SHB 1063
In CommitteeHouse
Earned wage access services
Establishing a new chapter for the licensing and regulation of businesses providing earned wage access services.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill creates a new licensing and regulatory framework for businesses that offer earned wage access services—like same-day access to wages already earned but not yet paid—by requiring state licensing, setting fee limits, mandating consumer protections, and clarifying that such services are not loans or money transmission under existing law. It takes effect on July 1, 2026.
- Requires earned wage access service providers to obtain a state license starting July 1, 2026, and prohibits unlicensed operation.
- Mandates background checks, surety bonds (minimum $30,000), and financial responsibility standards for license applicants.
- Prohibits providers from charging more than $7.00 per transaction for delivery or expedited delivery, banning late fees, interest, or credit-card payments for repayment.
- Requires clear, upfront disclosures of all fees, a no-cost option for accessing earned wages, and prohibits deceptive marketing or misleading consumers about voluntary tips/donations.
- Bars providers from reporting unpaid balances to credit bureaus or using aggressive collection tactics (e.g., unsolicited calls, lawsuits, or third-party collectors) for standard repayments.
Who is affected
- Earned wage access service providers — Businesses that want to offer earned wage access services (like same-day access to earned wages) in Washington must now get a state license, follow new rules about fees and disclosures, and meet background and financial responsibility requirements.
- Workers (consumers) using earned wage access services — Workers who use these services will see clearer disclosures about fees, a right to a no-cost option, and protections against certain collection tactics and hidden charges.
- Employers offering earned wage access as an employee benefit — Employers who partner with providers to offer earned wage access as a benefit may do so without triggering lending or wage deduction laws—this bill clarifies their role and limits their liability.
- Washington State Department of Financial Institutions — The Department of Financial Institutions will gain authority to license, monitor, and enforce rules for this industry—including fines, license revocations, and consumer restitution.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Requires clear, upfront fee disclosures and explicit voluntary-language for tips/donations, empowering consumers to make informed choices and preventing deceptive practices that exploit financial vulnerability.
Rights & LibertiesPeopleRef: Sec. 9(3), Sec. 9(7)Mandates criminal background checks for officers and prohibits licensing to those with recent financial crime convictions, reducing risk of fraud or exploitation by bad actors in this high-risk, low-income consumer segment.
Public SafetyPeopleRef: Sec. 4(2), Sec. 5(1)(d)Bars late fees, interest, and penalties on repayment, preventing providers from imposing additional costs on consumers who experience temporary cash-flow gaps—protecting against debt escalation.
FinancialPeopleRef: Sec. 9(5), Sec. 10(5)Prohibits credit checks for eligibility, preserving access for underbanked or thin-file consumers who might otherwise be excluded from essential liquidity tools.
Rights & LibertiesPeopleRef: Sec. 10(2)Bars deceptive advertising and fraudulent schemes, reducing consumer harm from misleading claims about cost or necessity—especially important for vulnerable populations targeted by predatory marketing.
Public SafetyLean peopleRef: Sec. 11, Sec. 12
Potential Concerns (5)
Mandates a no-cost option for accessing earned wages and caps transaction fees at $7, reducing out-of-pocket costs for low-wage workers who rely on these services for liquidity management.
FinancialPeopleRef: Sec. 9(2), Sec. 10(4)Prohibits credit reporting of unpaid balances and restricts aggressive collection tactics (e.g., lawsuits, third-party collectors), protecting workers from debt traps and credit score damage that could result from routine repayment delays.
FinancialPeopleRef: Sec. 9(1), Sec. 10(6), Sec. 10(7)Requires providers to reimburse consumers for overdraft fees caused by erroneous or premature withdrawal attempts, directly shielding low-income users from bank penalties they did not cause.
FinancialPeopleRef: Sec. 9(9)Imposes $30,000 surety bonds and annual assessments on providers, which may increase operational costs passed on to consumers or absorbed by providers—modest net cost to the public, but not clearly regressive or progressive.
FinancialRef: Sec. 4(4), Sec. 7Clarifies that earned wage access services are not loans or money transmission, reducing regulatory uncertainty for providers but offering no direct benefit or harm to consumers beyond enabling market entry.
legalRef: Sec. 18
Who Is Most Affected
Workers using these services—especially low-wage, hourly, and gig workers—will benefit from fee caps, no-cost options, and protections against credit reporting and aggressive collection, reducing financial stress and debt risk.
Earned wage access providers will face new licensing, bonding, and compliance costs, but gain regulatory clarity and legitimacy, potentially expanding their market if they can absorb initial setup costs.
Employers offering these services as benefits will have reduced liability exposure and legal clarity, making it easier and safer to partner with providers—primarily benefiting mid- to large-sized employers with HR infrastructure.
The Department of Financial Institutions gains new authority and funding through fees, strengthening consumer protection capacity but requiring new staffing and oversight resources.
Banks and credit unions are exempt under Sec. 2, preserving their existing services, while fintech firms without banking charters must now comply—shifting competitive dynamics in the financial tech space.