CT: Testimony to Amend SB 1396

TO: Connecticut Joint Banking Committee
FROM: Ashley Urisman, Director-State Government Affairs, American Fintech Council (AFC)
DATE: March 4, 2025
SUBJECT: SB 1396

Position: Amend

Testimony:

Thank you Co-Chairs Doucette and Miller and members of the Connecticut Banking Committee. My name is Ashley Urisman, and I am the Director of State Government Affairs for the American Fintech Council (AFC). I am testifying today in support of SB 1393 with amendments.

AFC is the premier trade association representing the largest financial technology (Fintech) companies, including the biggest providers of Earned Wage Access (EWA) services. 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 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. We applaud the Connecticut legislature for considering the regulatory framework established in SB 1396, which would once again allow companies to offer EWA in Connecticut. However, we are concerned with the provision of this bill that requires that users seeking an expedited transaction be offered at least 75% of their earned wages. We ask that this requirement be removed from the bill before it advances.

We respect the intent of the legislature to protect consumers with this requirement; however, withdrawal caps should be set by EWA providers, instead of by statute. This ensures that the withdrawal cap fits the provider’s business model and serves consumers best within an ever-changing market. Simply put, EWA providers will have the flexibility to make determinations based on data that ensure EWA products adapt to the market and meet workers on the terms they need.

As a distinct financial product, EWA must be governed by distinct regulations. 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.

We believe that SB 1396 establishes these standards for Connecticut EWA users, and would overall serve the workers of this state well when amended. Thank you for considering this issue in a timely manner and seeking a pragmatic solution to regulation. I am happy to answer any questions you might have.

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