HB2043 - Relating to the regulation of earned wage access services; requiring an occupational registration; imposing fees.

  89R20571 PRL-F     By: Lambert H.B. No. 2043     Substitute the following for H.B. No. 2043:     By:  Bumgarner C.S.H.B. No. 2043       A BILL TO BE ENTITLED   AN ACT   relating to the regulation of earned wage access services;   requiring an occupational registration; imposing fees.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subtitle B, Title 4, Finance Code, is amended by   adding Chapter 355 to read as follows:   CHAPTER 355. EARNED WAGE ACCESS SERVICES           Sec.   355.001.     SHORT TITLE. This chapter shall be known and   may be cited as the "Texas Earned Wage Access Services Act."           Sec. 355.002.  DEFINITIONS. In this chapter:                 (1)     "Consumer" means an individual who resides in this   state.                 (2)     "Consumer-directed wage access services"   means   offering or providing services directly to a consumer based on the   consumer's earned but unpaid income.                 (3)  "Control" means the power to:                       (A)     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;                       (B)     elect or appoint a majority of key   individuals; or                       (C)     directly or indirectly exercise a   controlling influence over the management or policies of a provider   or person in control of a provider.                 (4)     "Earned but unpaid income" means salary, wages,   compensation, or income that:                       (A)     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                       (B)     has not, at the time of the payment of   proceeds, been paid to the consumer by the employer.                 (5)     "Earned wage access services" means the business   of providing:                       (A)  consumer-directed wage access services;                       (B)  employer-integrated wage access services; or                       (C)     both consumer-directed wage access services   and employer-integrated wage access services.                 (6)     "Earned wage access services provider" or   "provider" means a person who is in the business of offering and   providing earned wage access services to consumers. The term does   not include:                       (A)     an entity that offers or provides earned wage   access services and reports to a consumer reporting agency   described by Section 603(p), Fair Credit Reporting Act (15 U.S.C.   Section 1681a(p)), a consumer's payment or nonpayment of:                             (i)     outstanding proceeds of the earned wage   access services; or                             (ii)     fees, voluntary tips, gratuities, or   other donations in connection with the earned wage access services;                       (B)     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                       (C)     an employer that offers a portion of salary,   wages, or compensation directly to its employees or independent   contractors before the scheduled pay date.                 (7)     "Employer" means 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.   The term does not include 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.                 (8)     "Employer-integrated wage access services" means   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.                 (9)     "Fee" includes 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. The term does not include a   voluntary tip, gratuity, or donation paid to the provider.                 (10)     "Key individual" means an individual who is   ultimately responsible for establishing or directing policies and   procedures of a provider, including an executive officer, manager,   director, or trustee.                 (11)     "Outstanding proceeds" means proceeds remitted   to a consumer by a provider that have not been repaid to that   provider.                 (12)     "Proceeds" means a payment to a consumer by a   provider that is based on earned but unpaid income.           Sec.   355.003.     DETERMINATION OF CONSUMER'S RESIDENCE. A   provider may use the mailing address or state of residence provided   by a consumer to determine the consumer's state of residence for   purposes of this chapter.           Sec.   355.004.     APPLICABILITY OF OTHER LAW. A provider is not   considered to be engaging in lending, money transmission, or debt   collection in this state, or in violation of the laws of this state   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 of Sections 355.008 and   355.009.           Sec.   355.005.     FINANCIAL STATEMENTS. (a) A provider shall,   not later than the 30th business day after the date of a request   from the commissioner, file with the commissioner:                 (1)     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                 (2)     any other information as the commissioner may   reasonably require.           (b)     An audited financial statement filed with the   commissioner under Subsection (a)(1) must be prepared:                 (1)     in accordance with United States generally   accepted accounting principles; and                 (2)     by an independent certified public accountant or   independent public accountant who is satisfactory to the   commissioner.           (c)     An audited financial statement filed with the   commissioner under Subsection (a)(1) must 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. If the certificate of opinion   is qualified, the commissioner may 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.           Sec.   355.006.     REPORTS OF CERTAIN EVENTS. (a) A provider   shall file a report with the commissioner not later than the first   business day after the provider has reason to know of:                 (1)     the filing of a petition by or against the provider   under the United States Bankruptcy Code (11 U.S.C. Sections   101-1532) for bankruptcy or reorganization;                 (2)     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                 (3)     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.           (b)     A provider shall 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:                 (1)  the provider or a key individual; or                 (2)  a person in control of the provider.           Sec.   355.007.     TIMELY TRANSMISSION. (a) A provider who   receives the proceeds of a paycheck of a consumer for forwarding all   or a portion of the proceeds to the consumer shall 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.           (b)     If a provider fails to forward the proceeds of a   paycheck received for forwarding in accordance with this section,   the provider must respond to inquiries by the consumer with the   reason for the failure unless providing the reason would violate a   local, state, or federal law.           Sec.   355.008.     REQUIREMENTS. (a) Before entering into an   agreement with a consumer for the provision of earned wage access   services, an earned wage access services provider shall provide the   consumer with a disclosure that:                 (1)  may be in written or electronic form;                 (2)     may be included as part of the contract to provide   earned wage access services;                 (3)     uses a font and language intended to be easily   understood by a layperson;                 (4)     informs th [Text truncated for display. Full text available on Congress.gov.]