ND: AFC Letter to Senate Industry, Business and Labor Committee on HB 1393

The Honorable Senator Jeff Barta, Chair
Senate Industry, Business and Labor Committee
State Capitol
600 East Boulevard Avenue
Bismarck, ND 58505-0360

The Honorable Senator Keith Boehm, Vice Chair
Senate Industry, Business and Labor Committee
State Capitol
600 East Boulevard Avenue
Bismarck, ND 58505-0360

Re: Earned Wage Access Legislation – House Bill 1393

Dear Chair Barta, Vice Chair Boehm, and members of Senate Industry, Business, and Labor Committee:

On behalf of The American Fintech Council (AFC), the premiere industry association representing responsible fintech companies, including the largest providers of earned wage access (EWA) services in the country, I am writing in regard to earned wage access legislation in North Dakota. We support the bill in question, House Bill 1393 (HB 1393), in the form that passed out of the House. We ask that the Senate Industry, Business and Labor Committee not adopt any amendments which would require the use of a state database for EWA transactions.

EWA is a financial tool that allows consumers to access wages they have already earned prior to their regularly scheduled paycheck at no or low cost. EWA providers served more than 20,000 North Dakotan workers in 2024, helping your constituents enhance their liquidity options. EWA is a financial lifeline for many North Dakotans, providing a safe and low-cost alternative to high-cost, predatory products like payday loans.

Industry leaders have worked hard to build consensus around HB 1393. HB 1393 passed the North Dakota House of Representatives, and is under consideration by the State Senate. The current bill is the result of conversations with the sponsor and other relevant legislators, educating them on what Earned Wage Access is, and how it specifically differs from a loan, especially a payday loan. It would allow North Dakotan consumers continued access to EWA products and services with consumer protections and innovation in mind.

However, we are concerned that private interest groups, particularly those aligned with the payday lending industry, not with the EWA industry, may try to disrupt this important legislation. These groups misrepresent our members’ products, services, and fee structures to further their agenda, and ultimately harm North Dakotans who use and rely on EWA.

Notably, these groups are pushing to mandate a private EWA transaction database under the guise of “consumer protection.” However, an EWA database would harm North Dakota EWA users and increase the costs associated with EWA transactions in the state.

The company advocating for this database also claims they are the only ones capable of building it, despite having no experience with EWA transactions or related data. At this point, they do not even have a product. Their goal is to mandate the state purchase of their non-existent product, and figure it out later.

EWA regulation should prioritize consumer protection and keep costs low – not generate profit for private companies with unnecessary services. If an EWA database is mandated, each transaction in North Dakota could cost up to an additional $3. A database is not only unnecessary and incongruent with how EWA products are offered, but it would double costs to consumers without adding any meaningful protection. Instead, a mandated transaction database would create insurmountable barriers for the very individuals EWA services are meant to serve and that HB 1393 seeks to protect. This superfluous, predatory measure would devastate the EWA industry, undermine consumer trust, and empower profiteers at the expense of vulnerable workers who rely on these services to make ends meet. This effort is not about protecting consumers, it is about creating a pay-to-play system that benefits one company’s special interests.

Harms of a Mandated Database for North Dakota EWA Users

● Massive Privacy Threat: Forces EWA providers to collect additional sensitive personal information, jeopardizing consumer privacy and exposing millions to fraud.

● Doubles Consumers Costs: Increases costs per transaction up to an additional $3, making EWA services significantly more expensive.

● Unproven Solution: This company has no experience working with EWA data.

● Unnecessary: EWA companies already report data to regulators; California did not add this requirement after a four-year regulatory review.

● Profit-Driven Advocacy: Pushed by a company who stands to profit at the expense of consumers.

● Technical Issues: Incompatible with some EWA models and limits consumer protections.

AFC values the effort state legislators have devoted to developing a thoughtful and balanced regulatory approach to earned wage access services in HB 1393. North Dakota has made substantial progress in safeguarding residents from predatory payday loans. As new technologies emerge to provide alternatives for consumers, we are concerned that the same predatory organizations that have trapped workers in debt are now being used to oppose initiatives that broaden consumers’ choices. We respectfully request that you dismiss these efforts so that all parties continue collaborating in good faith.

Thank you for your attention to this matter.

Sincerely,

Ashley Urisman,
Director of State Government Affairs American Fintech Council

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