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Texas House Bill HB2043

Texas 2025 - 89th Regular

Texas House Bill HB2043 Compare Versions

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1-89R20571 PRL-F
1+89R4859 PRL-F
22 By: Lambert H.B. No. 2043
3- Substitute the following for H.B. No. 2043:
4- By: Bumgarner C.S.H.B. No. 2043
3+
4+
55
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77 A BILL TO BE ENTITLED
88 AN ACT
99 relating to the regulation of earned wage access services;
10- requiring an occupational registration; imposing fees.
10+ providing an administrative penalty.
1111 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12- SECTION 1. Subtitle B, Title 4, Finance Code, is amended by
13- adding Chapter 355 to read as follows:
14- CHAPTER 355. EARNED WAGE ACCESS SERVICES
15- Sec. 355.001. SHORT TITLE. This chapter shall be known and
12+ SECTION 1. Sections 14.251(a) and (b), Finance Code, are
13+ amended to read as follows:
14+ (a) The commissioner may assess an administrative penalty
15+ against a person who knowingly and wilfully violates or causes a
16+ violation of this chapter, Chapter 394, Chapter 398, or Subtitle B,
17+ Title 4, or a rule adopted under this chapter, Chapter 394, or
18+ Subtitle B, Title 4.
19+ (b) The commissioner may order the following businesses or
20+ other persons to pay restitution to an identifiable person:
21+ (1) a person who violates or causes a violation of this
22+ chapter, Chapter 394, or Subtitle B, Title 4, or a rule adopted
23+ under this chapter, Chapter 394, or Subtitle B, Title 4;
24+ (2) a credit access business who violates or causes a
25+ violation of Chapter 393 or a rule adopted under Chapter 393;
26+ (3) an earned wage access services provider who
27+ violates or causes a violation of Chapter 398; or
28+ (4) [(3)] a person who violates or causes a violation
29+ of Subchapter B, Chapter 1956, Occupations Code, or a rule adopted
30+ under that subchapter.
31+ SECTION 2. Title 5, Finance Code, is amended by adding
32+ Chapter 398 to read as follows:
33+ CHAPTER 398. EARNED WAGE ACCESS SERVICES
34+ Sec. 398.001. SHORT TITLE. This chapter shall be known and
1635 may be cited as the "Texas Earned Wage Access Services Act."
17- Sec. 355.002. DEFINITIONS. In this chapter:
36+ Sec. 398.002. DEFINITIONS. In this chapter:
1837 (1) "Consumer" means an individual who resides in this
1938 state.
2039 (2) "Consumer-directed wage access services" means
2140 offering or providing services directly to a consumer based on the
2241 consumer's earned but unpaid income.
23- (3) "Control" means the power to:
24- (A) directly or indirectly vote at least 25
25- percent or more of the outstanding voting shares or voting
26- interests of a provider or person in control of a provider;
27- (B) elect or appoint a majority of key
28- individuals; or
29- (C) directly or indirectly exercise a
30- controlling influence over the management or policies of a provider
31- or person in control of a provider.
32- (4) "Earned but unpaid income" means salary, wages,
42+ (3) "Earned but unpaid income" means salary, wages,
3343 compensation, or income that:
3444 (A) a consumer represents, and a provider
3545 reasonably determines, has been earned or has accrued to the
3646 benefit of the consumer in exchange for the consumer's provision of
3747 services to an employer or on the employer's behalf; and
3848 (B) has not, at the time of the payment of
3949 proceeds, been paid to the consumer by the employer.
40- (5) "Earned wage access services" means the business
50+ (4) "Earned wage access services" means the business
4151 of providing:
4252 (A) consumer-directed wage access services;
4353 (B) employer-integrated wage access services; or
4454 (C) both consumer-directed wage access services
4555 and employer-integrated wage access services.
46- (6) "Earned wage access services provider" or
56+ (5) "Earned wage access services provider" or
4757 "provider" means a person who is in the business of offering and
4858 providing earned wage access services to consumers. The term does
4959 not include:
50- (A) an entity that offers or provides earned wage
51- access services and reports to a consumer reporting agency
52- described by Section 603(p), Fair Credit Reporting Act (15 U.S.C.
