SB579,,112023 SENATE BILL 579
October 30, 2023 - Introduced by Senators Stafsholt, Tomczyk and Cowles, cosponsored by Representatives Dallman, Neylon, Allen, Dittrich, Gundrum, Murphy, Mursau, Nedweski, Novak, Rettinger, Steffen and Tusler. Referred to Committee on Financial Institutions and Sporting Heritage.
SB579,,22An Act to amend 73.0301 (1) (d) 6., 108.227 (1) (e) 6., 138.14 (3) and 220.02 (3); and to create 138.09 (1a) (c), chapter 203 and 220.02 (2) (j) of the statutes; relating to: regulating earned wage access services, granting rule-making authority, and providing a penalty.
SB579,,33Analysis by the Legislative Reference Bureau
This bill regulates companies that provide earned wage access services in this state to individuals who reside in this state (consumers) and requires such companies to be licensed by the Division of Banking (division) in the Department of Financial Institutions before providing those services.
Under the bill, “earned wage access service” is defined as the business of delivering to consumers access to earned but unpaid income that is based on 1) the consumer’s representations and the provider’s reasonable determination of the consumer’s earned but unpaid income; or 2) employment, income, or attendance data obtained directly or indirectly from an employer. The bill defines, with exceptions, a “provider” as a business entity that is in the business of providing earned wage access services to consumers. “Earned but unpaid income” is defined as salary, wages, compensation, or other income that a consumer or an employer has represented, and that a provider has reasonably determined, has been earned or accrued to the benefit of the consumer in exchange for the consumer’s provision of services to the employer or on the employer’s behalf but has not, at the time of the payment of proceeds, been paid to the consumer by the employer. An “employer” includes a person who is obligated to pay a consumer acting as an independent contractor. “Proceeds” are defined as a provider’s payment to a consumer based on earned but unpaid income.
The bill requires a provider, before providing earned wage access services in this state, to be licensed by the division. This requirement applies even if the provider is not physically located in this state, such as when the provider conducts business by means of a website. However, these provisions do not apply to financial institutions and their affiliates. An applicant for a license must pay a fee to the division, file and maintain a surety bond, and provide specified information to the division.
The bill imposes various requirements on a licensed provider, including requiring a licensed provider to do all of the following:
1. Develop and implement policies and procedures to respond to consumer questions and complaints.