Earned Wage Access (“EWA”) allows employees to access their earned wages before scheduled paydays. The growing popularity of these services that provide pre-payday payments has sparked debates about consumer protection and appropriate regulation. Wisconsin is the third state to enact legislation overseeing EWA service providers, requiring them to obtain licensing from the Department of Financial Institutions. The new law does not categorize EWA payments as loans in contrast to some other states like California that are considering subjecting EWA to lending laws.
Business Takeaway: The EWA regulatory landscape is evolving. As more states implement oversight, companies offering EWA benefits will need to ensure compliance with new licensing requirements and disclosure standards. Moreover, federal developments, such as the proposed Earned Wage Access Consumer Protection Act (which would establish a national regulatory framework for EWA) would also impact such services. Certainly more to come on this issue.