On April 19, Kansas Governor Laura Kelly signed House Bill (HB) 2560 to regulate earned wage access (EWA) products and services. HB 2560 enacts the Earned Wage Access Services Act that requires EWA providers to be licensed by the state bank commissioner and comply with certain disclosure rules. Kansas follows Nevada, Missouri, and Wisconsin in enacting EWA legislation.

HB 2560 expressly exempts bank holding companies regulated by the Federal Reserve and depository institutions regulated by a federal banking agency and subsidiaries of both. The law specifically states that EWA services are not to be considered a loan or money transmission and fees and gratuities are not to be considered finance or interest charges. Additionally, providers of EWA services shall not be subject to the provisions of the uniform consumer credit code in connection with the provider’s earned wage access services.

HB 2560 applies to both direct-to-consumer EWA services and employer-integrated EWA services. In either case, the amount being provided to the consumer must be earned by the consumer at the time of the advance. EWA providers must be licensed to offer EWA services in the state. Additionally, a licensed EWA provider will be required to:

• Provide all proceeds on a non-recourse basis and treat all fees and non-mandatory payments as non-recourse payment obligations.
• Develop policies to respond to questions raised by consumers in an expedient manner.
• Disclose all fees associated with the EWA product.
• Describe how the consumer may obtain the proceeds at no cost to the consumer.
• Provide proceeds to a consumer by any mutually agreed-upon means.
• Inform the consumer of any material changes to the terms and conditions of the EWA product before implementing the change.
• Allow the consumer to cancel the EWA service at any time, without incurring a fee.
• Disclose, both in the contract and immediately before each transaction, that tips and gratuities are voluntary and that the offering of EWA services is not contingent on a tip.
• Comply with applicable provisions of the federal Electronic Fund Transfer Act.
• Reimburse the consumer for any overdraft or nonsufficient funds fees caused by the provider attempting to seek payment on a date before, or in an incorrect amount from, the date or amount disclosed to the consumer.

The bill also prohibits providers from:

• Compelling a consumer to repay by filing a suit against the consumer, using a third-party collection agency, using outbound telephone calls to attempt collection, or selling outstanding amounts to a third-party collector.
• Sharing with a consumer’s employer any fees or tips received from or charged to a consumer.
• Using credit reports or credit scores to determine a consumer’s eligibility for EWA services.
• Reporting a consumer’s nonpayment to a consumer reporting agency or debt collector.
• Imposing late fees, deferral fees, interest, or any other charge for failure to pay any outstanding proceeds, fees, or tips.
• Accepting payment from a consumer via credit card.
• Misleading consumers about the voluntary nature of the tips or gratuities or representing that the tips or gratuities will benefit specific individuals.

HB 2560 provides that an EWA provider that was engaged in the business of providing EWA services in the state as of January 1, 2024 may continue providing EWA services as long as the provider submits an application for a license within three months after the commissioner prescribes the form.