Wisconsin Assembly Bill AB574

Wisconsin 2023-2024 Regular Session

• Introduced: 10/27/23
• Refer: 10/27/23
• Report Pass: 11/9/23
• Refer: 11/9/23
• Engrossed: 11/14/23
• Refer: 11/21/23
• Refer: 2/20/24
• Enrolled: 3/4/24
• Chaptered: 3/21/24
• Passed: 3/21/24

Caption

Regulating earned wage access services, granting rule-making authority, and providing a penalty. (FE)

Impact

The passage of AB574 significantly alters the landscape for earned wage access services and introduces better oversight and consumer rights protections. By requiring providers to be licensed, the bill aims to enhance accountability and ensure that businesses adhere to ethical standards when providing financial services to consumers. It delineates penalties for violations and establishes procedures for enforcement, thus giving the state the necessary tools to regulate the industry effectively. The act also incorporates transitional provisions for existing providers to obtain licenses, facilitating a smoother transition into compliance with the new regulations.

Summary

AB574, known as the 2023 Wisconsin Act 131, focuses on regulating earned wage access services in the state. This act establishes a licensing system for providers who offer consumers access to their earned but unpaid income. It mandates that service providers must apply for and acquire a license from the division of banking, effectively creating a regulatory framework for these financial services to ensure consumer protection and reduce potential malpractices within this sector. The legislation aims to prevent providers from imposing unfair fees or collecting debts improperly, establishing clear guidelines for acceptable business practices.

Sentiment

The sentiment around AB574 appears to be largely positive among consumer advocates and proponents of financial reform, as it seeks to safeguard consumers against potential exploitation. However, some stakeholders in the financial sector may view the additional regulatory requirements as burdensome. The law reflects a growing recognition of the need to protect individuals in precarious financial situations, particularly as earned wage access services become more prevalent. Overall, it represents a balanced approach to regulation that encourages responsible lending while protecting consumers.

Contention

Notably, while most discussions highlighted the necessity of consumer protections, there may have been dissent from parts of the financial industry regarding the perceived complexity and costs associated with licensing. There are concerns that stringent regulations could stifle innovation in financial service offerings or lead to higher service costs for consumers. Furthermore, the implications of enforcing penalties for infractions could raise questions about the balance between safeguarding consumers and promoting a competitive marketplace.