Regulate the provision of earned wage access services

As Introduced

136th
General Assembly

Regular
Session
S. B. No. 117

2025-2026

Senator Lang

A
BILL

To
amend section 1321.21 and to enact sections 1320.01, 1320.02,
1320.03, 1320.04, 1320.05, 1320.06, 1320.07, 1320.08, 1320.09, and
1320.10 of the Revised Code
to
regulate the provision of earned wage access services.

BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section
1.
That
section 1321.21 be amended and sections 1320.01, 1320.02, 1320.03,
1320.04, 1320.05, 1320.06, 1320.07, 1320.08, 1320.09, and 1320.10 of
the Revised Code be enacted to read as follows:

Sec.
1320.01.
As
used in this chapter:

(A)
"Certificate" means a certificate of registration issued
under this chapter.

(B)
"Company" means a business entity other than an individual
or sole proprietorship, including a firm, business trust,
partnership, limited liability company, association, corporation, or
general partnership.

(C)
"Consumer" means any individual who resides in this state
and has accrued earned but unpaid income. A provider may use the
mailing address or state of residence provided by a consumer to
determine the consumer's state of residence for purposes of this
chapter.

(D)
"Consumer-directed wage access services" means the business
of delivering to consumers access to earned but unpaid income based
on the consumer's representation, and the provider's reasonable
determination, of the consumer's earned but unpaid income.

(E)
"Earned but unpaid income" means salary, wages,
compensation, or other income that an individual or an employer has
represented, and that a provider has reasonably determined, has been
earned or has accrued to the benefit of the individual in exchange
for the individual's provision of services to the employer or on
behalf of the employer, including services provided on an hourly,
project-based, piecework, or other basis, and where the individual
acts as an independent contractor of the employer, for which the
individual has not been paid by the employer at the time of the
payment of proceeds.

(F)
"Earned wage access services" means the business of
providing consumer-directed wage access services, employer-integrated
wage access services, or both.

(G)(1)
"Employer" means a person that employs a consumer, or any
other person who is contractually obligated to pay a consumer earned
but unpaid income in exchange for a consumer's provision of services
to the employer or on behalf of the employer, including services
provided on an hourly, project-based, piecework, or other basis and
where the consumer acts as an independent contractor with respect to
the employer.

(2)
"Employer" does not mean 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.

(H)
"Employer-integrated wage access services" means the
business of delivering to consumers access to earned but unpaid
income that is based on employment, income, and attendance data
obtained directly or indirectly from an employer.

(I)
"Fee" means any of the following:

(1)
An amount charged by a provider for delivery or expedited delivery of
proceeds to a consumer;

(2)
A subscription or membership charge imposed by a provider for a bona
fide group of services that includes earned wage access services;

(3)
An amount paid by an employer to a provider on a consumer's behalf,
which entitles the consumer to receive proceeds at reduced or no cost
to the consumer.

(J)
"Key officer" means a chief executive officer, chief
financial officer, or chief compliance officer.

(K)
"Outstanding proceeds" means a payment of proceeds to a
consumer by a provider that has not yet been repaid to that provider.

(L)
"Proceeds" means a payment of money to a consumer by a
provider pursuant to an agreement to provide earned wage access
services to that consumer.

(M)
"Provider" means a company who is in the business of
offering and providing earned wage access services to consumers.

(N)
"Registrant" means a company to whom one or more
certificates of registration have been issued under this chapter.

(O)
"Superintendent of financial institutions" includes the
deputy superintendent for consumer finance as provided in section
1181.21 of the Revised Code.

Sec.
1320.02.
(A)
No person shall offer or provide earned wage access services in this
state without having a valid certificate of registration under this
chapter. Each company issued a certificate of registration is subject
to all provisions of this chapter and any associated rules.

