Texas 2025 - 89th Regular

Texas Senate Bill SB938 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R4859 PRL-F
2	2	By: Parker S.B. No. 938
3	3
4	4
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the regulation of earned wage access services;
10	10	providing an administrative penalty.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Sections 14.251(a) and (b), Finance Code, are
13	13	amended to read as follows:
14	14	(a) The commissioner may assess an administrative penalty
15	15	against a person who knowingly and wilfully violates or causes a
16	16	violation of this chapter, Chapter 394, Chapter 398, or Subtitle B,
17	17	Title 4, or a rule adopted under this chapter, Chapter 394, or
18	18	Subtitle B, Title 4.
19	19	(b) The commissioner may order the following businesses or
20	20	other persons to pay restitution to an identifiable person:
21	21	(1) a person who violates or causes a violation of this
22	22	chapter, Chapter 394, or Subtitle B, Title 4, or a rule adopted
23	23	under this chapter, Chapter 394, or Subtitle B, Title 4;
24	24	(2) a credit access business who violates or causes a
25	25	violation of Chapter 393 or a rule adopted under Chapter 393;
26	26	(3) an earned wage access services provider who
27	27	violates or causes a violation of Chapter 398; or
28	28	(4) [(3)] a person who violates or causes a violation
29	29	of Subchapter B, Chapter 1956, Occupations Code, or a rule adopted
30	30	under that subchapter.
31	31	SECTION 2. Title 5, Finance Code, is amended by adding
32	32	Chapter 398 to read as follows:
33	33	CHAPTER 398. EARNED WAGE ACCESS SERVICES
34	34	Sec. 398.001. SHORT TITLE. This chapter shall be known and
35	35	may be cited as the "Texas Earned Wage Access Services Act."
36	36	Sec. 398.002. DEFINITIONS. In this chapter:
37	37	(1) "Consumer" means an individual who resides in this
38	38	state.
39	39	(2) "Consumer-directed wage access services" means
40	40	offering or providing services directly to a consumer based on the
41	41	consumer's earned but unpaid income.
42	42	(3) "Earned but unpaid income" means salary, wages,
43	43	compensation, or income that:
44	44	(A) a consumer represents, and a provider
45	45	reasonably determines, has been earned or has accrued to the
46	46	benefit of the consumer in exchange for the consumer's provision of
47	47	services to an employer or on the employer's behalf; and
48	48	(B) has not, at the time of the payment of
49	49	proceeds, been paid to the consumer by the employer.
50	50	(4) "Earned wage access services" means the business
51	51	of providing:
52	52	(A) consumer-directed wage access services;
53	53	(B) employer-integrated wage access services; or
54	54	(C) both consumer-directed wage access services
55	55	and employer-integrated wage access services.
56	56	(5) "Earned wage access services provider" or
57	57	"provider" means a person who is in the business of offering and
58	58	providing earned wage access services to consumers. The term does
59	59	not include:
60	60	(A) a service provider, including a payroll
61	61	service provider, whose role includes verification of the earned
62	62	but unpaid income but who is not contractually obligated to fund
63	63	proceeds delivered to a consumer as part of an earned wage access
64	64	service; or
65	65	(B) an employer that offers a portion of salary,
66	66	wages, or compensation directly to its employees or independent
67	67	contractors before the scheduled pay date.
68	68	(6) "Employer" means a person who employs a consumer
69	69	or a person who is contractually obligated to pay a consumer earned
70	70	but unpaid income on an hourly, project-based, piecework, or other
71	71	basis, in exchange for the consumer's provision of services to the
72	72	employer or on the employer's behalf, including to a consumer who is
73	73	acting as an independent contractor with respect to the employer.
74	74	The term does not include a customer of the employer or a person
75	75	whose obligation to pay salary, wages, compensation, or other
76	76	income to a consumer is not based on the consumer's provision of
77	77	services for or on behalf of that person.
78	78	(7) "Employer-integrated wage access services" means
79	79	delivering to consumers access to earned but unpaid income that is
80	80	based on employment, income, or attendance data obtained directly
81	81	or indirectly from an employer.
