BILL ANALYSIS C.S.H.B. 2043 By: Lambert Pensions, Investments & Financial Services Committee Report (Substituted) BACKGROUND AND PURPOSE The bill author has informed that committee that the number of companies providing earned wage access services has increased in recent years and, while earned wage access stakeholders such as EarnIn and DailyPay are attempting to promote ethical business practices and responsible self-regulation within their industry, there is a need for legislation to provide oversight. C.S.H.B. 2043 seeks to address the need for the regulation of earned wage access services in both business-to-business and business-to-consumer interactions by creating the Texas Earned Wage Access Services Act, which requires earned wage access services providers to hold a registration to engage in that business in Texas, among other provisions. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is expressly granted to the Finance Commission of Texas in SECTION 1 of this bill. ANALYSIS C.S.H.B. 2043 amends the Finance Code to provide for the regulation of earned wage access services, defined by the bill as the business of providing consumer-directed wage access services, employer-integrated wage access services, or both such services. The bill further defines the following terms: "consumer" as an individual who resides in Texas; "consumer-directed wage access services" as offering or providing services directly to a consumer based on the consumer's earned but unpaid income; "control" as the power to directly or indirectly vote at least 25 percent or more of the outstanding voting shares or voting interests of a provider or person in control of a provider, elect or appoint a majority of key individuals, or directly or indirectly exercise a controlling influence over the management or policies of a provider or person in control of a provider; "earned but unpaid income" as salary, wages, compensation, or income that a consumer represents, and a provider reasonably determines, has been earned or has accrued to the benefit of the consumer in exchange for the consumer's provision of services to an employer or on the employer's behalf and has not, at the time of the payment of proceeds, been paid to the consumer by the employer; "earned wage access services provider" or "provider" as a person who is in the business of offering and providing earned wage access services to consumers, not including the following: o an entity that offers or provides earned wage access services and reports to a consumer reporting agency described by the federal Fair Credit Reporting Act a consumer's payment or nonpayment of outstanding proceeds of the earned wage access services or fees, voluntary tips, gratuities, or other donations in connection with the earned wage access services; o a service provider, including a payroll service provider, whose role includes verification of the earned but unpaid income but who is not contractually obligated to fund proceeds delivered to a consumer as part of an earned wage access service; or o an employer that offers a portion of salary, wages, or compensation directly to its employees or independent contractors before the scheduled pay date; "employer" as a person who employs a consumer or a person who is contractually obligated to pay a consumer earned but unpaid income on an hourly, project-based, piecework, or other basis, in exchange for the consumer's provision of services to the employer or on the employer's behalf, including to a consumer who is acting as an independent contractor with respect to the employer, not including a customer of the employer or a person whose obligation to pay salary, wages, compensation, or other income to a consumer is not based on the consumer's provision of services for or on behalf of that person; "employer-integrated wage access services" as 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; "fee" as including an amount charged by a provider for expedited delivery or other delivery of proceeds to a consumer and for a subscription or membership fee charged by a provider for a bona fide group of services that includes earned wage access services or an amount paid by an employer to a provider on a consumer's behalf that entitles the consumer to receive proceeds at reduced or no cost to the consumer, not including a voluntary tip, gratuity, or donation paid to the provider; "key individual" as an individual who is ultimately responsible for establishing or directing policies and procedures of a provider, including an executive officer, manager, director, or trustee; "outstanding proceeds" as proceeds remitted to a consumer by a provider that have not been repaid to that provider; and "proceeds" as a payment to a consumer by a provider that is based on earned but unpaid income. C.S.H.B. 2043 requires an earned wage access services provider, not later than the 30th business day after the date of a request from the consumer credit commissioner, to file with the commissioner a financial statement, audited or unaudited, dated as of the last day of the provider's fiscal year that ended in the immediately preceding calendar year and any other information as the commissioner may reasonably require. The bill does the following with respect to an audited financial statement: requires the statement to be prepared in accordance with United States generally accepted accounting principles and by an independent certified public accountant or independent public accountant who is satisfactory to the commissioner; requires the statement to include or be accompanied by a certificate of opinion of the independent certified public accountant or independent public accountant that is satisfactory in form and content to the commissioner; and if the certificate of opinion is qualified, authorizes the commissioner to order the provider to take any action the commissioner finds necessary to enable the independent certified public accountant or independent public accountant to remove the qualification. C.S.H.B. 2043 requires an earned wage access services provider to file a report with the commissioner not later than the first business day after the provider has reason to know of any of the following: the filing of a petition by or against the provider under the federal U.S. Bankruptcy Code for bankruptcy or reorganization; the filing of a petition by or against the provider for receivership, the commencement of any other judicial or administrative proceeding for the provider's dissolution or reorganization, or the making of a general assignment for the benefit of the provider's creditors; or the commencement of a proceeding to revoke or suspend the provider's license in a state or country in which the provider engages in or is licensed to engage in earned wage access services. The bill requires a provider to file a report with the commissioner not later than the third business day after the provider has reason to know of the occurrence of a felony charge or conviction of the provider or a key individual or a person in control of the provider. C.S.H.B. 2043 requires a provider who receives the proceeds of a paycheck of a consumer for forwarding all or a portion of the proceeds to the consumer to forward the proceeds in accordance with the terms of the agreement between the provider and the consumer unless the provider has a reasonable belief or a reasonable basis to believe of the existence of fraud or that a crime or violation of law, rule, or regulation has occurred, is occurring, or may occur. The bill requires a provider who fails to forward the proceeds to respond to inquiries by the consumer with the reason for the failure unless providing the reason would violate a local, state, or federal law. C.S.H.B. 2043 requires a provider, before entering into an agreement with a consumer for the provision of earned wage access services, to provide that consumer with a disclosure that meets the following criteria: uses a font and language intended to be easily understood by a layperson; informs the consumer of the consumer's rights under the contract; and fully and clearly discloses each fee associated with the earned wage access services. The disclosure may be in written or electronic form and included as part of the contract to provide earned wage access services. The bill requires a provider to notify a consumer of any material change to the information provided in such a disclosure, using a font and language intended to be easily understood by a layperson, before implementing the particular change with respect to that consumer. C.S.H.B. 2043 requires a provider, at the time that the provider charges a fee or solicits a tip, gratuity, or donation from a consumer, to offer the consumer at least one reasonable option to obtain proceeds at no cost to the consumer and clearly explain how to elect that no-cost option. The no-cost option must require the provider to initiate transmission of