Purpose of the Bill

The bill is designed to regulate earned wage access services in Minnesota. These services allow consumers (employees) to access their earned wages before their actual pay date. The goal is to ensure consumer protection and fair operation of earned wage access services.

Main Provisions

1. Definitions:

   • Clarifies terms like "consumer," "earned wage access services," "provider," and "fee."
   • Differentiates between consumer-directed and employer-integrated wage access services.

2. Requirements for Providers:

   • Providers must develop clear policies and procedures for consumer inquiries and complaints.
   • Disclosures: Providers must inform consumers of any fees, the voluntary nature of any tips, and offer one no-cost option for receiving wages.
   • Privacy: Compliance with all relevant privacy and information security laws is mandatory.
   • Methods of Payment: Consumers should be able to choose how they receive their payments.

3. Prohibitions on Providers:

   • Cap of $7 on fees for any service.
   • Prohibition on sharing fees with employers.
   • No use of credit reports or scores for eligibility determination.
   • Prohibition on credit card payment for proceeds.
   • No penalties for late payment or sharing of debt information with collectors.

4. Licensing Requirements:

   • Providers must obtain a license to offer services in Minnesota.
   • Licenses are explicitly detailed in terms of documentation and display requirements.

5. Consumer Protections:

   • Consumers can cancel services without a fee.
   • Providers must reimburse overdraft fees caused by their payment requests.
   • Restrictions are placed on using aggressive collection actions like lawsuits for recoveries.

6. Regulatory Oversight:

   • Annual reports and record-keeping are required from providers.
   • The commissioner has the authority to investigate, examine business practices, and handle consumer complaints.

7. Enforcement of Compliance:

   • The commissioner can revoke or suspend licenses for non-compliance.
   • Specific processes are detailed for license suspension or revocation, including notice and hearing procedures.

Significant Changes

• This bill introduces licensure requirements for all businesses offering earned wage access services.
• It establishes strict guidelines on fees, consumer rights, and limits the methods and extent of collection practices.
• Protects consumers by ensuring providers cannot use consumer credit information or engage in practices classified as loans or credit.

Relevant Terms

earned wage access, consumer protection, fees, licensing, consumer rights, privacy laws, credit report, payday loans, wage advance, financial regulation, tip gratuity, Minnesota Statutes.