82	82	(8) "Fee" includes an amount charged by a provider for
83	83	expedited delivery or other delivery of proceeds to a consumer and
84	84	for a subscription or membership fee charged by a provider for a
85	85	bona fide group of services that includes earned wage access
86	86	services or an amount paid by an employer to a provider on a
87	87	consumer's behalf that entitles the consumer to receive proceeds at
88	88	reduced or no cost to the consumer. The term does not include a
89	89	voluntary tip, gratuity, or donation paid to the provider.
90	90	(9) "Outstanding proceeds" means proceeds remitted to
91	91	a consumer by a provider that have not been repaid to that provider.
92	92	(10) "Proceeds" means a payment to a consumer by a
93	93	provider that is based on earned but unpaid income.
94	94	Sec. 398.003. DETERMINATION OF CONSUMER'S RESIDENCE. A
95	95	provider may use the mailing address or state of residence provided
96	96	by a consumer to determine the consumer's state of residence for
97	97	purposes of this chapter.
98	98	Sec. 398.004. APPLICABILITY OF OTHER LAW. A provider is not
99	99	considered to be engaging in lending, money transmission, or debt
100	100	collection in this state, or in violation of the laws of this state
101	101	governing deductions from wages or the purchase, sale, or
102	102	assignment of or an order for earned but unpaid income, if that
103	103	provider complies with the requirements of Sections 398.005 and
104	104	398.006.
105	105	Sec. 398.005. REQUIREMENTS. (a) Before entering into an
106	106	agreement with a consumer for the provision of earned wage access
107	107	services, an earned wage access services provider shall provide the
108	108	consumer with a disclosure that:
109	109	(1) may be in written or electronic form;
110	110	(2) may be included as part of the contract to provide
111	111	earned wage access services;
112	112	(3) uses a font and language intended to be easily
113	113	understood by a layperson;
114	114	(4) informs the consumer of the consumer's rights
115	115	under the contract; and
116	116	(5) fully and clearly discloses each fee associated
117	117	with the earned wage access services.
118	118	(b) An earned wage access services provider must notify a
119	119	consumer of any material change to the information provided in a
120	120	disclosure statement under Subsection (a) to that consumer, using a
121	121	font and language intended to be easily understood by a layperson,
122	122	before implementing the particular change with respect to that
123	123	consumer.
124	124	(c) At the time that a provider charges a fee or solicits a
125	125	tip, gratuity, or donation from a consumer, the provider is
126	126	required to offer the consumer at least one reasonable option to
127	127	obtain proceeds at no cost to the consumer and clearly explain how
128	128	to elect that no-cost option.
129	129	(d) Each contract for the provision of earned wage access
130	130	services to a consumer by a provider may be in writing or electronic
131	131	form and must:
132	132	(1) be dated;
133	133	(2) include the written or digital signature of the
134	134	consumer; and
135	135	(3) use a font and language intended to be easily
136	136	understood by a layperson.
137	137	(e) Each contract must disclose that:
138	138	(1) fee obligations are subject to the limitations on
139	139	compelling or attempting to compel repayment under Section
140	140	398.006(a)(6);
141	141	(2) proceeds will be provided to the consumer using a
142	142	method agreed to by the consumer and the provider;
143	143	(3) the consumer may cancel at any time the consumer's
144	144	participation in the provider's earned wage access services without
145	145	incurring a cancellation fee;
146	146	(4) the provider is required to develop and implement
147	147	policies and procedures to respond to questions asked and concerns
148	148	raised by consumers and to address complaints from consumers in an
149	149	expedient manner;
150	150	(5) if a provider seeks repayment of outstanding
151	151	proceeds, a fee, or another payment from a consumer, including a
152	152	voluntary tip, gratuity, or other donation, from a consumer's
153	153	account at a depository institution, including through an
154	154	electronic funds transfer, the provider must:
155	155	(A) comply with applicable provisions of and
156	156	regulations adopted under the federal Electronic Fund Transfer Act
157	157	(15 U.S.C. Section 1693 et seq.); and
158	158	(B) unless the payment sought by the provider was
159	159	incurred by the consumer using fraudulent or unlawful means,
160	160	reimburse the consumer for the full amount of any overdraft or
