AFC releases policy standards for its members offering earned wage access products as part of mission to promote affordable, responsible and transparent financial products

Earned Wage Access Consumer Protection Act drafted by Representative Bryan Steil (R- WI) can create national standard for appropriate EWA regulatory guardrails

Phil Goldfeder, former New York State Legislator and AFC CEO, travelled to Madison, Wisconsin to testify before the State Assembly Committee of Financial Institutions in support of Assembly Bill 574 to regulate EWA

Washington, D.C. (November 29, 2023) – The American Fintech Council (AFC), the premier industry association representing responsible fintech companies and innovative banks has released, the first of its kind, policy and regulatory standards for fintech companies offering earned wage access (EWA) products. Additionally, AFC has announced support for federal EWA legislation introduced by Representative Bryan Steil and AFC CEO appeared in Madison, Wisconsin to testify before the State Assembly Committee on Financial Institutions in strong support of AB 574, legislation that balances important consumer protection and access to vital EWA service.

“AFC differentiates itself as an association by developing industry best practice and regulatory gold standards for nascent innovative products and companies offering critical access to financial services,” said Phil Goldfeder, Chief Executive Officer of the American Fintech Council.“Responsible EWA providers are currently serving millions of families and ensuring they have low or no cost access to their pay when they need it, and we will continue to advocate in Washington and states across the country on behalf of our members.”

AFC has publicly advocated for a clear and consistent regulatory framework for EWA that avoids duplicative or diverging requirements and accurately reflects the nuances of the financial service. As the premier trade association representing the largest EWA providers, AFC has worked to promote and advocate for industry best practices and consumer protections.

The newly released AFC standards are clear that EWA is not a loan and should not be regulated as such. Unlike a loan, EWA services provide employees access to wages they have already earned prior to arbitrary biweekly or monthly pay periods. Additional standards 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.

In-line with these new standards AFC is proud to support the Earned Wage Access Consumer Protection Act, recently introduced by Representative Bryan Stein (R-WI) and looks forward to helping to build strong bipartisan support for this groundbreaking legislation.

“AFC supports the Earned Wage Access Consumer Protection Act because it recognizes the important distinction between EWA services and lending products by establishing clear definitions for what constitutes EWA services, creating functional disclosure requirements and consumer protections that fit the parameters of the service, and ensuring that EWA services are not subjected to legacy lending laws,” wrote Ian P. Moloney, SVP and Head of Federal and State Policy in AFC’s support letter to Representative Bryan Steil.  “While AFC remains in favor of the consumer protection principles afforded by existing lending laws, we maintain that its provisions are ill-suited for application to EWA services as EWA is not a loan.”

In addition, AFC CEO Phil Goldfeder recently travelled with members toMadison, Wisconsin to testify before the State Assembly Committee on Financial Institutions in strong support of AB 574. Legislation introduced by Representative Alex Dallman and Senator Rob Stafsholt balances important consumer protection and access to vital EWA service utilized by thousands of Wisconsin families.

“The provisions of AB 574 properly balance responsible innovation with a pragmatic, consumer protected regulatory framework that fits the EWA industry,” said Phil Goldfeder in his public testimony. “This new legislation establishes clear standards for acceptable EWA services regulated under its licensing regime in a manner that reflects the nuances and optionality of the EWA industry while also protecting consumers from irresponsible actors.”

AFC successfully championed first-in-the-nation legislation in Nevada and then Missouri and was the only association to appear in Carson City and Jefferson City on multiple occasions. AFC supports the next generation of fintech companies and banks at the intersection of technology and financial services and is committed to robust industry standards that can provide certainty for fintech companies and innovative financial institutions.

AFC Standards for Earned Wage Access (EWA) can be found here.