the proceeds to the consumer not later than one business day after the date the consumer makes the request. C.S.H.B. 2043 authorizes each contract for the provision of earned wage access services to a consumer by a provider to be in writing or electronic form and requires each contract to be dated, include the written or digital signature of the consumer, and use a font and language intended to be easily understood by a layperson. The bill requires an earned wage access services provider to make available to the consumer a copy of the completed contract when receipt of the document is acknowledged by the consumer and requires each contract to disclose the following: fee obligations are subject to the limitations on compelling or attempting to compel repayment under the bill's provisions; proceeds will be provided to the consumer using a method agreed to by the consumer and the provider; the consumer may cancel at any time the consumer's participation in the provider's services without incurring a cancellation fee; the provider is required to develop and implement policies and procedures to respond to questions asked and concerns raised by consumers and to address consumer complaints in an expedient manner; if a provider seeks repayment of outstanding proceeds, a fee, or another payment from a consumer, including a voluntary tip, gratuity, or other donation, from a consumer's account at a depository institution, including through an electronic funds transfer, the provider must: o comply with applicable provisions of and regulations adopted under the federal Electronic Fund Transfer Act; and o unless the payment sought by the provider was incurred by the consumer using fraudulent or unlawful means, reimburse the consumer for the full amount of any overdraft or non-sufficient funds fees imposed on the consumer by the consumer's depository institution if the provider attempts to seek any payment from the consumer on a date before, or in a different amount from, the date or amount disclosed to the consumer for that payment; the provider is required to comply with all local, state, and federal privacy and information security laws; and if the provider solicits, charges, or receives a tip, gratuity, or donation from the consumer, the provider: o must clearly and conspicuously disclose to the consumer immediately before each transaction that the tip, gratuity, or donation is voluntary and may be set to zero by the consumer; o must set the amount of any default tip, gratuity, or donation at zero; o must clearly and conspicuously disclose in the contract and other service contracts with consumers that any tip, gratuity, or donation from a consumer to a provider is voluntary and the offering of 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 a consumer pays any tip, gratuity, or donation or on the size of any tip, gratuity, or donation; o may not mislead or deceive the consumer regarding the voluntary nature of the tip, gratuity, or donation; and o may not represent that the tip, gratuity, or donation will benefit a specific individual. C.S.H.B. 2043 prohibits an earned wage access services provider from doing the following in connection with providing earned wage access services to consumers: sharing with an employer any fees, tips, gratuities, or other donations that were received from or charged to a consumer for earned wage access services; accepting payment of outstanding proceeds, a fee, or a tip, gratuity, or other donation from a consumer through use of a credit card or charge card; charging a late fee, deferral fee, interest, or other fee or charge for failure to pay outstanding proceeds, a fee, or a tip, gratuity, or other donation; requiring a consumer's credit score from a credit report to determine the consumer's eligibility for earned wage access services; making or using a false or misleading representation or statement to a consumer during the offer or provision of earned wage access services; directly or indirectly engaging in a fraudulent or deceptive act, practice, or course of business relating to the offer or provision of earned wage access services; or compelling or attempting to compel payment by a consumer of outstanding proceeds, a fee, or a tip, gratuity, or other donation to the provider by: o repeatedly attempting to debit a consumer's depository institution account in violation of applicable payment system rules; o making outbound telephone calls to the consumer; o filing a suit against the consumer; o using a third party to pursue collection of the payment from the consumer on the provider's behalf; or o selling the outstanding amount to a third-party collector or debt buyer for purposes of collection from the consumer. A provider is not precluded from using any of the prohibited methods for compelling or attempting to compel payment by a consumer as follows: to compel or attempt to compel repayment of outstanding amounts incurred by a consumer through fraudulent or unlawful means; or to pursue an employer for breach of the employer's contractual obligations to the provider. C.S.H.B. 2043 requires a person to hold a registration under the bill's provisions to engage in the business of offering or providing earned wage access services in Texas, except for the following persons: a bank, credit union, savings bank, or savings and loan association organized under federal law or under the laws of the financial institution's state of domicile; or an employer that offers a portion of salary, wages, or compensation directly to its employees or independent contractors before the normally scheduled pay date. The bill does the following with respect to the application for registration: authorizes the commissioner to prescribe the form for the application; requires the application to contain the information required by the commissioner in order to determine an applicant's eligibility; requires an applicant, on the filing of each registration application, to pay to the commissioner an investigation fee and a registration fee in amounts determined as provided by statutory provisions relating to the commissioner's power and duties; requires the commissioner to approve the application and issue to the applicant a registration if the commissioner finds that the applicant obtained the surety bond required by the bill and that the financial responsibility, experience, character, and general fitness of the applicant are sufficient to command the confidence of the public and warrant the belief that the business will be operated lawfully and fairly, within the purposes of the bill's provisions; requires the commissioner to notify the applicant if the commissioner does not find the eligibility requirements are met; and entitles an applicant who requests a hearing on the application not later than the 30th day after the date of such notification to a hearing on the denial of the application. A registration issued under the bill's provisions is valid for the period prescribed by Finance Commission of Texas rule adopted under statutory provisions relating to licensing and registration terms. The bill requires a registration holder, to maintain an active registration, to pay to the commissioner the following amount determined as provided by applicable state law: an assessment to cover costs associated with registration; and any direct and indirect costs of examination. The bill requires a person who is required to hold a registration to hold a registration for each office at which the person conducts business of offering or providing earned wage access services in Texas. C.S.H.B. 2043 authorizes the commissioner, after notice and opportunity for a hearing, to suspend or revoke a registration if the commissioner finds that: the registration holder failed to pay the registration fee, an examination fee, an investigation fee, or another charge imposed by the commissioner under the bill's provisions; the registration holder, knowingly or without the exercise of due care, violated the bill's provisions or a rule adopted or order issued under those provisions; or a fact or condition exists that, if it had existed or had been known to exist at the time of the original application for the registration, clearly would have justified the commissioner's denial of the application. The bill authorizes the commissioner to refuse to renew the registration of a person who fails to comply with an order issued by the commissioner to enforce the bill. C.S.H.B. 2043 requires a provider to maintain a surety bond in the amount of $200,000. The bill does the following with respect to the surety bond: requires the bond to be in favor of the state for the state's use and the use of a person damaged by a violation of the bill's provisions; requires the bond to be issued by a surety company qualified to do business as a surety in Texas; and prohibits the aggregate liability of a surety to all persons damaged by the registration holder's