161	161	non-sufficient funds fees imposed on the consumer by the consumer's
162	162	depository institution if the provider attempts to seek any payment
163	163	from the consumer on a date before, or in a different amount from,
164	164	the date or amount disclosed to the consumer for that payment;
165	165	(6) the provider is required to comply with all local,
166	166	state, and federal privacy and information security laws; and
167	167	(7) if the provider solicits, charges, or receives a
168	168	tip, gratuity, or donation from the consumer, the provider:
169	169	(A) must clearly and conspicuously disclose to
170	170	the consumer immediately before each transaction that the tip,
171	171	gratuity, or donation is voluntary and may be set to zero by the
172	172	consumer;
173	173	(B) must clearly and conspicuously disclose in
174	174	the contract and other service contracts with consumers that any
175	175	tip, gratuity, or donation from a consumer to a provider is
176	176	voluntary and the offering of earned wage access services,
177	177	including the amount of proceeds a consumer is eligible to request
178	178	and the frequency with which proceeds are provided to a consumer, is
179	179	not contingent on whether a consumer pays any tip, gratuity, or
180	180	donation or on the size of any tip, gratuity, or donation;
181	181	(C) may not mislead or deceive the consumer
182	182	regarding the voluntary nature of the tip, gratuity, or donation;
183	183	and
184	184	(D) may not represent that the tip, gratuity, or
185	185	donation will benefit a specific individual.
186	186	(f) An earned wage access services provider shall make
187	187	available to the consumer a copy of the completed contract, when
188	188	receipt of the document is acknowledged by the consumer.
189	189	Sec. 398.006. PROHIBITIONS. (a) An earned wage access
190	190	services provider may not, in connection with providing earned wage
191	191	access services to consumers:
192	192	(1) share with an employer any fees, tips, gratuities,
193	193	or other donations that were received from or charged to a consumer
194	194	for earned wage access services;
195	195	(2) accept payment of outstanding proceeds, a fee, or
196	196	a tip, gratuity, or other donation from a consumer through use of a
197	197	credit card or charge card;
198	198	(3) charge a late fee, deferral fee, interest, or
199	199	other fee or charge for failure to pay outstanding proceeds, a fee,
200	200	or a tip, gratuity, or other donation;
201	201	(4) report any information regarding the provider's
202	202	inability to receive repayment of outstanding proceeds, or receive
203	203	a fee or a tip, gratuity, or other donation, from a consumer to a
204	204	consumer credit reporting agency or a debt collector;
205	205	(5) require a consumer's credit report or credit score
206	206	to determine the consumer's eligibility for earned wage access
207	207	services;
208	208	(6) compel or attempt to compel payment by a consumer
209	209	of outstanding proceeds, a fee, or a tip, gratuity, or other
210	210	donation to the provider by:
211	211	(A) repeatedly attempting to debit a consumer's
212	212	depository institution account in violation of applicable payment
213	213	system rules;
214	214	(B) making outbound telephone calls to the
215	215	consumer;
216	216	(C) filing a suit against the consumer;
217	217	(D) using a third party to pursue collection of
218	218	the payment from the consumer on the provider's behalf; or
219	219	(E) selling the outstanding amount to a
220	220	third-party collector or debt buyer for purposes of collection from
221	221	the consumer;
222	222	(7) make or use a false or misleading representation
223	223	or statement to a consumer during the offer or provision of earned
224	224	wage access services; or
225	225	(8) directly or indirectly engage in a fraudulent or
226	226	deceptive act, practice, or course of business relating to the
227	227	offer or provision of earned wage access services.
228	228	(b) An earned wage access services provider is not precluded
229	229	from using any of the methods described by Subsection (a)(6) to:
230	230	(1) compel or attempt to compel repayment of
231	231	outstanding amounts incurred by a consumer through fraudulent or
232	232	unlawful means; or
233	233	(2) pursue an employer for breach of the employer's
234	234	contractual obligations to the provider.
235	235	SECTION 3. Sections 398.005 and 398.006, Finance Code, as
236	236	added by this Act, apply only to a contract for earned wage access
237	237	services entered into on or after the effective date of this Act.
238	238	SECTION 4. This Act takes effect September 1, 2025.