Bill Highlight's: H.B. 674 Earned Wage Access Bill

H.B. 674 was introduced in the House by Rep. Tom Kirby (R), Loganville. The bill relates to financial institutions and provides requirements for earned wage access service providers and their required registration of the provider with the Department of Banking and Finance (DBF). The bill was assigned to the Industry & Labor committee.
 
The bill was presented to the House Industry & Labor committee. In the initial presentation on the bill, Bo Fears with the DBF pointed out numerous concerns/issues with the bill as drafted though he stated that DBF was neither for nor against the bill as drafted.  There were discussions that the bill would be moved to the House Banks & Banking Committee. 
 
The bill did not move and remained with the Industry & Labor Committee.  On Thursday, Rep. Kirby presented a substitute bill that removed DBF from the bill and inserted a rate cap based on current check casher statute, which would be 5% of wages or $5 whichever is greater.  The bill would allow an employee to request payment for wages that have been earned but not yet paid for a service fee and repayment would come from a deduction from the employee’s next pay check.  There were extensive discussions and testimonies on the bill and a few corporations that are in the Earned Wage Access space discussed how their company operates.  After a lengthy discussion on the pros/cons of the bill, a motion was made to table the bill for further discussion on this topic during the off session. 
 
CBA has concerns with the bill as this type of program appears to be an end-run around restrictions on pay day lending which would apply only to “Earned Wage Access Service Providers,” which do not fit clearly under the jurisdiction of any financial regulatory body. While banks are not expressly prohibited from being an Earned Wage Access Service Provider, it will likely be difficult for banks to offer the products referenced in this bill due to the regulatory scrutiny applied to small dollar consumer lending. The proponents of the bill go to great lengths to explain how the payroll advances are not actually loans, but we believe that this will be a distinction without a difference in the eyes of bank regulators. 

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