AB 1099

This bill regulates persons that provide earned income access services in this

state to individuals who reside in this state (consumers) and requires such persons

to register with the Division of Banking (division) in the Department of Financial

Institutions before providing those services.

Under the bill, “earned income access service” is defined as “the business of

delivering proceeds to consumers before the date on which obligors are obligated to

pay salary, wages, or other benefits.” A person other than an individual that is in the

business of providing earned income access services to consumers is a “provider.”

The bill defines “proceeds” as “the amount of earned but unpaid income that a

provider provides to a consumer,” and “earned but unpaid income” is defined as

“money that is based on wages, compensation, or other income that a consumer

represents, and that a provider determines, has been earned by or has accrued to the

benefit of the consumer but that has not, at the time the proceeds are provided, been

paid to the consumer by an obligor.” The bill defines “obligor” as “an employer,

independent contractor, or other person that is legally obligated to pay a consumer

a sum of money on an hourly, project-based, piecework, or other basis,” but “obligor”

does not include “the customer of an obligor or a 3rd party that has an obligation to

make a payment to a consumer based solely on the consumer's agency relationship

with the obligor.”

Under the bill, a provider that wants to provide earned income access services

in this state must apply to the division for a certificate of registration, pay a

registration fee, and do all of the following:

1. Supply certain information to the division, including the addresses of the

provider's offices or retail stores in this state and, if the provider provides earned

income access services at a location that is not an office or retail store in this state,

a brief description of the manner in which the provider provides earned income

access services.

2. Notify the division of any material changes in the information supplied to

division.

3. File with the division and maintain in force a surety bond or irrevocable

letter of credit in the amount of $25,000 for the purpose of protecting consumers or

other persons that may be damaged if the provider does not comply with the

regulations created in the bill.

4. Conspicuously post the provider's certificate of registration at the provider's

physical place of business or, if the provider conducts business on an Internet site,

post the provider's registration number on the Internet site.

Under the bill, the division generally must issue a certificate of registration to

a provider if the division finds that the character and general fitness and the

financial responsibility of the provider warrant the belief that the provider will

operate its business in compliance with the regulations created in the bill. The bill