| 6 | | - | To amend Part 2 of Article 15 of Chapter 1 of Title 10 of the Official Code of Georgia1 |
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| 7 | | - | Annotated, the "Fair Business Practices Act of 1975," so as to provide requirements for2 |
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| 8 | | - | earned wage access services; to provide for fees that may be charged for such services; to3 |
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| 9 | | - | provide for prohibitions; to provide for consumer protections; to provide that earned wage4 |
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| 10 | | - | access payments are nonrecourse; to provide that earned wage access services shall not be5 |
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| 11 | | - | considered lending activity or money transmission; to provide that permitted fees are not6 |
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| 12 | | - | interest; to provide for definitions; to provide for applicability; to provide for related matters;7 |
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| 13 | | - | to repeal conflicting laws; and for other purposes.8 |
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| 14 | | - | BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:9 |
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| 15 | | - | SECTION 1.10 |
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| 16 | | - | Part 2 of Article 15 of Chapter 1 of Title 10 of the Official Code of Georgia Annotated, the11 |
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| 17 | | - | "Fair Business Practices Act of 1975," is amended by adding a new Code section to read as12 |
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| 18 | | - | follows:13 |
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| 19 | | - | "10-1-393.20.14 |
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| 20 | | - | (a) As used in this Code section, the term:15 |
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| 21 | | - | - 1 - 24 LC 55 0312S |
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| 22 | | - | (1) 'Consumer' means an individual who indicates to a provider that he or she resides in16 |
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| 23 | | - | the State of Georgia. A provider may use the mailing address or state of residence17 |
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| 24 | | - | provided by a consumer to determine the consumer's state of residence for purposes of18 |
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| 25 | | - | this Code section.19 |
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| 26 | | - | (2) 'Consumer directed wage access services' means the business of offering or providing20 |
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| 27 | | - | earned wage access services directly to a consumer based on the consumer's21 |
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| 28 | | - | representation and the provider's reasonable determination of the consumer's earned but22 |
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| 29 | | - | unpaid income, which may include, but is not limited to, time and attendance data,23 |
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| 30 | | - | geolocation data, access to obligor systems, payroll systems, and paycheck history.24 |
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| 31 | | - | (3) 'Earned but unpaid income' means salary, wages, compensation, or other income that25 |
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| 32 | | - | a consumer or an employer has represented, and that a provider has reasonably26 |
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| 33 | | - | determined, has been earned by or accrued to the benefit of the consumer in exchange for27 |
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| 34 | | - | the consumer's provision of services to the employer or on behalf of the employer,28 |
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| 35 | | - | including on an hourly, project based, piecework, or other basis and including when the29 |
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| 36 | | - | consumer is acting as an independent contractor of the employer, but has not, at the time30 |
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| 37 | | - | of the payment of proceeds, been paid to the consumer by the employer.31 |
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| 38 | | - | (4) 'Earned wage access services' means the business of providing consumer directed32 |
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| 39 | | - | wage access services, employer integrated wage access services, or both.33 |
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| 40 | | - | (5) 'Earned wage access services provider' or 'provider' means a person that is in the34 |
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| 41 | | - | business of offering or providing earned wage access services to consumers.35 |
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| 42 | | - | (6) 'Employer' means:36 |
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| 43 | | - | (A) A person who employs a consumer; or37 |
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| 44 | | - | (B) Any other person who is contractually obligated to pay a consumer earned but38 |
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| 45 | | - | unpaid income in exchange for a consumer's provision of services to the employer or39 |
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| 46 | | - | on behalf of the employer, including on an hourly, project based, piecework, or other40 |
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| 47 | | - | basis and including where the consumer is acting as an independent contractor with41 |
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| 48 | | - | respect to the employer. Such term does not mean a customer of an employer or any42 |
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| 49 | | - | - 2 - 24 LC 55 0312S |
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| 50 | | - | other person whose obligation to make a payment of salary, wages, compensation, or43 |
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| 51 | | - | other income to a consumer is not based on the provision of services by that consumer44 |
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| 52 | | - | for or on behalf of such person.45 |
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| 53 | | - | (7) 'Employer integrated wage access services' means the business of delivering to46 |