53- Section 1681a(p)), a consumer's payment or nonpayment of:
54- (i) outstanding proceeds of the earned wage
55- access services; or
56- (ii) fees, voluntary tips, gratuities, or
57- other donations in connection with the earned wage access services;
58- (B) a service provider, including a payroll
60+ (A) a service provider, including a payroll
5961 service provider, whose role includes verification of the earned
6062 but unpaid income but who is not contractually obligated to fund
6163 proceeds delivered to a consumer as part of an earned wage access
6264 service; or
63- (C) an employer that offers a portion of salary,
65+ (B) an employer that offers a portion of salary,
6466 wages, or compensation directly to its employees or independent
6567 contractors before the scheduled pay date.
66- (7) "Employer" means a person who employs a consumer
68+ (6) "Employer" means a person who employs a consumer
6769 or a person who is contractually obligated to pay a consumer earned
6870 but unpaid income on an hourly, project-based, piecework, or other
6971 basis, in exchange for the consumer's provision of services to the
7072 employer or on the employer's behalf, including to a consumer who is
7173 acting as an independent contractor with respect to the employer.
7274 The term does not include a customer of the employer or a person
7375 whose obligation to pay salary, wages, compensation, or other
7476 income to a consumer is not based on the consumer's provision of
7577 services for or on behalf of that person.
76- (8) "Employer-integrated wage access services" means
78+ (7) "Employer-integrated wage access services" means
7779 delivering to consumers access to earned but unpaid income that is
7880 based on employment, income, or attendance data obtained directly
7981 or indirectly from an employer.
80- (9) "Fee" includes an amount charged by a provider for
82+ (8) "Fee" includes an amount charged by a provider for
8183 expedited delivery or other delivery of proceeds to a consumer and
8284 for a subscription or membership fee charged by a provider for a
8385 bona fide group of services that includes earned wage access
8486 services or an amount paid by an employer to a provider on a
8587 consumer's behalf that entitles the consumer to receive proceeds at
8688 reduced or no cost to the consumer. The term does not include a
8789 voluntary tip, gratuity, or donation paid to the provider.
88- (10) "Key individual" means an individual who is
89- ultimately responsible for establishing or directing policies and
90- procedures of a provider, including an executive officer, manager,
91- director, or trustee.
92- (11) "Outstanding proceeds" means proceeds remitted
93- to a consumer by a provider that have not been repaid to that
94- provider.
95- (12) "Proceeds" means a payment to a consumer by a
90+ (9) "Outstanding proceeds" means proceeds remitted to
91+ a consumer by a provider that have not been repaid to that provider.
92+ (10) "Proceeds" means a payment to a consumer by a
9693 provider that is based on earned but unpaid income.
97- Sec. 355.003. DETERMINATION OF CONSUMER'S RESIDENCE. A
94+ Sec. 398.003. DETERMINATION OF CONSUMER'S RESIDENCE. A
9895 provider may use the mailing address or state of residence provided
9996 by a consumer to determine the consumer's state of residence for
10097 purposes of this chapter.
101- Sec. 355.004. APPLICABILITY OF OTHER LAW. A provider is not
98+ Sec. 398.004. APPLICABILITY OF OTHER LAW. A provider is not
10299 considered to be engaging in lending, money transmission, or debt
103100 collection in this state, or in violation of the laws of this state
104101 governing deductions from wages or the purchase, sale, or
105102 assignment of or an order for earned but unpaid income, if that
106- provider complies with the requirements of Sections 355.008 and
107- 355.009.
108- Sec. 355.005. FINANCIAL STATEMENTS. (a) A provider shall,
109- not later than the 30th business day after the date of a request
110- from the commissioner, file with the commissioner:
111- (1) a financial statement, audited or unaudited, dated
112- as of the last day of the provider's fiscal year that ended in the
113- immediately preceding calendar year; and
114- (2) any other information as the commissioner may
115- reasonably require.
116- (b) An audited financial statement filed with the
117- commissioner under Subsection (a)(1) must be prepared:
118- (1) in accordance with United States generally
119- accepted accounting principles; and
120- (2) by an independent certified public accountant or
121- independent public accountant who is satisfactory to the
122- commissioner.
