Senate Engrossed earned wage access; providers; license State of Arizona Senate Fifty-seventh Legislature First Regular Session 2025 SENATE BILL 1582 An Act amending sections 6-602 and 6-1202, Arizona Revised Statutes; amending title 6, Arizona Revised Statutes, by adding chapter 18; relating to banks and financial institutions. (TEXT OF BILL BEGINS ON NEXT PAGE)
Senate Engrossed earned wage access; providers; license
State of Arizona Senate Fifty-seventh Legislature First Regular Session 2025
SENATE BILL 1582
Senate Engrossed
earned wage access; providers; license
State of Arizona
Senate
Fifty-seventh Legislature
First Regular Session
2025
SENATE BILL 1582
An Act
amending sections 6-602 and 6-1202, Arizona Revised Statutes; amending title 6, Arizona Revised Statutes, by adding chapter 18; relating to banks and financial institutions.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona: Section 1. Section 6-602, Arizona Revised Statutes, is amended to read: START_STATUTE6-602. Exemptions A. This chapter does not apply to: 1. A person who does business under any other law of this state, or any other state while regulated by a state agency of that other state, or of the United States, relating to banks, savings banks, trust companies, savings and loan associations, profit sharing and pension trusts, credit unions, insurance companies or receiverships if the consumer lender loan transactions are regulated by the other law or are under the jurisdiction of a court. 2. A person who is licensed as a pawnbroker pursuant to title 44, chapter 11, article 3 to the extent that the person's activities are governed by that article. 3. A person who is not regularly engaged in the business of making consumer lender loans. 4. A person who is licensed pursuant to chapter 9 of this title to the extent that the person's activities are governed by that chapter. 5. A person who is licensed as an earned wage access provider pursuant to chapter 18 of this title. B. The requirements of this chapter do not apply to: 1. Closed end loans of more than $10,000. 2. Advances on open end revolving loans that are not secured by the consumer's principal residence with an agreed on credit limit of more than $10,000, regardless of the amount of any advances on these revolving loans. 3. Advances on open end revolving loans that are secured by the consumer's principal residence with an agreed on credit limit of more than $10,000, regardless of the amount of any advances on these revolving loans. 4. Consumer lender loans that are lawfully made to nonresidents of the state in any other state under and in accordance with a regulatory consumer lender law similar in principle to this chapter. 5. Educational loans that are either: (a) Made, insured or guaranteed pursuant to a program authorized by the United States, this state or any other state. (b) Made by a nonprofit organization that is exempt from taxation under section 501(c)(3) of the internal revenue code to students who attend postsecondary educational institutions in this state. 6. Earned wage access service transactions and related payments regulated pursuant to chapter 18 of this title. C. A consumer loan made pursuant to a consumer lender license is not a secondary motor vehicle finance transaction as defined in section 44-281. END_STATUTE Sec. 2. Section 6-1202, Arizona Revised Statutes, is amended to read: START_STATUTE6-1202. Exemptions A. This article does not apply to any of the following: 1. An operator of a payment system that provides processing, clearing or settlement services between or among persons exempted by this section or licensees in connection with wire transfers, credit card transactions, debit card transactions, stored value transactions, automated clearinghouse transfers, earned wage access service transactions regulated pursuant to chapter 18 of this title or similar transfers of money. 2. A person appointed as an agent of a payee to collect and process a payment from a payor to the payee for goods or services, other than money transmission, provided to the payor by the payee, if all of the following apply: (a) A written agreement exists between the payee and the agent directing the agent to collect and process payments from payors on the payee's behalf. (b) The payee holds the agent out to the public as accepting payments for goods or services on the payee's behalf. (c) Payment for the goods and services is treated as received by the payee on receipt by the agent so that the payor's obligation is extinguished and there is no risk of loss to the payor if the agent fails to remit the money to the payee. 3. A person that acts as an intermediary by processing payments between an entity that has directly incurred an outstanding money transmission obligation to a sender and the sender's designated recipient, if the entity meets all of the following criteria: (a) Is properly licensed or exempt from the licensing requirements under this article. (b) Provides a receipt, electronic record or other written confirmation to the sender identifying the entity as the provider of money transmission in the transaction. (c) Bears sole responsibility to satisfy the outstanding money transmission obligation to the sender, including the obligation to make the sender whole in connection with any failure to transmit the money to the sender's designated recipient. 4. The United States or a department, an agency or an instrumentality of the United States or its agent. 5. Money transmission by the United States postal service or by an agent of the United States postal service. 6. A state, county, city or town or any other governmental agency or governmental subdivision or instrumentality of a state or its agent. 7. A federally insured depository financial institution, a bank holding company, an office of an international banking corporation, A foreign bank that establishes a federal branch pursuant to 12 United States Code section 3102, a corporation organized as a bank service company pursuant to 12 United States Code sections 1861 through 1867 or a corporation organized pursuant to 12 United States Code sections 611 through 633. 8. An electronic funds transfer of governmental benefits for a federal, state, county or governmental agency by a contractor on behalf of the United States or a department, agency or instrumentality of the United States or on behalf of a state or governmental subdivision, agency or instrumentality of a state. 9. A board of trade designated as a contract market under the commodity exchange act (7 United States Code sections 1 through 26 27f) or a person that, in the ordinary course of business, provides clearance and settlement services for a board of trade to the extent of its operation as or for the board of trade. 10. A registered futures commission merchant under the federal commodities laws to the extent of its operation as a merchant. 11. A person registered as a securities broker or dealer under federal or state securities laws to the extent of the person's operation. 12. An individual employed by a licensee, an authorized delegate or any person exempt from the licensing requirements of this article when acting within the scope of employment and under the supervision of the licensee, authorized delegate or exempt person as an employee and not as an independent contractor. 13. A person expressly appointed as a third-party service provider to or agent of an entity exempt under paragraph 7 of this subsection solely to the extent that both: (a) The service provider or agent is engaging in money transmission on behalf of and pursuant to a written agreement with the exempt entity that sets forth the specific functions that the service provider or agent is to perform. (b) The exempt entity assumes all risk of loss and all legal responsibility for satisfying the outstanding money transmission obligations owed to purchasers and holders of the outstanding money transmission obligations on receipt of the purchaser's or holder's money or monetary value by the service provider or agent. 