Purpose of the Bill

The bill intends to regulate earned wage access (EWA) services in Minnesota. Earned wage access services allow employees to access wages they have earned but not yet received from their employer.

Main Provisions

• Definitions: The bill defines key terms such as "consumer-directed wage access services," "earned wage access services provider," "earned but unpaid income," and "employer-integrated wage access services."
• Provider Requirements: EWA providers must:
  1. Respond to consumer inquiries and complaints promptly.
  2. Offer an option to access wages without a fee.
  3. Inform consumers about their rights and any fees before providing services.
  4. Allow consumers to cancel services without a cancellation fee.
  5. Follow privacy laws and federal electronic fund transfer regulations.
  6. Reimburse overdraft fees caused by their payment request errors.

Prohibitions for Providers

• Fee Limitations: Providers cannot charge more than $7 in fees for services.
• Prohibited Practices:
  • Sharing fees or donations with employers.
  • Using a consumer's credit score to determine eligibility.
  • Accepting credit card payments for services.
  • Charging late fees or interest on outstanding amounts.
  • Reporting consumers to debt collectors if they fail to repay.

Applicability

• The regulations do not apply to traditional financial institutions like banks and credit unions.
• EWA services are explicitly not considered loans or credit.

Licensing and Reporting

• Providers must obtain a license to offer EWA services.
• They must maintain accurate records and report annually on operations, including the number of transactions and total consumer fees collected.

Regulatory Oversight

• Enforcement: The commissioner can inspect providers’ records to ensure compliance and can investigate complaints.
• Penalties: Providers violating regulations can face license suspension or revocation.

Licensing Process

• Licensing applies to both physical and online operations offering EWA services in Minnesota.
• Providers already operating as of January 2025 can continue services while their licensing application is processed, provided they apply within three months after the application form is available.

Consumer Complaints

• Consumers can file complaints with specific details, prompting investigation by the commissioner.

Relevant Terms

earned wage access, EWA, consumer fees, licensing, wage advance, wage access provider, consumer protection, financial regulation