AFC strongly supports Bipartisan Kansas House Bill 2560(HB 2560) that includes Earned Wage Access (EWA) registration structure to create consumer protection safeguards

InFebruary, AFC appeared before the Kansas Senate Committee on FinancialInstitutions and Insurance to testify in support of proposed legislation

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Topeka, KS (April 9, 2024) – The American Fintech Council(AFC), the premier industry association representing responsible fintechcompanies including the largest Earned Wage Access Providers has joined withmembers to request Governor Laura Kelly sign HB 2560. This legislation, oncesigned into law will implement key safeguards, ensure transparency and applyimportant standards for EWA providers to protect Kansas consumers.

“We commend the Kansasstate legislature for their thoughtful review of this emerging industry and forsiding with Kansas families when crafting and passing this law,” said Phil Goldfeder, ChiefExecutive Officer of the American Fintech Council. “AFCdifferentiates itself as an association by developing industry best practiceand regulatory gold standards for nascent innovative products and companiesoffering critical access to financial services. Responsible EWA providers offera safe alternative to predatory and payday loans and utilized by millions offamilies ensuring they have low or no cost access to their pay when they needit most.”

In a recent letter toGovernor Laura Kelly, AFC, together with some of their members, urged immediatesignage of the legislation arguing that it properly balances responsible innovationwith a pragmatic, consumer protected regulatory framework that fits the EWAindustry. The new legislation establishes clear standards for acceptable EWAservices regulated under its registration regime in a manner that reflects thenuances and optionality of the EWA industry while also protecting consumersfrom irresponsible actors.

“Atevery stage of the legislative process, EWA has received broad bipartisansupport, with nearly all members of the Kansas Legislature voting in-favor ofthe bill,” wrote AFC and members in their letterto Governor Kelly. “Our data shows that over 50,000 Kansans haveused an EWA product, whether offered through their employers, directly throughan app, or as part of a financial health subscription service. Signing the billthat now sits on your desk represents an opportunity for you to affirm both thebipartisanship that propelled this bill through the Legislature, as well as aprudent regulatory path forward to ensure responsible innovations, like EWA,continue to serve Kansans effectively.”

AFC has publicly advocated for a clear and consistent regulatoryframework for EWA that avoids duplicative or diverging requirements andaccurately reflects the nuances of the financial service. In 2023, AFC releasedindustry standards that emphasize regulatory best practice and makes it clearthat EWA is not a loan and should not be regulated as such. Unlike a loan, EWAservices provide employees access to wages they have already earned prior toarbitrary biweekly or monthly pay periods.

Additional standards include strong transparency and disclosures,non-recourse, no interest, late fees or penalties, no debt collection, nocredit reporting, no collection activity of any kind, and a requirement that a“no cost” option be offered to all EWA users. As the premiertrade association representing the largest EWA providers, AFC has worked topromote and advocate for industry best practices and consumer protections.