- Key insight: A bill dealing with earned wage access would preempt state laws around the products, creating a national standard for the offerings.
- Forward look: There's few opportunities for the bill to pass this Congress, but since the bulk of the complaints from Democrats were on the state preemption question, the measure could come up again next year.
- What's at stake: The bill has been supported by financial technology trade groups.
WASHINGTON — The House Financial Services Committee passed earned wage access legislation in a largely party-line vote, as well as a number of other bills in a multiday markup session ahead of the July 4 recess.
The earned wage access bill, which would preempt state laws creating requirements for EWA transactions, was reported favorably to the full House in a 29-22 vote Tuesday evening.
The bill has no Senate companion legislation, and the partisan breakdown of the House committee vote suggests the bill is a long way from the finish line. Even so,
Mostly, objections to the bill centered around preemption concerns, and associated lack of consumer protection.
"Republicans are teaming up with Donald Trump to chip away at the safeguards that protect working families, and today's markup is no exception," said Rep Maxine Waters, D-Calif., the committee's ranking member. "Take the so-called earned wage access bill. Republicans say it helps workers get access to the wages that they have already earned sooner, and workers should absolutely have affordable access to their own money, but that's not what this bill does in reality, it creates new loopholes, weakens consumer protections, overrides strong state laws, which could leave workers paying more in fees and with fewer rights when something goes wrong."
There are few legislative vehicles on which the EWA bill can attach itself before the end of the year, especially without momentum in the Senate. But because Democratic concern about the bill is mostly centered around the preemption piece, it is possible that the issue is picked up again next year.
"Democrats were opposed though we see the objections as less about the substance of the bill and more about preemption of state law," TD Cowen analyst Jaret Seiberg said in a note. "We believe that opens the door for a compromise though it would likely be in the next Congress rather than this year."
Generally, the fintech industry has pushed for this legislation.
"Responsible EWA enables workers to access wages they have already earned between paychecks, helping them manage cash flow, avoid unnecessary fees, and reduce reliance on higher-cost alternatives," American Fintech Council CEO Phil Goldfeder said in a statement. "This legislation recognizes the unique nature of EWA and establishes a national, consumer-focused framework with clear disclosures, credit invisibility and no-cost access options."
Other bills passed by a wider and more bipartisan margin, although vehicles to attach them to remain few before next Congress. One would set up procedures for resellers of consumer report information, and another would allow banks to withhold payments and stop wire transfers when fraud is suspected.
