A BILL for an Act to create and enact a new chapter to title 13 of the North Dakota Century Code, relating to earned wage access providers; and to provide a penalty.
HB 1393 would create a new chapter in Title 13 of the North Dakota Century Code to regulate earned wage access services, sometimes called on-demand pay or wage advance services. The bill defines key terms such as consumer, provider, employer-integrated wage access services, and consumer-directed wage access services, and places the Department of Financial Institutions in charge of administering and enforcing the new regulatory framework.
The bill requires providers to obtain a state license before offering earned wage access services to North Dakota consumers, unless specifically exempted. Licensing standards include minimum net worth, a surety bond, background and character review, reporting obligations, and ongoing renewal requirements. It also authorizes the commissioner to conduct examinations, issue cease-and-desist orders, suspend or revoke licenses, impose civil penalties, and refer unlicensed activity as a class C felony. Existing providers operating as of January 1, 2025, could continue temporarily while applying for licensure and, for consumer-directed services, until the required database becomes operational.
HB 1393 would significantly expand state oversight of earned wage access providers by treating them as a regulated financial service industry under a new chapter of state law. It would create licensing, disclosure, recordkeeping, reporting, examination, and enforcement requirements, while also clarifying that compliant earned wage access services are not to be treated as loans, debt, money transmission, or interest-bearing transactions. The bill would also preempt conflicting laws to the extent they interfere with the new chapter and would impose restrictions on collection practices, tips, fees, and use of consumer credit information.
The bill appears to have had strong initial support in the House, passing second reading 85-5, suggesting broad agreement with the idea of regulating the industry. However, it failed in the Senate on second reading by a 16-30 vote, indicating substantially less support in the upper chamber. The vote pattern suggests that while many lawmakers were receptive to consumer protections and oversight, the Senate was not persuaded to adopt the bill as written.
The main points of contention likely centered on how heavily to regulate earned wage access providers and whether the bill’s licensing and database requirements were too burdensome. The bill imposes a detailed regulatory regime, including a mandatory transaction database for consumer-directed services, a $25,000 net worth requirement, a $50,000 bond, and strict limits on collections and fees, which may have raised concerns among providers and some legislators about compliance costs and operational feasibility. At the same time, supporters likely viewed these provisions as necessary consumer protections to prevent abusive practices, clarify legal status, and ensure transparency in a fast-growing financial product.