HB 5462

relating to the regulation of earned income access providers and
earned income access transactions; requiring an occupational
license; authorizing fees; providing an administrative penalty;
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 14.107, Finance Code, is amended to read
Sec. 14.107.  FEES.  (a)  The finance commission shall
establish reasonable and necessary fees for carrying out the
commissioner's powers and duties under this chapter, Title 4,
Chapter 393 with respect to a credit access business, and Chapters
371, 392, [and] 394, and 398 and under Chapters 51, 302, 601, and
(b)  The finance commission by rule shall set the fees for
licensing and examination, as applicable, under Chapter 393 with
respect to a credit access business or Chapter 342, 347, 348, 351,
353, [or] 371, or 398 at amounts or rates necessary to recover the
costs of administering those chapters.  The rules may provide that
the amount of a fee charged to a license holder is based on the
volume of the license holder's regulated business and other key
factors.  The commissioner may provide for collection of a single
fee for the term of the license from a person licensed under
Subchapter G of Chapter 393 or Chapter 342, 347, 348, 351, or 371.
The fee must include amounts due for both licensing and
SECTION 2.  Section 14.112(a), Finance Code, is amended to
(a)  The finance commission by rule shall prescribe the
licensing or registration period for licenses and registrations
issued under Chapters 342, 345, 347, 348, 351, 352, 353, 371, 393,
[and] 394, and 398 of this code and Chapter 1956, Occupations Code,
SECTION 3.  Section 14.201, Finance Code, is amended to read
Sec. 14.201.  INVESTIGATION AND ENFORCEMENT AUTHORITY.
Investigative and enforcement authority under this subchapter
(2)  Subtitles B and C, Title 4;
(3)  Chapter 393 with respect to a credit access
(6) [(5)]  Subchapter B, Chapter 1956, Occupations
SECTION 4.  Sections 14.251(a) and (b), Finance Code, are
(a)  The commissioner may assess an administrative penalty
against a person who knowingly and wilfully violates or causes a
violation of this chapter, Chapter 394, Chapter 398, or Subtitle B,
Title 4, or a rule adopted under this chapter, Chapter 394, Chapter
(b)  The commissioner may order the following businesses or
other persons to pay restitution to an identifiable person:
(1)  a person who violates or causes a violation of this
chapter, Chapter 394, or Subtitle B, Title 4, or a rule adopted
under this chapter, Chapter 394, or Subtitle B, Title 4;
(2)  a credit access business who violates or causes a
violation of Chapter 393 or a rule adopted under Chapter 393;
(3)  an earned income access provider who violates or
causes a violation of Chapter 398 or a rule adopted under Chapter
(4) [(3)]  a person who violates or causes a violation
of Subchapter B, Chapter 1956, Occupations Code, or a rule adopted
SECTION 5.  Title 5, Finance Code, is amended by adding
Chapter 398 to read as follows:
CHAPTER 398.  EARNED INCOME ACCESS TRANSACTIONS
SUBCHAPTER A.  GENERAL PROVISIONS
Sec. 398.001.  SHORT TITLE.  This chapter may be cited as the
Texas Earned Income Access Act.
Sec. 398.002.  DEFINITIONS.  In this chapter:
(1)  "Commissioner" means the consumer credit
(2)  "Consumer" means an individual who resides in this
(3)  "Debt collection activity" means:
(A)  the business of collecting any debts,
directly or indirectly, owed or due another person or any debts
asserted to be owed or due another person;
(B)  the business of a buyer of debts seeking  to
collect the debts, directly or indirectly; or
(C)  the business of a creditor collecting its own
debts if the creditor uses a name other than the creditor's own name
that would suggest or indicate that someone other than the creditor
is collecting or attempting to collect the debts.
(4)  "Earned but unpaid income" means salary, wages, or
compensation that has been earned by, or has accrued to the benefit
of, a consumer for labor or services performed for or on behalf of
an obligor but has not, at the time of the payment of proceeds, been
paid to the consumer by the obligor.
(5)  "Earned income access provider" or "provider"
(A)  provides or offers to provide, on behalf of
an obligor, an earned income access transaction to a consumer
earning salary, wages, or compensation from the obligor;
(B)  offers an earned income access transaction to
(C)  enters into an earned income access
(6)  "Earned income access rate cap" means the limit,
established by the commissioner, on the amount that may be charged
to or received from a consumer for an earned income access
transaction, without option to the consumer.