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| 54 | | - | consumers earned but unpaid income.47 |
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| 55 | | - | (8) 'Fee' means:48 |
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| 56 | | - | (A) A fee imposed by a provider for delivery or expedited delivery of proceeds to a49 |
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| 57 | | - | consumer;50 |
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| 58 | | - | (B) A subscription or membership fee imposed by a provider for a bona fide group of51 |
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| 59 | | - | services that includes earned wage access services;52 |
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| 60 | | - | (C) A tip or gratuity paid by a consumer; provided, however, that any default tips or53 |
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| 61 | | - | gratuities shall be set to $0.00; or54 |
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| 62 | | - | (D) An amount of money paid by an employer to a provider on a consumer's behalf,55 |
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| 63 | | - | which entitles the consumer to receive proceeds at reduced or no cost to the consumer.56 |
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| 64 | | - | (9) 'Outstanding proceeds' means a payment of proceeds to a consumer by a provider that57 |
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| 65 | | - | has not yet been repaid to such provider.58 |
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| 66 | | - | (10) 'Person' means a business entity other than an individual.59 |
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| 67 | | - | (b) An earned wage access services provider shall:60 |
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| 68 | | - | (1) Develop and implement policies and procedures to respond to questions raised by61 |
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| 69 | | - | consumers and address complaints from consumers;62 |
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| 70 | | - | (2) Whenever it offers a consumer the option to receive proceeds for a fee, offer such63 |
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| 71 | | - | consumer at least one reasonable option to obtain proceeds at no cost and clearly explain64 |
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| 72 | | - | to the consumer how to choose such no-cost option;65 |
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| 73 | | - | (3) Before entering into an agreement with a consumer for the provision of earned wage66 |
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| 74 | | - | access services:67 |
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| 75 | | - | (A) Inform the consumer of his or her rights under the agreement;68 |
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| 76 | | - | - 3 - 24 LC 55 0312S |
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| 77 | | - | (B) Inform the consumer that the agreement is not intended to create a legal obligation69 |
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| 78 | | - | for the consumer to repay advances; and70 |
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| 79 | | - | (C) Fully and clearly disclose all fees or a schedule of fees associated with the earned71 |
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| 80 | | - | wage access services;72 |
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| 81 | | - | (4) Inform the consumer of the fact of any material changes to the terms and conditions73 |
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| 82 | | - | of the earned wage access services before implementing those changes for such74 |
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| 83 | | - | consumer;75 |
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| 84 | | - | (5) Allow the consumer to cancel use of the provider's earned wage access services at76 |
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| 85 | | - | any time, without incurring a cancellation fee imposed by the provider;77 |
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| 86 | | - | (6) Provide proceeds to a consumer via any means mutually agreed upon by the78 |
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| 87 | | - | consumer and the provider;79 |
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| 88 | | - | (7) Comply with all local, state, and federal privacy and information security laws;80 |
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| 89 | | - | (8) In any case in which such provider will seek repayment of outstanding earned wage81 |
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| 90 | | - | access payments or payment of fees from a consumer, inform the consumer when the82 |
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| 91 | | - | provider will make its first attempt to seek such repayment or payment; and83 |
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| 92 | | - | (9) In any case in which such provider will seek repayment of outstanding proceeds or84 |
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| 93 | | - | payment of fees in connection with the activities covered by this Code section from a85 |
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| 94 | | - | consumer's depository institution account via electronic funds transfer:86 |
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| 95 | | - | (A) Comply with the federal Electronic Funds Transfer Act , 15 U.S.C. Section 1693,87 |
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| 96 | | - | et seq., and its implementing regulations; and88 |
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| 97 | | - | (B) Reimburse the consumer for the full amount of any overdraft or insufficient funds89 |
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| 98 | | - | fees imposed on a consumer by the consumer's depository institution that were caused90 |
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| 99 | | - | by the provider attempting to seek payment of any outstanding proceeds or fees on a91 |
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| 100 | | - | date before, or in an incorrect amount from, the date or amount disclosed to the92 |
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| 101 | | - | consumer; provided, however, that a provider is not subject to the requirements in this93 |
