Upon signature by Gov. Spencer Cox, Utah will join five other states in enacting a law that specifically regulates earned wage access (EWA) providers as nonlenders.
EWA is an on-demand payment product that allows workers to access their wages as they are earned, rather than waiting for scheduled pay periods. If signed, Utah will join Kansas, Missouri, Nevada, South Carolina and Wisconsin, which enacted legislation regulating EWA products in 2023 and 2024. Similar to the legislation adopted in Missouri, Utah’s H.B. 279 — the Earned Wage Access Services Act — is a registration regime that largely follows other industry-favorable EWA legislation.
Utah’s Proposed EWA Act
The act would establish guidelines for EWA providers in Utah, including direct-to-consumer providers and employer-integrated providers. The bill would require EWA providers to register each year (by May 7, 2025, if signed) with the state Department of Commerce’s Division of Consumer Protection. Providers would also be required to offer at least one no-cost option, transparent fee disclosures and the ability for users to cancel the service at any time without penalties.
In addition, disclosures must include the:
- anticipated timeline for the consumer to receive the requested funds;
- amount of funds the consumer requested;
- amount of the fee charged;
- amount of funds the consumer will receive;
- account that will receive the funds; and
- date the provider is authorized to withdraw funds from the consumer’s account, including fees and voluntary payments.
Before initiating an advance, providers must require the customer to acknowledge receiving the opportunity to view all disclosures and any costs and fees.
“Fees” in the bill are defined as any charge the provider imposes for the service, expedited delivery of funds, or a subscription or membership that includes EWA services. Like other EWA laws, tips, gratuity and donations are not included in the bill’s definition of a fee but must be “clearly and conspicuously” marked as voluntary.
The bill exempts registered providers from Title 7 (Financial Institutions Act) and Title 12 (Collections Agencies), payroll providers that verify time and attendance but do not fund the wage advances, and employers who directly advance earned funds to their employees.
Finally, the bill states that EWA providers do not violate state law governing deductions from payroll, are not offering a loan or credit, and are not money transmitters.
This bill is supported by industry groups like the American Fintech Council and is expected to be well-received by EWA providers in Utah due its clear framework and its recognition that EWA products are nonloans, thus solidifying their status and shielding them from other, ill-fitting regulatory regimes. This stands in stark contrast to EWA’s treatment in states like Connecticut, where regulators have subjected most EWA products to the state’s small loan law.