violation from exceeding the amount of the bond. C.S.H.B. 2043 requires the commissioner or the commissioner's representative, at the times the commissioner considers necessary, to examine each place of business of each provider and investigate the provider's transactions and records. The bill requires a provider to give the commissioner or the commissioner's representative free access to the provider's place of business and records and allow the commissioner or the commissioner's representative to make a copy of a record that may be investigated. The bill requires the provider to maintain a record of each transaction conducted under the bill's provisions as is necessary to enable the commissioner to determine whether the provider is complying with the bill's provisions. The bill requires the provider to keep the record until the later of the fourth anniversary of the date of the contract for earned wage access services or the second anniversary of the date on which the final entry is made in the record. The bill requires the provider to annually file with the commissioner a report that contains relevant information required by the commissioner concerning the provider's business in Texas during the preceding calendar year. The bill requires the report to be in the form prescribed by the commissioner and filed not later than the deadline set by the commissioner. The bill establishes that the report is confidential. C.S.H.B. 2043 authorizes a provider to use the mailing address or state of residence provided by a consumer to determine the consumer's state of residence for purposes of the bill's earned wage access services provisions. The bill establishes that a provider is not considered to be engaging in lending, money transmission, or debt collection in Texas, or in violation of state law governing deductions from wages or the purchase, sale, or assignment of or an order for earned but unpaid income, if that provider complies with the requirements and prohibitions specified in those bill provisions. C.S.H.B. 2043 authorizes the finance commission to adopt rules to enforce the bill's earned wage access services provisions and requires the commissioner to recommend proposed rules to the finance commission. C.S.H.B. 2043 amends the Government Code to entitle the commissioner to obtain criminal history record information that relates to a person who is an applicant for or holder of a registration under the bill's provisions. C.S.H.B. 2043 requires a person engaging in business as an earned wage access services provider on the bill's effective date to obtain a registration not later than January 1, 2026, and establishes that the bill's provisions specifying certain requirements and prohibitions apply only to a contract for earned wage access services entered into on or after the bill's effective date. EFFECTIVE DATE September 1, 2025. COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 2043 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. The substitute omits provisions from the introduced that authorized the commissioner to assess an administrative penalty against a person who knowingly and wilfully violates or causes a violation of the bill's provisions and to order an earned wage access services provider who violates or causes such a violation to pay restitution to an identifiable person. The substitute includes provisions absent from the introduced that do the following: define "control" and "key individual"; include among the entities that are not considered earned wage access services providers an entity that offers or provides earned wage access services and reports to a consumer reporting agency described by the federal Fair Credit Reporting Act a consumer's payment or nonpayment of outstanding proceeds of the earned wage access services or fees, voluntary tips, gratuities, or other donations in connection with the earned wage access services; require an earned wage access services provider to file a financial statement with the commissioner; set out requirements for the preparation of such a financial statement that is audited; require an audited financial statement to include or be accompanied by a certificate of opinion of the independent certified public accountant or independent public accountant; authorize the commissioner to order the provider to take any action the commissioner finds necessary to enable the independent certified public accountant or independent public accountant to remove the qualification if the certificate of opinion is qualified; require a provider to file a report with the commissioner in the event of certain judicial or administrative events; require a provider to file a report with the commissioner regarding the occurrence of a felony charge or certain convictions; require a provider who receives the proceeds of a paycheck of a consumer for forwarding all or a portion of the proceeds to the consumer to forward the proceeds in accordance with the terms of the agreement between the provider and the consumer unless certain conditions exist; require a provider who fails to forward the proceeds to respond to inquiries by the consumer with the reason for the failure unless providing the reason would violate a local, state, or federal law; require a no-cost option offered to a consumer by the provider regarding proceeds to require the provider to initiate transmission of the proceeds to the consumer not later than one business day after the date the consumer makes the request; require a contract for provision of services to disclose that a provider who solicits, charges, or receives a tip, gratuity, or donation from the consumer must set the amount of any default tip, gratuity, or donation at zero; require a provider to hold a registration to engage in the business of offering or providing earned wage access services in Texas and set out related provisions regarding the registration and the suspension or revocation of or refusal to renew a registration; require a provider to maintain a surety bond of $200,000 and set out related surety bond provisions; set out requirements regarding the examination and investigation of providers' places of business and records by the commissioner or the commissioner's representative and the commissioner's or the commissioner's representative's access to the provider's place of business and records; require a provider to maintain a record of each transaction conducted under the bill's provisions as is necessary to enable the commissioner to determine whether the provider is complying with the bill's provisions and establish a retention period for those records; require a provider to file an annual report with the commissioner and set out requirements relating to the report; authorize the finance commission to adopt rules to enforce the bill's provisions and require the commissioner to recommend proposed rules to the finance commission; entitle the commissioner to obtain criminal history record information that relates to an applicant for or holder of the registration; and require a person engaging in business as an earned wage access services provider on the bill's effective date to obtain a registration not later than January 1, 2026. The substitute omits a prohibition from the introduced that prohibited a provider from reporting any information regarding the provider's inability to receive repayment of outstanding proceeds, or receive a fee or a tip, gratuity, or other donation, from a consumer to a consumer credit reporting agency or a debt collector. Whereas the introduced prohibited a provider from requiring a consumer's credit report or credit score to determine the consumer's eligibility for earned wage access services, the substitute prohibits a provider from requiring a consumer's credit score from a credit report to make that determination.
BILL ANALYSIS
# BILL ANALYSIS
C.S.H.B. 2043
By: Lambert
Pensions, Investments & Financial Services
Committee Report (Substituted)
C.S.H.B. 2043
By: Lambert
Pensions, Investments & Financial Services
Committee Report (Substituted)
BACKGROUND AND PURPOSE The bill author has informed that committee that the number of companies providing earned wage access services has increased in recent years and, while earned wage access stakeholders such as EarnIn and DailyPay are attempting to promote ethical business practices and responsible self-regulation within their industry, there is a need for legislation to provide oversight. C.S.H.B. 2043 seeks to address the need for the regulation of earned wage access services in both business-to-business and business-to-consumer interactions by creating the Texas Earned Wage Access Services Act, which requires earned wage access services providers to hold a registration to engage in that business in Texas, among other provisions.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is expressly granted to the Finance Commission of Texas in SECTION 1 of this bill.
