LA: Joint Industry Letter in Support of HB 368

Louisiana State Capitol
House Commerce Committee
900 North 3rd Street
Baton Rouge, LA 70804

Re: Support for HB 368

Dear Honorable Members of the Louisiana House Commerce Committee:

Thank you for the opportunity to express our strong support for HB 368, which creates new consumer protections and establishes a clear framework for the regulation of Earned Wage Access (EWA) services in Louisiana.

EWA helps Louisiana workers make ends meet

In the face of rising costs and financial uncertainty, many of your constituents are struggling to make ends meet. Based on many studies, including analysis by the Federal Reserve Board, at least one-third of Americans are living paycheck-to-paycheck. For those Americans in particular, the need for accessible and affordable financial solutions is urgent. EWA services offer working families a much-needed lifeline by allowing them to access wages they’ve already earned before their scheduled payday, typically with no fees or low fees. EWA services empower workers to address unexpected costs as they arise, giving them flexibility beyond their employers’ pay periods.

EWA services have become an invaluable tool for at least 200,000 workers in the Bayou State. Businesses operating in Louisiana have embraced the technology too—at least 1,000 employers in the state offer EWA as a benefit to their workers. By giving employees early access to their earned wages, EWA helps them avoid costly alternatives like high-cost online payday loans, credit card debt, bank over-drafts, and late fees for upcoming payments.

HB 368 creates important consumer protections.

HB 368 creates new, dedicated regulations for EWA that are aligned with how this novel product operates. The regulatory framework proposed in HB 368 creates important consumer protections. These consumer protections include:

● Banning interest, late fees, and penalties: The bill prohibits the imposition of interest, late fees, or penalties if the consumer fails to pay the outstanding amount from their EWA advance(s), shielding workers from the high-cost practices often associated with payday loans, pawn loans, auto loans, short-term installment loans, and other types of predatory lending.

● Requiring at least one free option: HB 368 mandates that providers offer at least one no-cost option for workers to access their earned wages ahead of payday.

● Ensuring low-credit workers will always have access: HB 368 ensures that no credit checks or credit reporting will be involved in EWA transactions, which means even workers with poor or no credit are able to access these beneficial services.

● Banning recourse in an EWA transaction: The bill gives users the ability to cancel their account with an EWA provider at any point without penalty. HB 368 prohibits providers from pursuing recourse against users including interest, late fees, or debt collection.

● Disclosing fees and promoting transparency: The bill requires that EWA provider provide clear fee disclosures for optional fees so that consumers are well-informed and can choose the EWA option that best suits their needs.

For these reasons, HB 368 ensures workers can access their earned wages responsibly and at no cost. By distinguishing EWA as an innovative service that allows access to earned wages, this bill controls for the consumer risks unique to EWA, which are different from those posed by credit or other financial products.

We strongly urge you to support HB 368 and provide your constituents with the tools they need to achieve financial stability.

Sincerely,

American Fintech Council

Brigit
Chamber of Progress
Cleo
Cross River Bank
DailyPay
EarnIn
Immediate
MoneyLion
Payactiv
Rain
WageStream
ZayZoon

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