Consumer groups team up to battle EWA lobby

• Key insights: A group of state-focused consumer advocacy groups are banding together to fight against earned wage access industry lobbyists. 
• What's at stake: Last year, six states pushed EWA regulation, but the revitalization of a federal bill governing the product poses an existential threat to states' regulatory independence. 
• Forward look: The bill is unlikely to pass in this year's legislative session, according to TD Cowen analysts, but lawmakers could find some middle ground next year. 

As earned wage access legislation continues to advance at state and federal levels, a group of state-focused consumer advocacy groups are joining forces to fight against the earned wage access industry lobby. 

The "Stop Taking Our Pay," or STOP, Coalition is composed of 24 community, labor and faith-based organizations from 21 states where payday lending is illegal. Community development credit unions have also joined the organization. 

The STOP Coalition is an information-sharing group designed to better defend against what they describe as aggressive lobbying pushes from the EWA industry on the state and federal level, and comes in response to the revitalization of a federal earned wage access bill. 

"It's people power," Andy Morrison, associate director at New Economy Project, told American Banker. "These are honestly groups that are stretched thin, doing a lot of really important advocacy on a number of issues, who are seeing a threat that is really existential for many communities that are already struggling under the weight of a worsening affordability crisis. 

"We're not going to take this lying down. The industry push that we're experiencing in New York is happening nationwide. The industry is exploding," he said. 

Industry groups such as the American Fintech Council and the Financial Technology Association, which both count EWA providers as members, are pushing for state and federal regulations that carve out earned wage access from wider credit requirements. Last year, six states enacted EWA legislation, effectively doubling the number of states that govern the liquidity product. Most state EWA regulations — with the exception of Maryland, California and Connecticut — precludes earned wage access from state usury caps and other lender disclosure requirements.

"What we see now with EWA is very reminiscent of how payday lending took root in communities," Morrison said. "They bombard state legislatures with high-paid lobbyists, a lot of deceptive rhetoric around their business model, and that results in carve-outs." 

Industry groups have also accused consumer advocacy groups of perpetrating false narratives surrounding the product. 

So far this year, no new states have codified EWA laws, as election-year planning mutes some lawmakers' appetite for new legislation. But that does not mean that those industry groups have been sitting it out. 

"It was certainly a quieter year on the state front, in terms of past bills, but I wouldn't let that be an indicator that we need to make progress," Phil Goldfeder, CEO of the American Fintech Council, told American Banker. "We made a huge amount of progress in 2026, which sets us up ready to go for the beginning of state legislative sessions [next year]." 

Most states have wrapped their legislative session for the year. 

The ultimate goal, though, is for a broad federal bill that would eliminate the patchwork of state regulation and unify industry oversight at the federal level. That bill, which was sponsored by Congressman Brian Steil, R-Wis, and is called the Earned Wage Access Consumer Protection Act, gained fresh traction in the House Financial Services Committee at the beginning of the month but lacks a realistic path to becoming law this year, according to TD Cowen analysts. 

"We do not see a path for HR 9330 to become law in 2026 given the lack of progress in the Senate. It also seems unlikely to be added to an end-of-Congress bill like the National Defense Authorization Act," TD Cowen analyst Jaret Seiberg wrote in a research note. "Yet, it still matters because we believe there is bipartisan interest in regulating EWA even if the vote on the Earned Wage Access Consumer Protection Act was partisan with Rep. Maxine Waters leading the opposition." 

A federal bill that preempts state lawmakers' ability to regulate EWA would effectively cripple state-based advocacy groups' best ability to fight against the lobby. 

"This is a dire threat," Maren Hurley-Matz, Equal Justice Works fellow at the New Economy Project, told American Banker. "This would allow high interest payday loans to effectively be unleashed in every state, including where payday loans have been banned for decades." 

The coalition would like to see a federal bill govern the EWA industry, but one that is similar to protections like the Military Lending Act, which caps interest rates at 36% but does not preempt state usury laws and supersedes any arbitration requirements. 

"It is a huge line in the sand for us to preempt any state regulations. There are already 21 states that have passed laws, and voters have decided these are not acceptable in our state," Hurley-Matz said. "We are in favor of expanding the Military Lending Act, because that would essentially expand payday loan bans nationally and at a federal level."

Congressional Democrats also pushed back against the preemption clause in Steil's bill rather than the policy regime, Seiberg said. "It is why we see the door open for a bipartisan effort in the next Congress."