ANALYSIS C.S.H.B. 2043 amends the Finance Code to provide for the regulation of earned wage access services, defined by the bill as the business of providing consumer-directed wage access services, employer-integrated wage access services, or both such services. The bill further defines the following terms: "consumer" as an individual who resides in Texas; "consumer-directed wage access services" as offering or providing services directly to a consumer based on the consumer's earned but unpaid income; "control" as the power to directly or indirectly vote at least 25 percent or more of the outstanding voting shares or voting interests of a provider or person in control of a provider, elect or appoint a majority of key individuals, or directly or indirectly exercise a controlling influence over the management or policies of a provider or person in control of a provider; "earned but unpaid income" as salary, wages, compensation, or income that a consumer represents, and a provider reasonably determines, has been earned or has accrued to the benefit of the consumer in exchange for the consumer's provision of services to an employer or on the employer's behalf and has not, at the time of the payment of proceeds, been paid to the consumer by the employer; "earned wage access services provider" or "provider" as a person who is in the business of offering and providing earned wage access services to consumers, not including the following: o an entity that offers or provides earned wage access services and reports to a consumer reporting agency described by the federal Fair Credit Reporting Act a consumer's payment or nonpayment of outstanding proceeds of the earned wage access services or fees, voluntary tips, gratuities, or other donations in connection with the earned wage access services; o a service provider, including a payroll service provider, whose role includes verification of the earned but unpaid income but who is not contractually obligated to fund proceeds delivered to a consumer as part of an earned wage access service; or o an employer that offers a portion of salary, wages, or compensation directly to its employees or independent contractors before the scheduled pay date; "employer" as a person who employs a consumer or a person who is contractually obligated to pay a consumer earned but unpaid income on an hourly, project-based, piecework, or other basis, in exchange for the consumer's provision of services to the employer or on the employer's behalf, including to a consumer who is acting as an independent contractor with respect to the employer, not including a customer of the employer or a person whose obligation to pay salary, wages, compensation, or other income to a consumer is not based on the consumer's provision of services for or on behalf of that person; "employer-integrated wage access services" as 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; "fee" as including an amount charged by a provider for expedited delivery or other delivery of proceeds to a consumer and for a subscription or membership fee charged by a provider for a bona fide group of services that includes earned wage access services or an amount paid by an employer to a provider on a consumer's behalf that entitles the consumer to receive proceeds at reduced or no cost to the consumer, not including a voluntary tip, gratuity, or donation paid to the provider; "key individual" as an individual who is ultimately responsible for establishing or directing policies and procedures of a provider, including an executive officer, manager, director, or trustee; "outstanding proceeds" as proceeds remitted to a consumer by a provider that have not been repaid to that provider; and "proceeds" as a payment to a consumer by a provider that is based on earned but unpaid income. C.S.H.B. 2043 requires an earned wage access services provider, not later than the 30th business day after the date of a request from the consumer credit commissioner, to file with the commissioner a financial statement, audited or unaudited, dated as of the last day of the provider's fiscal year that ended in the immediately preceding calendar year and any other information as the commissioner may reasonably require. The bill does the following with respect to an audited financial statement: requires the statement to be prepared in accordance with United States generally accepted accounting principles and by an independent certified public accountant or independent public accountant who is satisfactory to the commissioner; requires the statement to include or be accompanied by a certificate of opinion of the independent certified public accountant or independent public accountant that is satisfactory in form and content to the commissioner; and if the certificate of opinion is qualified, authorizes the commissioner to order the provider to take any action the commissioner finds necessary to enable the independent certified public accountant or independent public accountant to remove the qualification. C.S.H.B. 2043 requires an earned wage access services provider to file a report with the commissioner not later than the first business day after the provider has reason to know of any of the following: the filing of a petition by or against the provider under the federal U.S. Bankruptcy Code for bankruptcy or reorganization; the filing of a petition by or against the provider for receivership, the commencement of any other judicial or administrative proceeding for the provider's dissolution or reorganization, or the making of a general assignment for the benefit of the provider's creditors; or the commencement of a proceeding to revoke or suspend the provider's license in a state or country in which the provider engages in or is licensed to engage in earned wage access services. The bill requires a provider to file a report with the commissioner not later than the third business day after the provider has reason to know of the occurrence of a felony charge or conviction of the provider or a key individual or a person in control of the provider. C.S.H.B. 2043 requires a provider who receives the proceeds of a paycheck of a consumer for forwarding all or a portion of the proceeds to the consumer to forward the proceeds in accordance with the terms of the agreement between the provider and the consumer unless the provider has a reasonable belief or a reasonable basis to believe of the existence of fraud or that a crime or violation of law, rule, or regulation has occurred, is occurring, or may occur. The bill requires a provider who fails to forward the proceeds to respond to inquiries by the consumer with the reason for the failure unless providing the reason would violate a local, state, or federal law. C.S.H.B. 2043 requires a provider, before entering into an agreement with a consumer for the provision of earned wage access services, to provide that consumer with a disclosure that meets the following criteria: uses a font and language intended to be easily understood by a layperson; informs the consumer of the consumer's rights under the contract; and fully and clearly discloses each fee associated with the earned wage access services. The disclosure may be in written or electronic form and included as part of the contract to provide earned wage access services. The bill requires a provider to notify a consumer of any material change to the information provided in such a disclosure, using a font and language intended to be easily understood by a layperson, before implementing the particular change with respect to that consumer. C.S.H.B. 2043 requires a provider, at the time that the provider charges a fee or solicits a tip, gratuity, or donation from a consumer, to offer the consumer at least one reasonable option to obtain proceeds at no cost to the consumer and clearly explain how to elect that no-cost option. The no-cost option must require the provider to initiate transmission of the proceeds to the consumer not later than one business day after the date the consumer makes the request. C.S.H.B. 2043 authorizes each contract for the provision of earned wage access services to a consumer by a provider to be in writing or electronic form and requires each contract to be dated, include the written or digital signature of the consumer, and use a font and language intended to be easily understood by a layperson. The bill requires an earned wage access services provider to make available to the consumer a copy of the completed contract when receipt of the document is acknowledged by the consumer and requires each contract to disclose the following: fee obligations are subject to the limitations on compelling or attempting to compel repayment under the bill's provisions; proceeds will be provided to the consumer using a method agreed to by the consumer and the provider; the consumer may cancel at any time the consumer's participation in the provider's services without incurring a cancellation fee; the provider is required to develop and implement policies and procedures to respond to questions asked and concerns raised by consumers and to address consumer complaints in an expedient manner; if a provider seeks repayment of outstanding proceeds, a fee, or another payment from a consumer, including a voluntary tip, gratuity, or other donation, from a consumer's account at a depository institution, including through an electronic funds transfer, the provider must: o comply with applicable provisions of and regulations adopted under the federal Electronic Fund Transfer Act; and o unless the payment sought by the provider was incurred by the consumer using fraudulent or unlawful means, reimburse the consumer for the full amount of any overdraft or non-sufficient funds fees imposed on the consumer by the consumer's depository institution if the provider attempts to seek any