Utah and Arkansas have enacted new legislation governing earned wage access (EWA) services, establishing state-level registration obligations and consumer protection standards. Both laws clarify that EWA services are not loans under state law if certain conditions are met, including limitations on fees, debt collection, and credit reporting.

Utah’s Earned Wage Access Services Act, enacted on March 25, defines covered EWA services, sets eligibility conditions for regulatory exemptions, and imposes compliance obligations to ensure consumer protection. Key provisions of the Utah law include:

• Annual registration required. EWA providers must register with the Utah Department of Financial Institutions before offering services in the state. Registration must be renewed annually.
• Exemption from lending laws. To remain exempt from lending laws, providers must (i) not impose mandatory repayment, (ii) engage in debt collection or credit reporting, or (iii) charge interest or late fees.
• Voluntary payments permitted. Providers may accept tips or other voluntary payments, but they must not be required to access services or influence future availability.
• Clear disclosure of gratuity policies. Providers must disclose that gratuities are optional and not a condition of service.
• No coercive repayment tactics. Providers cannot engage in wage or bank account garnishment. Compelling a consumer to repay funds by threatening civil lawsuits, outbound calls, third-party collections, or debt sells is also prohibited.
• Compliance with data protection standards. Providers must implement reasonable procedures to protect personal data from unauthorized use, access, or disclosure. This includes wage, banking, and employment information collected during service delivery.

Arkansas’s act, the Earned Wage Access Services Act, similarly adopts a formal regulatory structure for EWA services while carving out complaint providers from lending regulation. The law incorporates registration requirements and consumer safeguards designed to prevent coercive fee practices or collection tactics. Key provisions include:

• Annual registration. Covered providers are required to register with the Arkansas Securities Commissioner and are subject to ongoing oversight.
• Exemption from lending regulation. EWA providers qualify for exemption from Arkansas’s usury and lending laws if they do not charge interest, impose mandatory repayment, report to credit bureaus, or engage in debt collection practices. 
• Voluntary payments only. Any fees, tips, or gratuities must be optional, and providers must offer at least one method for consumers to access funds at no cost.
• Required consumer disclosures. Providers must disclose all fees and consumer rights prior to entering an agreement and notify users of any material changes to terms. Disclosures must also clarify that payments are voluntary and do not impact service access.
• Cancellation and complaint handling. Consumers must be allowed to cancel the service at any time without penalty. Providers are also required to maintain internal procedures for resolving consumer complaints.
• Prohibited practices. Providers may not share fees or tips with employers, use credit scores for eligibility, accept credit card repayments, impost interest or late fees, or engage in any debt collection activity. Misleading users about the voluntary nature of payments is also prohibited.

Putting It Into Practice: There are now 7 states that have adopted EWA-specific laws, and many more states with EWA legislation pending. Many of these states, like Utah and Arkansas, have recognized that EWA products are not loans, effectively exempting them from state usury limits. (See our prior discussions here, here, here, and here.) This is in contrast to the CFPB’s proposed interpretive rule that would classify EWA products as extensions of credit (previously discussed here), which may likely be rescinded under the new administration.