14. A person exempt by regulation or order if the director finds such exemption to be in the public interest and that regulating the person is not necessary for the purposes of this article. B. The director may require that any person claiming to be exempt from licensing pursuant to this section provide information and documentation to the director demonstrating that the person qualifies for any claimed exemption. END_STATUTE Sec. 3. Title 6, Arizona Revised Statutes, is amended by adding chapter 18, to read: CHAPTER 18 EARNED WAGE ACCESS ARTICLE 1. GENERAL PROVISIONS START_STATUTE6-1801. Definitions In this chapter, unless the context otherwise requires: 1. "business entity" means any corporation, limited liability company, partnership, association or other commercial entity. 2. "consumer" means an individual who resides in this state. 3. "consumer-directed wage access services" means delivering to consumers access to earned but unpaid income that is based on the consumer's representations and the provider's reasonable determination of the consumer's earned but unpaid income. 4. "earned but unpaid income" means salary, wages, compensation or other income that a consumer or an employer has represented and that a provider has reasonably determined has been earned or accrued to the benefit of the consumer in exchange for the consumer's services to the employer or on behalf of the employer, includING: (a) On an hourly, project-based, piecework or other basis. (b) Circumstances in which the consumer is acting as an independent contractor of the employer, but has not, at the time of the payment of proceeds, been paid to the consumer by the employer. 5. "earned wage access services" means providing consumer-directed wage access services or employer-integrated wage access services, or both. 6. "employer": (a) means a person that employs a consumer or any other person that is contractually obligated to pay a consumer earned but unpaid income in exchange for the consumer's provision of services to the person or on behalf of the person, including: (i) On an hourly, project-based, piecework or other basis. (ii) Circumstances in which the consumer is acting as an independent contractor. (b) does not include: (i) a customer of the person. (ii) any other person whose obligation to make a payment of salary, wages, compensation or other income to a consumer is not based on the provision of services by that consumer for or on behalf of the person. 7. "employer-integrated wage access services" means delivering to consumers access to earned but unpaid income that is based on employment, income or attendance data obtained directly or indirectly from an employer. 8. "fee": (a) means a fee imposed by a provider for delivery or expedited delivery of proceeds to a consumer or a subscription or membership fee imposed by a provider for a bona fide group of services that includes earned wage access services. (b) does not include: (i) voluntary tips. (ii) gratuities. (iii) other donations. 9. "licensee" means a business entity that is licensed by the department under section 6-1802 as a provider. 10. "nationwide mortgage licensing system and registry" means a MORTGAGE licensing system DEVELOPED and maintained by a conference of state bank supervisors and an American association of residential mortgage regulations for the state licensing and registration of licensed loan originators and REGISTERED loan originators or such a system established by the United states director of the bureau of consumer financial protection. 11. "Outstanding proceeds" means proceeds that were remitted to a consumer by a provider and have not yet been repaid to that provider. 12. "proceeds" means a payment in United States dollars to a consumer by a provider that is based on earned but unpaid income. 13. "provider": (a) means a business entity that provides earned wage access services to consumers. (b) does not include: (i) a service provider, such as a payroll service provider, whose role may include verifying the available earnings but that is not contractually obligated to fund proceeds delivered as part of an earned wage access service. (ii) an employer that offers a portion of salary, wages or compensation directly to its employees or independent contractors before the normally scheduled pay date. END_STATUTE START_STATUTE6-1802. License; application; fees; bond; definitions A. Beginning January 1, 2026, A provider, whether located in this state or in another state, may not provide earned wage access services in this state unless the provider has been issued a license by the department. B. A provider required to be licensed under this section shall apply for a license on a form and in a manner as prescribed by the department. The application shall include all of the following information: 1. The name of the provider. 2. The name under which the provider transacts business, if different from paragraph 1 of this subsection. 3. The address of the provider's principal office, which may be outside of this state. 4. The addresses of all of the provider's offices or retail stores, if any, located in this state. 5. If the provider provides earned wage access services at a location that is not an office or retail store in this state, a description of the manner in which the provider provides earned wage access services and the provider's website uniform resource locator. 6. The address of the provider's designated agent on whom service of process may be made in this state. 7. The provider's federal employer identification number. 8. a fee schedule that includes a complete description of all the fees that the PROVIDER CHArGES or may CHARGE to provide access to earned wages. 9. Documentation or other information that demonstrates the character, general fitness and financial responsibility of the following, as applicable: (a) The applicant. (b) The applicant's partners if the provider is a partnership. (c) The applicant's managers and members if the provider is a limited liability company or association. (d) The applicant's officers and directors if the provider is a corporation. 10. Any other information the department requires to administer this chapter. C. In addition to the application under subsection b of this section, each licensee shall register with and maintain a valid unique identifier issued by the nationwide mortgage licensing system and registry. D. Each provider required to be licensed under this section shall update any information provided in its license application within fifteen business days after any material change in that information. E. A provider required to be licensed under this section shall file with the department and maintain in force a surety bond that is issued by a surety company admitted to do business in this state and that meets all of the following requirements: 1. Is in an amount equal to $50,000. 2. Is in favor of this state for the benefit of any person that is damaged by a violation of this chapter. 3. Is in favor of any person that is damaged by a violation of this chapter. F. A person that claims against a bond described under subsection E of this section for a violation of this chapter may maintain an action at law against the provider that obtained the surety that issued the bond. The surety is liable only for actual damages and not for punitive damages. The aggregate liability of the surety to all persons damaged by a provider's violation of this chapter does not exceed the amount of the bond. G. Once the applicant submits an application, the department shall conduct a character and general fitness and financial responsibility investigation of the following: 1. The Applicant. 2. The applicant's partners if the provider is a partnership. 3. The applicant's managers and members if the provider is a limited liability company or association. 4. The applicant's officers and directors if the provider is a corporation. H. If the investigation pursuant to SUBSECTION G of this section finds relevant facts that warrant the belief that the Applicant's business will be operated in COMPLIANCE with this chapter, the department shall issue a license and, if not, the department shall deny the application for a license. I. The department may not issue a license to an applicant if any of the following applies: 1. The applicant fails to provide any information required under subsection b of this section. 