Louisiana has enacted a new Earned Wage Access (EWA) law, effective August 1, 2025. Sponsored by Representative Vinney St. Blanc, HB 368 introduces a comprehensive compliance framework for EWA providers, marking a pivotal shift in how these services are distinguished from traditional lending.
Key Provisions of the EWA Law
The new law outlines several critical requirements for EWA providers:
- Clear Disclosures: All fees must be transparently disclosed before services are offered, ensuring consumers are fully informed.
- No-Cost Option: If fees, tips, or gratuities are solicited, providers must offer a reasonable free option, enhancing consumer choice.
- Cancellation Rights: Consumers can cancel EWA services at any time without penalty, reinforcing consumer protection.
- Prohibited Collection Practices: Providers are barred from pursuing repayment through civil suits, unsolicited calls, third-party collectors, or debt sales.
- Eligibility Criteria: The use of credit reports or scores to determine access is prohibited, ensuring equitable access.
- Fee Restrictions: No late fees, deferral fees, interest, or similar charges may be assessed, preventing undue financial burdens.
Reporting Requirements: Annual reports must be filed with the Louisiana Office of Financial Institutions, ensuring regulatory oversight.
Implications for EWA Providers
For providers operating in Louisiana, this law necessitates immediate action to review and adjust their operations:
- Compliance Review: Providers must scrutinize their fee structures, consumer disclosures, and repayment practices to align with the new legal requirements.
- Consumer Rights: The emphasis on consumer protection requires providers to clearly communicate and uphold these rights, including the ability to cancel services without penalty.
- Reporting Obligations: Establishing robust reporting processes to meet the annual reporting requirements set by the Louisiana Office of Financial Institutions.
- Distinction from Lending: By differentiating EWA from traditional lending, the law may impact how providers structure their services and compliance strategies.
- Potential Broader Impact: As other states consider similar regulations, Louisiana’s approach could influence broader trends in state-level EWA frameworks.
Conclusion
Louisiana has distinguished EWA from traditional lending while imposing strict compliance obligations. Providers must adapt their operations to meet these new requirements, ensuring transparency and fairness in their offerings. This regulatory landscape continues to evolve, so staying informed and proactive in compliance efforts will be essential for providers navigating these changes. As more states explore regulating EWA, Louisiana’s approach may signal a broader trend toward state-level frameworks. Several states (Arkansas, Indiana, Kansas, Maryland, Missouri, Nevada, South Carolina, Utah, and Wisconsin) have already adopted similar legislation. California has also adopted regulations (but not laws) for EWA services.
