Bill
SB 5328
Washington requires licensing of employer-integrated earned wage access providers, with DFI oversight starting July 1, 2026, to protect consumers and curb abuses.
Status and context
- Bill: SB 5328 (1st Substitute, S-1724.1) — introduced Jan 17, 2025; first substitute filed Feb 20, 2025.
- Committee and floor actions: public hearing and executive action in Senate Business, Financial Services & Trade; passed the Senate on March 7, 2025; returned to Senate Rules Committee for third reading on April 27, 2025.
- Note: The SB 5328 bill number was used in an earlier (2023) measure concerning public‑safety telecommunicators and retirement membership; the active 2025 SB 5328 addresses licensing and regulation of earned wage access providers (employer‑integrated model).
Purpose and intent
- Establish a regulatory framework to license and supervise businesses that provide employer‑integrated earned wage access (EWA) services in Washington. The act is captioned the “Washington state employer‑integrated wage access services act.”
- Distinguish employer‑integrated EWA (based on employer‑provided payroll/attendance data) from consumer‑directed EWA (covered under existing chapter 31.04 RCW), and regulate the former.
Key definitions and scope
- Employer‑integrated wage access services: advances of earned but unpaid income to consumers based on employment, income, or attendance data obtained from an employer.
- Provider: any person or entity offering or holding out employer‑integrated EWA services to Washington consumers (with carve‑outs for payroll service providers that only verify earnings and for employers that directly advance pay).
- Consumer: an individual resident of or physically located in Washington.
Major provisions
- Licensing requirement: beginning July 1, 2026, providers must obtain and maintain a license from the Department of Financial Institutions (DFI) to advertise, solicit, offer, or provide employer‑integrated EWA in Washington.
- Application and vetting: applications submitted via the Nationwide Mortgage Licensing System and Registry or in a DFI form; applicants and key personnel must submit identifying information, fingerprints, criminal history (including certain non‑conviction data), business information, and any other director‑required materials.
- Fees, bond, and consumer protections: applicants must pay application fees and satisfy surety bond requirements (details in bill). If services are provided in violation of the licensing requirement, fees/subscriptions/tips charged must be refunded to consumers and any outstanding proceeds (amounts advanced) are declared null, void, uncollectible, and unenforceable.
- Exemptions: state and federal‑chartered banks, savings banks, trust companies, thrifts, and credit unions are exempt. Payroll service providers that do not fund advances and employers that directly advance wages are excluded from the definition of provider.
Enforcement and penalties
- DFI is authorized to regulate licensees, promulgate rules, receive required application materials, and enforce compliance. The bill prescribes civil remedies (refunds and debt invalidation for unlicensed activity) and contemplates penalties and administrative enforcement authority (specific penalties are set within the bill text).
Who is affected
- Directly: companies that provide or plan to provide employer‑integrated earned wage access services to Washington workers (including out‑of‑state firms serving Washington residents).
- Indirectly: employers who partner with or supply payroll/attendance data to EWA providers; payroll service vendors; Washington workers/consumers who use EWA products (gain consumer protections and potential debt relief if providers act without license).
Potential impacts
- Increased regulatory compliance costs for EWA providers (licensing, bonding, background checks, fees).
- Stronger consumer protections: refunds and voiding of advances for unlicensed activity, and DFI oversight intended to reduce abusive practices.
- Clarifies the state’s regulatory approach by treating employer‑integrated models separately from consumer‑directed EWA (the latter remains under chapter 31.04 RCW).
Effective timeline
- Licensing prohibition for unlicensed activity takes effect July 1, 2026 (providers must be licensed from that date to operate lawfully in Washington).
For further details
- The bill text contains additional specifics (fee/bond amounts, rulemaking authority, licensing forms and renewal procedures, and precise enforcement mechanisms) that should be consulted for implementation and compliance planning.
Compiled from official sources — confirm details with the bill’s official record.
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