2. The department of revenue certifies that the applicant is liable for delinquent taxes as prescribed in section 42-1103. J. the provider's license remains in force and effect until the department suspends or revokes the license in accordance with this chapter or the provider surrenders the license. A licensee shall apply for renewal as prescribed by the director not later than december 31 of each year. For each day after December 31 that the RENEWAL application is not received by the director, the applicant shall pay a $25 late fee. If the director does not receive the licensee's renewal application on or before December 31, the licensee may not act as an earned wage access services provider until the license is renewed or a new license is issued pursuant to this article. If the director does not receive the licensee's renewal application on or before January 31, the license automatically expires. The holder of an expired license may not be issued a renewal license but may be issued a new license as provided in this article. K. A provider shall conspicuously post its license at its physical place of business, on the provider's website and on any official consumer-facing document, agreement or correspondence. L. An applicant may appeal a denial of an application pursuant to title 41, chapter 6, article 10. M. For the purposes of this section: 1. "applicant" means a provider that has submitted an application for a license under subsection b of this section. 2. "director" means a member of the applicant's or licensee's board of directors. 3. "Member", except under paragraph 2 of this subsection, means a person who either: (a) has the right to receive on dissolution. (b) has contributed ten percent or more of the capital contribution of an applicant or licensee that is organized as a limited liability company or association or is otherwise entitled to receive ten percent or more of the rights and benefits of the membership interest ownership in the limited liability company or association. 4. "officer": (a) Means a person who participates or has authority to participate, other than in the capacity of a director, in major policymaking functions of an applicant or licensee, whether or not the person has an official title. (b) Includes the chief executive officer, chief financial officer, chief operations officer, chief legal officer, chief credit officer and chief compliance officer, each executive vice president or senior vice president and any other person meeting the standard under this paragraph. 5. "partner" means a person that either: (a) has the right to receive on dissolution. (b) has contributed ten percent or more of the capital contribution of an applicant or licensee that is organized as a partnership. END_STATUTE START_STATUTE6-1803. Provider requirements; limitations A. A provider required to be licensed under section 6-1802 shall do all of the following: 1. Develop and implement policies and procedures to respond to questions raised by consumers and address complaints from consumers in an expedient manner, including reimbursing a consumer pursuant to paragraph 10, subdivision (b) of this subsection. 2. Offer at least one reasonable option to a consumer to obtain proceeds at no cost and clearly explain to the consumer how to elect that no cost option. 3. Before entering into an agreement with a consumer for earned wage access services, do all of the following: (a) inform the consumer of the consumer's rights under the agreement in writing. (b) fully and clearly disclose all fees associated with the earned wage access services and the difference between the services and the no fee option. (c) Explain the procedures the provider will follow if the provider's first attempt to obtain payment of outstanding proceeds and any associated fees, tips, gratuities and other donations is unsuccessful. 4. except as provided in paragraph 5 of this subsection, obtain the consent of the consumer for any material change to the terms and conditions of the earned wage access services before implementing that change for the consumer. 5. provide at least thirty days' advance written notice to a consumer for any material change to the terms and conditions of an earned wage access product that includes the customer's assent to a voluntary preauthorized automated electronic funds transfer. The notice required by this paragraph may be provided through email or another conspicuous electronic method if the consumer consents to receive communications through electronic means. For the purposes of this paragraph, Voluntary preauthorized automated electronic funds transfer does not include a onetime transaction for proceeds authorized by the consumer. 6. Allow the consumer to cancel use of the provider's earned wage access services at any time without incurring a cancellation fee or inhibiting access to consumer funds that are in process. 7. Comply with all local, state and federal privacy and information security laws. 8. If a provider solicits, charges or receives a tip, gratuity or other donation from a consumer, do all of the following: (a) clearly and conspicuously disclose to the consumer in prominently displayed writing immediately before each transaction that any tip, gratuity or other donation amount may be zero and is voluntary. (b) clearly and conspicuously disclose in its service contract with the consumer and elsewhere that any tip, gratuity or donation is voluntary and that offering earned wage access services, including the amount of proceeds a consumer is eligible to request and the frequency with which proceeds are provided to a consumer, is not contingent on whether the consumer pays any tip, gratuity or other donation or on the size of the tip, gratuity or other donation. (c) Set at zero dollars any suggested recommended or prefilled amount for any tip, gratuity or donation. 9. Provide proceeds to a consumer by any means mutually agreed on by the consumer and the licensee. 10. If the provider seeks repayment of outstanding proceeds or payment of fees or other amounts owed, including voluntary tips, gratuities or other donations, in connection with the activities covered by this chapter from a consumer's account at a depository institution by means of an electronic funds transfer, do all of the following: (a) comply with applicable provisions of the electronic fund transfer act as prescribed in 15 United States Code sections 1693 through 1693r and the regulations adopted under 15 United States Code sections 1693 through section 1693r. (b) Within ten business days after the consumer's request, reimburse the consumer for the full amount of any overdraft or nonsufficient fund fees imposed on that consumer by the consumer's depository institution that were caused by the provider attempting to seek payment of any outstanding proceeds, fees or other payments in connection with the activities covered by this chapter, including voluntary tips, gratuities or other donations, on a date before, or in an incorrect amount from, the date or amount disclosed to the consumer. The provider is not subject to the requirements in this paragraph with respect to payments of outstanding amounts or fees incurred by a consumer through fraudulent or other unlawful means that the provider, using reasonable good-faith efforts to determine, reasonably believes are the result of the customer's conduct. B. A provider thAt is required to be licensed under section 6-1802 may not do any of the following: 1. Share with an employer a portion of any fees, voluntary tips, gratuities or other donations that were received from or charged to a consumer for earned wage access services. 2. Require a consumer's credit report or a credit score provided or issued by a consumer reporting agency to determine a consumer's eligibility for earned wage access services. 3. Accept payment of outstanding proceeds, fees, voluntary tips, gratuities or other donations from a consumer by means of a credit card or charge card. 4. Charge a late fee or deferral fee, interest or any other penalty or charge for failure to pay outstanding proceeds, fees, voluntary tips, gratuities or other donations. 5. Report to a consumer reporting agency or debt collector any information about the consumer regarding the inability of the provider to be repaid outstanding proceeds, fees, voluntary tips, gratuities or other donations. 6. Compel or attempt to compel payment by a consumer of outstanding proceeds, fees, voluntary tips, gratuities or other donations to the provider through any of the following means: (a) a suit against the consumer in a court of competent jurisdiction. (b) Use of outbound telephone calls. (c) use of a third party to pursue collection from the consumer on the provider's behalf. (d) sale of outstanding amounts to a third-party collector or debt buyer for collection from the consumer. (e) By acting as a collection agency as defined in section 32-1001. 