Bill > HB645

This bill establishes the Kentucky Earned Wage Access Act, creating a comprehensive regulatory framework for earned income access providers (companies that allow workers to access their earned wages before their regular payday). The bill defines key terms and requires providers to obtain a license from the state's Department of Financial Institutions, with an initial license fee of $1,000 and an annual renewal fee. Providers must follow strict consumer protection guidelines, including offering at least one no-cost option for accessing wages, providing clear fee disclosures, ensuring transactions are nonrecourse (meaning no legal action can be taken against the consumer), and limiting transaction fees to $5 per $100 of proceeds. The bill also mandates the creation of a real-time database to track transactions, requires providers to submit detailed transaction data, and prohibits providers from pulling credit reports or reporting transactions to credit agencies. Providers are restricted from offering transactions to consumers under 18 or for more than $500, and must provide annual statements to consumers detailing their transactions and costs. The commissioner of financial institutions is given broad powers to investigate, examine, and penalize providers who violate the regulations, with potential civil penalties ranging from $1,000 to $5,000 per violation. The act will take effect for transactions offered on or after January 1, 2026, and aims to protect consumers while providing a regulated framework for early wage access services.

Business and Industry

https://apps.legislature.ky.gov/record/25RS/hb645.html