Section 1 Short title
This Act may be cited as the “Earned Wage Access Consumer Protection Act”.
Earned Wage Access Consumer Protection Act
A BILL
To regulate the business of offering and providing earned wage access services to consumers, and for other purposes.
Sec. 2 Earned wage access services
Provision of earned wage access services—
No-cost option required—
In general— If an earned wage access provider offers a consumer the option to receive earned wages in exchange for a fee, such earned wage access provider shall also offer such consumer the option to obtain the same amount of earned wages at no cost to the consumer.
Transfer time period— If a consumer elects the no-cost option described in subparagraph (A), the earned wage access provider shall initiate the transfer of earned wages to the consumer within one business day of such election.
No effect on earned wages— A consumer’s election of the no-cost option described in subparagraph (A) may not impact—
the amount of earned wages disbursed to such consumer;
the frequency with which such earned wages are disbursed to such consumer; or
the consumer’s eligibility to use the provider’s earned wage access services.
Required disclosures—
Disclosures preceding agreement— Each earned wage access provider shall disclose the following before entering into an agreement with a consumer:
Any limits on access to the earned wages a consumer may request from such provider, including—
any limits on the amount of earned wages a consumer may request from the provider each day, pay period, or other time period;
any limits on the frequency or number of disbursements of earned wages a consumer may request from the provider each day, pay period, or other time period; and
any limits on the amount of earned wages a consumer may request from the provider that are based on a determination by the provider of the ratio between the amount of earned wages requested by the consumer and the total wages earned by the consumer, and how such determination is made.
Any fees that such provider may apply, and the amount of such fees.
A clear and conspicuous description of how the consumer may obtain earned wages without paying a fee or tip.
An overview of such provider’s use of tips that describes—
whether such provider will accept tips from the consumer and in what amounts; and
whether such provider will suggest the consumer provide tips and in what amounts.
Disclosures preceding disbursement of earned wages— Each earned wage access provider shall disclose the following in a clear and conspicuous manner after approving any request from a consumer for access to earned wages but before disbursing such earned wages to such consumer:
The account number such provider has assigned to the consumer, if applicable.
The amount of earned wages that will be provided to the consumer by such provider.
The total amount of any fees applied by such provider for such transaction.
A list of any tips the consumer has chosen to provide for such transaction.
The amount that such provider expects to receive as payment after disbursing the earned wages, the date on which such provider expects to receive such amount or a description of when such provider expects to receive such amount, and the manner in which such provider expects to receive such amount.
Additional disclosures relating to fees and tips— Each earned wage access provider who, during a calendar year, has disbursed earned wages and received a fee or tip from a consumer shall provide the consumer ongoing access to the following disclosures:
The total amount of fees and tips that the consumer has already paid in the then-current pay period.
The total amount of fees and tips that the consumer has already paid in the calendar year-to-date.
Additional disclosures relating to tips— If an earned wage access provider solicits, charges, or receives a tip from a consumer, such provider—
shall clearly and conspicuously disclose to the consumer, before the provider commences the transaction to which the tip is related, that such tip—
is voluntary;
is not a requirement for receiving earned wage access services; and
will not impact—
the amount of such earned wages;
the frequency with which such earned wages are disbursed to such consumer; or
the consumer’s eligibility to use the provider’s earned wage access services;
may not state that such tip will benefit—
any specific individual; or
any group of individuals other than the provider itself; and
may describe, in general terms, the benefits or services offered by such provider to consumers.
Changes to terms— Each earned wage access provider shall notify each consumer with which such earned wage access provider has entered an agreement to offer earned wage access services of any material changes to the terms and conditions of service used by such provider not less than—
30 days before such material changes take effect; or
a shorter amount of time before such material changes take effect, if the consumer has consented to such shorter amount of time.
Consumer attestation before receiving earned wages— Each earned wage access provider shall require a consumer, prior to the first disbursement of earned wages during each applicable pay period, to attest that the consumer has not requested disbursement of the same earned wages from another earned wage access provider during that pay period.
Cancellation of services— If an earned wage access provider makes earned wage access services available to a consumer on a recurring basis, such earned wage access provider—
shall allow such consumer to discontinue such services if such consumer provides notice to such earned wage access provider that such consumer desires to discontinue such services; and
may not impose any financial penalty or cancellation charge on such consumer as a result of any discontinuation of services.
