Arkansas Gov. Sarah Huckabee Sanders signed a new law last week putting restrictions on companies that provide workers with early access to their earned income, but stopped short of calling on such companies to adhere to lending laws.

Among other requirements, the new Arkansas law mandates that EWA providers offer at least one of their service options at no cost; clearly disclose all fees; and state that tips or gratuities are voluntary. The governor signed the bill into law on March 20, along with a raft of other bills.

The state is one of a handful across the country, including Missouri and Nevada, that have passed such laws to protect consumers as they seek services from an increasing number of companies enabling workers to digitally tap their income before regularly scheduled paydays, sometimes with fees required or gratuities requested. Some of the laws also require the providers to register with a given state, but don’t force the providers to adhere to lending laws.

The Consumer Financial Protection Bureau, under the Biden administration and leadership of Director Rohit Chopra, sought last year to subject EWA providers to U.S. and state lending laws, saying that such provisions were necessary to protect the rising number of consumers using the EWA services. Workers using the services tend to be those paid by the hour with incomes under $50,000.

Nonetheless, the CFPB under the second Trump administration is likely to take a different tack, angling back toward the first Trump administration’s initial lighter touch in overseeing EWA providers. 

Utah’s legislature also passed an EWA bill with bipartisan support earlier this month. Its provisions are similar to that of the Arkansas bill and are also supported by the industry. The state’s governor hasn’t signed the bill.

EWA providers, and their trade group supporters, have reacted positively to the laws, saying they provide needed oversight without going so far as to impose lending laws.

DailyPay, one of dozens of EWA providers, commended the Arkansas governor for signing the bill into law. Rival EWA companies include Payactiv and EarnIn, among others.

“We’re pleased to see the unanimous support for EWA in the Arkansas Senate and near unanimous support in its House of Representatives as it becomes the latest state to codify earned wage access as its own financial product, recognizing the helpful benefits that this technology offers to workers,” DailyPay’s vice president of public policy, Ryan Naples, said in a release.

EWA providers use a variety of different business models, some imposing fees for various aspects of the service, like faster access to pay, and others providing it at lower costs. Some employers are also offering the service to their workers at no cost.

Consumer advocates have often panned EWA services, arguing that they will trap workers in a cycle of rising fees and debt.

“It is disappointing to see Arkansas gut its strong laws against payday lending by authorizing a new form of payday loan with no cap on the cost,” Lauren Saunders, a National Consumer Law Center attorney and associate director, said in an email statement. “Utah has among the weakest lending laws in the country, one of only a few states with no interest rate cap, so it would not be surprising to see it legalize a new form of payday loan.”

Workers themselves have also described situations in which they’ve become dependent on the EWA services, and therefore caught up in a continuous payment cycle for tapping their wages.

Congress has also deliberated over passing EWA legislation, with Republicans Rep. French Hill of Arkansas and Rep. Bryan Steil of Wisconsin introducing a bill last year, but they haven’t reintroduced that legislation in this Congress.

The states’ attention to EWA may be part of a broader move by them to take the lead on consumer protection, especially during the second Trump administration, which has significantly pared back the CFPB’s staff and work.

“As the federal regulatory landscape shifts, states will undoubtedly play a larger role in regulating and shaping the future of consumer protections in financial services,”American Fintech Council CEO Phil Goldfeder said by email. “While state-level action can help fill gaps, a fragmented regulatory environment can also create uncertainty for both consumers and responsible providers.”

The American Fintech Council has also supported the bulk of the states’ legislative approaches to EWA, with Goldfeder, a former state legislator in New York, pushing for certain bills in some states and counseling against them in others. The council has urged Republican Utah Governor Spencer Cox to sign the bill that the legislature passed.

“Having served as a legislator, I know firsthand that states can be laboratories for innovation, crafting pragmatic policies that balance financial inclusion with strong consumer protections,” Goldfeder said. “We’ve already seen states like Utah and California take steps to regulate EWA in ways that recognize its value while ensuring appropriate guardrails.”

Nonetheless, Goldfeder noted that “state-by-state rulemaking runs the risk of inconsistent standards that could limit access to responsible financial options, particularly for consumers who rely on these services the most.”