payment from the consumer on a date before, or in a different amount from, the date or amount disclosed to the consumer for that payment; the provider is required to comply with all local, state, and federal privacy and information security laws; and if the provider solicits, charges, or receives a tip, gratuity, or donation from the consumer, the provider: o must clearly and conspicuously disclose to the consumer immediately before each transaction that the tip, gratuity, or donation is voluntary and may be set to zero by the consumer; o must set the amount of any default tip, gratuity, or donation at zero; o must clearly and conspicuously disclose in the contract and other service contracts with consumers that any tip, gratuity, or donation from a consumer to a provider is voluntary and the offering of 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 a consumer pays any tip, gratuity, or donation or on the size of any tip, gratuity, or donation; o may not mislead or deceive the consumer regarding the voluntary nature of the tip, gratuity, or donation; and o may not represent that the tip, gratuity, or donation will benefit a specific individual. C.S.H.B. 2043 prohibits an earned wage access services provider from doing the following in connection with providing earned wage access services to consumers: sharing with an employer any fees, tips, gratuities, or other donations that were received from or charged to a consumer for earned wage access services; accepting payment of outstanding proceeds, a fee, or a tip, gratuity, or other donation from a consumer through use of a credit card or charge card; charging a late fee, deferral fee, interest, or other fee or charge for failure to pay outstanding proceeds, a fee, or a tip, gratuity, or other donation; requiring a consumer's credit score from a credit report to determine the consumer's eligibility for earned wage access services; making or using a false or misleading representation or statement to a consumer during the offer or provision of earned wage access services; directly or indirectly engaging in a fraudulent or deceptive act, practice, or course of business relating to the offer or provision of earned wage access services; or compelling or attempting to compel payment by a consumer of outstanding proceeds, a fee, or a tip, gratuity, or other donation to the provider by: o repeatedly attempting to debit a consumer's depository institution account in violation of applicable payment system rules; o making outbound telephone calls to the consumer; o filing a suit against the consumer; o using a third party to pursue collection of the payment from the consumer on the provider's behalf; or o selling the outstanding amount to a third-party collector or debt buyer for purposes of collection from the consumer. A provider is not precluded from using any of the prohibited methods for compelling or attempting to compel payment by a consumer as follows: to compel or attempt to compel repayment of outstanding amounts incurred by a consumer through fraudulent or unlawful means; or to pursue an employer for breach of the employer's contractual obligations to the provider. C.S.H.B. 2043 requires a person to hold a registration under the bill's provisions to engage in the business of offering or providing earned wage access services in Texas, except for the following persons: a bank, credit union, savings bank, or savings and loan association organized under federal law or under the laws of the financial institution's state of domicile; or an employer that offers a portion of salary, wages, or compensation directly to its employees or independent contractors before the normally scheduled pay date. The bill does the following with respect to the application for registration: authorizes the commissioner to prescribe the form for the application; requires the application to contain the information required by the commissioner in order to determine an applicant's eligibility; requires an applicant, on the filing of each registration application, to pay to the commissioner an investigation fee and a registration fee in amounts determined as provided by statutory provisions relating to the commissioner's power and duties; requires the commissioner to approve the application and issue to the applicant a registration if the commissioner finds that the applicant obtained the surety bond required by the bill and that the financial responsibility, experience, character, and general fitness of the applicant are sufficient to command the confidence of the public and warrant the belief that the business will be operated lawfully and fairly, within the purposes of the bill's provisions; requires the commissioner to notify the applicant if the commissioner does not find the eligibility requirements are met; and entitles an applicant who requests a hearing on the application not later than the 30th day after the date of such notification to a hearing on the denial of the application. A registration issued under the bill's provisions is valid for the period prescribed by Finance Commission of Texas rule adopted under statutory provisions relating to licensing and registration terms. The bill requires a registration holder, to maintain an active registration, to pay to the commissioner the following amount determined as provided by applicable state law: an assessment to cover costs associated with registration; and any direct and indirect costs of examination. The bill requires a person who is required to hold a registration to hold a registration for each office at which the person conducts business of offering or providing earned wage access services in Texas. C.S.H.B. 2043 authorizes the commissioner, after notice and opportunity for a hearing, to suspend or revoke a registration if the commissioner finds that: the registration holder failed to pay the registration fee, an examination fee, an investigation fee, or another charge imposed by the commissioner under the bill's provisions; the registration holder, knowingly or without the exercise of due care, violated the bill's provisions or a rule adopted or order issued under those provisions; or a fact or condition exists that, if it had existed or had been known to exist at the time of the original application for the registration, clearly would have justified the commissioner's denial of the application. The bill authorizes the commissioner to refuse to renew the registration of a person who fails to comply with an order issued by the commissioner to enforce the bill. C.S.H.B. 2043 requires a provider to maintain a surety bond in the amount of $200,000. The bill does the following with respect to the surety bond: requires the bond to be in favor of the state for the state's use and the use of a person damaged by a violation of the bill's provisions; requires the bond to be issued by a surety company qualified to do business as a surety in Texas; and prohibits the aggregate liability of a surety to all persons damaged by the registration holder's violation from exceeding the amount of the bond. C.S.H.B. 2043 requires the commissioner or the commissioner's representative, at the times the commissioner considers necessary, to examine each place of business of each provider and investigate the provider's transactions and records. The bill requires a provider to give the commissioner or the commissioner's representative free access to the provider's place of business and records and allow the commissioner or the commissioner's representative to make a copy of a record that may be investigated. The bill requires the provider to maintain a record of each transaction conducted under the bill's provisions as is necessary to enable the commissioner to determine whether the provider is complying with the bill's provisions. The bill requires the provider to keep the record until the later of the fourth anniversary of the date of the contract for earned wage access services or the second anniversary of the date on which the final entry is made in the record. The bill requires the provider to annually file with the commissioner a report that contains relevant information required by the commissioner concerning the provider's business in Texas during the preceding calendar year. The bill requires the report to be in the form prescribed by the commissioner and filed not later than the deadline set by the commissioner. The bill establishes that the report is confidential. C.S.H.B. 2043 authorizes a provider to use the mailing address or state of residence provided by a consumer to determine the consumer's state of residence for purposes of the bill's earned wage access services provisions. The bill establishes that a provider is not considered to be engaging in lending, money transmission, or debt collection in Texas, or in violation of state law governing deductions from wages or the purchase, sale, or assignment of or an order for earned but unpaid income, if that provider complies with the requirements and prohibitions specified in those bill provisions. C.S.H.B. 2043 authorizes the finance commission to adopt rules to enforce the bill's earned wage access services provisions and requires the commissioner to recommend proposed rules to the finance commission. C.S.H.B. 2043 amends the Government Code to entitle the commissioner to obtain criminal history record information that relates to a person who is an applicant for or holder of a registration under the bill's provisions. C.S.H.B. 2043 requires a person engaging in business as an earned wage access services provider on the bill's effective date to obtain a registration not later than January 1, 2026, and establishes that the bill's provisions specifying certain requirements and prohibitions apply only to a contract for earned wage access services entered into on or after the bill's effective date.
