Legislation championed by Reps. Steil and Hill would establish a first-of-its-kind federal regulatory framework to protect workers’ access to their wages.
WASHINGTON, D.C. – The Financial Technology Association (FTA) applauds the House Financial Services Committee’s passage of H.R. 7428, the Earned Wage Access Consumer Protection Act. The legislation introduced by Congressmen Bryan Steil (WI-01) and French Hill (AR-02) defines earned wage access as a non-credit product and establishes specific consumer disclosures and protections for the first time at the federal level.
“Our current payroll system is broken, with arbitrary monthly or biweekly pay periods preventing workers from accessing their wages when needed,” said Penny Lee, President and Chief Executive Officer of the Financial Technology Association. “Earned Wage Access gives workers financial freedom by allowing access to a portion of their already earned income with no mandatory fees. We applaud the House Financial Services Committee for advancing this critical legislation protecting workers’ access to their wages.”
More than two in three Americans believe the traditional pay period is outdated, according to a survey conducted by OnePoll on behalf of the Financial Technology Association. Earned Wage Access (EWA) is a safe and cost-effective way for workers to access their earned wages to meet routine or emergency needs. Unlike other products in the marketplace, EWA always offers a no-cost option. EWA products do not charge interest or mandatory fees and do not impact users’ credit scores.
By definition, EWA products are not loans, as they are non-recourse, meaning that providers do not have the legal right to repayment. They simply provide access to income the user has already earned, not future pay. Studies show that EWA products reduce people’s reliance on high-cost credit, and the Government Accountability Office found that EWA products “generally cost less than typical costs associated with payday loans.”
To read FTA’s letter in support of H.R. 7428, click here. To learn more, read Earned Wage Access Explained and Just the Facts.
ABOUT US
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.