AN ACT TO AMEND TITLE 5 OF THE DELAWARE CODE RELATING TO EARNED WAGE ACCESS SERVICES PROVIDERS.

Plain English Breakdown

The bill summary and digest text do not provide specific details on licensing processes or penalties for non-compliance.

Earned Wage Access Services Regulation Act

This act creates a regulatory framework for Earned Wage Access (EWA) providers in Delaware, ensuring they offer safe and fair services to workers.

What This Bill Does

• Creates a new license for Earned Wage Access (EWA) providers in Delaware.
• Requires EWA providers to offer at least one no-cost option for each transaction.
• Ensures all fees and charges are clearly shown before users agree to transactions.
• Makes sure that EWA services do not affect users' credit scores or report late payments.
• Prevents EWA providers from charging interest, late fees, or sending unpaid amounts to collections.

Who It Names or Affects

• EWA service companies in Delaware
• Workers who use EWA services

Terms To Know

Earned Wage Access (EWA)

A financial product that lets workers access their earned wages before payday through a mobile app.

Limits and Unknowns

• The bill does not specify how EWA providers will be licensed or the exact process for issuing licenses.
• It is unclear what penalties will apply if an EWA provider breaks these rules.

Official Summary Text

AN ACT TO AMEND TITLE 5 OF THE DELAWARE CODE RELATING TO EARNED WAGE ACCESS SERVICES PROVIDERS.
Earned Wage Access (EWA) is a Fintech product that allows workers to voluntarily access the money they have already earned during a pay-period for work they have already completed, ahead of their scheduled payday. Users primarily access EWA services through a mobile app and are only able to withdraw wages their EWA provider has verified that they have already earned. This verification process, coupled with the fact that EWA transactions are non-recourse and credit-invisible make the product distinct from loans and credit cards.
As an innovative financial product with distinct characteristics that do not fit within existing regulations, EWA requires a distinct regulatory framework. Currently, more than 100,000 workers in Delaware have already used Earned Wage Access services, which are mostly unregulated in the state. This bill helps ensure that responsible EWA providers can operate under the supervision of Delaware’s banking regulator and continue to serve users in the state of Delaware. Moreover, this bill codifies a regulatory framework that recognizes the distinct characteristics of EWA products and will keep Delawareans protected from bad actors who might seek to use the “Earned Wage Access” moniker, while instead offering a predatory product.
Specifically, this bill protects consumers in Delaware by creating a new Earned Wage Access provider license, issued by the Office of the State Bank Commissioner to companies whose products meet the following criteria, ensuring that:
• All users have at least one reasonable no-cost option for each transaction
• All fees and gratuities are clearly and transparently represented to users before they confirm their transactions
• EWA transactions are credit-invisible, that providers do not check a user’s credit before issuing EWA services, nor do they report to a credit agency if a user cancels their service
• EWA providers do not pursue recourse against users including charging interest, late fees, or sending unresolved EWA transactions to collections