Bill Summary – FastDemocracy

       Florida Senate - 2024                                    SB 1146
       
       
        
       By Senator Trumbull
       
       
       
       
       
       2-01118-24                                            20241146__
                      A bill to be entitled                      
       An act relating to earned wage access providers;
       creating part V of ch. 560, F.S., entitled “Florida
       Earned Wage Access Services Act”; creating s. 560.409,
       F.S.; providing a short title; creating s. 560.410,
       F.S.; defining terms; creating s. 560.411, F.S.;
       defining terms; requiring providers of earned wage
       access services to register with the Financial
       Services Commission; specifying the information that
       must be included with the application; requiring the
       commission to issue a proof of registration to
       qualified applicants; requiring that the registration
       or the registration number, as applicable, be
       displayed in a specified manner; requiring that
       registrations be renewed biennially; authorizing the
       commission to extend the expiration date of a
       registration for a specified purpose; prohibiting
       assignment of a registration and the conduct of
       business under more than one name; authorizing the
       commission to deny, refuse to renew, or revoke a
       registration for specified reasons; requiring the
       commission to deny or refuse to renew a registration
       under certain circumstances; creating s. 560.412,
       F.S.; providing requirements for registered providers;
       prohibiting certain activities on the part of
       registered providers; providing construction;
       authorizing providers to use a mailing address
       provided by a consumer to determine a consumer’s state
       of residence; creating s. 560.413, F.S.; providing
       applicability; creating s. 560.414, F.S.; authorizing
       the commission to issue orders imposing certain
       actions or penalties for violations, including
       imposition of administrative fines; authorizing the
       commission to adopt rules; requiring the commission to
       adopt an application for registration; authorizing
       certain providers to operate without registration for
       a specified timeframe after the effective date of this
       act under certain conditions; providing an effective
       date.
        
Be It Enacted by the Legislature of the State of Florida:

       Section 1. Part V of chapter 560, Florida Statutes,
consisting of sections 560.409 through 560.414, Florida
Statutes, is created to read:

