Landmark bill would establish an Earned Wage Access regulatory and disclosure framework for the first time at the federal level.
WASHINGTON, D.C. – The Financial Technology Association (FTA), a trade group representing leading fintech companies, today applauded U.S. Representatives Bryan Steil (WI-01) and French Hill (AR-02), Chairman of the Subcommittee on Digital Assets, Financial Technology, and Inclusion, for introducing H.R. 7428, the Earned Wage Access Consumer Protection Act. This legislation would establish a first-of-its-kind federal regulatory and disclosure framework for Earned Wage Access, a safe and cost-effective way for workers to access their already earned wages.
“Getting paid once or twice a month doesn’t work for millions of Americans trying to make ends meet between paychecks. Workers want direct access to their already earned wages to budget better, manage unexpected expenses, and take care of emergencies, all without having to take out an expensive loan or go into debt,” said Penny Lee, President and CEO of the Financial Technology Association. “We applaud Congressmen Steil and Hill for introducing landmark federal legislation regulating Earned Wage Access and providing clarity for the millions of American workers and businesses that rely on it.”
Earned Wage Access (EWA) products give workers access to the wages they have already earned. The two primary EWA models – employer-based (B2B) and direct-to-consumer (DTC) – meet critical consumer needs by streamlining access to short-term liquidity so people can manage their money safely and responsibly. By definition, EWA products are not loans and have no mandatory fees, no credit checks, no interest, no recourse, and no impact on credit scores. Studies show that users value having access to their own wages as an alternative to other options, such as payday loans or high-cost credit.
The Earned Wage Access Consumer Protection Act would establish regulatory standards for EWA at the federal level. While states across the country have begun passing licensing bills defining EWA as a non-credit product, there is no federal standard defining and regulating EWA. Congressman Steil’s bill would clarify that EWA products are not loans, establish clear definitions for EWA models, and require EWA businesses to provide specific disclosures to consumers. The bill is consistent with previous guidance at the federal level – including a 2017 Consumer Financial Protection Bureau rulemaking expressly excluding both DTC and B2B EWA products from the definition of a loan and a 2020 advisory opinion that defined certain EWA products as non-credit.
Click here to learn more about Earned Wage Access and here to read the Earned Wage Access Consumer Protection Act.
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The Financial Technology Association (FTA) is a Washington, DC-based trade association representing industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.