Bill Summary for S 442 (2023-2024)

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Summary date: 

Mar 30 2023

Bill Information:

View NCGA Bill Details2023-2024 Session
Senate Bill 442 (Public) Filed Thursday, March 30, 2023
Intro. by Moffitt, Hanig.

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Bill summary

Enacts new Article 26, Earned Wage Access Services Act, providing as follows. Requires registration as an earned wage access (EWA) service provider before providing earned wage access services. Defines earned wage access services as payment of amounts representing earned wages to a consumer prior to the next date on which an obligor is scheduled to pay the consumer, the amount of which is deducted from the obligor's next payment of wages to the consumer. Sets the registration and renewal fee at $1,000; registration must be renewed every three years. Sets out information that must be included in the application for registration/renewal, which is to be submitted through the Nationwide Multistate Licensing System and Registry (NMLS). Permits the Commissioner of Banks (Commissioner) to participate in the NMLS. Requires the Commissioner to approve a registration application/renewal upon the finding of the following: the applicant has satisfied the requirements imposed by the article; (2) the applicant's business will be conducted honestly, fairly, and in a manner commanding the confidence and trust of the community; (3) persons controlling the applicant, as a group, have degrees of character, competence, and experience that command the confidence and trust of the community and justify the belief that the applicant will operate safely, soundly, and in compliance with the law; (4) the applicant meets other similar requirements determined by the Commissioner.  

Directs that an EWA service provider registering for the first time will pay the actual cost of obtaining a credit report and federal and State criminal background checks and the processing fees required by the NMLS. Specifies that a registration is not assignable. Specifies that if the information contained in any document filed with the Commissioner or the NMLS under the article is or becomes inaccurate or incomplete in any material respect, the EWA service provider, whether registered or applying for registration, must within 30 days file a correcting amendment to the information contained in the document.

Allows a registered EWA service provider to provide earned wage access services through a contract with an obligor or service provider to an obligor if: (1) the EWA service provider verifies the consumer's earned wages based on data relating directly to the consumer's earnings in that pay period, (2) the EWA service provider informs the consumer in writing that the consumer has a right to receive the full amount of the obligor's next payment of wages on the next date on which the obligor is scheduled to pay the consumer if the consumer chooses to not use earned wage access services, and (3) the consumer authorizes in writing that the amount of the payment of earned wages from the EWA service provider is to be deducted from the obligor's next payment of wages to the consumer. Prohibits an obligor from sharing information with an EWA service provider relating to the obligor's accrued and expected obligations to the consumer unless the obligor has entered into a contract for earned wage access services with the EWA service provider and the consumer has given advance consent to sharing the information. Allows an EWA service provider to charge a fee for earned wage access services if they are disclosed in writing to the consumer before the consumer chooses to use the services. Provides that if an EWA service provider complies with this Article, then the EWA service provider's earned wage access services are not lending activity and its payments pursuant to those services are not loans, and any fees for the EWA service provider's earned wage access services are not interest.

Allows the Commissioner to examine an EWA service provider, with the costs borne by the EWA service provider. Specifies when the reimbursement of these expenses can be waived. Permits the Commissioner to also conduct an examination of an EWA service provider upon receipt of a consumer complaint.

Specifies that information obtained by the Commissioner is subject to the confidential treatment under GS 53C-2-7 (confidentiality provisions pertaining to certain records of the NC Office of the Commissioner of Banks). Requires Commissioner to report enforcement actions and other relevant information to the NMLS.  Authorizes the Commissioner to enter into written agreements with certain entities to share confidential information with these entities. Sets forth rules relating to confidentiality for these shared records. Clarifies that the Commissioner is not prohibited from releasing to the public a list of persons registered under the article or aggregated financial data on the registered EWA service providers. 

Allows the Commissioner to adopt rules to enforce the Article and procedures aggrieved persons may take, including an initial appeal to the State Banking Commission and subsequent petition for judicial review.  Sets out actions that may be taken for violations of this Article or any rule adopted under it, after notice and opportunity for hearing, to include (1) revoking, suspending, or refusing to renew an EWA service provider's registration; (2) ordering an EWA service provider to cease and desist from providing earned wage access services; (3) assessing a civil penalty of not more than $10,000 for each willful violation, with the clear proceeds of the penalty to be remitted to the Civil Penalty and Forfeiture Fund; and (4) ordering an EWA service provider to make restitution to the injured customer. Failure to comply with the Article is an unfair or deceptive trade practice. Sets forth rules related to service of process.

Effective May 1, 2024.