TX: Testimony in Support of HB 2043

TO: Texas House Pensions, Investments & Financial Services Committee
FROM: Ashley Urisman, Director-State Government Affairs, American Fintech Council (AFC)
DATE: March 24, 2025
SUBJECT: House Bill 2043

Position: Support

Testimony:

Thank you Chair Lambert and members of the Pensions, Investments & Financial Services Committee. My name is Ashley Urisman, and I am the Director of State Government Affairs for the American Fintech Council (AFC). I’m here to testify in support of House Bill 2043 (HB 2043).

AFC is the premier trade association representing the largest financial technology (Fintech) companies, including the largest number of Earned Wage Access (EWA) companies. Supporting responsible innovation in financial services and encouraging sound public policy is a core part of our mission.

EWA is an innovative financial product that allows users to access the wages they have already earned before their scheduled payday- freeing workers from their employers’ arbitrary payroll cycles. EWA is not a loan. In lieu of traditional underwriting, the service leverages technology to give users fast access to money they have already earned in the current pay period. As a new and distinct financial product, the EWA industry supports HB 2043 to legally differentiate EWA from legacy financial products, including payday loans.

AFC represents more than a dozen EWA providers, and each of these companies has unique operational and business models. Some integrate directly with employers’ payroll systems to track hours worked in nearly real time, and others sync with users’ bank accounts to analyze paycheck deposits to verify employee earnings. Despite these different models, there are certain characteristics that EWA services have in common, these include

• At least one voluntary, no-cost option is made available for all users;

• Credit invisibility- there is no underwriting, credit checks, or reporting to credit agencies;

• No interest is charged to users, even on transactions repaid after the originally specified date;

• All fees associated with a transaction are clearly and transparently communicated to users;

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

We believe that HB 2043 successfully codifies these standards for EWA providers. Thank you again for considering this issue in a timely manner and seeking a pragmatic solution to regulation. I am happy to address any questions you may have.

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