American Fintech Council (AFC) CEO and former New York State Legislator, Phil Goldfeder travelled to the Washington state house to advocate for responsible consumer financial access, particularly in minority and rural communities

Responsible bank-fintech partnerships create important access to credit for families long forgotten by traditional financial institutions particularly in minority and rural communities

Earned Wage Access (EWA) companies have created affordable non-credit financial options for more than 250,000 across the state

Olympia, WA (January 11, 2024) – The American Fintech Council (AFC), the premier industry association representing responsible fintech companies and innovative banks, offered testimony before the Washington State House Committee on Consumer Protection and Business recommending key amendments to legislation recently introduced. Phil Goldfeder, AFC CEO and former member of the New York State Assembly, appeared in Olympia to urge legislators to amend legislation to better protect Washington families without stifling innovation, competition or access.

“As a former state representative, I understand how pragmatic legislation, when implemented correctly can change the lives of the families we represent but I’ve also seen the unintended consequences,” said Phil Goldfeder, Chief Executive Officer of AFC. “Not all fintech is created equal. AFC’s diverse members represent a cross section of responsible Fintech companies that embrace transparency and are rooted in regulatory compliance and consumer protection. They are committed to working with state policy makers and regulators to develop reasonable regulation that balances consumer access to financial services with strong and appropriate consumer protections.”

AFC testified before the committee and commended the inclusion of a 36% interest rate cap on predatory payday loans but offered important suggestions on HB 2083 and HB 1874 specifically related to the proper understanding and nature of the relationship between responsible community banks and their fintech partners. Creating access to credit without compromising on consumer protection or regulatory compliance is critical when drafting, passing, and implementing new state legislation and regulation.

In addition, AFC raised concerns related to expansion of certain lending definition that would mischaracterize earned wage access (EWA) products as loans.

“EWA is not a loan and should not be regulated as such,” said Goldfeder in his remarks before the committee. “These bills would expand the language related to lending that would inadvertently apply Washington’s lending statute to EWA, and, in turn limit the ability for EWA providers to offer their products to Washington consumers. We developed standards for the EWA industry and would support robust regulation specifically related to this emerging product.”

EWA services provide employees access to wages they have already earned prior to arbitrary biweekly or monthly pay periods and serve as an important alternative to predatory high-cost and payday loans. Additional standards recently released by AFC include strong transparency and disclosures, non-recourse, no interest, late fees or penalties, no debt collection, no credit reporting, no collection activity of any kind, and a requirement that a “no cost” option be offered to all EWA users.

AFC is committed to supporting its members who believe in regulatory standards that balance access to financial services, innovation, and regulatory compliance. Their advocacy is paving the way for the future of financial services.

Submitted testimony on HB 1874 can be found here
Submitted testimony on HB 2083 can be found here