EFFECTIVE DATE September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 2043 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. The substitute omits provisions from the introduced that authorized the commissioner to assess an administrative penalty against a person who knowingly and wilfully violates or causes a violation of the bill's provisions and to order an earned wage access services provider who violates or causes such a violation to pay restitution to an identifiable person. The substitute includes provisions absent from the introduced that do the following: define "control" and "key individual"; include among the entities that are not considered earned wage access services providers an entity that offers or provides earned wage access services and reports to a consumer reporting agency described by the federal Fair Credit Reporting Act a consumer's payment or nonpayment of outstanding proceeds of the earned wage access services or fees, voluntary tips, gratuities, or other donations in connection with the earned wage access services; require an earned wage access services provider to file a financial statement with the commissioner; set out requirements for the preparation of such a financial statement that is audited; require an audited financial statement to include or be accompanied by a certificate of opinion of the independent certified public accountant or independent public accountant; authorize the commissioner to order the provider to take any action the commissioner finds necessary to enable the independent certified public accountant or independent public accountant to remove the qualification if the certificate of opinion is qualified; require a provider to file a report with the commissioner in the event of certain judicial or administrative events; require a provider to file a report with the commissioner regarding the occurrence of a felony charge or certain convictions; require a provider who receives the proceeds of a paycheck of a consumer for forwarding all or a portion of the proceeds to the consumer to forward the proceeds in accordance with the terms of the agreement between the provider and the consumer unless certain conditions exist; require a provider who fails to forward the proceeds to respond to inquiries by the consumer with the reason for the failure unless providing the reason would violate a local, state, or federal law; require a no-cost option offered to a consumer by the provider regarding proceeds to require the provider to initiate transmission of the proceeds to the consumer not later than one business day after the date the consumer makes the request; require a contract for provision of services to disclose that a provider who solicits, charges, or receives a tip, gratuity, or donation from the consumer must set the amount of any default tip, gratuity, or donation at zero; require a provider to hold a registration to engage in the business of offering or providing earned wage access services in Texas and set out related provisions regarding the registration and the suspension or revocation of or refusal to renew a registration; require a provider to maintain a surety bond of $200,000 and set out related surety bond provisions; set out requirements regarding the examination and investigation of providers' places of business and records by the commissioner or the commissioner's representative and the commissioner's or the commissioner's representative's access to the provider's place of business and records; require a provider to maintain a record of each transaction conducted under the bill's provisions as is necessary to enable the commissioner to determine whether the provider is complying with the bill's provisions and establish a retention period for those records; require a provider to file an annual report with the commissioner and set out requirements relating to the report; authorize the finance commission to adopt rules to enforce the bill's provisions and require the commissioner to recommend proposed rules to the finance commission; entitle the commissioner to obtain criminal history record information that relates to an applicant for or holder of the registration; and require a person engaging in business as an earned wage access services provider on the bill's effective date to obtain a registration not later than January 1, 2026. The substitute omits a prohibition from the introduced that prohibited a provider from reporting any information regarding the provider's inability to receive repayment of outstanding proceeds, or receive a fee or a tip, gratuity, or other donation, from a consumer to a consumer credit reporting agency or a debt collector. Whereas the introduced prohibited a provider from requiring a consumer's credit report or credit score to determine the consumer's eligibility for earned wage access services, the substitute prohibits a provider from requiring a consumer's credit score from a credit report to make that determination.
BACKGROUND AND PURPOSE
The bill author has informed that committee that the number of companies providing earned wage access services has increased in recent years and, while earned wage access stakeholders such as EarnIn and DailyPay are attempting to promote ethical business practices and responsible self-regulation within their industry, there is a need for legislation to provide oversight. C.S.H.B. 2043 seeks to address the need for the regulation of earned wage access services in both business-to-business and business-to-consumer interactions by creating the Texas Earned Wage Access Services Act, which requires earned wage access services providers to hold a registration to engage in that business in Texas, among other provisions.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is expressly granted to the Finance Commission of Texas in SECTION 1 of this bill.
ANALYSIS
C.S.H.B. 2043 amends the Finance Code to provide for the regulation of earned wage access services, defined by the bill as the business of providing consumer-directed wage access services, employer-integrated wage access services, or both such services. The bill further defines the following terms:
"consumer" as an individual who resides in Texas;
"consumer-directed wage access services" as offering or providing services directly to a consumer based on the consumer's earned but unpaid income;
"control" as the power to directly or indirectly vote at least 25 percent or more of the outstanding voting shares or voting interests of a provider or person in control of a provider, elect or appoint a majority of key individuals, or directly or indirectly exercise a controlling influence over the management or policies of a provider or person in control of a provider;
"earned but unpaid income" as salary, wages, compensation, or income that a consumer represents, and a provider reasonably determines, has been earned or has accrued to the benefit of the consumer in exchange for the consumer's provision of services to an employer or on the employer's behalf and has not, at the time of the payment of proceeds, been paid to the consumer by the employer;
"earned wage access services provider" or "provider" as a person who is in the business of offering and providing earned wage access services to consumers, not including the following:
o an entity that offers or provides earned wage access services and reports to a consumer reporting agency described by the federal Fair Credit Reporting Act a consumer's payment or nonpayment of outstanding proceeds of the earned wage access services or fees, voluntary tips, gratuities, or other donations in connection with the earned wage access services;
o a service provider, including a payroll service provider, whose role includes verification of the earned but unpaid income but who is not contractually obligated to fund proceeds delivered to a consumer as part of an earned wage access service; or
o an employer that offers a portion of salary, wages, or compensation directly to its employees or independent contractors before the scheduled pay date;
"employer" as a person who employs a consumer or a person who is contractually obligated to pay a consumer earned but unpaid income on an hourly, project-based, piecework, or other basis, in exchange for the consumer's provision of services to the employer or on the employer's behalf, including to a consumer who is acting as an independent contractor with respect to the employer, not including a customer of the employer or a person whose obligation to pay salary, wages, compensation, or other income to a consumer is not based on the consumer's provision of services for or on behalf of that person;
"employer-integrated wage access services" as 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;
"fee" as including an amount charged by a provider for expedited delivery or other delivery of proceeds to a consumer and for a subscription or membership fee charged by a provider for a bona fide group of services that includes earned wage access services or an amount paid by an employer to a provider on a consumer's behalf that entitles the consumer to receive proceeds at reduced or no cost to the consumer, not including a voluntary tip, gratuity, or donation paid to the provider;
"key individual" as an individual who is ultimately responsible for establishing or directing policies and procedures of a provider, including an executive officer, manager, director, or trustee;
"outstanding proceeds" as proceeds remitted to a consumer by a provider that have not been repaid to that provider; and
"proceeds" as a payment to a consumer by a provider that is based on earned but unpaid income.
C.S.H.B. 2043 requires an earned wage access services provider, not later than the 30th business day after the date of a request from the consumer credit commissioner, to file with the commissioner a financial statement, audited or unaudited, dated as of the last day of the provider's fiscal year that ended in the immediately preceding calendar year and any other information as the commissioner may reasonably require. The bill does the following with respect to an audited financial statement:
requires the statement to be prepared in accordance with United States generally accepted accounting principles and by an independent certified public accountant or independent public accountant who is satisfactory to the commissioner;
requires the statement to include or be accompanied by a certificate of opinion of the independent certified public accountant or independent public accountant that is satisfactory in form and content to the commissioner; and
if the certificate of opinion is qualified, authorizes the commissioner to order the provider to take any action the commissioner finds necessary to enable the independent certified public accountant or independent public accountant to remove the qualification.
C.S.H.B. 2043 requires an earned wage access services provider to file a report with the commissioner not later than the first business day after the provider has reason to know of any of the following:
the filing of a petition by or against the provider under the federal U.S. Bankruptcy Code for bankruptcy or reorganization;
the filing of a petition by or against the provider for receivership, the commencement of any other judicial or administrative proceeding for the provider's dissolution or reorganization, or the making of a general assignment for the benefit of the provider's creditors; or
the commencement of a proceeding to revoke or suspend the provider's license in a state or country in which the provider engages in or is licensed to engage in earned wage access services.
