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

AFC CEO and former New York State Legislator, Phil Goldfeder travelled to Annapolis to support responsible innovation creating critical access to financial services

Earned Wage Access (EWA) companies have created affordable non-credit financial options for more than 100,000 across the state

Annapolis, MD (January 24, 2024) – The American Fintech Council (AFC), the premier industry association representing responsible fintech companies and innovative banks, offered testimony before the Maryland General Assembly’s Economic Matters Committee opposing two bills recently introduced in the body. Phil Goldfeder, AFC CEO and former member of the New York State Assembly, appeared in Annapolis, MD to urge legislators to oppose HB 246 and HB 254 as both bills will limit safe and responsible financial services currently being used safely by Maryland families.

“These bills, if passed, would harm the very families we should be helping,” said Phil Goldfeder, Chief Executive Officer of AFC. “Responsible fintech companies and bank-fintech partnerships are utilizing innovation to create important financial options for consumers long forgotten by the largest banks and traditional financial service providers. We are committed to working with state policy makers and regulators to develop practical regulation that balances consumer access to financial services with strong and appropriate consumer protections.”

AFC testified before the committee and vehemently opposed House Bill 254 on the grounds that the bill improperly categorizes the 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.

“Painting with this broad regulatory brush will only serve to stymie responsible actors in the space,” testified Goldfeder before the committee. “The [legislation] will limit the ability for responsible banks and fintech companies to operate in Maryland and, in turn, limit the availability of access to responsible credit for thousands of Marylanders.”

AFC also opposed House Bill 246, which would mischaracterize Earned Wage Access (EWA) and urged lawmakers to work with responsible industry leaders to build a framework for EWA that protects consumers without limiting access. Products like EWA are providing important consumer options and serve as an alternative to high-cost predatory loans.

“EWA is not a loan and should not be regulated as such,” said Goldfeder in his testimony before the committee. “Shoehorning EWA into existing Maryland lending laws will allow the companies who are seeking to take advantage of families you represent to exploit loopholes in the existing regulatory framework. More than 100,000 Maryland residents have already utilized EWA as a safe, reliable alternative to payday and predatory and they deserve to right to access the money they have already earned on their own terms.”

EWA services provide employees access to wages they have already earned prior to arbitrary biweekly or monthly pay periods. AFC recently released standards for the emerging industry that 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.