Delaware would license covered companies offering early access to pay

Covered companies would need a Delaware license to offer residents early access to earned pay. This covers companies offering Delaware residents early access to pay they have earned but not received, including pay for contract work. Banks and credit unions are excluded. So are employers paying their own employees or contractors before payday, service firms with no duty to fund payments, and providers that report payments or missed payments for this service to credit bureaus. The commissioner may exempt others. Applicants would pay $250. Licensees would pay $1,500 each year and provide a bond capped at $35,000, unless the commissioner accepts a payment guarantee from an insured financial institution instead. That guarantee is also capped at $35,000. Licenses would expire each December 31.

Covered providers would offer a reasonable free option when they offer paid early pay or ask for tips. These rules cover providers that hold or must get a license and their Delaware customers. The free option would provide the same amount, and providers would explain how to choose it. They would disclose fees before an agreement and let users cancel without a fee. Tips could not affect access, available amounts, or how often users receive money. Immediately before each transaction in which they seek or receive a tip, providers would say a tip is optional and can be zero.

Covered providers could not use lawsuits, collection calls, or outside debt collectors to force consumer repayment, except for amounts incurred through fraud or other unlawful acts. These limits cover unpaid early pay amounts, fees, tips, and donations sought from consumers. The collection limits would not stop providers from pursuing employers that break their contracts. Providers also could not charge late fees, interest, or other penalties for failure to repay.

Delaware would not treat services offered by licensed providers under these rules as loans or money transmission. Only services that licensed providers offer under these rules would receive this treatment. Fees, tips, and donations paid to those providers under these rules would not count as interest or borrowing charges.