referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To regulate the business of offering and providing earned wage access
services to consumers, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Earned Wage Access Consumer
Protection Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Bureau.--The term ``Bureau'' means the Bureau of
Consumer Financial Protection.
(2) Consumer.--The term ``consumer'' means a natural
person.
(3) Consumer-directed wage access services.--The term
``consumer-directed wage access services'' means offering or
providing earned wage access services directly to consumers
based on the consumer's representations and the provider's
reasonable determination of the consumer's earned but unpaid
income.
(4) Debt collector.--The term ``debt collector'' has the
meaning given that term under section 803 of the Fair Debt
Collection Practices Act (15 U.S.C. 1692a).
(5) Earned but unpaid income.--The term ``earned but unpaid
income'' means salary, wages, compensation, or other income
that a consumer or an employer has represented, and that a
provider has reasonably determined, have been earned or have
accrued to the benefit of the consumer in exchange for the
consumer's provision of services to the employer or on behalf
of the employer, including on an hourly, project-based,
piecework, or other basis and including where the consumer is
acting as an independent contractor of the employer, but have
not, at the time of the payment of proceeds, been paid to the
consumer by an employer.
(6) Earned wage access services.--The term ``earned wage
access services'' means the business of providing consumer-
directed wage access services or employer-integrated wage
access services, or both at the request of an employee.
(7) Employer.--
(A) In general.--The term ``employer'' means a
person who--
(i) employs a consumer; or
(ii) any other person who is contractually
obligated to pay a consumer earned but unpaid
income in exchange for the consumer's provision
of services to the employer or on behalf of the
employer, including on an hourly, project-
based, piecework, or other basis and including
where the consumer is acting as an independent
contractor with respect to the employer.
(B) Exclusion.--The term ``employer'' does not
include--
(i) a customer of an employer or any other
person whose obligation to make a payment of
salary, wages, compensation, or other income to
a consumer is not based on the provision of
services by that consumer for or on behalf of
such person; or
(ii) a third-party service provider
contracted by the employer to distribute income
to consumers, including on demand pay for
earned but unpaid income requested by the
consumer, on behalf of the employer at no fee
to the consumer.
(8) Employer-integrated wage access services.--The term
``employer-integrated wage access services'' means the business
of delivering to consumers access to earned but unpaid income
that is based on employment, income, or attendance data
obtained directly or indirectly from an employer.
(9) Fee.--The term ``fee'' means--
(A) a fee imposed by a provider for delivery or
expedited delivery of proceeds to a consumer;
(B) a subscription or membership fee imposed by a
provider for a bona fide group of services that include
earned wage access services; and
(C) does not include a voluntary tip, gratuity, or
other donation paid by a consumer to a provider.
(10) Outstanding proceeds.--The term ``outstanding
proceeds'' means a payment of proceeds to a consumer by a
provider, which has not yet been repaid to that provider.
(11) Proceeds.--The term ``proceeds'' means a payment to a
consumer by a provider, which is based on earned but unpaid
income.
(12) Provider.--The term ``provider''--
(A) means a person who is in the business of
providing earned wage access services to consumers; and
(B) does not include--
(i) a service provider (such as a payroll
service provider) whose role may include
verifying a consumer's available earnings but
that is not contractually obligated to fund
proceeds delivered as part of an earned wage
access service;
(ii) an employer that offers a portion of
salary, wages, or compensation directly to its
employees or independent contractors prior to
the normally scheduled pay date;
(iii) a financial institution (as such term
is defined in section 20 of title 18, United
States Code) when it permits customers to
access amounts associated with an electronic
funds transaction for which the financial
institution has received information but which
has not yet settled; and
(iv) a payroll service provider that
facilitates payments to workers of earned,
available wage balances in accordance with
Federal, State, and local law, including the
Fair Labor Standards Act of 1938.
SEC. 3. NON-DISCRIMINATION.
It shall be unlawful for any provider to discriminate against any
consumer, with respect to any aspect of a transaction on the basis of
race, color, religion, national origin, sex, pregnancy, marital status,
or age (provided the consumer has the capacity to contract).
SEC. 4. REQUIREMENTS APPLICABLE TO PROVIDERS.
(a) Dispute Policy.--Each provider shall develop and implement
policies and procedures to respond to consumer disputes and questions
raised by consumers.
(b) Non-Recourse Payments.--
(1) In general.--A provider may not compel or attempt to
compel repayment by a consumer of outstanding proceeds, fees,
voluntary tips, gratuities, or other donations to that provider
through--
(A) a civil suit or arbitration proceeding against
the consumer;
(B) use of a third party to pursue collection of
outstanding proceeds, fees, voluntary tips, gratuities,
or other donations on the provider's behalf; or
(C) the sale of outstanding amounts to a third-
party collector or debt buyer for collection from the
consumer.
(2) Fraud exception.--Paragraph (1) shall not apply to
repayment of outstanding amounts obtained by a consumer through
fraudulent means or preclude a provider from pursuing an
employer for breach of its contractual obligations to the
provider.
