Bill would change consumer finance oversight and wage-access rules

Earned wage access providers would have to offer a no-fee option whenever they offer access for a fee. This covers providers that give consumers access to wages they have earned but have not yet received, with listed exclusions for some employers, banks, and payroll vendors. The no-fee option must provide the same amount of earned wages as the fee-based option. A consumer's choice of the no-fee option could not reduce the amount or frequency of wage payments or eligibility to use the service. Providers would have to give disclosures about limits, fees, tips, repayment, and changes to service terms. Providers could not sue, arbitrate against, use debt collectors against, or sell the expected payment for disbursed wages, unless the consumer knowingly supplied false information. The provider rules would apply after enactment, and the Bureau would have 180 days after enactment to issue needed implementing rules.

The Bureau would have to define an abusive act or practice by rule and could enforce that standard only under specified conditions. The rules would apply to covered financial companies and service providers subject to the Consumer Financial Protection Act, including actions involving unfair, deceptive, or abusive practices. An abusive practice would generally need to intentionally and materially interfere with understanding or take unreasonable advantage of a consumer's lack of understanding and reliance on a provider's representation. A practice would also need to cause, or likely cause, substantial injury that consumers cannot reasonably avoid and that is not outweighed by benefits to consumers or competition. The Bureau could not begin abusive-practice enforcement before the required definition rule takes effect. If a company identifies a potential violation, the Bureau would generally have to give notice and 180 days to cure it before filing an administrative or civil action. The Bureau would have 180 days after enactment to issue the definition rule; the bar on abusive-practice proceedings would last until that rule takes effect.

Eligible banks, credit unions, and certain contracted providers could avoid specified civil penalties and private monetary claims by meeting the safe-harbor rules. The safe harbor would cover loans or lines of credit of $3,500 or less offered by insured banks, insured credit unions, and certain service providers working for them. Installment loans would need terms longer than 45 days, fully amortized payments, and limits on rollovers and multiple open products. Lines of credit would generally need terms longer than 45 days for each draw, with a limited exception for small single payments. Providers would have to use sound underwriting, make required disclosures, avoid prepayment penalties, limit balloon payments, and send approved funds within five days. The safe harbor would not prevent regulators from ordering repayment or stopping conduct, or from enforcing other laws. The Bureau would adjust the specified dollar limit annually beginning January 1, 2028, using consumer-price increases and rounding to the nearest $100.