Dispute process required— Each earned wage access provider shall develop and implement policies and procedures to respond to questions and complaints from consumers relating to—
unauthorized disbursement of earned wages;
disbursement of earned wages in an incorrect amount;
disbursed earned wages that were not received;
payment of disbursed earned wages that was not received or was made in an incorrect amount; and
fees or tips that were not authorized or were made in an incorrect amount.
Compelling payment for disbursed earned wages—
In general— An earned wage access provider may not seek payment for earned wages disbursed by such provider to a consumer, including such disbursed earned wages, or any related fees or tips, by—
filing a civil suit against the consumer;
initiating arbitration proceedings against the consumer;
using the services of a debt collector (as such term is defined in section 803 of the Fair Debt Collection Practices Act) to collect amounts from the consumer; or
selling expected payment to a third-party debt buyer for purposes of debt collection from the consumer.
Exception— Subparagraph (A) shall not apply if an earned wage access provider is seeking payment for earned wages disbursed to a consumer based on information provided by the consumer that the consumer knew was false.
Reimbursement required— If an earned wage access provider seeks payment of disbursed earned wages, a fee, or a tip directly from a deposit account of a consumer, on a date earlier than, or in an amount different from, what was disclosed at the time of authorization and such attempt triggers an overdraft fee or non-sufficient funds fee from the consumer’s financial institution (as defined in section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809)), the earned wage access provider shall reimburse such consumer for such fee.
Additional limitations— An earned wage access provider may not—
share any fees or tips that were received from or charged to a consumer for earned wage access services with the employer of such consumer;
accept payment of disbursed earned wages, fees, or tips from a consumer through a credit card of the consumer, unless such credit card is provided to the consumer as a part of the earned wage access service;
require a consumer to pay a late fee, deferral fee, interest, or any other penalty or charge as a result of a failure by the consumer to pay disbursed earned wages, fees, or tips requested or applied by such provider; or
furnish information to a consumer reporting agency (as defined in section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a)) about a consumer’s earned wage access services activities.
Disclosure to employer— An earned wage access provider may disclose to an employer with which such provider has a contract relating to earned wage access services the date and amount of a consumer’s earned wage access transactions associated with the earned wage access services. Subject to applicable privacy laws, a provider may disclose information necessary to perform under a contract with an employer relating to additional products or services.
Non-discrimination—
In general— It shall be unlawful for any earned wage access provider to discriminate against any consumer on the basis of race, color, religion, national origin, sex (including on the basis of pregnancy, childbirth, or related medical conditions), marital status, or age when offering earned wage access services.
Definitions— In this paragraph—
the terms race, color, religion, national origin, sex, marital status, and age have the same meanings, respectively, as used in section 701 of the Equal Credit Opportunity Act (15 U.S.C. 1691) and rules issued thereunder; and
the terms pregnancy, childbirth, and related medical conditions have the same meanings, respectively, as used in section 701(k) of the Civil Rights Act of 1964 (42 U.S.C. 2000e(k)).
Consumer data protections— Each earned wage access provider shall be deemed a “financial institution” for purposes of subtitle A of title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.).
Default tip amount—
In general— An earned wage access provider may not set any default tip amount greater than $0 in connection with earned wage access services.
Selection of $0 tip— If a consumer selects a tip amount of $0, the earned wage access provider may not require the consumer to confirm, reconfirm, or otherwise take any additional action with respect to such tip selection as a condition of completing the transaction.
Rule of construction— Nothing in this paragraph may be construed to prohibit the provider from requiring the consumer to confirm the final transaction on a completion screen.
Earned Wage Access Provider Attestation— Before each requested disbursement of earned wages for a consumer, an earned wage access provider shall verify and attest to the consumer that the amount to be disbursed, together with any prior disbursements during the applicable pay period, does not exceed the amount of earned wages actually earned and available to the consumer for that applicable pay period.
Relation to State laws—
Preservation of State law— Except as provided in paragraph (2), nothing in this Act may be construed as annulling, altering, affecting, or exempting any person from complying with any State law, except to the extent that a State law is inconsistent with the provisions of this Act, and then only to the extent of the inconsistency.
Preemption— No State or political subdivision thereof may impose, maintain, or enforce any laws, constitutions, statutes, regulations, orders, or interpretations with respect to earned wage access services that comply with this Act that—
treat such services as credit, a loan, debt, or a substantially similar product or service;
treat a provider of such services as a creditor, lender, or provider of a substantially similar product or service; or
prevent or significantly interfere with the offering or provision of earned wage access services that comply with this Act.