123- (c) An audited financial statement filed with the
124- commissioner under Subsection (a)(1) must include or be accompanied
125- by a certificate of opinion of the independent certified public
126- accountant or independent public accountant that is satisfactory in
127- form and content to the commissioner. If the certificate of opinion
128- is qualified, the commissioner may order the provider to take any
129- action the commissioner finds necessary to enable the independent
130- certified public accountant or independent public accountant to
131- remove the qualification.
132- Sec. 355.006. REPORTS OF CERTAIN EVENTS. (a) A provider
133- shall file a report with the commissioner not later than the first
134- business day after the provider has reason to know of:
135- (1) the filing of a petition by or against the provider
136- under the United States Bankruptcy Code (11 U.S.C. Sections
137- 101-1532) for bankruptcy or reorganization;
138- (2) the filing of a petition by or against the provider
139- for receivership, the commencement of any other judicial or
140- administrative proceeding for the provider's dissolution or
141- reorganization, or the making of a general assignment for the
142- benefit of the provider's creditors; or
143- (3) the commencement of a proceeding to revoke or
144- suspend the provider's license in a state or country in which the
145- provider engages in or is licensed to engage in earned wage access
146- services.
147- (b) A provider shall file a report with the commissioner not
148- later than the third business day after the provider has reason to
149- know of the occurrence of a felony charge or conviction of:
150- (1) the provider or a key individual; or
151- (2) a person in control of the provider.
152- Sec. 355.007. TIMELY TRANSMISSION. (a) A provider who
153- receives the proceeds of a paycheck of a consumer for forwarding all
154- or a portion of the proceeds to the consumer shall forward the
155- proceeds in accordance with the terms of the agreement between the
156- provider and the consumer unless the provider has a reasonable
157- belief or a reasonable basis to believe of the existence of fraud or
158- that a crime or violation of law, rule, or regulation has occurred,
159- is occurring, or may occur.
160- (b) If a provider fails to forward the proceeds of a
161- paycheck received for forwarding in accordance with this section,
162- the provider must respond to inquiries by the consumer with the
163- reason for the failure unless providing the reason would violate a
164- local, state, or federal law.
165- Sec. 355.008. REQUIREMENTS. (a) Before entering into an
103+ provider complies with the requirements of Sections 398.005 and
104+ 398.006.
105+ Sec. 398.005. REQUIREMENTS. (a) Before entering into an
166106 agreement with a consumer for the provision of earned wage access
167107 services, an earned wage access services provider shall provide the
168108 consumer with a disclosure that:
169109 (1) may be in written or electronic form;
170110 (2) may be included as part of the contract to provide
171111 earned wage access services;
172112 (3) uses a font and language intended to be easily
173113 understood by a layperson;
174114 (4) informs the consumer of the consumer's rights
175115 under the contract; and
176116 (5) fully and clearly discloses each fee associated
177117 with the earned wage access services.
178118 (b) An earned wage access services provider must notify a
179119 consumer of any material change to the information provided in a
180120 disclosure statement under Subsection (a) to that consumer, using a
181121 font and language intended to be easily understood by a layperson,
182122 before implementing the particular change with respect to that
183123 consumer.
184124 (c) At the time that a provider charges a fee or solicits a
185125 tip, gratuity, or donation from a consumer, the provider is
186126 required to offer the consumer at least one reasonable option to
187127 obtain proceeds at no cost to the consumer and clearly explain how
188- to elect that no-cost option. The no-cost option required by this
189- subsection must require the provider to initiate transmission of
190- the proceeds to the consumer not later than one business day after
191- the date the consumer makes the request.
128+ to elect that no-cost option.
192129 (d) Each contract for the provision of earned wage access
193130 services to a consumer by a provider may be in writing or electronic
194131 form and must:
195132 (1) be dated;
196133 (2) include the written or digital signature of the
197134 consumer; and
198135 (3) use a font and language intended to be easily
199136 understood by a layperson.
