Committee hears testimony opposing H.99 exemption for earned-wage-access services

The Vermont House Committee on Commerce and Economic Development on Feb. 4 heard testimony on H.99, a bill that would classify certain earned-wage-access (EWA) services outside Vermont's existing consumer-lending laws. Witnesses representing consumer-advocacy groups, older-adult advocates and the banking industry disagreed sharply over whether the products are loans and how they should be regulated.

Monica Burks, policy counsel with the Center for Responsible Lending, told the committee that the industry's products behave like short-term payday loans and urged the committee not to roll back Vermont's consumer protections. "These are just payday loans," Burks said, summarizing her view of how EWA products are structured and used.

Burks cited findings from the California Department of Financial Protection and Innovation and the Consumer Financial Protection Bureau to describe how many consumers pay repeated fees. She told the committee the California regulator found an average APR of about 334% (based on a 10-day repayment), that roughly 73% of consumers tipped on transactions, the average tip was about $4, and most advances were between $40 and $100. Burks said the CFPB found employer-integrated advances…