The bill requires a provider to file a report with the commissioner not later than the third business day after the provider has reason to know of the occurrence of a felony charge or conviction of the provider or a key individual or a person in control of the provider.
C.S.H.B. 2043 requires a provider who receives the proceeds of a paycheck of a consumer for forwarding all or a portion of the proceeds to the consumer to forward the proceeds in accordance with the terms of the agreement between the provider and the consumer unless the provider has a reasonable belief or a reasonable basis to believe of the existence of fraud or that a crime or violation of law, rule, or regulation has occurred, is occurring, or may occur. The bill requires a provider who fails to forward the proceeds to respond to inquiries by the consumer with the reason for the failure unless providing the reason would violate a local, state, or federal law.
C.S.H.B. 2043 requires a provider, before entering into an agreement with a consumer for the provision of earned wage access services, to provide that consumer with a disclosure that meets the following criteria:
uses a font and language intended to be easily understood by a layperson;
informs the consumer of the consumer's rights under the contract; and
fully and clearly discloses each fee associated with the earned wage access services.
The disclosure may be in written or electronic form and included as part of the contract to provide earned wage access services. The bill requires a provider to notify a consumer of any material change to the information provided in such a disclosure, using a font and language intended to be easily understood by a layperson, before implementing the particular change with respect to that consumer.
C.S.H.B. 2043 requires a provider, at the time that the provider charges a fee or solicits a tip, gratuity, or donation from a consumer, to offer the consumer at least one reasonable option to obtain proceeds at no cost to the consumer and clearly explain how to elect that no-cost option. The no-cost option must require the provider to initiate transmission of the proceeds to the consumer not later than one business day after the date the consumer makes the request.
C.S.H.B. 2043 authorizes each contract for the provision of earned wage access services to a consumer by a provider to be in writing or electronic form and requires each contract to be dated, include the written or digital signature of the consumer, and use a font and language intended to be easily understood by a layperson. The bill requires an earned wage access services provider to make available to the consumer a copy of the completed contract when receipt of the document is acknowledged by the consumer and requires each contract to disclose the following:
fee obligations are subject to the limitations on compelling or attempting to compel repayment under the bill's provisions;
proceeds will be provided to the consumer using a method agreed to by the consumer and the provider;
the consumer may cancel at any time the consumer's participation in the provider's services without incurring a cancellation fee;
the provider is required to develop and implement policies and procedures to respond to questions asked and concerns raised by consumers and to address consumer complaints in an expedient manner;
if a provider seeks repayment of outstanding proceeds, a fee, or another payment from a consumer, including a voluntary tip, gratuity, or other donation, from a consumer's account at a depository institution, including through an electronic funds transfer, the provider must:
o comply with applicable provisions of and regulations adopted under the federal Electronic Fund Transfer Act; and
o unless the payment sought by the provider was incurred by the consumer using fraudulent or unlawful means, reimburse the consumer for the full amount of any overdraft or non-sufficient funds fees imposed on the consumer by the consumer's depository institution if the provider attempts to seek any payment from the consumer on a date before, or in a different amount from, the date or amount disclosed to the consumer for that payment;
the provider is required to comply with all local, state, and federal privacy and information security laws; and
if the provider solicits, charges, or receives a tip, gratuity, or donation from the consumer, the provider:
o must clearly and conspicuously disclose to the consumer immediately before each transaction that the tip, gratuity, or donation is voluntary and may be set to zero by the consumer;
o must set the amount of any default tip, gratuity, or donation at zero;
o must clearly and conspicuously disclose in the contract and other service contracts with consumers that any tip, gratuity, or donation from a consumer to a provider is voluntary and the offering of 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 a consumer pays any tip, gratuity, or donation or on the size of any tip, gratuity, or donation;
o may not mislead or deceive the consumer regarding the voluntary nature of the tip, gratuity, or donation; and
o may not represent that the tip, gratuity, or donation will benefit a specific individual.
C.S.H.B. 2043 prohibits an earned wage access services provider from doing the following in connection with providing earned wage access services to consumers:
sharing with an employer any fees, tips, gratuities, or other donations that were received from or charged to a consumer for earned wage access services;
accepting payment of outstanding proceeds, a fee, or a tip, gratuity, or other donation from a consumer through use of a credit card or charge card;
charging a late fee, deferral fee, interest, or other fee or charge for failure to pay outstanding proceeds, a fee, or a tip, gratuity, or other donation;
requiring a consumer's credit score from a credit report to determine the consumer's eligibility for earned wage access services;
making or using a false or misleading representation or statement to a consumer during the offer or provision of earned wage access services;
directly or indirectly engaging in a fraudulent or deceptive act, practice, or course of business relating to the offer or provision of earned wage access services; or
compelling or attempting to compel payment by a consumer of outstanding proceeds, a fee, or a tip, gratuity, or other donation to the provider by:
o repeatedly attempting to debit a consumer's depository institution account in violation of applicable payment system rules;
o making outbound telephone calls to the consumer;
o filing a suit against the consumer;
o using a third party to pursue collection of the payment from the consumer on the provider's behalf; or
o selling the outstanding amount to a third-party collector or debt buyer for purposes of collection from the consumer.
A provider is not precluded from using any of the prohibited methods for compelling or attempting to compel payment by a consumer as follows:
to compel or attempt to compel repayment of outstanding amounts incurred by a consumer through fraudulent or unlawful means; or
to pursue an employer for breach of the employer's contractual obligations to the provider.
C.S.H.B. 2043 requires a person to hold a registration under the bill's provisions to engage in the business of offering or providing earned wage access services in Texas, except for the following persons:
a bank, credit union, savings bank, or savings and loan association organized under federal law or under the laws of the financial institution's state of domicile; or
an employer that offers a portion of salary, wages, or compensation directly to its employees or independent contractors before the normally scheduled pay date.
The bill does the following with respect to the application for registration:
authorizes the commissioner to prescribe the form for the application;
requires the application to contain the information required by the commissioner in order to determine an applicant's eligibility;
requires an applicant, on the filing of each registration application, to pay to the commissioner an investigation fee and a registration fee in amounts determined as provided by statutory provisions relating to the commissioner's power and duties;
requires the commissioner to approve the application and issue to the applicant a registration if the commissioner finds that the applicant obtained the surety bond required by the bill and that the financial responsibility, experience, character, and general fitness of the applicant are sufficient to command the confidence of the public and warrant the belief that the business will be operated lawfully and fairly, within the purposes of the bill's provisions;
requires the commissioner to notify the applicant if the commissioner does not find the eligibility requirements are met; and
entitles an applicant who requests a hearing on the application not later than the 30th day after the date of such notification to a hearing on the denial of the application.
