New Jersey Assembly Bill A2064

New Jersey 2022-2023 Regular Session

• Introduced: 2/3/22
• Refer: 2/3/22

Caption

Creates certain requirements for certain earned income access services and related provider contracts.

Impact

The legislation is designed to enhance consumer protection by regulating how earned income access services operate within the state. If a provider fails to comply with the bill's provisions, their services may be classified as loans, bringing them under the purview of civil and criminal usury laws. This regulatory change aims to prevent exploitation of consumers who may rely on advance payments of wages and enhance their financial safety. By also requiring providers to comply with the Federal Truth in Lending Act, the bill aims to ensure that consumers receive transparent disclosures about fees and charges, promoting responsible lending practices.

Summary

Assembly Bill A2064 introduces regulatory frameworks for earned income access services in New Jersey. These services involve the provision of funds to consumers that represent earned but unpaid income and stipulate that these funds should not be classified as loans. The bill outlines specific requirements for service providers, including obtaining a license from the Department of Banking and Insurance and establishing contractual agreements with obligors, which are employers or individuals financially responsible for the consumer's earnings. Notably, the bill defines key terminologies and establishes operational guidelines to ensure clarity in consumer-provider relationships.

Contention

There are potential points of contention regarding the effectiveness of the bill in balancing consumer protection with service provider operations. Critics may argue that certain compliance measures and fee cap regulations could deter financial service providers from entering the earned income access market, possibly limiting options for consumers. Others may voice concerns over the sufficiency of regulatory enforcement mechanisms to ensure compliance and protect consumers effectively. As earned income access services continue to grow in popularity, the implications of this bill could spark ongoing debates about the appropriate balance of regulatory intervention in financial services.