Bill > S725

This bill establishes a new regulatory framework for earned wage access services providers in Massachusetts, creating Chapter 140F to license and govern businesses that offer workers early access to wages they have already earned. The bill requires providers to obtain a license from the Massachusetts Commissioner of Banks and sets out detailed requirements for licensing, including background checks and application fees. Providers must develop consumer-friendly policies such as offering at least one no-cost option for accessing wages, clearly disclosing all fees, allowing consumers to cancel services without penalty, and protecting consumer privacy. The legislation prohibits certain practices like charging late fees, reporting consumer information to credit agencies, or compelling payment through aggressive collection methods. Providers are also restricted from sharing consumer-generated tips with employers and cannot require credit checks to determine eligibility for services. The bill classifies earned wage access services as neither loans nor money transmission, providing legal clarity for these financial technology services. Existing providers operating in Massachusetts as of January 1, 2025, will have until July 1, 2026, to obtain a license, with a transition period to allow current businesses to comply with the new regulatory requirements. The commissioner is granted enforcement powers, including the ability to impose penalties up to $1,000 for violations and conduct investigations of licensed providers.

Business and Industry

https://malegislature.gov/Bills/194/S725