Vermont committee hears mixed testimony on H.99 to regulate earned-wage-access services

The Vermont House Committee on Commerce & Economic Development heard testimony Jan. 30 on H.99, legislation to license and regulate companies that let workers access wages before payday.

Supporters from multiple earned-wage-access (EWA) companies described how their services work and said the bill offers consumer protections; a consumer advocate warned the measure would let providers evade Vermont's existing wage-assignment and usury limits and urged the committee to treat EWA as loans.

The bill matters to Vermont workers and employers because EWA companies say they reduce late fees and overdrafts for people living paycheck to paycheck, while critics say the short-term fees can amount to triple-digit annual rates and create repeated cost burdens.

Ben LaRocco, Senior Director of Government Relations at Earnin, testified that Earnin is a direct-to-consumer EWA provider and described the company's model and limits. "Our mission is to create a more worker friendly payroll system by giving workers access to the wages that they've already earned when they need it instead of waiting for an arbitrary 2 or 4 week pay cycle," LaRocco said. He told the committee Earnin offers a free ACH transfer option and a faster paid option, and that its expedited fees "range between 2.99 and 5.99 depending on a number of different services." LaRocco said Earnin solicits voluntary gratuities but that "you don't have to pay the gratuity," that gratuities can be refunded, and the company has changed its interface so tips are opt-in rather than default.

LaRocco gave several operational details: Earnin's median tip is zero and the average tip is about $1.12; roughly 47% of transactions include a tip; the average Cash Out transaction is about $100; customers may access up to $150 per day and up to $750 per pay period; and the company offers a free ACH option that can take 1— business days vs. an instant paid option. He also described data-protection provisions in the bill and said Earnin does not sell consumer data.

Ryan Naples of DailyPay, which integrates directly with employers, told the committee DailyPay is "a low cost or no cost option for accessing liquidity quickly." He said DailyPay pulls verified net earnings multiple times per day and that average transfers in Vermont are about $148. Naples said only about 36% of employees at client firms download DailyPay's app, and that 49% of platform users only track wages without transferring funds. He said research from DailyPay shows high-frequency use declines sharply over weeks and that "EWA is working" as an alternative to higher-cost options such as overdrafts and payday loans.

Mark Salters of PayActiv, which also integrates with employers, testified that PayActiv supports H.99 and praised provisions that require a mandatory fee-free option, nonrecourse transactions, and prohibitions on credit reporting or use of credit scores. "We are very supportive of this measure and creating a licensing system for EWA providers," Salters said.

Jeff Walsh, senior attorney for the National Consumer Law Center and former Vermont Legal Aid attorney, urged the committee to treat EWA as credit subject to existing disclosure and rate limits. Walsh said federal and state reviews, including a July 2024 Consumer Financial Protection Bureau analysis, support treating EWA as extensions of credit. He cited Vermont's wage-assignment statute (8 V.S.A. a7 22/34) and the state's usury rules (he referenced 9 V.S.A. a7 41a), and told the committee that wage-assignment loans in Vermont have been subject to an 80% cap (discussed in testimony as the statutory framework that limits finance charges). "They are loans. They are extensions of credit," Walsh said, and warned that voluntary fees and tips function as finance charges that could yield triple-digit APR equivalents.

Committee members questioned technical details cited by witnesses: how wages and limits are verified; the mechanics of ACH repayment and how many automatic repayment attempts are permitted (witnesses described systems that may retry debit/ACH attempts; Earnin referenced four retry attempts and noted ACH notice timing requires a three-day lead to stop a deduction); how consumer data is accessed and shared; whether employers receive any incentive or "kickback" from providers (witnesses said no); and whether an APR-style disclosure or a fee cap should be included in state law. Witnesses pointed to other states' approaches: Nevada, Missouri, Kansas, Wisconsin and South Carolina had enacted legislation; California adopted regulatory reporting and registration requirements for EWA providers.

No formal votes or committee decisions were recorded during this hearing. Committee members indicated additional testimony will follow in subsequent sessions.

The committee hearing presented a split record: providers stressed the lower-cost alternatives EWA can provide to overdrafts and payday loans and highlighted consumer protections in H.99; legal advocates urged the committee to preserve existing Vermont statutory limits on wage-assignment finance charges and to ensure fees and tips cannot be treated as a loophole around state usury law. The committee scheduled follow-up discussion and further testimony.

Ending: The committee will take additional testimony on H.99 in follow-up sessions; staff and witnesses offered to provide written materials and data referenced during testimony for the committee's review.