Bill
HB 1393
North Dakota would license and regulate earned wage access providers to protect consumers with fee caps, bonding and net-worth requirements, and state oversight.
Status
- Title: An Act to create and enact a new chapter to Title 13 of the North Dakota Century Code, relating to earned wage access providers; and to provide a penalty.
- Introduced: November 18, 2024.
- Most recent status provided: Second reading — failed to pass (yeas 16, nays 30).
Purpose and intent
- Establish a statutory framework to license, regulate, and supervise businesses that provide "earned wage access" (also called earned income access or earned wage access) — services that advance workers access to wages they have earned but not yet been paid.
- Provide consumer protections (limits on fees/charges, licensing standards, bonding, oversight) and a penalty for violations.
Key definitions (selected)
- Consumer: an individual who resides in the state.
- Earned but unpaid income: wages/compensation earned by a worker but not yet paid by the employer.
- Earned income access transaction: payment of such earnings to a consumer at a time other than the regular payday.
- Provider / earned wage access provider: a person or entity that offers or enters into earned income access transactions.
- Exempt organizations: include banks, federally chartered institutions, payroll service providers that merely verify earnings (and are not contractually obligated to fund advances), and employers that directly advance portions of pay.
Administration and licensing
- The Department of Financial Institutions (commissioner) would administer and enforce the chapter and be authorized to promulgate rules.
- Providers (except exempt organizations) would be required to obtain a license before offering earned wage access services to state residents. A provider is considered to be “engaging in business” if the consumer is located in North Dakota.
- Application requirements include written application under oath, disclosure of owners/officers, and other information as set by the commissioner. The commissioner may participate in a nationwide multistate licensing system.
Financial, fitness and surety requirements
- Minimum tangible net worth: at least $25,000 (or higher as the commissioner may require).
- Surety bond: minimum $50,000, with commissioner able to require a larger bond based on business volume.
- Applicants/personnel must not have convictions for crimes involving dishonesty, fraud, or breach of trust (deferred impositions and certain diversions treated as convictions).
Consumer protections and operational rules (high level)
- The bill provides for the commissioner to set an "earned income access rate cap" — a limit on the amount a provider may charge for an earned income access transaction.
- "Charge" is defined to include delivery/expedited delivery fees and subscriptions tied to earned wage access services (excluding voluntary tips).
- Definitions and provisions address proceeds, outstanding proceeds, nonrecourse, and recordkeeping/filing requirements. (Full operational and compliance details appear throughout the draft chapter.)
Enforcement and penalties
- The bill includes a penalty provision; enforcement authority rests with the Department of Financial Institutions. (Specific penalty amounts or criminal/ civil structure are not fully visible in the provided excerpts.)
Who would be affected
- Non-exempt earned wage access providers offering services to North Dakota residents (including small fintech firms).
- Employers and payroll service providers (explicitly exempt when not contractually funding advances).
- Consumers/workers using earned wage access services would gain statutory protections (fee caps, licensing oversight).
- State regulator: increased licensing and supervisory workload (rulemaking, examinations, potential participation in a multistate licensing system).
Potential fiscal/operational impact
- Administrative costs to the Department of Financial Institutions for rulemaking, licensure, and enforcement (extent depends on scope of rulemaking and staffing decisions).
- Business compliance costs for providers: license fees (set by commissioner), bonding, minimum net worth requirements, reporting obligations. Small providers and startups could face meaningful compliance burden.
- Exempt entities (banks, employers offering advances directly, certain payroll verifiers) would not be subject to licensure.
Procedural notes
- The bill underwent drafting and amendment (earlier drafts used terms like “payday lending organizations”; later drafts center on “earned wage access providers”).
- According to the status supplied with your request, HB 1393 failed on second reading (yeas 16, nays 30) and therefore did not advance (as of that recorded vote).
If you want, I can:
- Extract and summarize specific regulatory/compliance sections (licensing application form requirements, reporting, record retention) from the full text; or
- Compare this draft to other states’ earned wage access statutes to identify key differences and likely industry impacts.
Compiled from official sources — confirm details with the bill’s official record.
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