Vote Smart's Synopsis:

Vote to pass a bill that establishes consumer protections for earned wage access services by limiting fees, regulating licensing, and ensuring transparency in wage-based lending in Maryland.

Highlights:

• Defines “consumer-directed earned wage access” as delivery of access to unpaid but earned wages by a third party provider who does not have a relationship with the consumer’s employer (Sec. 1).

• Defines “employer-integrated earned wage access” as the delivery of unpaid but earned wages by a person the employer has contracted with to provide the service (Sec. 1).

• Specifies that earned wage access may not incur interest, and that a service fee imposed by a provider does not equate to interest (Sec. 1).

• Specifies that earned wage access qualifies as a loan (Sec. 1).

• Requires licensure for the business of providing earned wage access (Sec. 1).

• Requires providers of earned wage access to do the following (Sec. 1):

• Develop procedures to address questions and complaints by consumers;

• Offer consumers at least one option to obtain earned wage access at no cost;

• Disclose consumer’s rights and all fees associated with the service before entering into an agreement with a consumer;

• Allow consumers to cancel use of their services at any time without additional fee;

• Comply with all applicable privacy and information security laws; and

• Reimburse the consumer for any overdraft fees imposed by the consumer’s bank that were caused by the provider seeking repayment for outstanding fees.

• Prohibits providers of earned wage access from doing the following (Sec. 1):

• Sharing with an employer any fees, tips, or other charges received from a consumer;

• Charging a late fee, interest, or other penalty for failure to pay;

• Reporting information about a consumer’s failure to pay to any consumer reporting agency;

• Obtaining a consumer’s credit report as a method of qualifying them for service;

• Receiving interest from a consumer; or

• Compelling payment by a consumer through a civil action or use of a third party collector.

• Authorizes providers of earned wage access to charge the following fees (Sec. 1):

• $5.00 for any advance of proceeds up to $75.00; or

• $7.50 for any advance of proceeds greater than $75.00.

• Authorizes providers of earned wage access to collect tips for service, with the following conditions (Sec. 1):

• They must disclose that a tip may not be allocated to any particular employee of the servicer;

• They must disclose to whom the tip will be allocated;

• They must set the default tip amount at zero; and

• They must not suggest that a tip will influence their willingness to provide a loan, or the terms of any loan.

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that establishes consumer protections for earned wage access services by limiting fees, regulating licensing, and ensuring transparency in wage-based lending in Maryland.

Highlights:

• Defines “consumer-directed earned wage access” as delivery of access to unpaid but earned wages by a third party provider who does not have a relationship with the consumer’s employer (Sec. 1).

• Defines “employer-integrated earned wage access” as the delivery of unpaid but earned wages by a person the employer has contracted with to provide the service (Sec. 1).

• Specifies that earned wage access may not incur interest, and that a service fee imposed by a provider does not equate to interest (Sec. 1).

• Specifies that earned wage access qualifies as a loan (Sec. 1).

• Requires licensure for the business of providing earned wage access (Sec. 1).

• Requires providers of earned wage access to do the following (Sec. 1):

• Develop procedures to address questions and complaints by consumers;

• Offer consumers at least one option to obtain earned wage access at no cost;

• Disclose consumer’s rights and all fees associated with the service before entering into an agreement with a consumer;

• Allow consumers to cancel use of their services at any time without additional fee;

• Comply with all applicable privacy and information security laws; and

• Reimburse the consumer for any overdraft fees imposed by the consumer’s bank that were caused by the provider seeking repayment for outstanding fees.

• Prohibits providers of earned wage access from doing the following (Sec. 1):

• Sharing with an employer any fees, tips, or other charges received from a consumer;

• Charging a late fee, interest, or other penalty for failure to pay;

• Reporting information about a consumer’s failure to pay to any consumer reporting agency;

• Obtaining a consumer’s credit report as a method of qualifying them for service;

• Receiving interest from a consumer; or

• Compelling payment by a consumer through a civil action or use of a third party collector.

• Authorizes providers of earned wage access to charge the following fees (Sec. 1):

• $5.00 for any advance of proceeds up to $75.00; or

• $7.50 for any advance of proceeds greater than $75.00.

• Authorizes providers of earned wage access to collect tips for service, with the following conditions (Sec. 1):

• They must disclose that a tip may not be allocated to any particular employee of the servicer;

• They must disclose to whom the tip will be allocated;

• They must set the default tip amount at zero; and

• They must not suggest that a tip will influence their willingness to provide a loan, or the terms of any loan.

Full Bill Text