(B)
For the purpose of registering companies under and requiring
compliance with this chapter, the superintendent of financial
institutions may do both of the following:

(1)
Require any company registered, or applying for registration, under
this chapter to do both of the following:

(a)
Utilize the nationwide multistate licensing system for application,
renewal, amendment, or surrender of a certificate of registration or
for any other activity as the superintendent may require;

(b)
Pay all applicable charges to utilize the nationwide multistate
licensing system.

(2)
Establish requirements as necessary for the use of the nationwide
multistate licensing system to meet the purposes of these sections,
including:

(a)
Background checks of key officers for any of the following:

(i)
Criminal history through fingerprint or other databases;

(ii)
Civil or administrative records;

(iii)
Credit history;

(iv)
Any other information considered necessary by the nationwide
multistate licensing system or the superintendent.

(b)
Payment of fees to apply for or renew registrations through the
nationwide multistate licensing system;

(c)
Setting or resetting of renewal or reporting dates;

(d)
Requirements for amending or surrendering a registration or any other
such activities as the superintendent considers necessary for
participation in the nationwide multistate licensing system.

Sec.
1320.03.
(A)(1)
An application for a certificate of registration under this chapter
shall be in writing, under oath, and in the form prescribed by the
division of financial institutions. The application shall include an
affirmation that the applicant will abide by this chapter and shall
contain any information that the division may require. The division
shall not issue or renew a certificate of registration under this
chapter for an applicant that is a foreign corporation unless that
applicant first obtains and maintains a license pursuant to Chapter
1703. of the Revised Code.

(2)
Upon the filing of the application and the payment by the applicant
of a nonrefundable two-hundred-dollar investigation fee and a
nonrefundable three-hundred-dollar annual registration fee, the
division shall investigate the applicant. If the application involves
investigation outside this state, and it appears that the actual
expenses of the investigation will exceed two hundred dollars, the
division may require the applicant to advance sufficient funds to pay
for those actual expenses. The division shall furnish to the
applicant an itemized statement of any expenses in excess of the
standard two-hundred-dollar investigation fee which the applicant is
required to pay. The division shall not issue a certificate unless
all the required fees have been submitted to the division.

(3)
The investigation required by this section shall include both a civil
and criminal records check of the key officers of the applicant and
any individual whose identity is required to be disclosed in the
application. Where the applicant is a business entity, the
superintendent of financial institutions may require a civil and
criminal background check of any persons that the superintendent
determines have the authority to direct and control the operations of
the applicant.

(4)(a)
Notwithstanding division (L) of section 121.08 of the Revised Code,
the superintendent shall obtain a criminal history records check and,
as part of that records check, request that criminal record
information from the federal bureau of investigation be obtained. To
fulfill this requirement, the superintendent of financial
institutions shall request the superintendent of the bureau of
criminal identification and investigation, or a vendor approved by
the bureau, to conduct a criminal records check based on the
applicant's fingerprints or, if the fingerprints are unreadable,
based on the applicant's social security number, in accordance with
section 109.572 of the Revised Code.

(b)
Any fee required under division (C)(3) of section 109.572 of the
Revised Code shall be paid by the applicant.

(5)
If an application for a certificate of registration does not contain
all of the information required under division (A) of this section,
and if such information is not submitted to the division within
ninety days after the superintendent of financial institutions
requests the information in writing, including by electronic
transmission or facsimile, the superintendent may consider the
application withdrawn.

(6)
If the division finds that the financial responsibility, experience,
and general fitness of the applicant command the confidence of the
public and warrant the belief that the business will be operated
honestly and fairly in compliance with the purposes of this chapter
and the rules adopted thereunder, and that the applicant has the
applicable net worth and assets required by division (D) of this
section, the division shall issue a certificate of registration to
the applicant. The superintendent shall not use a credit score as the
sole basis for denying registration under this chapter.

(7)
Certificates of registration annually expire on the last day of
December, unless renewed by the filing of a renewal application and
payment of a three-hundred-dollar nonrefundable annual registration
fee on or before that date.