200137 (e) Each contract must disclose that:
201138 (1) fee obligations are subject to the limitations on
202139 compelling or attempting to compel repayment under Section
203- 355.009(a)(5);
140+ 398.006(a)(6);
204141 (2) proceeds will be provided to the consumer using a
205142 method agreed to by the consumer and the provider;
206143 (3) the consumer may cancel at any time the consumer's
207144 participation in the provider's earned wage access services without
208145 incurring a cancellation fee;
209146 (4) the provider is required to develop and implement
210147 policies and procedures to respond to questions asked and concerns
211148 raised by consumers and to address complaints from consumers in an
212149 expedient manner;
213150 (5) if a provider seeks repayment of outstanding
214151 proceeds, a fee, or another payment from a consumer, including a
215152 voluntary tip, gratuity, or other donation, from a consumer's
216153 account at a depository institution, including through an
217154 electronic funds transfer, the provider must:
218155 (A) comply with applicable provisions of and
219- regulations adopted under the Electronic Fund Transfer Act (15
220- U.S.C. Section 1693 et seq.); and
156+ regulations adopted under the federal Electronic Fund Transfer Act
157+ (15 U.S.C. Section 1693 et seq.); and
221158 (B) unless the payment sought by the provider was
222159 incurred by the consumer using fraudulent or unlawful means,
223160 reimburse the consumer for the full amount of any overdraft or
224161 non-sufficient funds fees imposed on the consumer by the consumer's
225162 depository institution if the provider attempts to seek any payment
226163 from the consumer on a date before, or in a different amount from,
227164 the date or amount disclosed to the consumer for that payment;
228165 (6) the provider is required to comply with all local,
229166 state, and federal privacy and information security laws; and
230167 (7) if the provider solicits, charges, or receives a
231168 tip, gratuity, or donation from the consumer, the provider:
232169 (A) must clearly and conspicuously disclose to
233170 the consumer immediately before each transaction that the tip,
234171 gratuity, or donation is voluntary and may be set to zero by the
235172 consumer;
236- (B) must set the amount of any default tip,
237- gratuity, or donation at zero;
238- (C) must clearly and conspicuously disclose in
173+ (B) must clearly and conspicuously disclose in
239174 the contract and other service contracts with consumers that any
240175 tip, gratuity, or donation from a consumer to a provider is
241176 voluntary and the offering of earned wage access services,
242177 including the amount of proceeds a consumer is eligible to request
243178 and the frequency with which proceeds are provided to a consumer, is
244179 not contingent on whether a consumer pays any tip, gratuity, or
245180 donation or on the size of any tip, gratuity, or donation;
246- (D) may not mislead or deceive the consumer
181+ (C) may not mislead or deceive the consumer
247182 regarding the voluntary nature of the tip, gratuity, or donation;
248183 and
249- (E) may not represent that the tip, gratuity, or
184+ (D) may not represent that the tip, gratuity, or
250185 donation will benefit a specific individual.
251186 (f) An earned wage access services provider shall make
252187 available to the consumer a copy of the completed contract, when
253188 receipt of the document is acknowledged by the consumer.
254- Sec. 355.009. PROHIBITIONS. (a) An earned wage access
189+ Sec. 398.006. PROHIBITIONS. (a) An earned wage access
255190 services provider may not, in connection with providing earned wage
256191 access services to consumers:
257192 (1) share with an employer any fees, tips, gratuities,
258193 or other donations that were received from or charged to a consumer
259194 for earned wage access services;
260195 (2) accept payment of outstanding proceeds, a fee, or
261196 a tip, gratuity, or other donation from a consumer through use of a
262197 credit card or charge card;
263198 (3) charge a late fee, deferral fee, interest, or
264199 other fee or charge for failure to pay outstanding proceeds, a fee,
265200 or a tip, gratuity, or other donation;
266- (4) require a consumer's credit score from a credit
267- report to determine the consumer's eligibility for earned wage
268- access services;
269- (5) compel or attempt to compel payment by a consumer
201+ (4) report any information regarding the provider's
202+ inability to receive repayment of outstanding proceeds, or receive
203+ a fee or a tip, gratuity, or other donation, from a consumer to a
204+ consumer credit reporting agency or a debt collector;
205+ (5) require a consumer's credit report or credit score
206+ to determine the consumer's eligibility for earned wage access
207+ services;
208+ (6) compel or attempt to compel payment by a consumer
270209 of outstanding proceeds, a fee, or a tip, gratuity, or other
271210 donation to the provider by:
272211 (A) repeatedly attempting to debit a consumer's
273212 depository institution account in violation of applicable payment
274213 system rules;
275214 (B) making outbound telephone calls to the
276215 consumer;
277216 (C) filing a suit against the consumer;
278217 (D) using a third party to pursue collection of
279218 the payment from the consumer on the provider's behalf; or
280219 (E) selling the outstanding amount to a
281220 third-party collector or debt buyer for purposes of collection from
282221 the consumer;
283- (6) make or use a false or misleading representation
222+ (7) make or use a false or misleading representation
284223 or statement to a consumer during the offer or provision of earned
285224 wage access services; or
286- (7) directly or indirectly engage in a fraudulent or
225+ (8) directly or indirectly engage in a fraudulent or
287226 deceptive act, practice, or course of business relating to the
288227 offer or provision of earned wage access services.
