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DFR urges caution on earned-wage access as Vermont committee weighs H99; H34 reported favorably
Summary
At a Jan. 31 meeting of the Commerce & Economic Development Committee, Aaron Farris, deputy commissioner of banking at the Department of Financial Regulation, told lawmakers earned-wage access products likely meet the legal definition of loans and recommended statutory changes or guidance.
Montpelier — At a Jan. 31 meeting of the Commerce & Economic Development Committee, Aaron Farris, deputy commissioner of banking at the Department of Financial Regulation (DFR), told lawmakers that earned-wage access products "are probably loan products of some sort" under existing guidance and federal law and urged either statutory changes or formal regulatory guidance before Vermont adopts a new legal framework.
The committee heard from Farris for about 40 minutes on H99, a bill that would create a specific framework for employer-integrated earned-wage access (EWA) products. Farris urged caution: "we are not against innovation or new ways offering that service, but we do like to practice innovation with caution," and recommended explicitly requiring that expedite fees and tips be included in the finance charge if the committee moves forward with the bill.
Why it matters: EWA services allow workers to access earned wages before payday, often for an "expedite" fee. Regulators and consumer advocates disagree on whether the fees and…
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