Savings clause— Nothing in this Act may be construed to preempt, displace, or limit the authority of a State or political subdivision thereof to enforce laws of general applicability, including laws relating to fraud, deceit, unfair or deceptive acts or practices, contracts, property, or taxation.
Rulemaking— Not later than 180 days after the date of enactment of this Act, the Bureau shall issue such rules as are necessary to carry out this Act.
Rule of construction— Earned wage access services provided in compliance with this Act, and any fees or tips received in connection with such services, may not be considered credit, a loan, debt, an obligation, liability, or consumer credit, and a person providing such services shall not be considered a creditor or lender, and such fees or tips shall not be considered interest or a finance charge, under Federal law.
Definitions— In this section:
Bureau— The term Bureau means the Bureau of Consumer Financial Protection.
Consumer— The term consumer means a natural person.
Earned wages—
In general— The term earned wages means salary, wages, compensation, or other income that a consumer or an employer has represented and that an earned wage access provider has reasonably determined have been earned or have accrued to the benefit of the consumer in exchange for the services provided by the consumer, but that have not yet been paid to the consumer by an employer.
Services provided— Services provided by the consumer include any services provided—
on an hourly, project-based, piecework, salaried, or other basis; or
when the consumer is acting as a contractor of the employer.
Earned Wage Access Provider—
In general— The term earned wage access provider means a person who provides earned wage access services to consumers.
Exclusions— The term earned wage access provider does not include—
a person who is not obligated to provide access to earned wages as part of an earned wage access service;
an employer that offers a portion of salary, wages, or compensation earned by a consumer directly to such consumer prior to a normally scheduled pay date or as such wages are accrued, irrespective of any scheduled periodic pay cycle;
a financial institution (as defined in section 509 of the Gramm-Leach-Bliley Act) that permits a consumer to access amounts associated with an electronic fund transfer from the consumer’s employer or a payroll services vendor of the employer for which the financial institution has received information but which has not yet settled; or
a payroll service vendor in its capacity as a facilitator of wage payments to a consumer by an employer, exclusive of any earned wage access services that such vendor may provide.
Earned wage access services— The term earned wage access services means the delivery of earned wages to a consumer based on—
employment, income, or attendance data obtained directly or indirectly from the employer of such consumer or a payroll service vendor, or other vendors, contracted by the employer of such consumer; or
representations made by the consumer and the reasonable determination of the earned wages of such consumer by an earned wage access provider, based on information made available or accessible to the provider by the consumer.
Employer— The term employer—
means a person who employs a consumer, or any other person who is contractually obligated to pay a consumer salary, wages, compensation, or other income in exchange for services provided to the person or on the person’s behalf; and
does not include—
a customer of a person; or
a person whose obligation to pay salary, wages, compensation, or other income to a consumer is not based on the services provided for or on behalf of that person.
Fee— The term fee means—
a fee for delivery, or expedited delivery, of proceeds to a consumer; or
a subscription, participation, or membership fee for earned wage access services or a group of services that includes earned wage access services.
Payroll service vendor— The term payroll service vendor means a vendor contracted directly or indirectly by an employer to facilitate payment of employee wages in accordance with Federal, State, and local law, including the Fair Labor Standards Act of 1938, or to provide or verify employment, income, or attendance data.
Tip— The term tip means any gratuity, donation, or other voluntary payment that is—
made by a consumer to an earned wage access provider;
provided gratuitously and without any consequence for nonpayment;
not subject to negotiation, and
in an amount determined by the consumer.
State— The term State means each of the several States, the District of Columbia, and any territory of the United States.
Sec. 3 Conforming amendments
Consumer Financial Protection Act of 2010— Section 1002 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481) is amended—
in paragraph (12)—
in subparagraph (Q), by striking “and” at the end;
in subparagraph (R), by striking the period at the end and inserting “; and”; and
by adding at the end the following:
“(S) the Earned Wage Access Consumer Protection Act.”
in paragraph (15)(A)—
by redesignating clauses (x) and (xi) as clauses (xi) and (xii), respectively; and
by inserting after clause (ix) the following:
“(x) providing earned wage access services, as defined in section 2 of the Earned Wage Access Consumer Protection Act;”
in subsection (f), by striking “defer its payment” and inserting “defer its payment, but does not include earned wage access services as defined in the Earned Wage Access Consumer Protection Act”; and
in subsection (g), by adding at the end the following: “The term creditor does not include earned wage access providers as such term is defined in the Earned Wage Access Consumer Protection Act.”.