289228 (b) An earned wage access services provider is not precluded
290- from using any of the methods described by Subsection (a)(5) to:
229+ from using any of the methods described by Subsection (a)(6) to:
291230 (1) compel or attempt to compel repayment of
292231 outstanding amounts incurred by a consumer through fraudulent or
293232 unlawful means; or
294233 (2) pursue an employer for breach of the employer's
295234 contractual obligations to the provider.
296- Sec. 355.010. REGISTRATION REQUIRED; FEES. (a) Except as
297- provided by Subsection (b), a person must hold a registration under
298- this chapter to engage in the business of offering or providing
299- earned wage access services in this state.
300- (b) The following persons are not required to obtain a
301- registration under this chapter:
302- (1) a bank, credit union, savings bank, or savings and
303- loan association organized under the laws of the United States or
304- under the laws of the financial institution's state of domicile; or
305- (2) an employer that offers a portion of salary,
306- wages, or compensation directly to its employees or independent
307- contractors before the normally scheduled pay date.
308- (c) The commissioner may prescribe the form for an
309- application for registration under this chapter. An application
310- must contain the information required by the commissioner in order
311- to determine an applicant's eligibility.
312- (d) On the filing of each registration application, the
313- applicant shall pay to the commissioner an investigation fee and a
314- registration fee in amounts determined as provided by Section
315- 14.107.
316- (e) The commissioner shall approve the application and
317- issue to the applicant a registration under this chapter if the
318- commissioner finds that:
319- (1) the financial responsibility, experience,
320- character, and general fitness of the applicant are sufficient to:
321- (A) command the confidence of the public; and
322- (B) warrant the belief that the business will be
323- operated lawfully and fairly, within the purposes of this chapter;
324- and
325- (2) the applicant has obtained the surety bond
326- required under Section 355.012.
327- (f) If the commissioner does not find the eligibility
328- requirements of Subsection (e) are met, the commissioner shall
329- notify the applicant.
330- (g) If an applicant requests a hearing on the application
331- not later than the 30th day after the date of notification under
332- Subsection (f), the applicant is entitled to a hearing on the denial
333- of the application.
334- (h) A registration issued under this chapter is valid for
335- the period prescribed by finance commission rule adopted under
336- Section 14.112.
337- (i) In order to maintain an active registration, a
338- registration holder must pay to the commissioner the following
339- amount determined as provided by Section 14.107:
340- (1) an assessment to cover costs associated with
341- registration; and
342- (2) any direct and indirect costs of examination.
343- (j) A person who is required to hold a registration under
344- this chapter must hold a registration for each office at which the
345- person conducts business under this chapter.
346- Sec. 355.011. REGISTRATION SUSPENSION, REVOCATION, OR
347- REFUSAL TO RENEW. (a) After notice and opportunity for a hearing,
348- the commissioner may suspend or revoke a registration if the
349- commissioner finds that:
350- (1) the registration holder failed to pay the
351- registration fee, an examination fee, an investigation fee, or
352- another charge imposed by the commissioner under this chapter;
353- (2) the registration holder, knowingly or without the
354- exercise of due care, violated this chapter or a rule adopted or
355- order issued under this chapter; or
356- (3) a fact or condition exists that, if it had existed
357- or had been known to exist at the time of the original application
358- for the registration, clearly would have justified the
359- commissioner's denial of the application.