(8)
Registrants shall timely file renewal applications on forms
prescribed by the division and provide any further information that
the division may require. If a renewal application does not contain
all of the information required under this section, and if that
information is not submitted to the division within ninety days after
the superintendent requests the information in writing, including by
electronic transmission or facsimile, the superintendent may consider
the application withdrawn.

(9)
The superintendent shall not grant a renewal if the applicant's
certificate of registration is subject to an order of suspension,
revocation, or an unpaid and past due fine or assessment imposed by
the superintendent.

(10)
If the division finds the applicant does not meet the conditions set
forth in this section, the division shall issue notice to the
applicant of the denial, the grounds for the denial, and the
applicant's reasonable opportunity to be heard on the action in
accordance with Chapter 119. of the Revised Code.

(11)
If there is a change of five per cent or more in the ownership of a
registrant, the division may make any investigation necessary to
determine whether any fact or condition exists that, if it had
existed at the time of the original application for a certificate of
registration, the fact or condition would have warranted the division
to deny the application under division (A)(6) of this section. If
such a fact or condition is found, the division may, in accordance
with Chapter 119. of the Revised Code, revoke the registrant's
certificate.

(B)(1)
If the annual registration fees collected by the superintendent
pursuant to division (A) of this section are less than the estimated
expenditures of the consumer finance section of the division of
financial institutions in administering this chapter for the
following fiscal year, as determined by the superintendent, the
superintendent may assess each registrant an additional fee at a rate
sufficient to equal in the aggregate the difference between the
renewal fees billed and the estimated expenditures.

(2)
Each registrant shall pay the assessed amount to the superintendent
prior to the last day of June.

(3)
In no case shall the assessment exceed ten cents for each one hundred
dollars of fees, tips, gratuities, and donations received by that
registrant during the previous calendar year.

(4)
Subject to division (B)(3) of this section, the assessment shall not
be less than two hundred fifty dollars per registrant and shall not
exceed two thousand dollars per registrant.

(C)
Notwithstanding any contrary provision of division (A) of this
section, the division shall issue a certificate of registration in
accordance with Chapter 4796. of the Revised Code to an applicant if
the applicant holds a license or registration to offer earned wage
access services in another state. Issuance of a license to such an
applicant is contingent upon the applicant's payment of the
three-hundred-dollar annual registration fee and any assessment
charged under division (B) of this section.

(D)
Each registrant that offers or provides earned wage access services
under this chapter shall maintain both of the following:

(1)
A net worth of at least fifty thousand dollars;

(2)
For each certificate of registration, assets of at least fifty
thousand dollars either in use or readily available for use in the
conduct of the business.

(E)
A registrant may operate in this state online or at one or more
physical places of business. Not more than one place of business
shall be maintained under the same certificate, but the division may
issue additional certificates to the same registrant. No change in
the place of business of a registrant to a location outside the
original municipal corporation or township shall be permitted under
the same certificate without the approval of a new application, the
payment of the registration fee, and, if required by the
superintendent, the payment of an investigation fee of two hundred
dollars. When a registrant wishes to change its place of business
within the same municipal corporation or township, it shall give
written notice of the change in advance to the division, which shall
provide a certificate for the new address without cost. If a
registrant changes its name, prior to offering or providing earned
wage access services under the new name, it shall give written notice
of the change to the division, which shall provide a certificate in
the new name without cost. This chapter does not limit the services
of any registrant to residents of the municipal corporation or
township in which the registrant's place of business is situated. A
registrant that operates online shall post evidence of its
registration on its internet web site. A registrant that operates at
one or more physical places of business shall conspicuously post its
registration in its places of business. Registrations are not
transferable or assignable.

(F)
This chapter does not apply to any entities chartered and lawfully
doing business under the authority of any law of this state, another
state, or the United States as a bank, savings bank, trust company,
savings and loan association, or credit union, or a subsidiary of any
such entity, which subsidiary is regulated by a federal banking
agency and is owned and controlled by such a depository institution.