                             PART V                              

             FLORIDA EARNED WAGE ACCESS SERVICES ACT             

       560.409 Short title.—This part shall be known as the
“Florida Earned Wage Access Services Act.”
       560.410 Definitions.—As used in this part, the term:
       (1) “Business entity” means any corporation, limited
liability company, partnership, association, or other commercial
entity.
       (2) “Commission” means the Financial Services Commission.
       (3) “Consumer” means an individual who resides in this
state.
       (4) “Consumer-directed earned wage access services” means
the business of delivering to consumers access to earned but
unpaid income that is based on the consumer’s representations
and the provider’s reasonable determination of the consumer’s
earned but unpaid income.
       (5) “Earned but unpaid income” means salary, wages,
compensation, or other income that a consumer or an employer has
represented, and that a provider has reasonably determined, has
been earned or accrued to the benefit of the consumer in
exchange for the consumer’s provision of services to the
employer or on behalf of the employer, including on an hourly,
project-based, piecework, or other basis and including
circumstances in which the consumer is acting as an independent
contractor of the employer, but has not, at the time of the
payment of proceeds, been paid to the consumer by the employer.
       (6) “Earned wage access service” means the business of
providing consumer-directed earned wage access services or
employer-integrated earned wage access services, or both.
       (7) “Employer” means a person or an entity that employs a
consumer or any other person who is contractually obligated to
pay a consumer earned but unpaid income in exchange for the
consumer’s provision of services to the employer or on behalf of
the employer, including on an hourly, project-based, piecework,
or other basis and including circumstances in which the consumer
is acting as an independent contractor with respect to the
employer. The term does not include a customer of an employer,
or any other person whose obligation to make a payment of
salary, wages, compensation, or other income to a consumer is
not based on the provision of services by that consumer for or
on behalf of the person.
       (8) “Employer-integrated earned wage access services” means
the business of delivering to consumers access to earned but
unpaid income that is based on employment, income, or attendance
data obtained directly or indirectly from an employer.
       (9) “Fee” includes a fee imposed by a provider for delivery
or expedited delivery of proceeds to a consumer or a
subscription or a membership fee imposed by a provider for a
bona fide group of services that includes earned wage access
services; however, the term does not include a voluntary tip,
gratuity, or other donation.
       (10) “Outstanding proceeds” means proceeds remitted to a
consumer by a provider which have not yet been repaid to the
provider.
       (11) “Proceeds” means a payment to a consumer by a provider
which is based on earned but unpaid income.
       (12) “Provider” means a business entity that is in the
business of providing earned wage access services to consumers;
however, the term does not include either of the following:
       (a) A service provider, such as a payroll service provider,
whose role may include verifying the available earnings but
which is not contractually obligated to fund proceeds delivered
as part of an earned wage access service.
       (b) An employer that offers a portion of salary, wages, or
compensation directly to its employees or independent
contractors before the normally scheduled pay date.
       (13) “Registrant” means a business entity registered with
the commission under s. 561.02(1) as an earned wage access
services provider.
       560.411 Registration.—
       (1) For the purposes of this section, the term:
       (a) “Applicant” means a provider that has submitted an
application for a certificate of registration under subsection
(2).
       (b) “Director” means a member of the applicant’s or
registrant’s board of directors. For purposes of this paragraph,
the term “member” means a person who has the right to receive
upon dissolution, or has contributed, 10 percent or more of the
capital of an applicant or registrant that is organized as a
limited liability company.
       (c) “Key officer” includes the chief executive officer, the
chief financial officer, and the chief compliance officer.
       (d) “Partner” means a person that has the right to receive
upon dissolution, or has contributed, 10 percent or more of the
capital of an applicant or a registrant that is organized as a
partnership.
       (2) Each provider shall register with the commission. An
applicant must provide its legal business and trade name,
mailing address, business locations, and the full names and
addresses of its partners, members, or directors and key
officers, and the Florida agent of the corporation; must state
whether it is a domestic or a foreign corporation; must provide
its state and date of incorporation, its charter number, and, if
it is a foreign corporation, the date it registered with the
Department of State; and, if the provider is operating under a
fictitious or trade name, must provide the date on which it
registered its fictitious name.
       (3) A certificate evidencing proof of registration must be
issued by the commission and must be prominently displayed at
the provider’s primary place of business; however, if the
provider conducts business on a website, the provider must post
its registration number on its website.
       (4) A registration must be renewed biennially on or before
its expiration date. In order to establish staggered expiration
dates, the commission may extend the expiration date of a
registration for a period not to exceed 12 months.
       (5) A registration issued under this chapter is not
assignable, and the provider may not conduct business under more
than one name except as registered. A provider desiring to
change its registered name, location, or designated agent for
service of process at a time other than upon renewal of
registration must notify the commission of the change.
       (6) The commission may deny, refuse to renew, or revoke the
registration of a provider based upon a determination that any
of the following criteria applies to the provider, or any of the
provider’s partners, members, or directors and key officers:
       (a) Has failed to meet the requirements for registration as
provided in this chapter.
       (b) Has been convicted of a crime involving fraud,
