Vermont committee agrees to rewrite H.99 on earned-wage access, will seek licensing and consumer protections

Members of the Vermont House Committee on Commerce & Economic Development on Feb. 6 debated H.99, a proposed bill to regulate earned-wage access products that let employees obtain pay before their scheduled payday, and agreed to form a working group to revise the draft language before deciding whether to advance it to the House floor.

Committee members framed the discussion around consumer benefits and risks. The committee chair opened the item by asking whether the proposal offered a net benefit to Vermonters and whether the committee could present a united position to the full House. Committee members broadly agreed the product could help people living paycheck to paycheck but expressed strong concern about potential consumer harms, including unclear fees, loan “stacking” and addictive use patterns.

Michael, a committee member, said he supported moving the bill forward “with some caveats,” and offered to provide clauses addressing advocates’ concerns. Several other members said the product should be treated as a loan subject to existing licensed-lender regulation, with rate limits and clear APR disclosures. One member said, “I do think we should add some additional clauses,” while another urged that the draft include stronger consumer education and “pop up” resources for users who may be distressed.

Speakers discussed alternatives, including employer-integrated advances — where an employer fronting an advance deducts repayment from payroll — and community-based credit-union models. The committee heard a detailed example of a private employer program in which Rhino Foods partners with North Country Federal Credit Union to offer unsecured small loans repaid via payroll deductions; once a loan is repaid, repayments are redirected into savings by default.

Members raised implementation and legal concerns: whether the transactions should be regulated under the licensed-lender statute, whether APR is the appropriate fee cap, the risk of private-right-of-action provisions, and how the bill should interact with an upcoming data-privacy law (members recommended removing biometric-data language until definitions are finalized). One member warned that treating similar transactions differently from payday lending may expose the state to legal challenge unless a rational basis for the distinction is documented.

Rather than take a vote to advance H.99, the committee directed a small group of members and staff to redraft the bill. Committee Chair said John, Herb and Kirk will work with Maria, Matt, Aaron and Deputy Kushner to negotiate revisions with industry and department staff and return to the committee; members acknowledged that a revised draft might not reach floor consideration before crossover. The committee asked that the draft address licensing, APR or fee caps, stacking protections, disclosure requirements, removal of problematic biometric/data provisions, and language on employer-integrated options.

The discussion produced no formal floor motion or vote to advance H.99. Committee members asked for additional input from the Department of Financial Regulation (or the department with licensing authority), stakeholders in the payroll-tech and banking sectors, and legislative counsel before the committee considers next steps.