A registration issued under the bill's provisions is valid for the period prescribed by Finance Commission of Texas rule adopted under statutory provisions relating to licensing and registration terms. The bill requires a registration holder, to maintain an active registration, to pay to the commissioner the following amount determined as provided by applicable state law:
an assessment to cover costs associated with registration; and
any direct and indirect costs of examination.
The bill requires a person who is required to hold a registration to hold a registration for each office at which the person conducts business of offering or providing earned wage access services in Texas.
C.S.H.B. 2043 authorizes the commissioner, after notice and opportunity for a hearing, to suspend or revoke a registration if the commissioner finds that:
the registration holder failed to pay the registration fee, an examination fee, an investigation fee, or another charge imposed by the commissioner under the bill's provisions;
the registration holder, knowingly or without the exercise of due care, violated the bill's provisions or a rule adopted or order issued under those provisions; or
a fact or condition exists that, if it had existed or had been known to exist at the time of the original application for the registration, clearly would have justified the commissioner's denial of the application.
The bill authorizes the commissioner to refuse to renew the registration of a person who fails to comply with an order issued by the commissioner to enforce the bill.
C.S.H.B. 2043 requires a provider to maintain a surety bond in the amount of $200,000. The bill does the following with respect to the surety bond:
requires the bond to be in favor of the state for the state's use and the use of a person damaged by a violation of the bill's provisions;
requires the bond to be issued by a surety company qualified to do business as a surety in Texas; and
prohibits the aggregate liability of a surety to all persons damaged by the registration holder's violation from exceeding the amount of the bond.
C.S.H.B. 2043 requires the commissioner or the commissioner's representative, at the times the commissioner considers necessary, to examine each place of business of each provider and investigate the provider's transactions and records. The bill requires a provider to give the commissioner or the commissioner's representative free access to the provider's place of business and records and allow the commissioner or the commissioner's representative to make a copy of a record that may be investigated. The bill requires the provider to maintain a record of each transaction conducted under the bill's provisions as is necessary to enable the commissioner to determine whether the provider is complying with the bill's provisions. The bill requires the provider to keep the record until the later of the fourth anniversary of the date of the contract for earned wage access services or the second anniversary of the date on which the final entry is made in the record. The bill requires the provider to annually file with the commissioner a report that contains relevant information required by the commissioner concerning the provider's business in Texas during the preceding calendar year. The bill requires the report to be in the form prescribed by the commissioner and filed not later than the deadline set by the commissioner. The bill establishes that the report is confidential.
C.S.H.B. 2043 authorizes a provider to use the mailing address or state of residence provided by a consumer to determine the consumer's state of residence for purposes of the bill's earned wage access services provisions. The bill establishes that a provider is not considered to be engaging in lending, money transmission, or debt collection in Texas, or in violation of state law governing deductions from wages or the purchase, sale, or assignment of or an order for earned but unpaid income, if that provider complies with the requirements and prohibitions specified in those bill provisions.
C.S.H.B. 2043 authorizes the finance commission to adopt rules to enforce the bill's earned wage access services provisions and requires the commissioner to recommend proposed rules to the finance commission.
C.S.H.B. 2043 amends the Government Code to entitle the commissioner to obtain criminal history record information that relates to a person who is an applicant for or holder of a registration under the bill's provisions.
C.S.H.B. 2043 requires a person engaging in business as an earned wage access services provider on the bill's effective date to obtain a registration not later than January 1, 2026, and establishes that the bill's provisions specifying certain requirements and prohibitions apply only to a contract for earned wage access services entered into on or after the bill's effective date.
EFFECTIVE DATE
September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 2043 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
The substitute omits provisions from the introduced that authorized the commissioner to assess an administrative penalty against a person who knowingly and wilfully violates or causes a violation of the bill's provisions and to order an earned wage access services provider who violates or causes such a violation to pay restitution to an identifiable person.
The substitute includes provisions absent from the introduced that do the following:
define "control" and "key individual";
include among the entities that are not considered earned wage access services providers an entity that offers or provides earned wage access services and reports to a consumer reporting agency described by the federal Fair Credit Reporting Act a consumer's payment or nonpayment of outstanding proceeds of the earned wage access services or fees, voluntary tips, gratuities, or other donations in connection with the earned wage access services;
require an earned wage access services provider to file a financial statement with the commissioner;
set out requirements for the preparation of such a financial statement that is audited;
require an audited financial statement to include or be accompanied by a certificate of opinion of the independent certified public accountant or independent public accountant;
authorize the commissioner to order the provider to take any action the commissioner finds necessary to enable the independent certified public accountant or independent public accountant to remove the qualification if the certificate of opinion is qualified;
require a provider to file a report with the commissioner in the event of certain judicial or administrative events;
require a provider to file a report with the commissioner regarding the occurrence of a felony charge or certain convictions;
require a provider who receives the proceeds of a paycheck of a consumer for forwarding all or a portion of the proceeds to the consumer to forward the proceeds in accordance with the terms of the agreement between the provider and the consumer unless certain conditions exist;
require a provider who fails to forward the proceeds to respond to inquiries by the consumer with the reason for the failure unless providing the reason would violate a local, state, or federal law;
require a no-cost option offered to a consumer by the provider regarding proceeds to require the provider to initiate transmission of the proceeds to the consumer not later than one business day after the date the consumer makes the request;
require a contract for provision of services to disclose that a provider who solicits, charges, or receives a tip, gratuity, or donation from the consumer must set the amount of any default tip, gratuity, or donation at zero;
require a provider to hold a registration to engage in the business of offering or providing earned wage access services in Texas and set out related provisions regarding the registration and the suspension or revocation of or refusal to renew a registration;
require a provider to maintain a surety bond of $200,000 and set out related surety bond provisions;
set out requirements regarding the examination and investigation of providers' places of business and records by the commissioner or the commissioner's representative and the commissioner's or the commissioner's representative's access to the provider's place of business and records;
require a provider to maintain a record of each transaction conducted under the bill's provisions as is necessary to enable the commissioner to determine whether the provider is complying with the bill's provisions and establish a retention period for those records;
require a provider to file an annual report with the commissioner and set out requirements relating to the report;
authorize the finance commission to adopt rules to enforce the bill's provisions and require the commissioner to recommend proposed rules to the finance commission;
entitle the commissioner to obtain criminal history record information that relates to an applicant for or holder of the registration; and
require a person engaging in business as an earned wage access services provider on the bill's effective date to obtain a registration not later than January 1, 2026.
The substitute omits a prohibition from the introduced that prohibited a provider from reporting any information regarding the provider's inability to receive repayment of outstanding proceeds, or receive a fee or a tip, gratuity, or other donation, from a consumer to a consumer credit reporting agency or a debt collector.
Whereas the introduced prohibited a provider from requiring a consumer's credit report or credit score to determine the consumer's eligibility for earned wage access services, the substitute prohibits a provider from requiring a consumer's credit score from a credit report to make that determination.