Summary:

 House Bill 59 (HB 59):  This Act proposes a statewide framework to license and regulate earned wage access providers, ensuring consumer protections—like clarity around fees and the right to cancel—while exempting certain entities such as banks and direct employer payroll advances. It gives the Financial Institutions Division broad power to enforce rules, conduct investigations, and penalize non-compliant providers, all under the umbrella of exclusive state authority. 

Legislation Overview:

 House Bill 59 (HB 59):  Creates a New Licensing Framework to establish the requirement that anyone offering “earned wage access services” must first obtain a license from the Financial Institutions Division (FID) of the Regulation and Licensing Department.  The Act also outlines an application process, annual renewal requirements, and grounds for denial, suspension, or revocation of a license.

This Act proposes clarification of exemptions for traditional financial institutions like banks, savings and loan associations, and credit unions are not required to obtain this license.  Employers offering early wage payments to their own employees (rather than via a third-party provider) are also exempt.  The Act also clarifies important concepts, such as “earned but unpaid income,” “fee,” “earned wage access services,” and “outstanding proceeds.”  It also distinguishes between “consumer-directed” services and “employer-integrated” services.

The Act further proposes to protect consumers by requiring providers to give clear disclosures on any fees, subscriptions, or tips before offering services.  It prohibits providers from charging interest, imposing late fees, sending debts to collections, or reporting nonpayment to credit bureaus when consumers fail to repay advances (unless fraud is involved).  Mandates a no-cost option to receive wages.  Prohibits sharing any portion of fees or tips with the employer.

Establishes Reporting and Oversight by mandating annual reporting by providers, including data such as the total number of transactions and fees received.  Grants the Division authority to investigate providers, examine their books and records, and ensure compliance with the Act.  Violations can result in penalties, including petty misdemeanor charges.
Preempts Local Regulation by asserting exclusive state jurisdiction over earned wage access services, precluding local governments from regulating these services.  Penalties for Violations for participating in any breach of the Act constitutes a petty misdemeanor, punishable by fines ranging from $500 to $1,000.  The Effective Date applies to providers issued licenses on or after October 15, 2025.