Utah Governor Signs Bill to Regulate Earned Wage Access Industry

Utah Gov. Spencer J. Cox signed an earned wage access bill Wednesday (March 26), according to a press release issued by his office.

The bill, the Earned Wage Access Services Act (H.B. 279), enacts provisions related to earned wage access services, including provider registration and renewal, and directs the state’s Division of Consumer Protection to administer and enforce the act. It takes effect May 7.

The chief sponsor of the bill, Rep. A. Cory Maloy, said on his website: “This bill ensures transparency, consumer protections and fair practices in the growing earned wage access industry while setting up a registration and enforcement system to prevent abuse.”

While earned wage access or cash advance apps do not charge traditional interest rates like payday loans, the imposition of monthly membership fees, bank transfer fees, and charges for instant access or same-day deposit has sparked a debate — and subsequent regulatory actions — regarding the classification of these income-based advances as loans, PYMNTS reported in March 2024.

At that point, three states — Missouri, Nevada and Wisconsin — had enacted legislation establishing financial services oversight for earned wage access service providers.

Earned wage access offerings have also come under scrutiny at the federal level.

The Consumer Financial Protection Bureau proposed a new rule in July that would classify earned wage access products and other paycheck-related offerings as consumer loans and require lenders to disclose more information to borrowers, more extensively detailing fees, interest and total costs inherent in accessing wages early.

The CFPB said at the time that employees take an average of 27 employer-sponsored paycheck advance loans each year and that the loans carry an average annual percentage rate of 109.5%.

“Many loan costs are finance charges: Fees for certain ‘tips’ and expedited delivery meet the Truth in Lending Act’s standard for being finance charges,” the CFPB said. “When the paycheck advance product is no-fee and truly free to the employee, many requirements would not apply.”

Critics charged that earned wage access payments should not be treated as loans and might force the providers to reconfigure business models.