Purpose of the Bill

The purpose of this bill is to regulate "earned wage access services" in Minnesota. These services allow employees to access wages they have earned but that have not yet been paid to them. The bill seeks to establish a legal framework to ensure these services operate fairly and transparently for consumers.

Main Provisions

• Definitions and Scope: The bill defines key terms related to earned wage access services, including "consumer," "earned but unpaid income," and "provider." It sets the stage for who is subject to these regulations.
• Provider Requirements: The bill mandates that service providers must:
  • Implement policies to handle consumer questions and complaints efficiently.
  • Offer consumers at least one no-cost option to access their wages.
  • Disclose all fees transparently before entering agreements with consumers.
  • Allow consumers to cancel services without a fee.
  • Comply with federal and state privacy and security laws.
  • Reimburse consumers for any overdraft or insufficient funds fees caused by the provider's actions.
• Prohibitions for Providers: Providers are prohibited from:
  • Charging fees exceeding $7 for access to services.
  • Utilizing credit reports to determine eligibility for services.
  • Requiring consumers to use credit cards for payments.
  • Imposing late fees, deferral fees, or similar charges.
  • Reporting debts or compelling payment through lawsuits or debt collectors in certain situations.

Significant Changes to Existing Law

• Licensing Requirements: All providers must obtain a license to offer earned wage access services in the state. Licensing procedures follow specific statutes, and licenses have specific stipulations about transfers and online versus offline operations.
• Exemptions and Non-Applicability: The bill clarifies that traditional financial institutions like banks and credit unions are exempt from these regulations, and stipulates conditions under which these services are not considered loans or credit.
• Consumer Protection: The bill introduces consumer protection measures, such as disallowing the sharing of collected fees with employers and ensuring transparency around voluntary tips or donations.

Applicability and Enforcement

• The bill establishes that the responsibilities under these regulations apply specifically to providers offering wage access services in Minnesota. It grants the commissioner authority to process applications, conduct investigations, and enforce compliance through examinations and potential penalties for violations.
• Consumer Complaints: Consumers can file complaints if they believe a service provider has violated the law, and the commissioner can investigate such claims.

Operating Standards

• Providers must keep detailed records of their operations and submit annual reports, including revenue and transaction data, to the commissioner. The commissioner is authorized to conduct examinations and enforce compliance with the bill's requirements.

Relevant Terms

earned wage access, consumer protection, license requirements, fee regulations, wage access services, consumer rights, employee wages, financial regulation, service provider compliance, bill provisions, state law.