Florida Senate - 2024                                    SB 1146
       By Senator Trumbull
       2-01118-24                                            20241146__
    1                        A bill to be entitled                      
    2         An act relating to earned wage access providers;
    3         creating part V of ch. 560, F.S., entitled “Florida
    4         Earned Wage Access Services Act”; creating s. 560.409,
    5         F.S.; providing a short title; creating s. 560.410,
    6         F.S.; defining terms; creating s. 560.411, F.S.;
    7         defining terms; requiring providers of earned wage
    8         access services to register with the Financial
    9         Services Commission; specifying the information that
   10         must be included with the application; requiring the
   11         commission to issue a proof of registration to
   12         qualified applicants; requiring that the registration
   13         or the registration number, as applicable, be
   14         displayed in a specified manner; requiring that
   15         registrations be renewed biennially; authorizing the
   16         commission to extend the expiration date of a
   17         registration for a specified purpose; prohibiting
   18         assignment of a registration and the conduct of
   19         business under more than one name; authorizing the
   20         commission to deny, refuse to renew, or revoke a
   21         registration for specified reasons; requiring the
   22         commission to deny or refuse to renew a registration
   23         under certain circumstances; creating s. 560.412,
   24         F.S.; providing requirements for registered providers;
   25         prohibiting certain activities on the part of
   26         registered providers; providing construction;
   27         authorizing providers to use a mailing address
   28         provided by a consumer to determine a consumer’s state
   29         of residence; creating s. 560.413, F.S.; providing
   30         applicability; creating s. 560.414, F.S.; authorizing
   31         the commission to issue orders imposing certain
   32         actions or penalties for violations, including
   33         imposition of administrative fines; authorizing the
   34         commission to adopt rules; requiring the commission to
   35         adopt an application for registration; authorizing
   36         certain providers to operate without registration for
   37         a specified timeframe after the effective date of this
   38         act under certain conditions; providing an effective
   39         date.
   41  Be It Enacted by the Legislature of the State of Florida:
   43         Section 1. Part V of chapter 560, Florida Statutes,
   44  consisting of sections 560.409 through 560.414, Florida
   45  Statutes, is created to read:
   47                               PART V                              
   49               FLORIDA EARNED WAGE ACCESS SERVICES ACT             
   51         560.409 Short title.—This part shall be known as the
   52  “Florida Earned Wage Access Services Act.
   53         560.410 Definitions.—As used in this part, the term:
   54         (1) “Business entity” means any corporation, limited
   55  liability company, partnership, association, or other commercial
   56  entity.
   57         (2) “Commission” means the Financial Services Commission.
   58         (3) “Consumer” means an individual who resides in this
   59  state.
   60         (4) “Consumer-directed earned wage access services” means
   61  the business of delivering to consumers access to earned but
   62  unpaid income that is based on the consumer’s representations
   63  and the provider’s reasonable determination of the consumer’s
   64  earned but unpaid income.
   65         (5) “Earned but unpaid income” means salary, wages,
   66  compensation, or other income that a consumer or an employer has
   67  represented, and that a provider has reasonably determined, has
   68  been earned or accrued to the benefit of the consumer in
   69  exchange for the consumer’s provision of services to the
   70  employer or on behalf of the employer, including on an hourly,
   71  project-based, piecework, or other basis and including
   72  circumstances in which the consumer is acting as an independent
   73  contractor of the employer, but has not, at the time of the
   74  payment of proceeds, been paid to the consumer by the employer.
   75         (6) “Earned wage access service” means the business of
   76  providing consumer-directed earned wage access services or
   77  employer-integrated earned wage access services, or both.
   78         (7)Employer” means a person or an entity that employs a
   79  consumer or any other person who is contractually obligated to
   80  pay a consumer earned but unpaid income in exchange for the
   81  consumer’s provision of services to the employer or on behalf of
   82  the employer, including on an hourly, project-based, piecework,
   83  or other basis and including circumstances in which the consumer
   84  is acting as an independent contractor with respect to the
   85  employer. The term does not include a customer of an employer,
   86  or any other person whose obligation to make a payment of
   87  salary, wages, compensation, or other income to a consumer is
   88  not based on the provision of services by that consumer for or
   89  on behalf of the person.