7. If the provider solicits or receives tips, gratuities or other donations from consumers, mislead or deceive consumers about the voluntary nature of the tips, gratuities or other donations or make representations that the tips, gratuities or other donations will benefit any individual, including the consumer, or are necessary to offer earned wage access services, including the amount of proceeds the consumer is eligible to request and the frequency with which proceeds are provided to the consumer. 8. Advertise, print, display, publish, distribute or broadcast or cause to be advertised, printed, displayed, published, distributed or broadcast, in any manner, any statement or representation with regard to the earned wage access services that are offered by the provider that is false, misleading or deceptive, or that omits or states material information that is necessary to make the statements not false, misleading or deceptive. 9. REquire that a consumer's sole means of accessing monies be through a provider paycard, digital wallet or similar payment process. 10. Charge fees for delivery or expedited delivery of proceeds that exceed $5 for any advance that is equal to or less than $75 or $7.50 for any advance that is more than $75. 11. Offer earned wage access services, including the amount of proceeds a consumer is eligible to request and the frequency with which proceeds are provided to a consumer, that are contingent on whether the consumer pays any tip, gratuity or other donation or on the size of the tip, gratuity or other donation. C. A provider that is required to be LICENSED under section 6-1802 May solicit or receive tips, gratuities or other donations only one time per transaction and confirm the final transaction on the completion screen. D. THE LIMITS SET FORTH IN SUBSECTION B, PARAGRAPH 6 OF THIS SECTION DO NOT APPLY TO A PROVIDER THAT IS: 1. seeking payment of any outstanding amount or fee that was incurred by a consumer through fraud or other unlawful means that the provider, using reasonable good-faith efforts to determine, reasonably believes are the result of CONSUMER'S conduct. 2. Suing an employer for the employer's breach of the employer's contract with the provider. E. A provider may use the mailing address provided by a consumer to determine the consumer's state of residence for the purposes of this chapter. END_STATUTE START_STATUTE6-1804. Interpretation; applicability A. Notwithstanding any other law, earned wage access services offered and provided by a licensee in compliance with this chapter are not considered any of the following: 1. A violation of or noncompliance with section 23-1068, subsection a or any other law of this state governing a sale, assignment or order for earned but unpaid income or other wages. 2. A loan or other form of credit or debt. 3. Money transmission. B. Notwithstanding any other law, fees paid to a licensee in accordance with this chapter are not considered interest or finance charges. If there is a conflict between this chapter and any other statute, this chapter controls. C. Title 32, chapter 9 does not apply to proceeds a provider provides to a consumer in accordance with this chapter. D. A voluntary tip, gratuity or other donation paid by a consumer to a licensee in accordance with this chapter is not considered a finance charge under state law. END_STATUTE START_STATUTE6-1805. Annual report; books and records A. On or before july 1 of each year, a provider that is required to be licensed under section 6-1802 shall submit an annual report to the department that includes all of the following information related to earned wage access services that the provider provided in this state during the prior year: 1. Gross revenue that is attributed to earned wage access services. 2. The total number of transactions in which the provider provided proceeds to consumers and the total number of transactions in which: (a) The provider received a fee from the consumer. (b) The provider received a voluntary tip, gratuity or other donation from the consumer. (c) The consumer obtained proceeds at no cost. 3. The total number of unique consumers to whom the provider provided proceeds. 4. The total dollar amount of proceeds the provider provided to consumers. 5. The total dollar amount of: (a) fees the provider received from consumers. (b) voluntary tips, gratuities or other donations the provider received from consumers. 6. The total number of transactions in which the provider provided and the total amount of reimbursements to a consumer for overdraft or nonsufficient fund fees that were imposed on that consumer. 7. The total number of claims made by the provider against a consumer for fraud or unlawful acts, including the dollar amounts of any claim. The department may request follow-up information that includes: (a) Investigation documentation. (b) Evidence that supports fraud or unlawful conduct. (c) Information as to whether a court of competent jurisdiction adjudicated the matter. B. The director may extend the deadline for the annual report for good cause. C. The department may take disciplinary action against a provider if the provider fails to submit a timely report as required under this section. D. A provider required to be licensed under section 6-1802 shall keep such books and records that, in the opinion of the department, will enable the department to determine whether the provider is in compliance with this chapter for at least five years. END_STATUTE START_STATUTE6-1806. Denial of renewal or suspension or revocation of license A. The department may deny renewal of a license or suspend or revoke a license if the department finds that the licensee: 1. Is insolvent as defined in section 47-1201. 2. Has failed to file an annual report as required by section 6-1805 by the due date or within an extended time frame granted by the deputy director for good cause. 3. Has failed to have or maintain the surety bond required by section 6-1802, subsection E. 4. has violated a rule, order or any provision of this title. 5. Has failed to operate the business of offering or providing earned wage access services in this state for a continuous period of twelve months or more, except that the deputy director may extend the time for not more than twelve additional months for a single fixed period on good cause shown. B. The department may also deny renewal of a license or suspend or revoke a license if the director finds that any fact or condition exists that, if it had existed at the time of the original application for the license, would have clearly warranted the director to refuse to issue the license. C. A licensee may appeal a denial of a renewal application or a suspension or revocation pursuant to title 41, chapter 6, article 10.END_STATUTE START_STATUTE6-1807. Mergers and acquisition of control; approval of director A person licensed under this chapter may not merge with, acquire control over or agree to be acquired by another entity without the approval of the director. This section does not prohibit a licensee or other person from negotiating or entering into agreements subject to the condition that the merger or acquisition of control becomes effective on approval of the director. END_STATUTE START_STATUTE6-1808. Unlawful practice Failure to comply with this chapter is an unlawful practice pursuant to section 44-1522. The attorney general may investigate and take appropriate action as prescribed in title 44, chapter 10, article 7.END_STATUTE START_STATUTE6-1809. Department; rules The director may adopt rules to implement this chapter. END_STATUTE
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 6-602, Arizona Revised Statutes, is amended to read:
START_STATUTE6-602. Exemptions
A. This chapter does not apply to:
1. A person who does business under any other law of this state, or any other state while regulated by a state agency of that other state, or of the United States, relating to banks, savings banks, trust companies, savings and loan associations, profit sharing and pension trusts, credit unions, insurance companies or receiverships if the consumer lender loan transactions are regulated by the other law or are under the jurisdiction of a court.