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| 102 | | - | subparagraph with respect to payments of outstanding proceeds or fees incurred by a94 |
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| 103 | | - | consumer through fraudulent or other unlawful means.95 |
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| 104 | | - | - 4 - 24 LC 55 0312S |
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| 105 | | - | (c) No earned wage access services provider shall:96 |
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| 106 | | - | (1) Share with an employer a portion of any fees, tips, gratuities, or other donations that97 |
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| 107 | | - | were received from or charged to a consumer for earned wage access services. Any98 |
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| 108 | | - | payment from the employer to the earned wage access services provider set forth in an99 |
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| 109 | | - | agreement between the employer and earned wage access services provider shall not be100 |
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| 110 | | - | considered a violation of this paragraph;101 |
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| 111 | | - | (2) Charge a consumer a fee in excess of $5.00 per transaction;102 |
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| 112 | | - | (3) Charge a consumer a late fee, a deferral fee, interest, or any other penalty or charge103 |
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| 113 | | - | for the consumer's failure to repay outstanding proceeds or fees;104 |
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| 114 | | - | (4) Require a consumer's credit report or credit score issued by a consumer reporting105 |
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| 115 | | - | agency to determine a consumer's eligibility for earned wage access services;106 |
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| 116 | | - | (5) Accept repayment of outstanding proceeds or fees from a consumer via a credit card107 |
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| 117 | | - | or charge card;108 |
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| 118 | | - | (6) Report to a consumer credit reporting agency or a third-party debt collector any109 |
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| 119 | | - | information about the consumer regarding the inability of the provider to be repaid110 |
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| 120 | | - | outstanding proceeds or fees; or111 |
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| 121 | | - | (7) Compel or attempt to compel payment by a consumer of any outstanding proceeds112 |
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| 122 | | - | or fees to the provider through any of the following means:113 |
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| 123 | | - | (A) A civil suit against the consumer;114 |
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| 124 | | - | (B) Use of a third party to pursue collection from the consumer on the provider's115 |
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| 125 | | - | behalf;116 |
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| 126 | | - | (C) The sale of outstanding amounts to a third-party debt collector or debt buyer for117 |
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| 127 | | - | collection from the consumer; or118 |
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| 128 | | - | (D) Use of unsolicited outbound telephone calls.119 |
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| 129 | | - | (d) No earned wage access services that comply with this Code section shall be considered120 |
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| 130 | | - | lending activity or money transmission, nor shall earned wage access payments that comply121 |
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| 131 | | - | - 5 - 24 LC 55 0312S |
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| 132 | | - | with this Code section be considered loans. No fees permitted under this Code section122 |
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| 133 | | - | shall be considered interest.123 |
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| 134 | | - | (e) Failure to comply with the provisions of this Code section shall be considered an unfair124 |
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| 135 | | - | or deceptive act or practice which is unlawful and which shall be punishable by the125 |
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| 136 | | - | provisions of this part."126 |
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| 137 | | - | SECTION 2.127 |
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| 138 | | - | This Act shall apply to agreements for earned wage access services that are entered into or128 |
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| 139 | | - | renewed on or after July 1, 2024.129 |
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| 140 | | - | SECTION 3.130 |
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| 141 | | - | All laws and parts of laws in conflict with this Act are repealed.131 |
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| 19 | + | To amend Chapter 1 of Title 10 of the Official Code of Georgia Annotated, relating to selling |
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| 20 | + | 1 |
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| 21 | + | and other trade practices, so as to provide for commercial financing disclosures; to require2 |
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| 22 | + | certain persons who provide commercial financing transactions to make certain disclosures;3 |
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| 23 | + | to provide for penalties; to provide for applicability; to provide for definitions; to provide for4 |
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| 24 | + | related matters; to repeal conflicting laws; and for other purposes.5 |
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| 25 | + | BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:6 |
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| 26 | + | SECTION 1.7 |
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| 27 | + | Chapter 1 of Title 10 of the Official Code of Georgia Annotated, relating to selling and other8 |
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| 28 | + | trade practices, is amended by adding a new Code section to read as follows:9 |