dishonest dealing, or any other act of moral turpitude.
       (c) Has not satisfied a civil fine or penalty arising out
of an administrative or enforcement action brought by a
governmental agency or a private person based upon conduct
involving fraud, dishonest dealing, or any violation of this
chapter.
       (d) Has pending against it any criminal, administrative, or
enforcement proceedings in any jurisdiction, based upon conduct
involving fraud, dishonest dealing, or any other act of moral
turpitude.
       (e) Has had a judgment entered against it in any action
brought by the commission or the Department of Legal Affairs
under this chapter or the Florida Deceptive and Unfair Trade
Practices Act.
       (7) The commission shall deny or refuse to renew the
registration of a provider or deny a registration or renewal
request by any of the provider’s partners, members, or directors
and key officers if such entities have not satisfied a civil
penalty or administrative fine for a violation of s. 560.412.
       560.412 Provider requirements; limitations.—
       (1) A provider required to register under s. 560.411(2)
shall do all of the following:
       (a) Develop and implement policies and procedures to
respond to questions raised by consumers and address complaints
from consumers in an expedient manner.
       (b) Offer to the consumer at least one reasonable option to
obtain proceeds at no cost to the consumer and clearly explain
how to elect the no-cost option.
       (c) Before entering into an agreement with a consumer for
the provision of earned wage access services:
       1. Inform the consumer of his or her rights under the
agreement; and
       2. Fully and clearly disclose all fees associated with the
earned wage access services.
       (d) Inform the consumer of any material changes to the
terms and conditions of providing the earned wage access
services before applying those changes to that consumer.
       (e) Allow the consumer to cancel use of the provider’s
earned wage access services at any time, without incurring a
cancellation fee or penalty imposed by the provider. If the
consumer has initiated an advance of proceeds, the provider may
require the effective date of the cancellation to be after the
consumer has satisfied any repayment obligation the consumer has
to the provider, either through payroll deduction, preauthorized
electronic funds transfer from a consumer’s account or
depository institution, or other means previously agreed to by
the consumer and the provider. This paragraph does not require a
provider to allow a consumer-initiated advance to be canceled,
revoked, suspended, or reversed after the consumer initiates the
advance.
       (f) Comply with all applicable local, state, and federal
privacy and information security laws.
       (g) If the provider solicits, charges, or receives a tip,
gratuity, or other donation from a consumer:
       1. Disclose, clearly and conspicuously, to the consumer
immediately before each transaction that a tip, gratuity, or
other donation amount may be zero and is voluntary; and
       2. Disclose, clearly and conspicuously, in the service
contract with the consumer that tips, gratuities, and donations
are voluntary and that the offering of earned wage access
services, including the amount of proceeds a consumer is
eligible to request and the frequency with which proceeds are
provided to a consumer, is not contingent on whether the
consumer pays any tip, gratuity, or other donation or on the
size of a tip, gratuity, or other donation.
       (h) Provide proceeds to a consumer by any means mutually
agreed upon by the consumer and the provider.
       (i) If the provider will seek repayment of outstanding
proceeds or payment of fees or other amounts owed, including
voluntary tips, gratuities, or other donations, in connection
with the activities covered by this chapter, from a consumer’s
depository institution, including by means of electronic funds
transfer:
       1. Comply with applicable provisions of the Electronic Fund
Transfer Act, 15 U.S.C. s. 1693, and regulations adopted under
the act; and
       2. Reimburse the consumer for the full amount of any
overdraft or insufficient funds fees imposed on the consumer by
the consumer’s depository institution which were caused by the
provider attempting to seek payment of any outstanding proceeds,
fees, or other payments in connection with the activities
covered by this chapter, including voluntary tips, gratuities,
or other donations, on a date before, or in an incorrect amount
from, the date or amount disclosed to the consumer. However, the
provider is not subject to the requirements in this subparagraph
with respect to payments of outstanding amounts or fees incurred
by a consumer through fraudulent or other unlawful means.
       (2) A provider required to register under s. 560.411(2) may
not do any of the following:
       (a) Share with an employer a portion of any fees, voluntary
tips, gratuities, or other donations that were received from or
charged to a consumer for earned wage access services.
       (b) Require a consumer’s credit report or a credit score
provided or issued by a consumer reporting agency to determine a
consumer’s eligibility for earned wage access services.
       (c) Accept payment of outstanding proceeds, fees, voluntary
tips, gratuities, or other donations from a consumer by means of
a credit card or charge card.
       (d) Charge a late fee, deferral fee, interest, or any other
penalty or fee for failure to pay outstanding proceeds, fees,
voluntary tips, gratuities, or other donations.
       (e) Report to a consumer reporting agency or debt collector
any information about the consumer regarding the inability of
the consumer to pay outstanding proceeds, fees, voluntary tips,
gratuities, or other donations.
       (f) Compel or attempt to compel payment by a consumer of
outstanding proceeds, fees, voluntary tips, gratuities, or other
donations to the provider through any of the following means:
       1. A suit against the consumer in a court of competent
jurisdiction.
       2. Use of a third party to pursue collection from the
consumer on the provider’s behalf.
       3. Sale of outstanding amounts to a third-party collector
or debt buyer for collection from the consumer.

The prohibition imposed in this paragraph does not preclude the
use by a provider of any of the methods specified in this
paragraph to compel payment of outstanding amounts or fees
incurred by a consumer through fraudulent or other unlawful
means, nor does it preclude a provider from pursuing an employer
for breach of its contractual obligations to the provider.
       (g) Mislead or deceive consumers about the voluntary nature
of ti