Committee reviews amendment to add online consumer-directed wage-access loans to payday database

A committee amendment was introduced to expand the state's payday lending database to include consumer-directed online payday and earned-wage access providers, bringing those online lenders into the same reporting framework now used by traditional brick-and-mortar payday vendors.

Bill Kolonik, appearing for the North Dakota Pawnbrokers Association and Catalyst HoldCo, told the committee the amendment would "put them on a level playing field with the traditional payday loan vendors in the state" and "require that the consumer-directed... services that an individual uses to get an online loan be reported into the database." He said employer-based earned-wage-access programs would be excluded from the requirement.

Key details: Under the amendment as explained by Kolonik, the database requirement would apply only to consumer-directed transactions (individuals obtaining online loans), not to employer-associated earned-wage access programs. The amendment would allow the Department of Financial Institutions (DFI) to set and collect a fee to operate the database and would not make reporting mandatory until the database is operational.

Consumer cost and protections: Committee members asked whether the database requirement would increase costs to consumers. Kolonik acknowledged a fee would likely be passed to borrowers but expected it to be smaller than the $3 point-of-sale fee tied to traditional payday loans. He framed the database as a consumer-protection measure intended to prevent borrowers from taking out multiple loans from different providers on the same day: "It's a consumer protection, in that regard so that a person couldn't rack up multiple loans with different providers."

Regulatory coordination: Kolonik said the amendment had been reviewed with the Department of Financial Institutions and that DFI staff (Assistant Director Corey Krebs) had revised the language to ensure the department could operate the database mechanically. Committee members discussed DFI's neutral stance and the department's oversight role; one committee member said DFI had been invited to attend the afternoon session to answer questions.

Action: No formal committee vote on this amendment or the underlying bill was recorded during the transcript. The amendment was described as drafted in coordination with DFI and intended to level regulatory requirements between online consumer-directed lenders and traditional payday lenders.

Ending: The committee heard technical and policy questions about costs and mechanics; DFI staff were expected to appear later to address operational details and fee-setting. No final committee action on the amendment was recorded in the transcript.