GA: Testimony in Support, with Amendments to Georgia SB 254

TO: The House Committee on Banks & Banking

FROM: Hon. Phil Goldfeder, CEO, American Fintech Council

DATE: February 21, 2024

SUBJECT: Senate Bill 254

Position: Support with Amendments.

Testimony:

Thank you Chair Williams, Vice-Chair Wade, and members of the House Committee on Banks & Banking for providing me the opportunity to testify before you on Senate Bill 254 (SB 254) in the position of support with amendments. My name is Phil Goldfeder, and I am the CEO of the American Fintech Council (AFC). As a former member of the New York State Assembly, I understand the importance of crafting legislation that adequately protects consumers while ensuring they receive the services they need.

During my time as a member of the New York State Assembly, it was crucial to ensure that my constituents could live their lives in strong mental, physical and financial health. As legislators, we are quick to answer the most important call to action: ensuring the families we represent are protected from harm and have the tools and resources they need to thrive in our communities and state. Every day, the families we represent are faced with new challenges that require strong and concise action for me in Albany, NY and for you, in Atlanta.

Our mission at AFC is to promote an innovative, transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial technology (Fintech) and encouraging sound public policy. AFC members are at the forefront of fostering competition in consumer finance and pioneering ways to better serve underserved consumer segments and geographies. We proudly represent the largest Earned Wage Access companies serving millions of consumers and families across the United States.

As part of AFC’s efforts to ensure EWA services effectively serve consumers, we established clear standards for providers that require a voluntary no cost free option be made available to all users; strong fee disclosures represented in a clear and transparent manner; and the ability for users to cancel the EWA service at any time. The provisions of SB 254 closely reflect the standards we established for responsible EWA services.

In general, we believe that the bill properly balances responsible innovation with a pragmatic, consumer protected regulatory framework that fits the EWA industry. This new legislation establishes clear standards for acceptable EWA services regulated under its registration regime in a manner that reflects the nuances and optionality of the EWA industry while also protecting consumers from irresponsible actors. However, as written, SB 254 would establish stringent limitations on fees that an EWA provider can charge. In turn, this could limit the ability for some EWA providers to effectively operate in the state. While we appreciate the need to ensure affordability, there must be a balance in your approach to limitations on fees. Therefore, AFC requests that the legislature consider amending the fee cap limitation in the bill.

As amended, the regulatory framework enumerated in SB 254 will allow EWA services to flourish in Georgia and help workers access the pay they are entitled to instantly. AFC has publicly advocated for a clear and consistent regulatory framework for EWA that avoids duplicative or diverging requirements and accurately reflects the nuances of the financial service. Passing SB 254 as amended would ensure that this regulatory aim is met in Georgia and directly benefit Georgians by giving EWA providers a clear and functional regulatory path to offer their services most effectively.

In closing, Estimates of the EWA market size suggests that in the United States’ the EWA industry is serving millions of workers nationwide. I applaud the Georgia legislature for taking up this issue in a timely manner and seeking a pragmatic solution through SB 254. I thank you again for the opportunity to offer my position of support with amendments for this bill. I appreciate your consideration and am happy to answer any questions you may have.