The Future of Earned Wage Access in New York State: Evaluating Impact, Innovation and Regulation

New York State Senate tasked the Capstone team to develop a report which will inform Senate leadership on key considerations with respect to possible approaches to regulating the Earned Wage Access (EWA) industry, which are unregulated products that are designed to provide employees access to wages for which they’ve already worked prior to the scheduled payday. These products are sometimes likened to payday loans, which are short-term loans that come due at the next payday and carry very high interest rates. EWA providers contend that their products are not loans as they do not carry interest and instead view it as a liquidity tool that provides instant access to cash for a fee. Most jurisdictions do not currently classify EWA as loans. This approach has allowed the industry to operate without being subject to the same limitations that banks and other licensed lenders are required to comply with. In developing their report, the Capstone team will address a number of specific questions:

• Understanding the market trends and conditions, competition, and product offerings, both nationally and in New York State
• Understanding current regulatory landscape (state and federal) and how existing laws affect EWA products
• Analysis of standard consumer protections needed in consumer lending and similar transactions