(c) Disclosures to Consumers.--Each provider shall--
(1) before entering into an agreement with a consumer for
the provision of earned wage access services--
(A) inform the consumer of his or her rights under
the agreement; and
(B) fully and clearly disclose all fees associated
with the earned wage access services; and
(2) inform a consumer of the fact of any material changes
to the terms and conditions of the earned wage access services
before implementing those changes for that consumer.
(d) Form of Proceeds.--A provider shall provide proceeds to a
consumer through a process mutually agreed upon between the consumer
and provider.
(e) Rules for Accessing Deposit Accounts.--
(1) In general.--A provider that seeks repayment of
outstanding proceeds, fees, voluntary tips, gratuities, or
other donations from a consumer's deposit account, including
via electronic transfer, shall--
(A) comply with applicable provisions of the
Electronic Fund Transfer Act and its implementing
regulations; and
(B) reimburse the consumer for the full amount of
any overdraft or non-sufficient funds fees imposed on a
consumer by the consumer's depository institution that
were caused by the provider attempting to seek payment
of any outstanding proceeds, fees, or other payments in
connection with the activities covered by this Act,
including voluntary tips, gratuities, or other
donations, on a date before, or in an incorrect amount
from, the date or amount disclosed to the consumer.
(2) Fraud exception.--Paragraph (1) shall not apply to
payments of outstanding proceeds, fees, or other amounts
obtained by a consumer through fraudulent or other unlawful
means.
(f) Canceling Participation in an Earned Wage Access Service.--A
provider that makes earned wage access services available to a consumer
on a recurring basis shall allow that consumer to discontinue receiving
future services upon reasonable notice without imposing a financial
penalty on that consumer.
(g) Limitations Related to Fees and Other Payments.--
(1) A provider may not--
(A) share with an employer any proceeds fees,
voluntary tips, gratuities, or other donations that
were received from or charged to a consumer for earned
wage access services;
(B) accept payment of outstanding proceeds, fees,
voluntary tips, gratuities, or other donations from a
consumer via credit card or charge card, unless such
credit card or charge card is provided to the consumer
as a part of the earned wage access service; or
(C) charge a late fee, deferral fee, interest, or
any other penalty or charge for failure to pay
outstanding proceeds, fees, voluntary tips, gratuities,
or other donations.
(2) A provider may, when contractually required, disclose
to an employer the date of a transaction associated with earned
wage access services.
(h) Voluntary Nature of Tips, Gratuities, and Other Donations.--If
a provider solicits, charges, or receives a tip, gratuity, or other
donation from a consumer, the provider shall--
(1) clearly and conspicuously disclose to the consumer
immediately prior to each transaction that a tip, gratuity, or
other donation amount may be zero and is voluntary;
(2) clearly and conspicuously disclose in its agreement
with the consumer that tips, gratuities, or donations are
voluntary and that the offering of earned wage access services,
including the amount of proceeds a consumer is eligible to
request and the frequency with which proceeds are provided to a
consumer, is not contingent on whether the consumer pays any
tip, gratuity, or other donation or on the size of the tip,
gratuity, or other donation;
(3) refrain from misleading or deceiving consumers about
the voluntary nature of such tips, gratuities, or other
donations; and
(4) refrain from representing that tips, gratuities, or
other donations will benefit any specific individuals.
(i) Consumer Dispute Defined.--In this section, the term ``consumer
dispute'' means an allegation by a consumer that--
(1) a payment of proceeds was--
(A) not authorized;
(B) in the incorrect amount; or
(C) not received;
(2) a repayment of proceeds was--
(A) in the incorrect amount; or
(B) not received; or
(3) a fee, tip, gratuity, or other donation was--
(A) not authorized; or
(B) in the incorrect amount.
SEC. 5. BUREAU AUTHORITY TO PROMULGATE REGULATIONS APPLICABLE TO
PROVIDERS.
(a) In General.--The Director of the Bureau shall have authority to
regulate the provision of earned wage access services by providers.
(b) Definition of Enumerated Consumer Laws.--Section 1002(12) of
the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481(12)) is
amended--
(1) in subparagraph (Q), by striking ``and'' at the end;
(2) in subparagraph (R), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(S) the Earned Wage Access Consumer Protection
Act.''.
SEC. 6. APPLICATION OF TRUTH IN LENDING ACT.
Proceeds provided to a consumer in compliance with this Act shall
not be considered consumer credit, for purposes of section 1602(f) of
title 15, United States Code, and the provider of those proceeds shall
not be considered a creditor for purposes of section 1602(g) of such
title. Fees, tips, gratuities, and donations paid by a consumer to a
provider shall not be considered finance charges for purposes of
section 1605(a) of such title.
SEC. 7. RULE OF CONSTRUCTION.
Nothing in this Act, or the amendments made by this Act, may be
construed to supercede any other requirement on a financial institution
or employer found in Federal law.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
Committee Consideration and Mark-up Session Held
Ordered to be Reported in the Nature of a Substitute (Amended) by the Yeas and Nays: 28 - 22.
Reported (Amended) by the Committee on Financial Services. H. Rept. 118-787.
Reported (Amended) by the Committee on Financial Services. H. Rept. 118-787.
Placed on the Union Calendar, Calendar No. 650.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line