AZ: Joint Industry letter in Support of SB 1582

Arizona State Capitol
Arizona State Senate Committee on Regulatory Affairs & Government Efficiency
1700 W Washington St
Phoenix, AZ 85007

Re: Support of SB 1582

Dear Honorable Members of State Senate Committee on Regulatory Affairs & Government Efficiency:

Thank you for the opportunity to express our strong support for SB 1582, which creates new consumer protections and establishes a clear framework for the licensing and regulation of Earned Wage Access (EWA) services in Arizona.

EWA helps Arizona workers make ends meet

In the face of rising living costs and financial uncertainty, many in Arizona are struggling to make ends meet. With more than one-third of American workers living paycheck to paycheck, the need for accessible and affordable financial solutions has never been more urgent. EWA offers workers a much-needed lifeline by allowing working families to access wages they’ve already earned before their scheduled payday, for low fees or no fees.

EWA has already become an invaluable tool for over 600,000 Arizonans, with more than 1,400 employers offering this service as an employee benefit – including hundreds of small businesses. By giving employees access to their already earned wages, EWA helps them avoid costly alternatives like high-cost online payday loans, credit card debt, and late fees.

SB 1582 creates important consumer protections

SB 1582 creates a new regulatory framework for EWA that is aligned with how the product operates. In doing so, SB 1582 creates important consumer protections and oversight and ensures providers know the guardrails around which to innovate to provide further value for workers. Key consumer protections within SB 1582 include:

● Bans interest, late fees, and penalties: The bill prohibits the imposition of interest, late fees, or penalties, shielding workers from the kinds of high-cost practices often associated with payday loans, pawn loans, auto loans, short-term installment loans, and other types of predatory lending.

● Requires at least one free option: The bill mandates that providers offer at least one free option for employees to access their earned wages.

● Ensuring low-credit workers will always have access: SB 1582 ensures that no credit checks or credit reporting will be involved in EWA transactions, which means even workers with poor or no credit are always able to access this beneficial service.

● Bans recourse in an EWA transaction: The bill gives users the ability to cancel an EWA transaction at any point without penalty, while also ensuring that providers cannot pursue recourse or debt collection in the event of insufficient funds at payday or an employer does not make payroll. This ensures there is no recourse in an EWA transaction, ever.

● Fee disclosures and transparency: The bill creates clear fee disclosures for optional fees, so consumers are well-informed about any optional fees.

For these reasons, SB 1582 ensures workers can access their earned wages responsibly and at no cost. By distinguishing EWA as an innovative service that allows access to earned wages, this bill controls for the consumer risks unique to EWA, which are different from those posed by credit or other financial products.

We strongly urge you to support SB 1582 and provide Arizona workers with the tools they need to achieve financial stability. Signed,

American Fintech Council
Brigit
Chamber of Progress
Cross River Bank
DailyPay
EarnIn
Immediate
MoneyLion
Payactiv
WageStream
Zayzoon

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