2. A person who is licensed as a pawnbroker pursuant to title 44, chapter 11, article 3 to the extent that the person's activities are governed by that article.
3. A person who is not regularly engaged in the business of making consumer lender loans.
4. A person who is licensed pursuant to chapter 9 of this title to the extent that the person's activities are governed by that chapter.
5. A person who is licensed as an earned wage access provider pursuant to chapter 18 of this title.
B. The requirements of this chapter do not apply to:
1. Closed end loans of more than $10,000.
2. Advances on open end revolving loans that are not secured by the consumer's principal residence with an agreed on credit limit of more than $10,000, regardless of the amount of any advances on these revolving loans.
3. Advances on open end revolving loans that are secured by the consumer's principal residence with an agreed on credit limit of more than $10,000, regardless of the amount of any advances on these revolving loans.
4. Consumer lender loans that are lawfully made to nonresidents of the state in any other state under and in accordance with a regulatory consumer lender law similar in principle to this chapter.
5. Educational loans that are either:
(a) Made, insured or guaranteed pursuant to a program authorized by the United States, this state or any other state.
(b) Made by a nonprofit organization that is exempt from taxation under section 501(c)(3) of the internal revenue code to students who attend postsecondary educational institutions in this state.
6. Earned wage access service transactions and related payments regulated pursuant to chapter 18 of this title.
C. A consumer loan made pursuant to a consumer lender license is not a secondary motor vehicle finance transaction as defined in section 44-281. END_STATUTE
Sec. 2. Section 6-1202, Arizona Revised Statutes, is amended to read:
START_STATUTE6-1202. Exemptions
A. This article does not apply to any of the following:
1. An operator of a payment system that provides processing, clearing or settlement services between or among persons exempted by this section or licensees in connection with wire transfers, credit card transactions, debit card transactions, stored value transactions, automated clearinghouse transfers, earned wage access service transactions regulated pursuant to chapter 18 of this title or similar transfers of money.
2. A person appointed as an agent of a payee to collect and process a payment from a payor to the payee for goods or services, other than money transmission, provided to the payor by the payee, if all of the following apply:
(a) A written agreement exists between the payee and the agent directing the agent to collect and process payments from payors on the payee's behalf.
(b) The payee holds the agent out to the public as accepting payments for goods or services on the payee's behalf.
(c) Payment for the goods and services is treated as received by the payee on receipt by the agent so that the payor's obligation is extinguished and there is no risk of loss to the payor if the agent fails to remit the money to the payee.
3. A person that acts as an intermediary by processing payments between an entity that has directly incurred an outstanding money transmission obligation to a sender and the sender's designated recipient, if the entity meets all of the following criteria:
(a) Is properly licensed or exempt from the licensing requirements under this article.
(b) Provides a receipt, electronic record or other written confirmation to the sender identifying the entity as the provider of money transmission in the transaction.
(c) Bears sole responsibility to satisfy the outstanding money transmission obligation to the sender, including the obligation to make the sender whole in connection with any failure to transmit the money to the sender's designated recipient.
4. The United States or a department, an agency or an instrumentality of the United States or its agent.
5. Money transmission by the United States postal service or by an agent of the United States postal service.
6. A state, county, city or town or any other governmental agency or governmental subdivision or instrumentality of a state or its agent.
7. A federally insured depository financial institution, a bank holding company, an office of an international banking corporation, A foreign bank that establishes a federal branch pursuant to 12 United States Code section 3102, a corporation organized as a bank service company pursuant to 12 United States Code sections 1861 through 1867 or a corporation organized pursuant to 12 United States Code sections 611 through 633.
8. An electronic funds transfer of governmental benefits for a federal, state, county or governmental agency by a contractor on behalf of the United States or a department, agency or instrumentality of the United States or on behalf of a state or governmental subdivision, agency or instrumentality of a state.
9. A board of trade designated as a contract market under the commodity exchange act (7 United States Code sections 1 through 26 27f) or a person that, in the ordinary course of business, provides clearance and settlement services for a board of trade to the extent of its operation as or for the board of trade.
10. A registered futures commission merchant under the federal commodities laws to the extent of its operation as a merchant.
11. A person registered as a securities broker or dealer under federal or state securities laws to the extent of the person's operation.
12. An individual employed by a licensee, an authorized delegate or any person exempt from the licensing requirements of this article when acting within the scope of employment and under the supervision of the licensee, authorized delegate or exempt person as an employee and not as an independent contractor.
13. A person expressly appointed as a third-party service provider to or agent of an entity exempt under paragraph 7 of this subsection solely to the extent that both:
(a) The service provider or agent is engaging in money transmission on behalf of and pursuant to a written agreement with the exempt entity that sets forth the specific functions that the service provider or agent is to perform.
(b) The exempt entity assumes all risk of loss and all legal responsibility for satisfying the outstanding money transmission obligations owed to purchasers and holders of the outstanding money transmission obligations on receipt of the purchaser's or holder's money or monetary value by the service provider or agent.
14. A person exempt by regulation or order if the director finds such exemption to be in the public interest and that regulating the person is not necessary for the purposes of this article.
B. The director may require that any person claiming to be exempt from licensing pursuant to this section provide information and documentation to the director demonstrating that the person qualifies for any claimed exemption. END_STATUTE
Sec. 3. Title 6, Arizona Revised Statutes, is amended by adding chapter 18, to read:
CHAPTER 18
EARNED WAGE ACCESS
ARTICLE 1. GENERAL PROVISIONS
START_STATUTE6-1801. Definitions
In this chapter, unless the context otherwise requires:
1. "business entity" means any corporation, limited liability company, partnership, association or other commercial entity.
