89R2929 MLH-F

By: Menéndez S.B. No. 3000

A BILL TO BE ENTITLED

AN ACT

relating to consumer protections for earned wage access products.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 341.001, Finance Code, is amended by adding Subdivision (6-a) and amending Subdivision (9) to read as follows:

(6-a) "Earned wage advance" means the provision of a cash advance to a borrower by a provider in an amount that is based, by estimate or otherwise, on the wages or other income that the borrower has accrued but has not yet been paid, where:

(A) the advance is to be repaid to the provider through:

(i) wage assignment;

(ii) one or more payroll deductions;

(iii) preauthorized account debits; or

(iv) another automated means; and

(B) the provider charges, contracts for, or receives from the borrower, directly or indirectly, one or more charges, fees, or other amounts, including voluntary or optional payments associated with the advance or the earned wage advance program.

(9) "Loan" has the meaning assigned by Section 301.002 and includes a sale-leaseback transaction, [and] a deferred presentment transaction, and an earned wage advance.

SECTION 2. Chapter 342, Finance Code, is amended by adding Subchapter N to read as follows:

SUBCHAPTER N. EARNED WAGE ADVANCES

Sec. 342.701. DEFINITIONS. In this subchapter:

(1) "Cash advance" or "advance" means proceeds received by a consumer from an earned wage advance provider.

(2) "Consumer" means an individual who resides in this state.

(3) "Earned wage advance provider" or "provider" means a person who is in the business of offering and providing earned wage advance services to consumers.

Sec. 342.702. CONSUMER ASSESSMENT. An earned wage advance provider shall, before making an advance connected to an earned wage advance, assess a consumer's ability to repay:

(1) the advance in cash in the time and by the means provided in the loan contract; and

(2) any other obligations owed by the consumer that are known to the provider.

Sec. 342.703. REIMBURSEMENT. If the provider causes the consumer to incur an overdraft fee because the provider attempts to collect payment before the consumer's paycheck or other income is deposited into the account, the provider shall reimburse the consumer for all fees incurred not later than 48 hours after receiving notice of the overdraft through any existing customer service methods, including telephone and electronic means.

Sec. 342.704. PROHIBITIONS. (a) An earned wage advance provider may not, in connection with providing earned wage advance services to consumers:

(1) charge, contract for, or receive in a 30-day period more than:

(A) 10 percent of the amount of any advances made in that period; or

(B) $10 in total charges, fees, or other amounts;

(2) provide more than one advance on the same day to the same consumer;

(3) compel or attempt to compel payment by a consumer of a cash advance or other outstanding amounts associated with an earned wage advance by:

(A) filing a suit against the consumer;

(B) using a third party to pursue collection of payment from the consumer on the provider's behalf; or

(C) selling or assigning the outstanding amounts to a third-party collector or debt buyer for purposes of collection from the consumer;

(4) charge a consumer a late fee, interest, or other penalty for failure to repay a cash advance; or

(5) report any information regarding the consumer's inability to repay a cash advance to a consumer credit reporting agency.

(b) For purposes of Subsection (a)(1)(B), charges, fees, or other amounts include the sum of any:

(1) voluntary or optional charges; and

(2) required charges associated with the earned wage advance.

Sec. 342.705. RULES. The finance commission may adopt rules as necessary to implement this subchapter.

Sec. 342.706. DATA COLLECTION. The finance commission may require providers to submit information considered beneficial to public policy and consumer protection in this state to the commission.

SECTION 3. This Act takes effect September 1, 2025.