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| 29 | + | "10-1-393.18. |
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| 30 | + | 10 |
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| 31 | + | (a) As used in this Code section, the term:11 |
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| 32 | + | (1) 'Accounts receivable purchase transaction' means a transaction in which a business12 |
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| 33 | + | forwards or otherwise sells to a person all or a portion of the business's accounts, as13 |
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| 34 | + | defined in Code Section 11-9-102, or payment intangibles, as defined in Code Section14 |
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| 35 | + | 11-9-102, at a discount to the accounts' or payment intangibles' expected value.15 23 LC 50 0478S |
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| 36 | + | H. B. 84 (SUB) |
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| 37 | + | - 2 - |
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| 38 | + | (2) 'Advance fee' means any consideration which is assessed or collected prior to the16 |
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| 39 | + | closing of a commercial financing transaction by a broker.17 |
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| 40 | + | (3) 'Broker' means a person who, for compensation or the expectation of compensation,18 |
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| 41 | + | arranges a commercial financing transaction between a third party and a business in the19 |
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| 42 | + | state that would, if executed, be binding upon that third party and communicates that20 |
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| 43 | + | offer to a business located in this state. Such term excludes a 'provider,' and any21 |
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| 44 | + | individual or entity whose compensation is not based or dependent upon on the terms of22 |
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| 45 | + | the specific commercial financing transaction obtained or offered.23 |
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| 46 | + | (4) 'Business' means a private enterprise carried on for the purpose of gain or economic24 |
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| 47 | + | profit.25 |
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| 48 | + | (5)(A) 'Business purpose transaction' means a transaction from which the resulting26 |
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| 49 | + | proceeds that a business receives are:27 |
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| 50 | + | (i) Provided to the business; or28 |
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| 51 | + | (ii) Intended to be used to carry on the business.29 |
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| 52 | + | (B) Such term shall not include a transaction from which the resulting proceeds are30 |
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| 53 | + | intended to be used for personal, family, or household purposes.31 |
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| 54 | + | (C) For purposes of determining whether a transaction is a business purpose32 |
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| 55 | + | transaction, a provider may rely on a written statement of intended purpose, signed by33 |
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| 56 | + | an individual authorized to sign on behalf of the business. Such written statement may34 |
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| 57 | + | be contained in an application, agreement, or other document signed by an individual35 |
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| 58 | + | authorized to sign on behalf of the business.36 |
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| 59 | + | (6) 'Commercial financing transaction' means a business purpose transaction:37 |
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| 60 | + | (A) Under which a person extends a business a commercial loan or a commercial38 |
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| 61 | + | open-end credit plan; or39 |
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| 62 | + | (B) That is an accounts receivable purchase transaction.40 |
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| 63 | + | (7) 'Commercial loan' means a loan to a business, regardless of whether the loan is41 |
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| 64 | + | secured.42 23 LC 50 0478S |
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| 65 | + | H. B. 84 (SUB) |
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| 66 | + | - 3 - |
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| 67 | + | (8) 'Commercial open-end credit plan' means commercial financing extended to a43 |
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| 68 | + | business on terms under which:44 |
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| 69 | + | (A) The creditor reasonably contemplates repeat transactions; and45 |
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| 70 | + | (B) Subject to any limit set by the creditor, the amount of financing that the creditor46 |
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| 71 | + | may extend to the business during the term of the plan is made available to the extent47 |
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| 72 | + | that any outstanding balance is repaid.48 |
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| 73 | + | (9) 'Motor vehicle dealer' means a dealer as defined in Code Section 40-2-39 or a used49 |
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| 74 | + | motor vehicle dealer as defined in Code Section 43-47-2.50 |
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| 75 | + | (10) 'Provider' means a person who consummates more than five commercial financing51 |
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| 76 | + | transactions in this state during any calendar year and includes, but is not limited to, a52 |
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| 77 | + | person who, under a written agreement with a depository institution, offers one or more53 |
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| 78 | + | commercial financing products provided by the depository institution via an online54 |
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| 79 | + | platform that the person administers.55 |