360- (b) The commissioner may refuse to renew the registration of
361- a person who fails to comply with an order issued by the
362- commissioner to enforce this chapter.
363- Sec. 355.012. SURETY BOND. (a) A provider must maintain a
364- surety bond in the amount of $200,000.
365- (b) The surety bond must be in favor of this state for the
366- use of this state and the use of a person damaged by a violation of
367- this chapter.
368- (c) The surety bond must be issued by a surety company
369- qualified to do business as a surety in this state.
370- (d) The aggregate liability of a surety to all persons
371- damaged by the registration holder's violation of this chapter may
372- not exceed the amount of the bond.
373- Sec. 355.013. EXAMINATION OF PROVIDERS; ACCESS TO RECORDS.
374- (a) The commissioner or the commissioner's representative shall,
375- at the times the commissioner considers necessary:
376- (1) examine each place of business of each provider;
377- and
378- (2) investigate the provider's transactions and
379- records.
380- (b) A provider shall:
381- (1) give the commissioner or the commissioner's
382- representative free access to the provider's place of business and
383- records; and
384- (2) allow the commissioner or the commissioner's
385- representative to make a copy of a record that may be investigated
386- under Subsection (a)(2).
387- Sec. 355.014. PROVIDER'S RECORDS. (a) A provider shall
388- maintain a record of each transaction conducted under this chapter
389- as is necessary to enable the commissioner to determine whether the
390- provider is complying with this chapter.
391- (b) A provider shall keep the record until the later of:
392- (1) the fourth anniversary of the date of the contract
393- for earned wage access services; or
394- (2) the second anniversary of the date on which the
395- final entry is made in the record.
396- Sec. 355.015. ANNUAL REPORT. (a) Each year, a provider
397- shall file with the commissioner a report that contains relevant
398- information required by the commissioner concerning the provider's
399- business in this state during the preceding calendar year.
400- (b) A report under this section must be:
401- (1) in the form prescribed by the commissioner; and
402- (2) filed not later than the deadline set by the
403- commissioner.
404- (c) A report under this section is confidential.
405- Sec. 355.016. ADOPTION OF RULES. (a) The finance
406- commission may adopt rules to enforce this chapter.
407- (b) The commissioner shall recommend proposed rules to the
408- finance commission.
409- SECTION 2. Section 411.095(a), Government Code, is amended
410- to read as follows:
411- (a) The consumer credit commissioner is entitled to obtain
412- criminal history record information as provided by
413- Subsection (a-1) that relates to a person who is:
414- (1) an applicant for or holder of a license or
415- registration under Chapter 180, 342, 347, 348, 351, 353, 355, 371,
416- 393, or 394, Finance Code;
417- (2) an employee of or volunteer with the Office of
418- Consumer Credit Commissioner;
419- (3) an applicant for employment with the Office of
420- Consumer Credit Commissioner;
421- (4) a contractor or subcontractor of the Office of
422- Consumer Credit Commissioner; or
423- (5) an officer, director, owner, or employee of a
424- person described by Subdivision (1) or another person having a
425- substantial relationship with that person under Chapter 180, 342,
426- 347, 348, 351, 353, 355, 371, 393, or 394, Finance Code.
427- SECTION 3. A person engaging in business as an earned wage
428- access services provider on the effective date of this Act must
429- obtain a registration in accordance with Chapter 355, Finance Code,
430- as added by this Act, not later than January 1, 2026.
431- SECTION 4. Sections 355.008 and 355.009, Finance Code, as
235+ SECTION 3. Sections 398.005 and 398.006, Finance Code, as
432236 added by this Act, apply only to a contract for earned wage access
433237 services entered into on or after the effective date of this Act.
434- SECTION 5. This Act takes effect September 1, 2025.
238+ SECTION 4. This Act takes effect September 1, 2025.