Utah Enacts Earned Wage Access Services Act

What happened?

On March 25, 2025, Utah Governor Spencer J. Cox signed the Earned Wage Access Services Act into law. This legislation aims to regulate earned wage access (EWA) providers to ensure fair and transparent services for consumers.

Overview:

Earned Wage Access Services Act Overview: This act ensures that EWA services are provided fairly and transparently, protecting consumers from potential abuses.

• Provider Registration and Renewal
  • Registration Requirement: EWA providers must register with the Utah Department of Commerce’s Division of Consumer Protection.
  • Application Details: Include a copy of the services agreement and other required information.
  • Fingerprinting and Background Checks: Required for the provider’s principal.
  • Annual Renewal: Registrations are renewable annually, with fees determined by the division.
  • Exemptions: Banks, credit unions, and other entities regulated under Title 7 of the Utah Code are exempt.

• Regulation of Earned Wage Access Services
  • Disclosure Requirements: Providers must disclose fees, consumer rights, and allow cancellation without penalty.
  • No Credit Scores: Providers cannot use credit reports or scores to determine eligibility.
  • Free Option: Must offer at least one no-fee option for receiving funds.
  • Delivery Methods: Funds can be delivered by any agreed method.
  • Compliance: Providers must comply with privacy and information security laws.
  • Transaction Disclosures: Providers must disclose details about the transaction, including fees and timelines.
  • Tip Practices: Tips must be disclosed as voluntary and not contingent on service terms.
  • No Interest or Penalties: Providers cannot charge interest or penalties for nonpayment.
  • No Credit Card Payments: Payments via credit card are not accepted.
  • Overdraft Fees: Providers must reimburse overdraft fees caused by their errors.
  • No Debt Reporting or Collection: Providers cannot compel repayment through lawsuits or credit reporting.
  • Complaints: Providers must inform consumers how to file complaints.

• Penalties and Enforcement
  • Division’s Powers: The division can enforce the law through administrative and judicial actions, including penalties and disciplinary actions.
  • Fines and Court Actions: The division can impose fines of up to $2,500 per violation and bring court actions to enforce compliance. Courts may issue injunctions, order disgorgement of funds, and impose additional fines. Violations of administrative or court orders can result in civil penalties of up to $5,000 per violation.

• Denial, Suspension, or Revocation of Provider Registration
  • Grounds for Action: The division can deny, suspend, or revoke registrations for public interest or violations, including false or misleading registrations, violations of laws, or failure to pay fines.

• Relation to Other Laws
  • Clarifications: Earned wage access services do not violate payroll deduction laws, are not loans or money transmissions, and fees/tips are not considered interest or finance charges.
  • Exemptions: Providers are exempt from the state’s collection agency statute but not from the Utah Consumer Sales Practices Act.

• Compliance Timelines
  • Grandfathering Provision: Providers operating on May 7, 2025, can continue if they apply for registration by October 6, 2025, and comply with the law.

Source References

• UT H.B. 279 Earned Wage Access Services Act

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