(G)
Neither the state nor any political subdivision of the state shall
require a registrant to pay any fee or assessment, other than those
expressly authorized by this section, as a condition of providing
earned wage access services in this state.

Sec.
1320.04.
As
often as the superintendent of financial institutions considers it
necessary, the superintendent may examine the records of a
registrant.

Sec.
1320.05.
A
provider subject to this chapter shall do all of the following:

(A)
Develop and implement policies and procedures to respond to questions
raised by consumers and address complaints from consumers in an
expedient manner;

(B)
Offer to consumers at least one reasonable option to obtain proceeds
at no cost and clearly explain how to elect that no-cost option;

(C)
Before entering into an agreement with a consumer for the provision
of earned wage access services, do both of the following:

(1)
Inform the consumer of the consumer's rights under the agreement;

(2)
Fully and clearly disclose all fees associated with the earned wage
access services.

(D)
Inform the consumer of any material changes to the terms and
conditions of the earned wage access services before implementing
those changes for that consumer;

(E)
Allow the consumer to cancel use of the provider's earned wage access
services at any time, without incurring a cancellation fee or penalty
imposed by the provider;

(F)
Comply with all applicable local, state, and federal privacy and
information security laws;

(G)
If a provider solicits, charges, or receives a tip, gratuity, or
other donation from a consumer, both of the following:

(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 service contract with the
consumer and elsewhere 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.

(H)
Provide proceeds to a consumer by any means mutually agreed upon by
the consumer and the provider;

(I)
If the provider will seek repayment of outstanding proceeds or
payment of fees or other amounts owed in connection with the
activities covered by this chapter, including voluntary tips,
gratuities, or other donations, from a consumer's depository
institution, including by means of electronic funds transfer, do both
of the following:

(1)
Comply with applicable provisions of the "Electronic Funds
Transfer Act," 15 U.S.C. 1693 to 1693r, and regulations adopted
under that act;

(2)
Reimburse the consumer for the full amount of any overdraft or
nonsufficient 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 chapter, 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. The provider is not subject to the requirements of division
(I)(2) of this section with respect to payments of outstanding
amounts or fees incurred by a consumer through fraudulent or other
unlawful means.

Sec.
1320.06.
A
provider subject to this chapter shall not do any of the following:

(A)
Share with an employer a portion of any fees, voluntary tips,
gratuities, or other donations that were received from or charged to
a consumer for earned wage access services;

(B)
Require a consumer's credit report or credit score provided or issued
by a consumer reporting agency to determine a consumer's eligibility
for earned wage access services;

(C)
Accept payment of outstanding proceeds, fees, voluntary tips,
gratuities, or other donations from a consumer by means of a credit
card or charge card;

(D)
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;

(E)
Report to a consumer reporting agency or debt collector any
information about a consumer regarding the consumer's inability to
repay outstanding proceeds, fees, voluntary tips, gratuities, or
other donations to a provider;

(F)(1)
Compel or attempt to compel payment by a consumer of outstanding
proceeds, fees, voluntary tips, gratuities, or other donations to the
provider through any of the following means:

(a)
An action against the consumer in a court of competent jurisdiction;

(b)
Use of a third party to pursue collection from the consumer on the
provider's behalf;

(c)
Sale of outstanding amounts to a third-party debt collector or debt
buyer for collection from the consumer.

(2)
Nothing in this section shall be interpreted as doing either of the
following:

(a)
Precluding the use by a provider of any of the methods described in
division (F)(1) of this section to compel payment of outstanding
proceeds or fees incurred by a consumer through fraudulent or other
unlawful means;

(b)
Precluding a provider from pursuing an employer for breach of its
contractual obligations to the provider.

(G)
If the provider solicits, charges, or receives tips, gratuities, or
other donations from a consumer, mislead or deceive consumers about
the voluntary nature of the tips, gratuities, or donations or make
representations that tips, gratuities, or other donations will
benefit any specific individuals.