   90         (8) “Employer-integrated earned wage access services” means
   91  the business of delivering to consumers access to earned but
   92  unpaid income that is based on employment, income, or attendance
   93  data obtained directly or indirectly from an employer.
   94         (9)“Fee” includes a fee imposed by a provider for delivery
   95  or expedited delivery of proceeds to a consumer or a
   96  subscription or a membership fee imposed by a provider for a
   97  bona fide group of services that includes earned wage access
   98  services; however, the term does not include a voluntary tip,
   99  gratuity, or other donation.
  100         (10) “Outstanding proceeds” means proceeds remitted to a
  101  consumer by a provider which have not yet been repaid to the
  102  provider.
  103         (11) “Proceeds” means a payment to a consumer by a provider
  104  which is based on earned but unpaid income.
  105         (12) “Provider” means a business entity that is in the
  106  business of providing earned wage access services to consumers;
  107  however, the term does not include either of the following:
  108         (a) A service provider, such as a payroll service provider,
  109  whose role may include verifying the available earnings but
  110  which is not contractually obligated to fund proceeds delivered
  111  as part of an earned wage access service.
  112         (b)An employer that offers a portion of salary, wages, or
  113  compensation directly to its employees or independent
  114  contractors before the normally scheduled pay date.
  115         (13) “Registrant” means a business entity registered with
  116  the commission under s. 561.02(1) as an earned wage access
  117  services provider.
  118         560.411 Registration.—
  119         (1) For the purposes of this section, the term:
  120         (a) “Applicant” means a provider that has submitted an
  121  application for a certificate of registration under subsection
  122  (2).
  123         (b) “Director” means a member of the applicant’s or
  124  registrant’s board of directors. For purposes of this paragraph,
  125  the term “member” means a person who has the right to receive
  126  upon dissolution, or has contributed, 10 percent or more of the
  127  capital of an applicant or registrant that is organized as a
  128  limited liability company.
  129         (c) “Key officer” includes the chief executive officer, the
  130  chief financial officer, and the chief compliance officer.
  131         (d) “Partner” means a person that has the right to receive
  132  upon dissolution, or has contributed, 10 percent or more of the
  133  capital of an applicant or a registrant that is organized as a
  134  partnership.
  135         (2) Each provider shall register with the commission. An
  136  applicant must provide its legal business and trade name,
  137  mailing address, business locations, and the full names and
  138  addresses of its partners, members, or directors and key
  139  officers, and the Florida agent of the corporation; must state
  140  whether it is a domestic or a foreign corporation; must provide
  141  its state and date of incorporation, its charter number, and, if
  142  it is a foreign corporation, the date it registered with the
  143  Department of State; and, if the provider is operating under a
  144  fictitious or trade name, must provide the date on which it
  145  registered its fictitious name.
  146         (3) A certificate evidencing proof of registration must be
  147  issued by the commission and must be prominently displayed at
  148  the provider’s primary place of business; however, if the
  149  provider conducts business on a website, the provider must post
  150  its registration number on its website.
  151         (4) A registration must be renewed biennially on or before
  152  its expiration date. In order to establish staggered expiration
  153  dates, the commission may extend the expiration date of a
  154  registration for a period not to exceed 12 months.
  155         (5) A registration issued under this chapter is not
  156  assignable, and the provider may not conduct business under more
  157  than one name except as registered. A provider desiring to
  158  change its registered name, location, or designated agent for
  159  service of process at a time other than upon renewal of
  160  registration must notify the commission of the change.
  161         (6) The commission may deny, refuse to renew, or revoke the
  162  registration of a provider based upon a determination that any
  163  of the following criteria applies to the provider, or any of the
  164  provider’s partners, members, or directors and key officers:
  165         (a) Has failed to meet the requirements for registration as
  166  provided in this chapter.
  167         (b) Has been convicted of a crime involving fraud,
  168  dishonest dealing, or any other act of moral turpitude.
  169         (c) Has not satisfied a civil fine or penalty arising out
  170  of an administrative or enforcement action brought by a
  171  governmental agency or a private person based upon conduct
  172  involving fraud, dishonest dealing, or any violation of this
  173  chapter.
  174         (d) Has pending against it any criminal, administrative, or
  175  enforcement proceedings in any jurisdiction, based upon conduct
  176  involving fraud, dishonest dealing, or any other act of moral
  177  turpitude.
