MA: Testimony in Support of Massachusetts HB 4456

TO: The Massachusetts Legislature Joint Committee on Financial Services

FROM: Elizabeth Gorz, Chief Strategy Officer and Head of Legislative Affairs, AmericanFintech Council

DATE: March 25, 2024

SUBJECT: House Bill 4456

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Position: Support.

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Testimony:

‍Thank you Chair Feeney, Chair Murphy, Vice-Chair Moore, Vice Chair Ayers, and members ofthe Joint Committee on Financial Services for providing me the opportunity to testify before youin support of House Bill 4456 (H. 4456). My name is Elizabeth Gorz, and I am the ChiefStrategy Officer and Head of Legislative Affairs at the American Fintech Council (AFC).

Our mission at AFC is to promote an innovative, transparent, inclusive, and customer-centricfinancial system by supporting responsible innovation in financial technology (Fintech) andencouraging sound public policy. AFC represents the largest number of Earned Wage Access(EWA) providers of any trade association. As such, we have a responsibility to the industry as awhole, but even more importantly, to the consumers they serve. To that end, AFC craftedstandards for what constitutes a responsible EWA service, which our members adhere to in theirofferings both nationally and in Massachusetts.

Our members adhere to the standards set by AFC, including the requirement a voluntary no costfree option be made available to all users; strong fee disclosures represented in a clear andtransparent manner; and the ability for users to cancel the EWA service at any time. Theprovisions of H. 4456 closely reflect the standards we established for responsible EWA services.

We believe that the bill, as written, properly balances responsible innovation with a pragmatic,consumer protected regulatory framework that fits the EWA industry. This new legislationestablishes clear standards for acceptable EWA services regulated under its registration regime ina manner that reflects the nuances and optionality of the EWA industry while also protectingconsumers from irresponsible actors.

Establishing the regulatory framework enumerated in H. 4456 will allow EWA services toflourish in Massachusetts and help workers access the pay they are entitled to instantly. AFC haspublicly advocated for a clear and consistent regulatory framework for EWA that avoidsduplicative or diverging requirements and accurately reflects the nuances of the financialservice.3 Passing H. 4456 would ensure that this regulatory aim is met in Massachusetts anddirectly benefit consumers by giving EWA providers a clear and functional regulatory path tooffer their services most effectively.

In closing, Estimates of the EWA market size suggests that in the United States’ the EWAindustry is serving millions of workers nationwide.¹ AFC applauds the Massachusetts legislaturefor taking up this issue in a timely manner and seeking a pragmatic solution through H. 4456. Ithank you again for the opportunity to offer AFC’s support for this bill. I appreciate yourconsideration of this bill and am happy to answer any questions you may have.

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¹See Yahoo Finance, “The Popularity Of Earned Wage Access Programs Is Rising; This EWA Provider Is Raising $5 Million ToCapitalize Through Expansion Into New Markets”, (Jun. 14, 2023), available at https://finance.yahoo.com/news/popularityearned-wage-access-programs130000943.html#:~:text=Increasing%20Trend%20Toward%20EWA%20Services&text=The%20fintech%20market%20was%20worth,19.5%25%20during%20the%20forecast%20period.