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| 80 | + | (b) The provisions of this Code section shall not apply to:56 |
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| 81 | + | (1) A provider that is a federally insured depository financial institution;57 |
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| 82 | + | (2) A provider that is:58 |
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| 83 | + | (A) A subsidiary, an affiliate, or a holding company of a federally insured depository59 |
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| 84 | + | financial institution; or60 |
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| 85 | + | (B) A service corporation for a federally insured depository financial institution;61 |
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| 86 | + | (3) A provider that is regulated under the federal Farm Credit Act, 12 U.S.C. Section62 |
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| 87 | + | 2001, et seq.;63 |
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| 88 | + | (4) A provider that is licensed as a money transmitter in accordance with Article 4 of64 |
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| 89 | + | Chapter 1 of Title 7;65 |
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| 90 | + | (5) A provider that consummates five or fewer commercial financing transactions in the66 |
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| 91 | + | state during any 12 month period;67 |
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| 92 | + | (6) A commercial financing transaction secured by real property;68 23 LC 50 0478S |
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| 93 | + | H. B. 84 (SUB) |
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| 94 | + | - 4 - |
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| 95 | + | (7) A commercial financing transaction that is a lease as defined in Code Section69 |
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| 96 | + | 11-2A-103;70 |
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| 97 | + | (8) A commercial financing transaction that is a purchase money obligation as defined71 |
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| 98 | + | in Code Section 11-9-103;72 |
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| 99 | + | (9) A commercial financing transaction that:73 |
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| 100 | + | (A) Involves a commercial loan or a commercial open-end credit plan;74 |
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| 101 | + | (B) Is $50,000.00 or more; and75 |
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| 102 | + | (C) Extends the commercial loan or the commercial open-end credit plan to:76 |
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| 103 | + | (i) A motor vehicle dealer or the motor vehicle dealer's affiliate; or77 |
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| 104 | + | (ii) A motor vehicle rental company as defined in Code Section 40-2-167 or the78 |
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| 105 | + | motor vehicle rental company's affiliate;79 |
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| 106 | + | (10) A commercial financing transaction offered by a person in connection with the sale80 |
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| 107 | + | or lease of a product or service that:81 |
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| 108 | + | (A) The person manufactures, licenses, or distributes; or82 |
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| 109 | + | (B) The person's parent company or the person's owned and controlled subsidiary83 |
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| 110 | + | manufactures, licenses, or distributes; or84 |
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| 111 | + | (11) A commercial financing transaction of more than $500,000.00.85 |
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| 112 | + | (c) For purposes of Chapter 1 of Title 7, a provider's characterization of an accounts86 |
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| 113 | + | receivable purchase transaction as a purchase shall be conclusive that the accounts87 |
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| 114 | + | receivable purchase transaction is not a loan or a transaction for the use, forbearance, or88 |
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| 115 | + | detention of money.89 |
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| 116 | + | (d) For purposes of Chapter 1 of Title 7, a provider extending a specific offer for a90 |
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| 117 | + | commercial financing transaction on behalf of a depository institution shall not be91 |
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| 118 | + | construed to mean that the provider engaged in lending or financing or originated that loan92 |
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| 119 | + | or financing.93 23 LC 50 0478S |
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| 120 | + | H. B. 84 (SUB) |
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| 121 | + | - 5 - |
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| 122 | + | (e)(1) Before consummating a commercial financing transaction, a provider shall94 |
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| 123 | + | disclose the terms of the commercial financing transaction in accordance with this Code95 |
|---|
| 124 | + | section.96 |
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| 125 | + | (2) Only one disclosure must be provided for each commercial financing transaction, and97 |
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| 126 | + | a disclosure is not required as a result of the modification, forbearance, or change to a98 |
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| 127 | + | consummated commercial financing transaction.99 |
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| 128 | + | (3) A provider shall disclose the following information in connection with each100 |
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| 129 | + | commercial financing transaction:101 |
|---|
| 130 | + | (A) The total amount of funds provided to the business under the terms of the102 |
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| 131 | + | commercial financing transaction;103 |
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| 132 | + | (B) The total amount of funds disbursed to the business under the terms of the104 |
