[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7428 Introduced in House (IH)]

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118th CONGRESS
  2d Session
                                H. R. 7428

 To regulate the business of offering and providing earned wage access 
             services to consumers, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 20, 2024

  Mr. Steil (for himself and Mr. Hill) introduced the following bill; 
       which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To regulate the business of offering and providing earned wage access 
             services to consumers, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Earned Wage Access Consumer 
Protection Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Bureau.--The term ``Bureau'' means the Bureau of 
        Consumer Financial Protection.
            (2) Consumer.--The term ``consumer'' means a natural 
        person.
            (3) Consumer-directed wage access services.--The term 
        ``consumer-directed wage access services'' means offering or 
        providing earned wage access services directly to consumers 
        based on the consumer's representations and the provider's 
        reasonable determination of the consumer's earned but unpaid 
        income.
            (4) Debt collector.--The term ``debt collector'' has the 
        meaning given that term under section 803 of the Fair Debt 
        Collection Practices Act (15 U.S.C. 1692a).
            (5) Earned but unpaid income.--The term ``earned but unpaid 
        income'' means salary, wages, compensation, or other income 
        that a consumer or an employer has represented, and that a 
        provider has reasonably determined, have been earned or have 
        accrued to the benefit of the consumer in exchange for the 
        consumer's provision of services to the employer or on behalf 
        of the employer, including on an hourly, project-based, 
        piecework, or other basis and including where the consumer is 
        acting as an independent contractor of the employer, but have 
        not, at the time of the payment of proceeds, been paid to the 
        consumer by an employer.
            (6) Earned wage access services.--The term ``earned wage 
        access services'' means the business of providing consumer-
        directed wage access services or employer-integrated wage 
        access services, or both at the request of an employee.
            (7) Employer.--
                    (A) In general.--The term ``employer'' means a 
                person who--
                            (i) employs a consumer; or
                            (ii) any other person who is contractually 
                        obligated to pay a consumer earned but unpaid 
                        income in exchange for the consumer's provision 
                        of services to the employer or on behalf of the 
                        employer, including on an hourly, project-
                        based, piecework, or other basis and including 
                        where the consumer is acting as an independent 
                        contractor with respect to the employer.
                    (B) Exclusion.--The term ``employer'' does not 
                include--
                            (i) a customer of an employer or any other 
                        person whose obligation to make a payment of 
                        salary, wages, compensation, or other income to 
                        a consumer is not based on the provision of 
                        services by that consumer for or on behalf of 
                        such person; or
                            (ii) a third-party service provider 
                        contracted by the employer to distribute income 
                        to consumers, including on demand pay for 
                        earned but unpaid income requested by the 
                        consumer, on behalf of the employer at no fee 
                        to the consumer.
            (8) Employer-integrated wage access services.--The term 
        ``employer-integrated wage access services'' means the business 
        of delivering to consumers access to earned but unpaid income 
        that is based on employment, income, or attendance data 
        obtained directly or indirectly from an employer.
            (9) Fee.--The term ``fee'' means--
                    (A) a fee imposed by a provider for delivery or 
                expedited delivery of proceeds to a consumer;
                    (B) a subscription or membership fee imposed by a 
                provider for a bona fide group of services that include 
                earned wage access services; and
                    (C) does not include a voluntary tip, gratuity, or 
                other donation paid by a consumer to a provider.
            (10) Outstanding proceeds.--The term ``outstanding 
        proceeds'' means a payment of proceeds to a consumer by a 
        provider, which has not yet been repaid to that provider.
            (11) Proceeds.--The term ``proceeds'' means a payment to a 
        consumer by a provider, which is based on earned but unpaid 
        income.
            (12) Provider.--The term ``provider''--
                    (A) means a person who is in the business of 
                providing earned wage access services to consumers; and
                    (B) does not include--
                            (i) a service provider (such as a payroll 
                        service provider) whose role may include 
                        verifying a consumer's available earnings but 
                        that is not contractually obligated to fund 
                        proceeds delivered as part of an earned wage 
                        access service;
                            (ii) an employer that offers a portion of 
                        salary, wages, or compensation directly to its 
                        employees or independent contractors prior to 
                        the normally scheduled pay date;
                            (iii) a financial institution (as such term 
                        is defined in section 20 of title 18, United 
                        States Code) when it permits customers to 
                        access amounts associated with an electronic 
                        funds transaction for which the financial 
                        institution has received information but which 
                        has not yet settled; and
                            (iv) a payroll service provider that 
                        facilitates payments to workers of earned, 
                        available wage balances in accordance with 
                        Federal, State, and local law, including the 
                        Fair Labor Standards Act of 1938.

SEC. 3. NON-DISCRIMINATION.

    It shall be unlawful for any provider to discriminate against any 
consumer, with respect to any aspect of a transaction on the basis of 
race, color, religion, national origin, sex, pregnancy, marital status, 
or age (provided the consumer has the capacity to contract).

SEC. 4. REQUIREMENTS APPLICABLE TO PROVIDERS.

