Earned-Wage Access Service Provider
HB1020 creates the Earned-Wage Access Services Act and requires providers of earned-wage access services to be licensed by the Colorado Attorney General’s office beginning January 1, 2026. The bill defines earned-wage access services as products that let consumers access wages or other earned but unpaid income before payday, including both employer-integrated and consumer-directed models. It sets out a licensing application, annual renewal, fees, recordkeeping, reporting, and examination framework, and gives the administrator authority to adopt rules, investigate complaints, and enforce compliance.
The bill also establishes consumer-protection standards for these services. Providers must disclose fees and terms, offer at least one no-cost option if they charge for expedited delivery, allow consumers to cancel at any time without a cancellation fee, and reimburse consumers for overdraft or insufficient-funds fees caused by certain erroneous payment attempts. It prohibits several practices, including requiring credit checks, charging tips, using credit cards for repayment, imposing late fees or interest, reporting nonpayment to credit bureaus or debt collectors, and forcing employees to use earned-wage access as a condition of getting paid. The bill caps delivery or expedited-delivery fees at $7 for fiscal year 2025-26, with future increases tied to CPI growth, and it bars providers from collecting outstanding amounts through lawsuits, third-party collectors, or debt buyers except in cases of fraud or claims against an employer for breach of contract.
The bill adds a new article to Title 5 of the Colorado Revised Statutes governing earned-wage access providers and expressly states that compliant services are not loans, debt, money transmission, or subject to laws governing payroll deductions or assignment of earned income. It also clarifies that licensees are not considered creditors, debt collectors, collection agencies, lenders, or money transmitters for purposes of these services, and that fees are not interest or finance charges. The Attorney General, through the administrator, would gain licensing, examination, disciplinary, and civil enforcement authority, including cease-and-desist orders, penalties, injunctions, and civil actions for willful violations.
The bill appears to have received mixed but generally workable support in committee, with unanimous or near-unanimous votes on some amendments and a 11-2 vote to send the amended bill to Finance. However, the Finance Committee later postponed the bill indefinitely by a 12-1 vote, indicating substantial opposition or unresolved concerns at that stage. Overall, the discussion history suggests interest in regulating the industry rather than outright rejection, but also significant hesitation about the bill’s final form.
The main points of contention likely centered on how heavily to regulate earned-wage access providers and whether the bill’s consumer protections and fee limits were too restrictive for the industry. The 8-5 vote on one amendment suggests disagreement over specific policy details, while the later Finance Committee action indicates broader concerns about the bill’s costs, market effects, or regulatory structure. Likely stakeholders on the supportive side include consumer advocates and regulators seeking clearer oversight, while providers and industry supporters may have objected to licensing burdens, fee caps, and restrictions on repayment and collections.