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| 133 | + | commercial financing transaction, if less than the amount described in105 |
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| 134 | + | subparagraph (A) of this paragraph, as a result of any fees deducted or withheld at106 |
|---|
| 135 | + | disbursement, any amount paid to the provider to satisfy a prior balance, and any107 |
|---|
| 136 | + | amount paid to a third party on behalf of the business;108 |
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| 137 | + | (C) The total amount to be paid to the provider under the terms of the commercial109 |
|---|
| 138 | + | financing transaction;110 |
|---|
| 139 | + | (D) The total dollar cost of the commercial financing transaction, calculated by finding111 |
|---|
| 140 | + | the difference between:112 |
|---|
| 141 | + | (i) The amount described in subparagraph (A) of this paragraph; and113 |
|---|
| 142 | + | (ii) The amount described in subparagraph (C) of this paragraph;114 |
|---|
| 143 | + | (E)(i) The manner, frequency, and amount of each payment; or115 |
|---|
| 144 | + | (ii) If the amount of each payment may vary, the manner, frequency, and estimated116 |
|---|
| 145 | + | amount of the initial payment; and117 |
|---|
| 146 | + | (F) A statement of whether there are any costs or discounts associated with prepayment118 |
|---|
| 147 | + | under the commercial financing transaction, including a reference to the paragraph in119 |
|---|
| 148 | + | the commercial financing transaction agreement that creates each cost or discount.120 23 LC 50 0478S |
|---|
| 149 | + | H. B. 84 (SUB) |
|---|
| 151 | + | (4) The commercial financing transaction agreement shall include a description of the121 |
|---|
| 152 | + | methodology for calculating any variable payment amount and the circumstances that122 |
|---|
| 153 | + | may cause a payment amount to vary.123 |
|---|
| 154 | + | (5) The provisions of this subsection shall apply to any commercial financing transaction124 |
|---|
| 155 | + | consummated on or after January 1, 2024.125 |
|---|
| 156 | + | (f) No broker shall:126 |
|---|
| 157 | + | (1) Assess, collect, or solicit an advance fee from a business to provide services as a127 |
|---|
| 158 | + | broker; provided, however, that nothing contained in this paragraph shall preclude a128 |
|---|
| 159 | + | broker from soliciting a potential business to pay for, or preclude a potential business129 |
|---|
| 160 | + | from paying for, actual services necessary to apply for a commercial financing130 |
|---|
| 161 | + | transaction, including, but not limited to, a credit check or an appraisal of security, where131 |
|---|
| 162 | + | such payment is made by check or money order payable to a party independent of the132 |
|---|
| 163 | + | broker;133 |
|---|
| 164 | + | (2) Make or use any false or misleading representations or omit any material fact in the134 |
|---|
| 165 | + | offer or sale of the services of a broker or engage, directly or indirectly, in any act that135 |
|---|
| 166 | + | operates or would operate as fraud or deception upon any person in connection with the136 |
|---|
| 167 | + | offer or sale of the services of a broker, notwithstanding the absence of reliance by the137 |
|---|
| 168 | + | buyer;138 |
|---|
| 169 | + | (3) Make or use any false or deceptive representation in its business dealings; or139 |
|---|
| 170 | + | (4) Offer the services of a broker by making, publishing, disseminating, circulating, or140 |
|---|
| 171 | + | placing before the public within this state an advertisement in a newspaper or other141 |
|---|
| 172 | + | publication or an advertisement in the form of a book, notice, handbill, poster, sign,142 |
|---|
| 173 | + | billboard, bill, circular, pamphlet, letter, photograph, or motion picture or an143 |
|---|
| 174 | + | advertisement circulated by radio, loud-speaker, telephone, television, telegraph, or in144 |
|---|
| 175 | + | any other way, where said offer or advertisement does not disclose the name, business145 |
|---|
| 176 | + | address, and telephone number of the broker. For purposes of this paragraph, the broker146 |
|---|
| 177 | + | shall disclose the actual address and telephone number of the business of the broker in147 23 LC 50 0478S |
|---|
| 178 | + | H. B. 84 (SUB) |
|---|
| 179 | + | - 7 - |
|---|
| 180 | + | addition to the address and telephone number of any forwarding service that the broker148 |
|---|
| 181 | + | may use.149 |
|---|
| 182 | + | (g) The Attorney General may:150 |
|---|
| 183 | + | (1) Receive and act on complaints;151 |
|---|
| 184 | + | (2) Take action designed to obtain voluntary compliance with this Code section; and152 |
|---|
| 185 | + | (3) Commence administrative or judicial proceedings on the Attorney General's own153 |
|---|
| 186 | + | initiative to enforce compliance with this Code section.154 |
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| 187 | + | (h) A person who violates a provision of this Code section is subject to a civil penalty of155 |
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| 188 | + | $500.00 per violation, not to exceed $20,000.00 for all violations arising from the use of156 |
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| 189 | + | the same transaction documentation or materials.157 |
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| 190 | + | (i) A person who violates a provision of this Code section after receiving written notice158 |
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| 191 | + | of a prior violation is subject to a civil penalty of $1,000.00 per violation, not to exceed159 |
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| 192 | + | $50,000.00 for all violations arising from the use of the same transaction documentation160 |
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| 193 | + | or materials.161 |
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| 194 | + | (j) Nothing in this Code section creates a private right of action against any person based162 |
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| 195 | + | on failure to comply with the provisions of this Code section.163 |
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| 196 | + | (k) A violation of this Code section shall not affect the enforceability of any underlying164 |
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| 197 | + | agreement."165 |
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| 198 | + | SECTION 2.166 |
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| 199 | + | All laws and parts of laws in conflict with this Act are repealed.167 |
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