Committee debates HB 59 to regulate earned-wage-access; sponsors to revise and roll the bill

At a House Judiciary Committee hearing, sponsors of House Bill 59 presented legislation to create a licensing and regulatory framework for earned-wage-access (EWA) providers operating in New Mexico and then asked members to delay formal action to allow further drafting and stakeholder work.

The bill’s lead sponsor, Representative Mikaela Lara Cadena, told the committee the measure is personal. “This is personal for me. I’ve been under the weight of overdraft fees and maxed out credit cards,” she said, repeating that the bill is intended to give workers safer options for getting wages they have already earned. Cosponsor Representative Luhan said she learned about the policy at a Congressional or legislative convening and defended the bill as nonpartisan: “That’s not how I came to understand this bill,” she said, urging the committee to discuss targeted protections.

Nut graf: HB 59 would establish a state license for EWA providers, require disclosure and no-cost options, ban interest and certain penalties, and set a per-transaction cap in two tiers: $7.50 for employer-integrated or direct-to-consumer single-transaction models and $3.50 for subscription/membership models, according to the amendment the sponsors presented. Opponents, including consumer groups and legal advocates, argued the products are loans already covered by New Mexico’s Small Loans Act and said the bill would create a statewide carve-out that could permit high-cost lending.

Most important facts: The sponsor’s amendment would - require EWA providers to obtain a license from the Regulation and Licensing Department (Financial Institutions Division, RLD FID); - require at least one no-cost access option (typically a 24–48 hour ACH option); - cap transaction fees at $7.50 for single-transaction models and $3.50 for subscription models (as introduced in the amendment); - set any voluntary tip/gratuity default to $0 and require it be voluntary and transparently disclosed; - prohibit interest, APR, late fees, deferral fees, reporting to consumer reporting agencies for failed payments, and requiring a consumer’s credit score; and - require providers to disclose fees, allow cancellation without penalty, and maintain consumer complaint procedures and certain recordkeeping.

Supporters from the industry framed EWA as a lower-cost alternative to payday loans and overdraft fees. Molly Jones, head of public policy at PayActiv, said the company has served “over 10,000 employees in New Mexico for over a decade” and described the bill as setting “strong consumer protections for the industry.” Tara Rider of Brigit (presented in testimony as a subscription-provider example) told the committee Brigit serves “over 37,000 consumers” in New Mexico and cited an average transfer amount of $72.

Consumer advocates and legal groups urged caution. Christina Fisher of Think New Mexico said the state’s existing cap on small-loan interest rates (36 percent) already covers these products, and she cited a Department of Justice agency analysis that called EWA products loans under the Small Loans Act. “This bill proposes to carve out earned wage access products and allow them to charge unlimited percentage rates,” Fisher said. Whitney Barclay Denny of the Center for Responsible Lending summarized the concern: “These are loans,” she said, adding that many customers are repeat users and a substantial share are “super users” who access advances repeatedly.

Committee discussion focused on statutory classification, the appropriate fee cap and consumer protections. Representatives on the committee asked whether the Consumer Financial Protection Bureau has finalized a rule classifying these products as loans (committee testimony said the CFPB did not finalize its interpretive rule and has not set a federal classification), how employers that offer comparable benefits would be treated, and whether the bill includes funding for RLD FID to stand up a new licensing process (sponsors acknowledged no appropriation was included in the bill text presented).

No final vote was taken. After questions and public comment, the bill sponsor said she would continue working with members and stakeholders to revise the language; the bill was rolled for additional drafting and discussion. The sponsor said she would consider placing the proposal inside the state Small Loans Act or otherwise adjusting fee caps and the tip/default approach if members prefer that route.

Ending: Sponsors and opponents left the committee with clear next steps: more technical drafting, review of the New Mexico Department of Justice analysis, and follow-up on whether and how the RLD FID would be funded to implement any licensing regime. The committee did not advance HB 59 beyond the concept hearing.