2. "consumer" means an individual who resides in this state.
3. "consumer-directed wage access services" means delivering to consumers access to earned but unpaid income that is based on the consumer's representations and the provider's reasonable determination of the consumer's earned but unpaid income.
4. "earned but unpaid income" means salary, wages, compensation or other income that a consumer or an employer has represented and that a provider has reasonably determined has been earned or accrued to the benefit of the consumer in exchange for the consumer's services to the employer or on behalf of the employer, includING:
(a) On an hourly, project-based, piecework or other basis.
(b) Circumstances in which the consumer is acting as an independent contractor of the employer, but has not, at the time of the payment of proceeds, been paid to the consumer by the employer.
5. "earned wage access services" means providing consumer-directed wage access services or employer-integrated wage access services, or both.
6. "employer":
(a) means a person that employs a consumer or any other person that is contractually obligated to pay a consumer earned but unpaid income in exchange for the consumer's provision of services to the person or on behalf of the person, including:
(i) On an hourly, project-based, piecework or other basis.
(ii) Circumstances in which the consumer is acting as an independent contractor.
(b) does not include:
(i) a customer of the person.
(ii) any other person whose obligation to make a payment of salary, wages, compensation or other income to a consumer is not based on the provision of services by that consumer for or on behalf of the person.
7. "employer-integrated wage access services" means delivering to consumers access to earned but unpaid income that is based on employment, income or attendance data obtained directly or indirectly from an employer.
8. "fee":
(a) means a fee imposed by a provider for delivery or expedited delivery of proceeds to a consumer or a subscription or membership fee imposed by a provider for a bona fide group of services that includes earned wage access services.
(b) does not include:
(i) voluntary tips.
(ii) gratuities.
(iii) other donations.
9. "licensee" means a business entity that is licensed by the department under section 6-1802 as a provider.
10. "nationwide mortgage licensing system and registry" means a MORTGAGE licensing system DEVELOPED and maintained by a conference of state bank supervisors and an American association of residential mortgage regulations for the state licensing and registration of licensed loan originators and REGISTERED loan originators or such a system established by the United states director of the bureau of consumer financial protection.
11. "Outstanding proceeds" means proceeds that were remitted to a consumer by a provider and have not yet been repaid to that provider.
12. "proceeds" means a payment in United States dollars to a consumer by a provider that is based on earned but unpaid income.
13. "provider":
(a) means a business entity that provides earned wage access services to consumers.
(b) does not include:
(i) a service provider, such as a payroll service provider, whose role may include verifying the available earnings but that is not contractually obligated to fund proceeds delivered as part of an earned wage access service.
(ii) an employer that offers a portion of salary, wages or compensation directly to its employees or independent contractors before the normally scheduled pay date. END_STATUTE
START_STATUTE6-1802. License; application; fees; bond; definitions
A. Beginning January 1, 2026, A provider, whether located in this state or in another state, may not provide earned wage access services in this state unless the provider has been issued a license by the department.
B. A provider required to be licensed under this section shall apply for a license on a form and in a manner as prescribed by the department. The application shall include all of the following information:
1. The name of the provider.
2. The name under which the provider transacts business, if different from paragraph 1 of this subsection.
3. The address of the provider's principal office, which may be outside of this state.
4. The addresses of all of the provider's offices or retail stores, if any, located in this state.
5. If the provider provides earned wage access services at a location that is not an office or retail store in this state, a description of the manner in which the provider provides earned wage access services and the provider's website uniform resource locator.
6. The address of the provider's designated agent on whom service of process may be made in this state.
7. The provider's federal employer identification number.
8. a fee schedule that includes a complete description of all the fees that the PROVIDER CHArGES or may CHARGE to provide access to earned wages.
9. Documentation or other information that demonstrates the character, general fitness and financial responsibility of the following, as applicable:
(a) The applicant.
(b) The applicant's partners if the provider is a partnership.
(c) The applicant's managers and members if the provider is a limited liability company or association.
(d) The applicant's officers and directors if the provider is a corporation.
10. Any other information the department requires to administer this chapter.
C. In addition to the application under subsection b of this section, each licensee shall register with and maintain a valid unique identifier issued by the nationwide mortgage licensing system and registry.
D. Each provider required to be licensed under this section shall update any information provided in its license application within fifteen business days after any material change in that information.
E. A provider required to be licensed under this section shall file with the department and maintain in force a surety bond that is issued by a surety company admitted to do business in this state and that meets all of the following requirements:
1. Is in an amount equal to $50,000.
2. Is in favor of this state for the benefit of any person that is damaged by a violation of this chapter.
3. Is in favor of any person that is damaged by a violation of this chapter.
F. A person that claims against a bond described under subsection E of this section for a violation of this chapter may maintain an action at law against the provider that obtained the surety that issued the bond. The surety is liable only for actual damages and not for punitive damages. The aggregate liability of the surety to all persons damaged by a provider's violation of this chapter does not exceed the amount of the bond.
G. Once the applicant submits an application, the department shall conduct a character and general fitness and financial responsibility investigation of the following:
1. The Applicant.
2. The applicant's partners if the provider is a partnership.
3. The applicant's managers and members if the provider is a limited liability company or association.
4. The applicant's officers and directors if the provider is a corporation.
H. If the investigation pursuant to SUBSECTION G of this section finds relevant facts that warrant the belief that the Applicant's business will be operated in COMPLIANCE with this chapter, the department shall issue a license and, if not, the department shall deny the application for a license.
I. The department may not issue a license to an applicant if any of the following applies:
1. The applicant fails to provide any information required under subsection b of this section.
2. The department of revenue certifies that the applicant is liable for delinquent taxes as prescribed in section 42-1103.
J. the provider's license remains in force and effect until the department suspends or revokes the license in accordance with this chapter or the provider surrenders the license. A licensee shall apply for renewal as prescribed by the director not later than december 31 of each year. For each day after December 31 that the RENEWAL application is not received by the director, the applicant shall pay a $25 late fee. If the director does not receive the licensee's renewal application on or before December 31, the licensee may not act as an earned wage access services provider until the license is renewed or a new license is issued pursuant to this article. If the director does not receive the licensee's renewal application on or before January 31, the license automatically expires. The holder of an expired license may not be issued a renewal license but may be issued a new license as provided in this article.
