Senate committee hears clash over earned-wage-access products, advocates seek fee caps and tip limits

The Senate Financial Institutions, Insurance and Technology Committee held a lengthy third hearing on Senate Bill 117, a proposal to establish a regulatory framework for earned-wage-access (EWA) services. Witnesses for consumer groups and community development organizations urged the committee to add guardrails for direct-to-consumer and employer-integrated EWA products, while industry witnesses described technical solutions to prevent "advance stacking."

Monica Burks, policy counsel for the Center for Responsible Lending, testified that analysis of about 214,000 EWA transactions showed frequent repeat usage and high costs for frequent users. "Almost half of the consumers in that dataset were stacking these ... advances," Burks said, and she told the committee that in the dataset "about 40% of the people ... are responsible for 86% of the advances taken." Burks also said that some platforms’ default and encouraged tipping practices and expedite fees push users to pay to receive funds immediately:…