On May 27, 2025, Maryland enacted first-of-its-kind earned wage access (EWA) legislation to ensure Maryland workers are able to retain continued access to this valuable employee benefit. This landmark legislation follows nearly two years of collaboration between leaders in the Maryland General Assembly, the Maryland Office of Financial Regulation (OFR), industry providers, and consumer advocacy organizations.
The passage and subsequent enactment of the bill is a resounding message from the legislature and Governor on the utility of EWA to Maryland workers. The new law replaces unclear guidance from OFR in August 2023 that sought to classify EWA products as loans subject to the state’s consumer lending laws. This had also included interest rate disclosures and caps that are incompatible with the structure and function of EWA products. This guidance threatened to shut off access for the thousands of Maryland consumers that rely on this tool.
In response to this guidance from the regulator, leaders in the General Assembly took up legislation to create a tailored regulatory framework for EWA that encodes important consumer protections, while also creating guardrails around which the industry can continue to innovate and grow.
This legislative session, Delegate C.T. Wilson and Delegate Marlon Amprey drafted and sponsored HB 1294, Earned Wage Access and Credit Modernization, which creates a new, dedicated licensure for EWA providers in Maryland.
HB 1294 enshrines the strongest consumer protections in the country on EWA, including:
- Creating a first-in-the-nation fee cap on expedited transactions. The fee cap is $5 for transactions of $75 or less and $7.50 for transactions greater than $75. These caps are aligned with the federal Truth in Lending Act disclosure exemptions.
- Mandating an EWA provider offers at least one no-cost option, so any fees for expedited delivery are fully voluntary.
- Ensuring EWA transactions remain non-recourse and a user can cancel their EWA transaction at any time.
- Providing credit invisibility in EWA, so there are no credit checks for users to participate and no reporting by providers to credit bureaus. This ensures workers with low or poor credit can still utilize the product.
- Banning late fees, interest, and other penalties in an EWA transaction.
- Requiring clear disclosures and transparency around fees.
- Creating new protections against overdraft charges, which are applicable to direct-to-consumer models. This includes requiring providers to reimburse overdraft fees that might be incurred from debiting user accounts.
- Creating new protections around the practice of tipping used by a select few direct-to-consumer providers, including setting the default tip to $0 and requiring clear disclosures that the tip is voluntary.
- Requiring annual data reporting to OFR.
Maryland joins nine other states in adopting dedicated EWA regulations – California, Nevada, Missouri, Wisconsin, South Carolina, Kansas, Utah, Arkansas, and Indiana. Additionally, two states – Arizona and Montana – have issued Attorney General Opinions confirming EWA is not a loan. These Opinions recognize EWA as a new financial product that does not fit within existing lending laws, providing regulatory clarity for the industry in that regard.
While Maryland follows California in regulating EWA as its own, distinct type of loan, HB 1294 goes above and beyond California’s registration system by imposing extensive consumer protections and fee caps. In doing so, Maryland has set a new standard for how some states may look to regulate EWA, likely including legislators in Washington, Colorado, and New York that are advancing EWA oversight frameworks.