  178         (e) Has had a judgment entered against it in any action
  179  brought by the commission or the Department of Legal Affairs
  180  under this chapter or the Florida Deceptive and Unfair Trade
  181  Practices Act.
  182         (7) The commission shall deny or refuse to renew the
  183  registration of a provider or deny a registration or renewal
  184  request by any of the provider’s partners, members, or directors
  185  and key officers if such entities have not satisfied a civil
  186  penalty or administrative fine for a violation of s. 560.412.
  187         560.412 Provider requirements; limitations.—
  188         (1) A provider required to register under s. 560.411(2)
  189  shall do all of the following:
  190         (a) Develop and implement policies and procedures to
  191  respond to questions raised by consumers and address complaints
  192  from consumers in an expedient manner.
  193         (b) Offer to the consumer at least one reasonable option to
  194  obtain proceeds at no cost to the consumer and clearly explain
  195  how to elect the no-cost option.
  196         (c)Before entering into an agreement with a consumer for
  197  the provision of earned wage access services:
  198         1. Inform the consumer of his or her rights under the
  199  agreement; and
  200         2. Fully and clearly disclose all fees associated with the
  201  earned wage access services.
  202         (d) Inform the consumer of any material changes to the
  203  terms and conditions of providing the earned wage access
  204  services before applying those changes to that consumer.
  205         (e) Allow the consumer to cancel use of the provider’s
  206  earned wage access services at any time, without incurring a
  207  cancellation fee or penalty imposed by the provider. If the
  208  consumer has initiated an advance of proceeds, the provider may
  209  require the effective date of the cancellation to be after the
  210  consumer has satisfied any repayment obligation the consumer has
  211  to the provider, either through payroll deduction, preauthorized
  212  electronic funds transfer from a consumer’s account or
  213  depository institution, or other means previously agreed to by
  214  the consumer and the provider. This paragraph does not require a
  215  provider to allow a consumer-initiated advance to be canceled,
  216  revoked, suspended, or reversed after the consumer initiates the
  217  advance.
  218         (f) Comply with all applicable local, state, and federal
  219  privacy and information security laws.
  220         (g) If the provider solicits, charges, or receives a tip,
  221  gratuity, or other donation from a consumer:
  222         1.Disclose, clearly and conspicuously, to the consumer
  223  immediately before each transaction that a tip, gratuity, or
  224  other donation amount may be zero and is voluntary; and
  225         2. Disclose, clearly and conspicuously, in the service
  226  contract with the consumer that tips, gratuities, and donations
  227  are voluntary and that the offering of earned wage access
  228  services, including the amount of proceeds a consumer is
  229  eligible to request and the frequency with which proceeds are
  230  provided to a consumer, is not contingent on whether the
  231  consumer pays any tip, gratuity, or other donation or on the
  232  size of a tip, gratuity, or other donation.
  233         (h) Provide proceeds to a consumer by any means mutually
  234  agreed upon by the consumer and the provider.
  235         (i) If the provider will seek repayment of outstanding
  236  proceeds or payment of fees or other amounts owed, including
  237  voluntary tips, gratuities, or other donations, in connection
  238  with the activities covered by this chapter, from a consumer’s
  239  depository institution, including by means of electronic funds
  240  transfer:
  241         1. Comply with applicable provisions of the Electronic Fund
  242  Transfer Act, 15 U.S.C. s. 1693, and regulations adopted under
  243  the act; and
  244         2. Reimburse the consumer for the full amount of any
  245  overdraft or insufficient funds fees imposed on the consumer by
  246  the consumer’s depository institution which were caused by the
  247  provider attempting to seek payment of any outstanding proceeds,
  248  fees, or other payments in connection with the activities
  249  covered by this chapter, including voluntary tips, gratuities,
  250  or other donations, on a date before, or in an incorrect amount
  251  from, the date or amount disclosed to the consumer. However, the
  252  provider is not subject to the requirements in this subparagraph
  253  with respect to payments of outstanding amounts or fees incurred
  254  by a consumer through fraudulent or other unlawful means.
  255         (2) A provider required to register under s. 560.411(2) may
  256  not do any of the following:
  257         (a) Share with an employer a portion of any fees, voluntary
  258  tips, gratuities, or other donations that were received from or
  259  charged to a consumer for earned wage access services.
