WASHINGTON, D.C. – The Financial Technology Association (FTA) today issued a statement on newly released guidance by the Connecticut Department of Banking that could jeopardize access to Earned Wage Access (EWA) services for workers in that state:
“EWA products help millions of Americans tap into their earned wages to make ends meet and manage bills like utilities, rent, or car payments. EWA products are not credit and should not be classified as loans – they simply give employees access to their already earned wages,” said Penny Lee, President and Chief Executive Officer of FTA. “We are greatly concerned that this guidance – which goes into effect in less than one month – would cause thousands of Connecticut residents to lose a service they rely on, limit innovation and consumer choice, and force customers into more costly and higher risk alternatives. We urge the Department of Banking to reconsider this guidance and work with the EWA industry to develop an appropriate regulatory framework that protects workers’ access to these valuable products.”
A national survey of nearly 5,000 EWA customers found that 93% report a greater sense of financial control when using the product, and 91% understand how the product works. Recently, FTA applauded legislatures in Missouri and Nevada for passing constructive regulatory frameworks that create an appropriate licensing and consumer protection framework to govern EWA. FTA also outlined a proactive approach to regulating EWA products in a comment letter to the California Department of Consumer Protection and Innovation.
Read Just the Facts on Earned Wage Access for more information on EWA service models.
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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.