House committee advances earned-wage-access licensing bill after contentious hearing over fees and consumer risk

The House Finance Committee on Feb. 19 voted 6–5 to send House Bill 10-46 to the Committee on Appropriations after an extended hearing that featured competing testimony from industry, academic researchers, consumer advocates and the Colorado Attorney General’s office.

Sponsors — Majority Leader Duran and Representative Brianna Camacho — said the bill creates a licensing framework under Title 5 and places administration with the Colorado Attorney General to standardize consumer protections for earned-wage-access (EWA) services. Key measures adopted in committee included: a ban on soliciting voluntary tips (amendment L023); a requirement that providers prominently offer at least one reasonable no-cost transfer option and initiate that transfer within 24 hours (L018); the ability for consumers to reschedule payments (L002); and clarification that credit reports/scores may not be required to access EWA (L003). Sponsors also added a three-year sunset and a funding mechanism that, as amended, includes gifts, grants and donations combined with statutory constraints (L007 as amended by L020).

"This bill creates guardrails for something that's already in the market and provides protections while we learn from the data during a three-year sunset," Majority Leader Duran said in closing. "Doing nothing does not protect workers. It protects chaos." Representative Camacho said the bill is intended to protect working families by requiring transparency, a free option, caps on expedited-transfer fees and prohibitions on abusive practices such as credit reporting, lawsuits and third-party collections.

Proponents from the EWA industry and employer-integrated providers argued the product is typically nonrecourse, does not create debt under current practice, and can substitute for higher-cost options such as overdraft and payday lending. Ben Lorocco (Earnin) and Molly Jones (PayActiv) said EWA can be low- or no-cost, and that many users rely on it to cover urgent essentials. Research presented by Jonathan Davis (University of Oregon, neutral testimony) found first-time EWA users experienced an average monthly income increase and used advances primarily for essential spending; he also recorded a small average increase in insufficient-funds fees.

Consumer advocates, labor groups and public-interest lawyers strongly disagreed about the bill's sufficiency. Witnesses from the Bell Policy Center, the National Consumer Law Center, the Center for Responsible Lending, the Colorado AFL-CIO, and other organizations cited enforcement actions and internal industry documents showing frequent repeat use, interface designs that nudge users toward paid instant transfers, and concentration of revenue among repeat users. They urged the committee to treat direct-to-consumer EWA like credit subject to Colorado’s Uniform Consumer Credit Code and to set per-transaction caps near $3.50, impose a monthly cap (for example $7), and prohibit tips because tips can be effectively mandatory in practice.

The Attorney General’s office said it was in an “amend position” and that direct-to-consumer EWA should be regulated as credit under the state UCCC; AG staff also recommended per-transaction caps, a monthly cap, anti-stacking measures to prevent multiple providers from claiming the same wages, and privacy protections. AG staff warned that funding a regulatory program via outside gifts, grants or donations — as proposed in an adopted amendment — raises operational and conflict-of-interest questions.

Committee amendments: L023 (ban on soliciting tips) was adopted; L002 (rescheduling payments) adopted; L003 (no credit-report/score requirement) adopted; L020 (struck an inflation escalation provision for expedited fees) amended L007; L007 as amended (including a three-year sunset and funding mechanics) passed 6–5 after roll call; L018 (require visible free option and 24-hour initiation) was also adopted. Several members voiced concern that adopted fee caps in the bill (a $5 cap for small advances and $7.50 for larger ones as proposed in sponsors’ text) might be higher than the per-transaction amounts consumer groups prefer and that the bill, as amended, reduces the AG’s existing enforcement scope in some respects.

After debate and roll-call, the committee voted to route HB 10-46 as amended to Appropriations by a 6–5 margin. Supporters said the bill modernizes access to wages with baseline protections and a sunset to revisit the policy after data collection; opponents warned it risks legitimizing fee-heavy business models without the APR or monthly caps they consider necessary.