AR: Testimony in Support of HB 1517

TO: Arkansas House Insurance & Commerce Committee
FROM: Phil Goldfeder, CEO, American Fintech Council (AFC)
DATE: March 5, 2025
SUBJECT: House Bill 1517

Position: Support.

Testimony:

Thank you Chair Maddox, Vice-Chair Brown, and members of the House Insurance & Commerce Committee. My name is Phil Goldfeder, I am former state legislator and continue my public service as the CEO of the American Fintech Council (AFC). I am here to testify in support of House Bill 1517 (HB 1517).

AFC is the premier trade association representing the largest financial technology (Fintech) companies and innovative banks, including the biggest providers and largest number of Earned Wage Access (EWA) companies. Our mission is to promote a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy.

EWA is not a loan and should not be regulated as such. As a distinct financial product, EWA must be governed by distinct regulations. This bill shapes a regulatory framework for companies to safely and responsibly offer EWA in Arkansas. EWA is an innovative financial tool that empowers workers to access their wages in a way that best fits their lifestyle rather than keeping them tethered to arbitrary payroll cycles. Users can opt to access EWA through their employers, as stand-alone products, or as part of a subscription.

To ensure that EWA providers safely and effectively serve consumers, AFC has established clear standards on what constitutes responsible EWA. Our standards require

• A voluntary no-cost option be made available for all users;

• Strong fee disclosures represented in a clear and transparent manner;

• No underwriting or credit checks and

• Ability for users to cancel the EWA service at any time, meaning it does not have to be repaid.

The provisions of HB 1517 reflect those standards, and we thank you for your nuanced and thoughtful approach to regulating this industry.

Establishing the regulatory framework enumerated in HB 1517 will provide a critical financial choice for Arkansas workers and allow responsible EWA services to flourish in this state. This bill will help workers access their pay by giving EWA providers a clear and functional regulatory path that recognizes the nuances of the service.

In closing, I applaud the Arkansas legislature for taking up this issue in a timely manner and seeking a pragmatic solution to regulation. I am happy to answer any questions you may have.

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