    (a) Dispute Policy.--Each provider shall develop and implement 
policies and procedures to respond to consumer disputes and questions 
raised by consumers.
    (b) Non-Recourse Payments.--
            (1) In general.--A provider may not compel or attempt to 
        compel repayment by a consumer of outstanding proceeds, fees, 
        voluntary tips, gratuities, or other donations to that provider 
        through--
                    (A) a civil suit or arbitration proceeding against 
                the consumer;
                    (B) use of a third party to pursue collection of 
                outstanding proceeds, fees, voluntary tips, gratuities, 
                or other donations on the provider's behalf; or
                    (C) the sale of outstanding amounts to a third-
                party collector or debt buyer for collection from the 
                consumer.
            (2) Fraud exception.--Paragraph (1) shall not apply to 
        repayment of outstanding amounts obtained by a consumer through 
        fraudulent means or preclude a provider from pursuing an 
        employer for breach of its contractual obligations to the 
        provider.
    (c) Disclosures to Consumers.--Each provider shall--
            (1) before entering into an agreement with a consumer for 
        the provision of earned wage access services--
                    (A) inform the consumer of his or her rights under 
                the agreement; and
                    (B) fully and clearly disclose all fees associated 
                with the earned wage access services; and
            (2) inform a consumer of the fact of any material changes 
        to the terms and conditions of the earned wage access services 
        before implementing those changes for that consumer.
    (d) Form of Proceeds.--A provider shall provide proceeds to a 
consumer through a process mutually agreed upon between the consumer 
and provider.
    (e) Rules for Accessing Deposit Accounts.--
            (1) In general.--A provider that seeks repayment of 
        outstanding proceeds, fees, voluntary tips, gratuities, or 
        other donations from a consumer's deposit account, including 
        via electronic transfer, shall--
                    (A) comply with applicable provisions of the 
                Electronic Fund Transfer Act and its implementing 
                regulations; and
                    (B) reimburse the consumer for the full amount of 
                any overdraft or non-sufficient funds fees imposed on a 
                consumer by the consumer's depository institution that 
                were caused by the provider attempting to seek payment 
                of any outstanding proceeds, fees, or other payments in 
                connection with the activities covered by this Act, 
                including voluntary tips, gratuities, or other 
                donations, on a date before, or in an incorrect amount 
                from, the date or amount disclosed to the consumer.
            (2) Fraud exception.--Paragraph (1) shall not apply to 
        payments of outstanding proceeds, fees, or other amounts 
        obtained by a consumer through fraudulent or other unlawful 
        means.
    (f) Canceling Participation in an Earned Wage Access Service.--A 
provider that makes earned wage access services available to a consumer 
on a recurring basis shall allow that consumer to discontinue receiving 
future services upon reasonable notice without imposing a financial 
penalty on that consumer.
    (g) Limitations Related to Fees and Other Payments.--
            (1) A provider may not--
                    (A) share with an employer any proceeds fees, 
                voluntary tips, gratuities, or other donations that 
                were received from or charged to a consumer for earned 
                wage access services;
                    (B) accept payment of outstanding proceeds, fees, 
                voluntary tips, gratuities, or other donations from a 
                consumer via credit card or charge card, unless such 
                credit card or charge card is provided to the consumer 
                as a part of the earned wage access service; or
                    (C) charge a late fee, deferral fee, interest, or 
                any other penalty or charge for failure to pay 
                outstanding proceeds, fees, voluntary tips, gratuities, 
                or other donations.
            (2) A provider may, when contractually required, disclose 
        to an employer the date of a transaction associated with earned 
        wage access services.
    (h) Voluntary Nature of Tips, Gratuities, and Other Donations.--If 
a provider solicits, charges, or receives a tip, gratuity, or other 
donation from a consumer, the provider shall--
            (1) clearly and conspicuously disclose to the consumer 
        immediately prior to each transaction that a tip, gratuity, or 
        other donation amount may be zero and is voluntary;
            (2) clearly and conspicuously disclose in its agreement 
        with the consumer that tips, gratuities, or donations are 
        voluntary and that the offering of earned wage access services, 
        including the amount of proceeds a consumer is eligible to 
        request and the frequency with which proceeds are provided to a 
        consumer, is not contingent on whether the consumer pays any 
        tip, gratuity, or other donation or on the size of the tip, 
        gratuity, or other donation;
            (3) refrain from misleading or deceiving consumers about 
        the voluntary nature of such tips, gratuities, or other 
        donations; and
            (4) refrain from representing that tips, gratuities, or 
        other donations will benefit any specific individuals.
    (i) Consumer Dispute Defined.--In this section, the term ``consumer 
dispute'' means an allegation by a consumer that--
            (1) a payment of proceeds was--
                    (A) not authorized;
                    (B) in the incorrect amount; or
                    (C) not received;
            (2) a repayment of proceeds was--
                    (A) in the incorrect amount; or
                    (B) not received; or
            (3) a fee, tip, gratuity, or other donation was--
                    (A) not authorized; or
                    (B) in the incorrect amount.

SEC. 5. BUREAU AUTHORITY TO PROMULGATE REGULATIONS APPLICABLE TO 
              PROVIDERS.

    (a) In General.--The Director of the Bureau shall have authority to 
regulate the provision of earned wage access services by providers.
    (b) Definition of Enumerated Consumer Laws.--Section 1002(12) of 
the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481(12)) is 
amended--
            (1) in subparagraph (Q), by striking ``and'' at the end;
            (2) in subparagraph (R), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(S) the Earned Wage Access Consumer Protection 
                Act.''.

SEC. 6. APPLICATION OF TRUTH IN LENDING ACT.

    Proceeds provided to a consumer in compliance with this Act shall 
not be considered consumer credit, for purposes of section 1602(f) of 
title 15, United States Code, and the provider of those proceeds shall 
not be considered a creditor for purposes of section 1602(g) of such 
title. Fees, tips, gratuities, and donations paid by a consumer to a 
provider shall not be considered finance charges for purposes of 
section 1605(a) of such title.

SEC. 7. RULE OF CONSTRUCTION.

     Nothing in this Act, or the amendments made by this Act, may be 
construed to supercede any other requirement on a financial institution 
or employer found in Federal law.
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