K. A provider shall conspicuously post its license at its physical place of business, on the provider's website and on any official consumer-facing document, agreement or correspondence.
L. An applicant may appeal a denial of an application pursuant to title 41, chapter 6, article 10.
M. For the purposes of this section:
1. "applicant" means a provider that has submitted an application for a license under subsection b of this section.
2. "director" means a member of the applicant's or licensee's board of directors.
3. "Member", except under paragraph 2 of this subsection, means a person who either:
(a) has the right to receive on dissolution.
(b) has contributed ten percent or more of the capital contribution of an applicant or licensee that is organized as a limited liability company or association or is otherwise entitled to receive ten percent or more of the rights and benefits of the membership interest ownership in the limited liability company or association.
4. "officer":
(a) Means a person who participates or has authority to participate, other than in the capacity of a director, in major policymaking functions of an applicant or licensee, whether or not the person has an official title.
(b) Includes the chief executive officer, chief financial officer, chief operations officer, chief legal officer, chief credit officer and chief compliance officer, each executive vice president or senior vice president and any other person meeting the standard under this paragraph.
5. "partner" means a person that either:
(a) has the right to receive on dissolution.
(b) has contributed ten percent or more of the capital contribution of an applicant or licensee that is organized as a partnership. END_STATUTE
START_STATUTE6-1803. Provider requirements; limitations
A. A provider required to be licensed under section 6-1802 shall do all of the following:
1. Develop and implement policies and procedures to respond to questions raised by consumers and address complaints from consumers in an expedient manner, including reimbursing a consumer pursuant to paragraph 10, subdivision (b) of this subsection.
2. Offer at least one reasonable option to a consumer to obtain proceeds at no cost and clearly explain to the consumer how to elect that no cost option.
3. Before entering into an agreement with a consumer for earned wage access services, do all of the following:
(a) inform the consumer of the consumer's rights under the agreement in writing.
(b) fully and clearly disclose all fees associated with the earned wage access services and the difference between the services and the no fee option.
(c) Explain the procedures the provider will follow if the provider's first attempt to obtain payment of outstanding proceeds and any associated fees, tips, gratuities and other donations is unsuccessful.
4. except as provided in paragraph 5 of this subsection, obtain the consent of the consumer for any material change to the terms and conditions of the earned wage access services before implementing that change for the consumer.
5. provide at least thirty days' advance written notice to a consumer for any material change to the terms and conditions of an earned wage access product that includes the customer's assent to a voluntary preauthorized automated electronic funds transfer. The notice required by this paragraph may be provided through email or another conspicuous electronic method if the consumer consents to receive communications through electronic means. For the purposes of this paragraph, Voluntary preauthorized automated electronic funds transfer does not include a onetime transaction for proceeds authorized by the consumer.
6. Allow the consumer to cancel use of the provider's earned wage access services at any time without incurring a cancellation fee or inhibiting access to consumer funds that are in process.
7. Comply with all local, state and federal privacy and information security laws.
8. If a provider solicits, charges or receives a tip, gratuity or other donation from a consumer, do all of the following:
(a) clearly and conspicuously disclose to the consumer in prominently displayed writing immediately before each transaction that any tip, gratuity or other donation amount may be zero and is voluntary.
(b) clearly and conspicuously disclose in its service contract with the consumer and elsewhere that any tip, gratuity or donation is voluntary and that offering earned wage access services, including the amount of proceeds a consumer is eligible to request and the frequency with which proceeds are provided to a consumer, is not contingent on whether the consumer pays any tip, gratuity or other donation or on the size of the tip, gratuity or other donation.
(c) Set at zero dollars any suggested recommended or prefilled amount for any tip, gratuity or donation.
9. Provide proceeds to a consumer by any means mutually agreed on by the consumer and the licensee.
10. If the provider seeks repayment of outstanding proceeds or payment of fees or other amounts owed, including voluntary tips, gratuities or other donations, in connection with the activities covered by this chapter from a consumer's account at a depository institution by means of an electronic funds transfer, do all of the following:
(a) comply with applicable provisions of the electronic fund transfer act as prescribed in 15 United States Code sections 1693 through 1693r and the regulations adopted under 15 United States Code sections 1693 through section 1693r.
(b) Within ten business days after the consumer's request, reimburse the consumer for the full amount of any overdraft or nonsufficient fund fees imposed on that consumer by the consumer's depository institution that were caused by the provider attempting to seek payment of any outstanding proceeds, fees or other payments in connection with the activities covered by this chapter, including voluntary tips, gratuities or other donations, on a date before, or in an incorrect amount from, the date or amount disclosed to the consumer. The provider is not subject to the requirements in this paragraph with respect to payments of outstanding amounts or fees incurred by a consumer through fraudulent or other unlawful means that the provider, using reasonable good-faith efforts to determine, reasonably believes are the result of the customer's conduct.
B. A provider thAt is required to be licensed under section 6-1802 may not do any of the following:
1. Share with an employer a portion of any fees, voluntary tips, gratuities or other donations that were received from or charged to a consumer for earned wage access services.
2. Require a consumer's credit report or a credit score provided or issued by a consumer reporting agency to determine a consumer's eligibility for earned wage access services.
3. Accept payment of outstanding proceeds, fees, voluntary tips, gratuities or other donations from a consumer by means of a credit card or charge card.
4. Charge a late fee or deferral fee, interest or any other penalty or charge for failure to pay outstanding proceeds, fees, voluntary tips, gratuities or other donations.
5. Report to a consumer reporting agency or debt collector any information about the consumer regarding the inability of the provider to be repaid outstanding proceeds, fees, voluntary tips, gratuities or other donations.
6. Compel or attempt to compel payment by a consumer of outstanding proceeds, fees, voluntary tips, gratuities or other donations to the provider through any of the following means:
(a) a suit against the consumer in a court of competent jurisdiction.
(b) Use of outbound telephone calls.
