We have focused much of the content in our Licensing Link newsletter on state licensing developments in traditional credit products that have been offered for decades. But that is not to say that state legislatures are ignoring some of the new and innovative financial products offered by fintechs and other market participants, offering novel and creative ways of delivering financial solutions to consumers. State legislatures in Missouri and Nevada recently enacted new laws to regulate innovative earned wage access ("EWA") programs, which should facilitate certain providers' ability to offer these programs in each state, and may provide a model for other states to license and regulate the product. While providers will have time to come into compliance with the Nevada law, which takes effect on July 1, 2024, the Missouri law becomes effective August 28, 2023.
Before diving into the Missouri and Nevada laws, we briefly remind readers of the basic structure of EWA programs. Earned wage access is a service that allows workers to obtain wages that they have earned, but have not yet been paid, prior to the worker's regularly scheduled payday. EWA programs have grown in popularity in recent years, and many large employers now partner with EWA providers to offer the providers' programs as an employee benefit, with the goal of promoting employees' financial well-being and offering employees access to a lower-cost alternative to payday loans or short-term loans.
As an emerging...
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