HF3448
Consumer small and short-term loans clarified to include earned wage access payday loans.
Legislative Session 94 (2025-2026)
Related bill: SF3831
AI Generated Summary
Purpose
This bill updates Minnesota law to clearly include earned wage access (EWA) payday loans as consumer small loans and consumer short-term loans, and it sets rules for who can offer these loans, how they are defined, and what information they must file with the state.
Main Provisions
- Includes earned wage access payday loans in the definitions of consumer small loans and consumer short-term loans.
- Clarifies key terms used to regulate these loans:
- Consumer small loan: a short, unsecured loan of up to $350 repaid in one installment; can involve a promissory note or a deferral of presenting a personal check; may include various fees.
- Fee: any charge beyond interest or a finance charge, such as membership, convenience, expediting, or tip/donation fees.
- Annual percentage rate (APR): the yearly cost of credit, including interest, fees, and other charges, calculated by standard methods.
- Licensing, filing, and oversight:
- Non-bank entities that want to offer consumer small loans to Minnesotans must file with the commissioner of commerce before operating, pay a $250 filing fee per place of business, show at least $50,000 in liquid assets at the operation location, and provide a biographical statement about the principal leader.
- Filing revocation is handled the same way as for regulated lender licenses.
- Online lenders with no Minnesota physical location are covered.
- Consumer short-term loans:
- Defines a consumer short-term loan as up to $1,300 with an arrangement that requires a minimum payment within 60 days or that sets a default payment schedule, and where each new loan advance counts as a new loan.
- Clarifies what is not included (for example, certain types of loans or loans secured solely by collateral with recourse limited to collateral).
- Defines a consumer short-term lender similarly to the small loan lender, including online lending via Internet or mobile apps.
- Scope of activities:
- Lenders may operate without a physical MN location if they offer loans electronically (Internet or mobile app) to Minnesota residents, but they remain subject to the definitions and filing requirements.
Significant Changes to Existing Law
- Expands the regulatory scope to explicitly cover earned wage access (EWA) payday loans as both consumer small loans and consumer short-term loans.
- Adds explicit filing and asset-availability requirements for non-bank lenders and online lenders.
- Updates definitions to reflect modern lending methods, including online and mobile app platforms.
- Sets clear criteria for loan amounts, repayment timelines, and how new advances are treated (each new advance is a new loan).
Practical Implications
- For consumers: loans that fall under these categories will be regulated under Minnesota law, with defined loan amounts, repayment expectations, and fee considerations.
- For lenders: online and offline lenders must meet filing, asset, and licensing requirements; they must adhere to the defined loan terms and APR methods.
Relevant Changes to Compliance
- Must file with the commissioner before starting to offer these loans (if not a traditional financial institution).
- Must maintain specified liquid assets and provide leadership information.
- If operating online, still subject to Minnesota rules and registration.
What the bill aims to accomplish
- Create a clear, consistent framework that recognizes earned wage access products as regulated consumer loans.
- Align online and offline lending practices under Minnesota’s commerce rules.
- Provide oversight to protect borrowers through defined loan amounts, fees, and repayment structures.
Relevant Terms earned wage access, EWA, payday loan, consumer small loan, consumer short-term loan, annual percentage rate (APR), fee, promissory note, deferral of presentation of a personal check, liquid assets, filing, Minnesota commissioner of commerce, filing fee, online lender, Internet lending, mobile application, non-bank lender, lender license, revocation, repayment schedule, new advance, collateral, Chapter 325J (excluded treatments), recourse, unsecured loan, terms of repayment.
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| February 19, 2026 | House | Action | Introduction and first reading, referred to | Commerce Finance and Policy | |
| March 23, 2026 | House | Action | Author added |
Citations
[
{
"analysis": {
"added": [
"Adds definitions for consumer small loan, consumer small loan lender, annual percentage rate, and fee.",
"Clarifies that annual percentage rate applies and that a consumer small loan is a short-term unsecured loan repaid in a single installment.",
"Expands the scope to include related terms such as credit-related fees and the mechanics of presenting or deferring payment instruments."
],
"removed": [],
"summary": "Amends Minnesota Statutes 2024, section 47.60, subdivision 1 to redefine and clarify consumer small loan concepts and related terms.",
"modified": [
"Subd. 1 definitions are being replaced with new definitions to support the expanded scope of consumer small loans, including wage-advance style loans."
]
},
"citation": "47.60",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [
"Requires non-financial institutions that make consumer small loans to Minnesota residents to file with the commissioner as a consumer small loan lender.",
"Imposes a filing fee of $250 per place of business.",
"Requires evidence of liquid assets of at least $50,000 and a biographical statement for the principal responsible for operation.",
"Permits revocation of the filing in a manner aligned with the process for regulated lenders under section 56.09.",
"Includes entities with no physical Minnesota location that make loans via Internet or electronic means."
],
"removed": [],
"summary": "Adds filing requirements for non-financial entities that engage in consumer small loans under section 47.60, subdivision 3.",
"modified": [
"Replaces existing process with new filing requirements for consumer small loan lenders.",
"Clarifies scope to include out-of-state entities operating electronically."
]
},
"citation": "47.60",
"subdivision": "subdivision 3"
},
{
"analysis": {
"added": [
"Adds definitions for Borrower, Commissioner, Consumer short-term loan, Consumer short-term lender, and Fee.",
"Incorporates cross-reference to annual percentage rate in 47.60 for the APR meaning."
],
"removed": [],
"summary": "Adds and defines key terms in Minnesota Statutes 2024, section 47.601, subdivision 1 for consumer short-term loans.",
"modified": [
"Subd. 1 is amended to replace/establish the definitions listed (a through g) for short-term loan concepts."
]
},
"citation": "47.601",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [
"Cross-references 47.59 for 'financial institution' definition."
],
"removed": [],
"summary": "References existing Minnesota Statutes section 47.59 for the definition of 'financial institution' used in the bill's definitions of loan lenders.",
"modified": []
},
"citation": "47.59",
"subdivision": ""
},
{
"analysis": {
"added": [
"References the revocation process for filings in line with the regulated lender license process under 56.09."
],
"removed": [],
"summary": "Uses the licensing framework in Minnesota Statutes section 56.09 as the basis for filing revocation of consumer small loan lender filings.",
"modified": []
},
"citation": "56.09",
"subdivision": ""
},
{
"analysis": {
"added": [
"Adds an exclusion: a transaction made under chapter 325J is not a consumer short-term loan."
],
"removed": [],
"summary": "Excludes transactions governed by chapter 325J from the definition of 'consumer short-term loan' and specifies collateral-based remedies in the event of default for those loans.",
"modified": []
},
"citation": "325J",
"subdivision": ""
}
]Progress through the legislative process
In Committee