LRB-2879/1
ARG:wlj
2023 - 2024 LEGISLATURE
October 27, 2023 - Introduced by Representatives Dallman, Neylon, Allen,
Dittrich, Gundrum, Murphy, Mursau, Nedweski, Novak, Rettinger, Steffen
and Tusler, cosponsored by Senators Stafsholt, Tomczyk and Cowles.
Referred to Committee on Financial Institutions.
AB574,1,4 1An Act to amend 73.0301 (1) (d) 6., 108.227 (1) (e) 6., 138.14 (3) and 220.02 (3);
2and to create 138.09 (1a) (c), chapter 203 and 220.02 (2) (j) of the statutes;
3relating to: regulating earned wage access services, granting rule-making
4authority, and providing a penalty.
Analysis by the Legislative Reference Bureau
This bill regulates companies that provide earned wage access services in this
state to individuals who reside in this state (consumers) and requires such
companies to be licensed by the Division of Banking (division) in the Department of
Financial Institutions before providing those services.
Under the bill, “earned wage access service” is defined as the business of
delivering to consumers access to earned but unpaid income that is based on 1) the
consumer's representations and the provider's reasonable determination of the
consumer's earned but unpaid income; or 2) employment, income, or attendance data
obtained directly or indirectly from an employer. The bill defines, with exceptions,
a “provider” as a business entity that is in the business of providing earned wage
access services to consumers. “Earned but unpaid income” is defined as salary,
wages, compensation, or other income that a consumer or an employer has
represented, and that a provider has reasonably determined, has been earned or
accrued to the benefit of the consumer in exchange for the consumer's provision of
services to the employer or on the employer's behalf but has not, at the time of the
payment of proceeds, been paid to the consumer by the employer. An “employer”
includes a person who is obligated to pay a consumer acting as an independent

contractor. “Proceeds” are defined as a provider's payment to a consumer based on
earned but unpaid income.
The bill requires a provider, before providing earned wage access services in
this state, to be licensed by the division. This requirement applies even if the
provider is not physically located in this state, such as when the provider conducts
business by means of a website. However, these provisions do not apply to financial
institutions and their affiliates. An applicant for a license must pay a fee to the
division, file and maintain a surety bond, and provide specified information to the
division.
The bill imposes various requirements on a licensed provider, including
requiring a licensed provider to do all of the following:
1. Develop and implement policies and procedures to respond to consumer
questions and complaints.
2. Offer to the consumer at least one reasonable option to obtain proceeds at
no cost and explain how to elect this option.
3. Before entering into an earned wage access services agreement with a
consumer, inform the consumer of his or her rights under the agreement and disclose
all fees associated with these services.
4. Inform the consumer of material changes to the terms and conditions of the
earned wage access services before implementing them.
5. Allow the consumer to cancel use of the provider's earned wage access
services at any time, without incurring a cancellation fee or penalty imposed by the
provider.
6. If the provider solicits, charges, or receives tips, gratuities, or other
donations (tips) from consumers, disclose in its service contract that tips are
voluntary and the provider's services are not contingent on tips and further disclose
before each transaction that a tip is voluntary.
7. If the provider will seek repayment of proceeds remitted to the consumer but
not yet repaid (outstanding proceeds) or payment of fees or other amounts from a
consumer's bank account, including through electronic funds transfer, reimburse the
consumer for overdraft or non-sufficient funds fees caused by the provider's
attempted payment before the date, or in an amount different from, that disclosed
to the consumer.
The bill imposes various limitations on a licensed provider, including
prohibiting a licensed provider from doing any of the following:
1. Sharing consumer fees or tips with the consumer's employer.
2. Accepting a consumer's payment of outstanding proceeds, fees, or tips by
means of a credit card.
3. Charging a late fee, deferral fee, interest, or other penalty for failure to pay
outstanding proceeds, fees, or tips.
4. Reporting to a consumer reporting agency or debt collector information about
the consumer's nonpayment to the provider of outstanding proceeds, fees, or tips.
5. Compelling the consumer's payment of outstanding proceeds, fees, or tips
through a lawsuit in court, use of a third-party debt collector, or sale of the obligation

