[co-author: Stephanie Kozol]*
Indiana and Maryland became the most recent states to enact legislation regulating earned wage access (EWA) services, with Indiana passing House Enrolled Act 1125 on May 6, and Maryland passing House Bill 1294 on May 20.
EWA services allow consumers to access their earned wages before they would otherwise receive them based on typical pay schedules and are generally categorized as either “employer-partnered” or “direct-to-consumer.” For employer-partnered services, EWA providers typically partner with a consumer’s employer to determine the amount of the consumer’s earned wages and to recover EWA proceeds through payroll deductions. For direct-to-consumer services, providers typically obtain information regarding the consumer’s earned wages directly from the consumer and recover EWA proceeds through automated bank account withdrawals.
EWA services have been the subject of significant debate over the past several years, particularly with regard to whether they constitute loans, in which case they would be subject to traditional lending laws. In addition, regulation of EWA services has been inconsistent, with numerous states passing EWA laws that take varying approaches while also imposing many overlapping requirements and prohibitions.
This is exemplified by Maryland’s and Indiana’s EWA laws. For example, Maryland’s law—which becomes effective October 1, 2025—classifies direct-to-consumer EWA services as loans subject to the Maryland Consumer Loan Law, but also states that a licensed provider is exempt from other Maryland laws that address lending, credit, and debt. On the other hand, Indiana’s law—which becomes effective January 1, 2026—clarifies that EWA services are not loans.
At the same time, both Indiana’s and Maryland’s laws impose many similar requirements on EWA providers. For example, they both create comprehensive licensing regimes that require EWA providers to obtain licenses and submit regular reports regarding their products. Both laws also include the following key requirements and prohibitions:
- Disclosures: Providers must fully and clearly disclose all fees associated with EWA services and inform consumers of their rights before entering into an agreement with a consumer.
- No-Cost Option: Providers must offer at least one option to obtain EWA proceeds at no cost to the consumer and clearly explain how to elect this option.
- Voluntary Tips: Providers may solicit, charge, or receive tips, but in doing so they are required to: (i) clearly disclose that tips are voluntary and that EWA services are not in any way contingent on the consumer paying a tip; (ii) set any default tip at $0; (iii) not increase fees because the consumer did not provide a tip; and (iv) abstain from representing that tips provide a benefit to any specific individual.
- Expedite Fees: Providers may charge a fee for expedited delivery of EWA proceeds but must cap fees at specified amounts. Indiana caps fees at the greater of $5 or 5% of the amount of the proceeds, while Maryland caps fees at $5 for proceeds up to $75 and $7.50 for proceeds greater than $75.
- Privacy and Security Compliance: Providers must comply with all applicable local, state, and federal privacy and information security laws.
- Fee Reimbursement: Providers must reimburse consumers for any overdraft or nonsufficient funds fees caused by the provider in certain instances.
- Fee and Tip Sharing: Providers cannot share with an employer any portion of the fees or tips received from consumers.
- Credit Reporting: Providers cannot obtain a consumer’s credit report for purposes of determining eligibility for or the terms of EWA services. In addition, providers cannot report a consumer’s failure to repay EWA proceeds to credit reporting agencies.
- Debt Collection: Providers cannot engage in third-party debt collection, litigation, or debt sales to collect EWA proceeds, fees, or tips that a consumer has not repaid.
- Charging Penalties and Interest: Providers cannot charge late fees, interest, or any other penalties for a failure to pay outstanding proceeds, fees, or tips.
- Exemptions: Certain entities, such as banks, credit unions, savings associations, and other financial institutions are not subject to either Indiana’s or Maryland’s EWA licensing requirements. In addition, both states’ laws explain that EWA services that are provided in compliance with each respective law do not constitute money transmission and are not subject to certain other laws, such as those governing payroll deductions.
While Indiana and Maryland now impose similar and overlapping requirements and prohibitions on EWA providers, they also include many nuanced differences. The passage of these laws, in addition to various other EWA laws such as those passed by Arkansas, Kansas, Nevada,
Missouri, and California (which has passed EWA regulations but not a specific EWA law), serve as a reminder to EWA providers that they must regularly assess their practices to ensure compliance with an inconsistent and shifting regulatory landscape, particularly with no specific federal law governing EWA services.
*Senior Government Relations Manager