Sec.
1320.07.
(A)
Every registered provider shall keep and use in the provider's
business such books, accounts, and records as will enable the
division of financial institutions to determine whether the provider
is complying with this chapter and with the orders and rules made by
the division under this chapter. Such books, accounts, and records
shall be segregated from those pertaining to transactions that are
not subject to this chapter. Every provider shall preserve the books,
accounts, and records pertaining to earned wage access services
transactions made under this chapter for at least two years after
extending proceeds to a consumer. Accounting systems maintained in
whole or in part by mechanical or electronic data processing methods
that provide information equivalent to that otherwise required are
acceptable for the purposes of this division.

(B)(1)
Each registered provider shall file with the division of financial
institutions each year a report under oath or affirmation, on forms
supplied by the division, concerning the business and its operations
for the preceding calendar year. If a provider has more than one
place of business in this state, the provider shall furnish a report
for each location.

(2)
The division shall annually publish and make available to the public
an analysis of the information reported under division (B)(1) of this
section, but the individual reports are not public records for the
purposes of Chapter 149. of the Revised Code and shall not be open to
public inspection.

(3)
The published analysis shall include all of the following:

(a)
Gross revenue attributable to earned wage access services;

(b)
The total number of transactions in which proceeds were remitted to
consumers;

(c)
The total number of unique consumers to whom proceeds were remitted;

(d)
The total dollar amount of proceeds remitted to consumers;

(e)
The total dollar amount of fees, tips, gratuities, and donations
received from consumers;

(f)
The total number of transactions in which proceeds were remitted to
consumers for which providers did not receive repayment of any
outstanding proceeds;

(g)
The total dollar amount of transactions described in division
(B)(3)(f) of this section;

(h)
The total number of transactions in which proceeds were remitted to
consumers, for which providers received partial repayment of
outstanding proceeds;

(i)
The total dollar amount of transactions described in division
(B)(3)(h) of this section and the total dollar amount of unpaid,
outstanding proceeds attributable to those transactions;

(j)
The total number of transactions in which outstanding proceeds were
repaid after the original, scheduled repayment date;

(k)
The total dollar amount of transactions described in division
(B)(3)(j) of this section;

(l)
Any other nonprivate information required by the superintendent.

Sec.
1320.08.
(A)
The superintendent of financial institutions shall, in accordance
with Chapter 119. of the Revised Code, suspend or revoke a
certificate of registration issued pursuant to this chapter if the
superintendent determines that either of the following apply:

(1)
The registrant has failed to comply with any order issued by the
superintendent pursuant to section 1320.10 of the Revised Code;

(2)
Any fact or condition exists that, if it had existed or had been
known to exist at the time the original or renewal certificate of
registration was issued, the fact or condition clearly would have
warranted the superintendent to refuse to issue a certificate of
registration.

(B)
The superintendent may make any investigation and conduct any hearing
the superintendent considers necessary to determine whether any
company or individual has violated this chapter or any rule or order
adopted in accordance with this chapter, or has otherwise engaged in
conduct that would justify the suspension, revocation, or refusal of
an original or renewal certificate of registration, or the imposition
of a fine. The superintendent may impose a monetary fine of not more
than one thousand dollars for each such violation.

(C)
In making any investigation or conducting any hearing pursuant to
this section, the superintendent, or any person designated by the
superintendent, at any time may compel by subpoena witnesses, may
take depositions of witnesses residing within this state in the
manner provided for in civil actions, pay any witnesses the fees and
mileage for their attendance provided under section 119.094 of the
Revised Code, and administer oaths. The superintendent also may
compel by order or subpoena duces tecum the production of, and
examine, all relevant books, records, accounts, and other documents.
If a company or individual does not comply with a subpoena or
subpoena duces tecum, the superintendent may apply to the court of
common pleas of Franklin county for an order compelling the company
or individual to comply with the subpoena or subpoena duces tecum or,
for failure to do so, an order to be held in contempt of court.

