7. If the provider will seek repayment of proceeds remitted to the consumer but not yet repaid (outstanding proceeds) or payment of fees or other amounts from a consumer’s bank account, including through electronic funds transfer, reimburse the consumer for overdraft or non-sufficient funds fees caused by the provider’s attempted payment before the date, or in an amount different from, that disclosed to the consumer.
The bill imposes various limitations on a licensed provider, including prohibiting a licensed provider from doing any of the following:
1. Sharing consumer fees or tips with the consumer’s employer.
2. Accepting a consumer’s payment of outstanding proceeds, fees, or tips by means of a credit card.
3. Charging a late fee, deferral fee, interest, or other penalty for failure to pay outstanding proceeds, fees, or tips.
4. Reporting to a consumer reporting agency or debt collector information about the consumer’s nonpayment to the provider of outstanding proceeds, fees, or tips.
5. Compelling the consumer’s payment of outstanding proceeds, fees, or tips through a lawsuit in court, use of a third-party debt collector, or sale of the obligation to a third-party debt collector or debt buyer, unless the consumer acted through fraudulent or other unlawful means.
6. Misleading or deceiving consumers about the voluntary nature of tips or making representations that tips will benefit any specific individual.
7. Advertising, publishing, or broadcasting any statement or representation regarding the provider’s earned wage access services that is false, misleading, or deceptive.
The bill specifies that a licensed provider’s earned wage access services are not, and do not fall within the scope of current law regulation of, any of the following: 1) a payday loan, or any other form of loan or form of credit or debt; 2) the Wisconsin Consumer Act; 3) money transmission (which current law refers to as a “seller of checks” business); or 4) a violation or noncompliance with state laws governing the sale or assignment of an individual’s wages or other compensation earned or accrued but not yet paid. In addition, the bill specifies that fees and tips paid by a consumer to a provider are not considered interest or finance charges.
The bill requires a licensed provider to submit an annual report to the division that includes certain information related to the provider’s earned wage access services in this state and to keep certain books and records. The bill gives the division the right to suspend or revoke a provider’s license under certain circumstances and provides the division with certain authority to enforce the regulations created in the bill.
For further information see the state fiscal estimate, which will be printed as an appendix to this bill.
AB574,,44The people of the state of Wisconsin, represented in senate and assembly, do enact as follows: AB574,15Section 1. 73.0301 (1) (d) 6. of the statutes is amended to read: AB574,,6673.0301 (1) (d) 6. A license or certificate of registration issued by the department of financial institutions, or a division of it, under ss. 138.09, 138.12, 138.14, 202.12 to 202.14, 202.22, 203.03, 217.06, 218.0101 to 218.0163, 218.02, 218.04, 218.05, 224.72, 224.725, 224.93 or under subch. IV of ch. 551. AB574,27Section 2. 108.227 (1) (e) 6. of the statutes is amended to read: AB574,,88108.227 (1) (e) 6. A license or certificate of registration issued by the department of financial institutions, or a division of it, under ss. 138.09, 138.12, 138.14, 202.12 to 202.14, 202.22, 203.03, 217.06, 218.0101 to 218.0163, 218.02, 218.04, 218.05, 224.72, 224.725, 224.93 or under subch. IV of ch. 551. AB574,39Section 3. 138.09 (1a) (c) of the statutes is created to read: AB574,,1010138.09 (1a) (c) Providers of earned wage access services required to be licensed under s. 203.03 (1). AB574,411Section 4. 138.14 (3) of the statutes is amended to read: AB574,,1212138.14 (3) Exemptions. This section does not apply to banks, savings banks, savings and loan associations, trust companies, credit unions, or any of their affiliates or to providers of earned wage access services required to be licensed under s. 203.03 (1). AB574,513Section 5. Chapter 203 of the statutes is created to read: AB574,,1514CHAPTER 203
15EARNED WAGE ACCESS SERVICES AB574,,1616203.01 Definitions. In this chapter: AB574,,1717(1) “Business entity” means any corporation, limited liability company, partnership, association, or other commercial entity. AB574,,1818(2) “Consumer” means an individual who resides in this state. AB574,,1919(3) “Consumer-directed wage access services” means the business of delivering to consumers access to earned but unpaid income that is based on the consumer’s representations and the provider’s reasonable determination of the consumer’s earned but unpaid income. AB574,,2020(4) “Division” means the division of banking.