On August 28, 2023 (the “Effective Date”), SB 103, signed into law by Missouri’s governor, will become the nation’s second statutory framework for earned wage access (EWA) providers.  The Missouri law closely resembles Nevada’s recently enacted law to license and regulate EWA providers.

SB 103 enacts a new RSMo § 361.749(2), which expressly provides that “[n]o person shall engage in the business of earned wage access services in [Missouri] without first registering as an earned wage access services provider” with the Missouri Division of Finance (the “Division”).  The term “earned wage access services” is defined in subsection (1)(6) thereof as “the business of providing consumer-directed wage access services, employer-integrated wage access services, or both.”  “Consumer-directed wage access services” is defined as “the business of offering or providing earned wage access services directly to a consumer based on the consumer’s representation and the provider’s reasonable determination of the consumer’s earned but unpaid income.”  “Employer-integrated wage access services” is defined as “the business of delivering to consumers access to earned but unpaid income that is based on employment, income, and attendance data obtained directly or indirectly from an employer.” See amended RSMo §§ 861.749(1)(2) & (8).  Accordingly, Missouri’s law applies to providers of both direct-to-consumer EWA services and employer-integrated EWA services that allow consumers to access their earned wages before the scheduled pay date.

Importantly, we note that RSMo § 361.749(3) expressly provides that the following entities are not required to register, but are otherwise subject to the substantive regulatory compliance obligations contained in the new law:

• A bank or savings and loan association whose depoframsits or accounts are eligible for insurance by the FDIC, or a subsidiary of such a bank or savings and loan association;
• A credit union doing business in Missouri; and
• A person authorized to make loans or extensions of credit under the laws of Missouri (e.g., a Missouri Consumer Installment Lender licensee) or the United States, who is subject to regulation and supervision by Missouri or the United States.

Non-exempt EWA providers will be required to register with the Division prior to commencing business and pay an annual $1,000 registration fee as of July 1 of each year.

New RSMo § 361.749(4) expressly states that EWA providers (including those that are exempt) must take the following actions, among other things:

• Develop and implement policies and procedures to respond to consumer inquiries and address complaints in a timely manner;
• Provide a consumer with a written or electronic disclosure which meets certain statutory requirements;
• Inform the consumer of the fact of any material changes to terms and conditions before such changes are implemented;
• Provide proceeds to a consumer by mutually agreed-upon means; and
• Comply with local, state, and federal privacy and information security laws.

New RSMo § 361.749(5) expressly prohibits EWA providers (again, including those that are exempt) from taking the following actions, among other things:

• Sharing any fees, tips, gratuities, or other donations with an employer;
• Using a consumer’s credit report to determine eligibility for EWA services;
• Reporting information about the user’s use of the EWA to a consumer reporting agency or debt collector;
• Charging interest or other penalty for failure to pay outstanding proceeds, fees, tips, gratuities, or donation;
• Accepting payment from a consumer of outstanding proceeds, fees, voluntary tips, gratuities, or other donations via credit card or charge card; or
• Compelling payment by a use of EWA services through civil action, use of a third party debt collector, or to sell the obligation to a third-party collector or debt buyer.

Importantly, the law clarifies that EWA products offered by a registered provider are not considered to be loans/credit or money transmission activity.  Moreover, EWA products offered by such providers are not considered to be violations of laws governing the sale or assignment or, or an order for, earned but unpaid income, and fees (including expedited delivery fees and subscription or membership fees) and tips are not considered interest or finance charges.  

It will be important for entities engaged in any business activities covered in SB 103 to consult the bill’s full text to determine how the new law will affect its business operations.

The Maryland Office of Financial Regulation recently issued guidance on EWA products and, in December 2022, the Arizona Attorney General issued an opinion on EWA products.

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