to a third-party debt collector or debt buyer, unless the consumer acted through
fraudulent or other unlawful means.
6. Misleading or deceiving consumers about the voluntary nature of tips or
making representations that tips will benefit any specific individual.
7. Advertising, publishing, or broadcasting any statement or representation
regarding the provider's earned wage access services that is false, misleading, or
deceptive.
The bill specifies that a licensed provider's earned wage access services are not,
and do not fall within the scope of current law regulation of, any of the following: 1)
a payday loan, or any other form of loan or form of credit or debt; 2) the Wisconsin
Consumer Act; 3) money transmission (which current law refers to as a “seller of
checks” business); or 4) a violation or noncompliance with state laws governing the
sale or assignment of an individual's wages or other compensation earned or accrued
but not yet paid. In addition, the bill specifies that fees and tips paid by a consumer
to a provider are not considered interest or finance charges.
The bill requires a licensed provider to submit an annual report to the division
that includes certain information related to the provider's earned wage access
services in this state and to keep certain books and records. The bill gives the division
the right to suspend or revoke a provider's license under certain circumstances and
provides the division with certain authority to enforce the regulations created in the
bill.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB574,1 1Section 1. 73.0301 (1) (d) 6. of the statutes is amended to read:
AB574,3,52 73.0301 (1) (d) 6. A license or certificate of registration issued by the
3department of financial institutions, or a division of it, under ss. 138.09, 138.12,
4138.14, 202.12 to 202.14, 202.22, 203.03, 217.06, 218.0101 to 218.0163, 218.02,
5218.04, 218.05, 224.72, 224.725, 224.93 or under subch. IV of ch. 551.
AB574,2 6Section 2. 108.227 (1) (e) 6. of the statutes is amended to read:
AB574,3,107 108.227 (1) (e) 6. A license or certificate of registration issued by the
8department of financial institutions, or a division of it, under ss. 138.09, 138.12,
9138.14, 202.12 to 202.14, 202.22, 203.03, 217.06, 218.0101 to 218.0163, 218.02,
10218.04, 218.05, 224.72, 224.725, 224.93 or under subch. IV of ch. 551.
AB574,3
1Section 3 . 138.09 (1a) (c) of the statutes is created to read:
AB574,4,32 138.09 (1a) (c) Providers of earned wage access services required to be licensed
3under s. 203.03 (1).
AB574,4 4Section 4 . 138.14 (3) of the statutes is amended to read:
AB574,4,85 138.14 (3) Exemptions. This section does not apply to banks, savings banks,
6savings and loan associations, trust companies, credit unions, or any of their
7affiliates or to providers of earned wage access services required to be licensed under
8s. 203.03 (1)
.
AB574,5 9Section 5. Chapter 203 of the statutes is created to read:
AB574,4,1110 CHAPTER 203
11 earned wage access services
AB574,4,12 12203.01 Definitions. In this chapter:
AB574,4,14 13(1) “Business entity” means any corporation, limited liability company,
14partnership, association, or other commercial entity.
AB574,4,15 15(2) “Consumer” means an individual who resides in this state.
AB574,4,19 16(3) “Consumer-directed wage access services” means the business of delivering
17to consumers access to earned but unpaid income that is based on the consumer's
18representations and the provider's reasonable determination of the consumer's
19earned but unpaid income.
AB574,4,20 20(4) “Division" means the division of banking.
AB574,5,3 21(5) “Earned but unpaid income” means salary, wages, compensation, or other
22income that a consumer or an employer has represented, and that a provider has
23reasonably determined, has been earned or accrued to the benefit of the consumer
24in exchange for the consumer's provision of services to the employer or on behalf of
25the employer, including on an hourly, project-based, piecework, or other basis and

1including circumstances in which the consumer is acting as an independent
2contractor of the employer, but has not, at the time of the payment of proceeds, been
3paid to the consumer by the employer.
AB574,5,6 4(6) “Earned wage access service” means the business of providing
5consumer-directed wage access services or employer-integrated wage access
6services, or both.
AB574,5,7 7(7) (a) Except as provided in par. (b), “employer” means any of the following:
AB574,5,88 1. A person who employs a consumer.
AB574,5,139 2. Any other person who is contractually obligated to pay a consumer earned
10but unpaid income in exchange for the consumer's provision of services to the
11employer or on behalf of the employer including on an hourly, project-based,
12piecework, or other basis and including circumstances in which the consumer is
13acting as an independent contractor with respect to the employer.
AB574,5,1414 (b) “Employer” does not include any of the following:
AB574,5,1515 1. A customer of an employer.
AB574,5,1816 2. Any other person whose obligation to make a payment of salary, wages,
17compensation, or other income to a consumer is not based on the provision of services
18by that consumer for or on behalf of the person.
AB574,5,22 19(8) “Employer-integrated wage access services” means the business of
20delivering to consumers access to earned but unpaid income that is based on
21employment, income, or attendance data obtained directly or indirectly from an
22employer.
AB574,5,23 23(9) (a) Except as provided in par. (b), “fee” includes any of the following:
AB574,5,2524 1. A fee imposed by a provider for delivery or expedited delivery of proceeds to
25a consumer.
AB574,6,2
12. A subscription or membership fee imposed by a provider for a bona fide group
2of services that include earned wage access services.
AB574,6,33 (b) “Fee” does not include a voluntary tip, gratuity, or other donation.
AB574,6,5 4(10) “Licensee” means a business entity that is licensed by the division under
5s. 203.03 (1) as an earned wage access services provider.
AB574,6,7 6(11) “Nationwide mortgage licensing system and registry" has the meaning
7given in 12 USC 5102 (6).
AB574,6,9 8(12) “Outstanding proceeds” means proceeds remitted to a consumer by a
9provider that have not yet been repaid to the provider.
AB574,6,11 10(13) “Proceeds” means a payment in U.S. dollars to a consumer by a provider
11that is based on earned but unpaid income.
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