(D)
In connection with any investigation under this section, the
superintendent may file an action in the court of common pleas of
Franklin county or the court of common pleas of the county in which
the company or individual who is the subject of the investigation
resides, or is engaging in or proposing to engage in actions in
violation of this chapter, to obtain an injunction, temporary
restraining order, or other appropriate relief.

Sec.
1320.09.
(A)(1)
Earned wage access services provided by a registrant in accordance
with this chapter shall not be considered to be any of the following:

(a)
A loan or other form of credit or debit;

(b)
A money transmission;

(c)
A violation of, or noncompliant with, any other provision of the
Revised Code governing the sale or assignment of, or an order for,
earned but unpaid income.

(2)
A registrant providing earned wage access services in accordance with
this chapter shall not be considered to be a creditor, debt
collector, lender, or money transmitter.

(B)
Notwithstanding any contrary provision of the Revised Code, earned
wage access services offered or provided by a provider in accordance
with this chapter are not subject to Chapter 1315., 1319., or 1321.
of the Revised Code.

(C)
Notwithstanding any contrary provision of the Revised Code, fees,
voluntary tips, gratuities, or other donations paid by a consumer to
a registrant in accordance with this chapter are not interest or
finance charges.

(D)
If there is a conflict between the provisions of this chapter and any
other provision of the Revised Code, the provisions of this chapter
control.

Sec.
1320.10.
(A)
The division of financial institutions shall administer this chapter.
Neither the superintendent of financial institutions nor any deputy,
assistant, clerk, examiner, or other person employed by the division
to assist in the administration of this chapter shall be interested,
directly or indirectly, in a business registered under this chapter.
Any person so interested or who becomes so interested shall not be
eligible to hold or retain such position.

(B)
The superintendent of financial institutions, in accordance with
Chapter 119. of the Revised Code, may adopt rules and issue specific
orders to enforce and carry out the purposes of this chapter.

(C)
Notwithstanding any provision of section 121.95 of the Revised Code
to the contrary, a regulatory restriction contained in a rule adopted
under this section is not subject to sections 121.95 to 121.953 of
the Revised Code.

Sec.
1321.21.
All
fees, charges, penalties, and forfeitures collected under Chapters

1320.,

1321., 1322., 4712., 4727., and 4728., sections 1315.21 to 1315.30,
and sections 1349.25 to 1349.37 of the Revised Code shall be paid to
the superintendent of financial institutions and shall be deposited
by the superintendent into the state treasury to the credit of the
consumer finance fund, which is hereby created. The fund may be
expended or obligated by the superintendent for the defrayment of the
costs of administration of Chapters
1320.,

1321.,
1322., 4712., 4727., and 4728., sections 1315.21 to 1315.30, and
sections 1349.25 to 1349.37 of the Revised Code by the division of
financial institutions. All actual and necessary expenses incurred by
the superintendent, including any services rendered by the department
of commerce for the division's administration of Chapters
1320.,

1321.,
1322., 4712., 4727., and 4728., sections 1315.21 to 1315.30, and
sections 1349.25 to 1349.37 of the Revised Code, shall be paid from
the fund. The fund shall be assessed a proportionate share of the
administrative costs of the department and the division. The
proportionate share of the administrative costs of the division of
financial institutions shall be determined in accordance with
procedures prescribed by the superintendent. Such assessment shall be
paid from the consumer finance fund to the division of administration
fund or the financial institutions fund.

Periodically,
in accordance with a schedule the director establishes by rule, but
at least once every three months, the director of budget and
management shall transfer five per cent of all charges, penalties,
and forfeitures received into the consumer finance fund to the
financial literacy education fund created under section 121.085 of
the Revised Code.

Section
2.
That
existing section 1321.21 of the Revised Code is hereby repealed.