(c) use of a third party to pursue collection from the consumer on the provider's behalf.
(d) sale of outstanding amounts to a third-party collector or debt buyer for collection from the consumer.
(e) By acting as a collection agency as defined in section 32-1001.
7. If the provider solicits or receives tips, gratuities or other donations from consumers, mislead or deceive consumers about the voluntary nature of the tips, gratuities or other donations or make representations that the tips, gratuities or other donations will benefit any individual, including the consumer, or are necessary to offer earned wage access services, including the amount of proceeds the consumer is eligible to request and the frequency with which proceeds are provided to the consumer.
8. Advertise, print, display, publish, distribute or broadcast or cause to be advertised, printed, displayed, published, distributed or broadcast, in any manner, any statement or representation with regard to the earned wage access services that are offered by the provider that is false, misleading or deceptive, or that omits or states material information that is necessary to make the statements not false, misleading or deceptive.
9. REquire that a consumer's sole means of accessing monies be through a provider paycard, digital wallet or similar payment process.
10. Charge fees for delivery or expedited delivery of proceeds that exceed $5 for any advance that is equal to or less than $75 or $7.50 for any advance that is more than $75.
11. Offer earned wage access services, including the amount of proceeds a consumer is eligible to request and the frequency with which proceeds are provided to a consumer, that are contingent on whether the consumer pays any tip, gratuity or other donation or on the size of the tip, gratuity or other donation.
C. A provider that is required to be LICENSED under section 6-1802 May solicit or receive tips, gratuities or other donations only one time per transaction and confirm the final transaction on the completion screen.
D. THE LIMITS SET FORTH IN SUBSECTION B, PARAGRAPH 6 OF THIS SECTION DO NOT APPLY TO A PROVIDER THAT IS:
1. seeking payment of any outstanding amount or fee that was incurred by a consumer through fraud or other unlawful means that the provider, using reasonable good-faith efforts to determine, reasonably believes are the result of CONSUMER'S conduct.
2. Suing an employer for the employer's breach of the employer's contract with the provider.
E. A provider may use the mailing address provided by a consumer to determine the consumer's state of residence for the purposes of this chapter. END_STATUTE
START_STATUTE6-1804. Interpretation; applicability
A. Notwithstanding any other law, earned wage access services offered and provided by a licensee in compliance with this chapter are not considered any of the following:
1. A violation of or noncompliance with section 23-1068, subsection a or any other law of this state governing a sale, assignment or order for earned but unpaid income or other wages.
2. A loan or other form of credit or debt.
3. Money transmission.
B. Notwithstanding any other law, fees paid to a licensee in accordance with this chapter are not considered interest or finance charges. If there is a conflict between this chapter and any other statute, this chapter controls.
C. Title 32, chapter 9 does not apply to proceeds a provider provides to a consumer in accordance with this chapter.
D. A voluntary tip, gratuity or other donation paid by a consumer to a licensee in accordance with this chapter is not considered a finance charge under state law. END_STATUTE
START_STATUTE6-1805. Annual report; books and records
A. On or before july 1 of each year, a provider that is required to be licensed under section 6-1802 shall submit an annual report to the department that includes all of the following information related to earned wage access services that the provider provided in this state during the prior year:
1. Gross revenue that is attributed to earned wage access services.
2. The total number of transactions in which the provider provided proceeds to consumers and the total number of transactions in which:
(a) The provider received a fee from the consumer.
(b) The provider received a voluntary tip, gratuity or other donation from the consumer.
(c) The consumer obtained proceeds at no cost.
3. The total number of unique consumers to whom the provider provided proceeds.
4. The total dollar amount of proceeds the provider provided to consumers.
5. The total dollar amount of:
(a) fees the provider received from consumers.
(b) voluntary tips, gratuities or other donations the provider received from consumers.
6. The total number of transactions in which the provider provided and the total amount of reimbursements to a consumer for overdraft or nonsufficient fund fees that were imposed on that consumer.
7. The total number of claims made by the provider against a consumer for fraud or unlawful acts, including the dollar amounts of any claim. The department may request follow-up information that includes:
(a) Investigation documentation.
(b) Evidence that supports fraud or unlawful conduct.
(c) Information as to whether a court of competent jurisdiction adjudicated the matter.
B. The director may extend the deadline for the annual report for good cause.
C. The department may take disciplinary action against a provider if the provider fails to submit a timely report as required under this section.
D. A provider required to be licensed under section 6-1802 shall keep such books and records that, in the opinion of the department, will enable the department to determine whether the provider is in compliance with this chapter for at least five years. END_STATUTE
START_STATUTE6-1806. Denial of renewal or suspension or revocation of license
A. The department may deny renewal of a license or suspend or revoke a license if the department finds that the licensee:
1. Is insolvent as defined in section 47-1201.
2. Has failed to file an annual report as required by section 6-1805 by the due date or within an extended time frame granted by the deputy director for good cause.
3. Has failed to have or maintain the surety bond required by section 6-1802, subsection E.
4. has violated a rule, order or any provision of this title.
5. Has failed to operate the business of offering or providing earned wage access services in this state for a continuous period of twelve months or more, except that the deputy director may extend the time for not more than twelve additional months for a single fixed period on good cause shown.
B. The department may also deny renewal of a license or suspend or revoke a license if the director finds that any fact or condition exists that, if it had existed at the time of the original application for the license, would have clearly warranted the director to refuse to issue the license.
C. A licensee may appeal a denial of a renewal application or a suspension or revocation pursuant to title 41, chapter 6, article 10.END_STATUTE
START_STATUTE6-1807. Mergers and acquisition of control; approval of director
A person licensed under this chapter may not merge with, acquire control over or agree to be acquired by another entity without the approval of the director. This section does not prohibit a licensee or other person from negotiating or entering into agreements subject to the condition that the merger or acquisition of control becomes effective on approval of the director. END_STATUTE
START_STATUTE6-1808. Unlawful practice
Failure to comply with this chapter is an unlawful practice pursuant to section 44-1522. The attorney general may investigate and take appropriate action as prescribed in title 44, chapter 10, article 7.END_STATUTE
START_STATUTE6-1809. Department; rules
The director may adopt rules to implement this chapter. END_STATUTE