  260         (b) Require a consumer’s credit report or a credit score
  261  provided or issued by a consumer reporting agency to determine a
  262  consumer’s eligibility for earned wage access services.
  263         (c) Accept payment of outstanding proceeds, fees, voluntary
  264  tips, gratuities, or other donations from a consumer by means of
  265  a credit card or charge card.
  266         (d) Charge a late fee, deferral fee, interest, or any other
  267  penalty or fee for failure to pay outstanding proceeds, fees,
  268  voluntary tips, gratuities, or other donations.
  269         (e) Report to a consumer reporting agency or debt collector
  270  any information about the consumer regarding the inability of
  271  the consumer to pay outstanding proceeds, fees, voluntary tips,
  272  gratuities, or other donations.
  273         (f)Compel or attempt to compel payment by a consumer of
  274  outstanding proceeds, fees, voluntary tips, gratuities, or other
  275  donations to the provider through any of the following means:
  276         1. A suit against the consumer in a court of competent
  277  jurisdiction.
  278         2. Use of a third party to pursue collection from the
  279  consumer on the provider’s behalf.
  280         3. Sale of outstanding amounts to a third-party collector
  281  or debt buyer for collection from the consumer.
  283  The prohibition imposed in this paragraph does not preclude the
  284  use by a provider of any of the methods specified in this
  285  paragraph to compel payment of outstanding amounts or fees
  286  incurred by a consumer through fraudulent or other unlawful
  287  means, nor does it preclude a provider from pursuing an employer
  288  for breach of its contractual obligations to the provider.
  289         (g) Mislead or deceive consumers about the voluntary nature
  290  of tips, gratuities, or donations or make representations that
  291  tips, gratuities, or other donations will benefit any specific
  292  individuals.
  293         (3) A provider may use the mailing address provided by a
  294  consumer to determine the consumer’s state of residence for
  295  purposes of this part.
  296         560.413 Applicability.—
  297         (1) Notwithstanding any other provision of law, earned wage
  298  access services offered and provided by a registrant in
  299  compliance with this chapter are not considered to be any of the
  300  following:
  301         (a)In conflict with s. 516.17 or other state law governing
  302  the sale or assignment of, or an order for, earned but unpaid
  303  income.
  304         (b)A loan or other form of credit or debt, and the
  305  provider is not considered a creditor, debt collector, or lender
  306  with respect to such services.
  307         (c)Money transmission, and the provider is not considered
  308  a money transmitter, as defined in s. 560.103(24), with respect
  309  to such services.
  310         (2) Chapter 516 does not apply to proceeds that a provider
  311  provides to a consumer in accordance with this part.
  312         (3) A voluntary tip, gratuity, or other donation paid by a
  313  consumer to a registrant in accordance with this chapter is not
  314  considered a finance charge.
  315         560.414 Administrative remedies, penalties.—
  316         (1)The commission may issue an order for one or more of
  317  the following actions or penalties if it finds that a provider
  318  has violated or is operating in violation of this part or rules
  319  adopted pursuant thereto:
  320         (a)Issue a notice of noncompliance under s. 120.695.
  321         (b)Impose an administrative fine in the Class II category
  322  pursuant to s. 570.971 for each act or omission.
  323         (c)Direct that the provider cease and desist specified
  324  activities.
  325         (d)Refuse to register or revoke or suspend a registration.
  326         (e)Place the registrant on probation, subject to
  327  conditions specified by the commission.
  328         (2)The administrative proceedings that could result in the
  329  entry of an order imposing any of the actions or penalties
  330  specified in subsection (1) are governed by chapter 120.
  331         (3)The commission may adopt rules under ss. 120.536(1) and
  332  120.54 to administer this part.
  333         Section 2. On or before the effective date of this act, the
  334  commission shall prescribe the form and content of an
  335  application for registration to provide earned wage access
  336  services pursuant to this act. A provider that, as of January 1,
  337  2024, is engaged in the business of providing earned wage access
  338  services in this state may, until 6 months after the effective
  339  date of this act, continue to engage in such business without
  340  registering if the provider has submitted an application for
  341  registration and otherwise complies with this act.
  342         Section 3. This act shall take effect October 1, 2024.