(7)  "Earned income access transaction" means a payment
of earned but unpaid income to a consumer occurring on a day other
(A)  the consumer's regular payday; or
(B)  a regularly scheduled day on which the
obligor pays to the consumer wages or compensation that has been
earned by or has accrued to the benefit of the consumer.
(i)  an amount charged to a consumer by a
provider for an earned income access transaction; and
(ii)  an amount received by a provider from a
consumer for an earned income access transaction; and
(B)  includes an amount paid voluntarily as
described by Section 398.103(a)(11).
(9)  "Finance commission" means the Finance Commission
(10)  "Legal representative" means an executor,
administrator, trustee, conservator, receiver, or other person
appointed by a court or by trust or will to be empowered to control
the person or property of any person.  The term includes a successor
to the person in accordance with the provisions of the appointment.
(11)  "Nonrecourse" means, with respect to an earned
income access transaction, the unavailability of a legal cause of
action or remedy that may be brought against a consumer relating to
(12)  "Obligor" means a person who is obligated to pay a
consumer a sum of money on an hourly, project-based, piecework, or
other basis for labor or services performed by the consumer for or
on behalf of the person.  The term does not include:
(A)  a customer of an obligor; or
(B)  a third party, other than a person described
by Paragraph (A), that has an obligation to make a payment to a
consumer based solely on the consumer's agency relationship with
(13)  "Proceeds" means money received by a consumer
under an earned income access transaction.
Sec. 398.003.  CONTROL.  (a)  For purposes of this chapter, a
person has control of another person if the person has possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of the other person
through the ownership of voting shares or in another manner.
(b)  The following create a presumption that a person has
(1)  a person's ownership of, control of, or having the
power to vote 20 percent or more of:
(A)  another person's outstanding voting shares;
(B)  the  outstanding voting shares of a person
that owns, controls, or holds the power to vote 10 percent or more
of the outstanding voting shares of a person described by Paragraph
(2)  subject to Subsection (c), a person who, directly
or indirectly, could effectively shut down the operations of
another person by the person's voting activities or by authorities
that lie within the other person's established corporate governance
(c)  A person is not considered to have control of another
person who is a company solely by virtue of being an officer or
Sec. 398.004.   RULES.  The finance commission may adopt
rules as necessary to implement this chapter.
SUBCHAPTER B.  LICENSE REQUIREMENT
Sec. 398.051.  LICENSE REQUIRED; EXEMPTION.  (a)  Except as
provided by Subsection (b), a person must hold a license under this
chapter to engage in the business of:
(A)  providing or offering to provide, on behalf
of an obligor, an earned income access transaction to a consumer
earning a salary, wages, or compensation from the obligor;
(B)  offering an earned income access transaction
(C)  entering into an earned income access
(b)  The following persons are not required to obtain a
(1)  a bank, credit union, savings bank, or savings and
loan association organized under the laws of the United States or
under the laws of the financial institution's state of domicile;
(2)  a service provider, including a payroll service
provider, whose role may include verifying available earnings, but
who is not contractually obligated to pay earned but unpaid income
as part of an earned income access transaction; or
(3)  an obligor that offers a portion of salary, wages,
or compensation directly to the obligor's employees or independent
contractors before the normally scheduled pay date.
(c)  An application for a license under this subchapter must:
(1)  be in writing and made under oath;
(2)  be filed with and in the form prescribed by the
(3)  be accompanied by a license fee and investigation
fee, in amounts set by finance commission rule.
(d)  On filing the application, the applicant shall pay an
application fee, in an amount not to exceed $375 as determined by
Sec. 398.052.  APPROVAL OR DENIAL OF APPLICATION; ISSUANCE
OF LICENSE.  (a)  On receipt of an application and payment of the
fees under Section 398.051, the commissioner shall review the
application.  Except as provided by Subsection (b), if the
commissioner determines that the application is complete, the
commissioner shall issue a license to the applicant.
(b)  The commissioner may refuse to issue a license if, after
an investigation, the commissioner finds the financial condition
and responsibility, business experience, character, and general
fitness of the applicant or any person associated with the
applicant are not sufficient to command the confidence of the
public and to warrant the belief that the business will be operated
honestly and fairly within the purposes of this chapter.
(c)  For the purposes of this section:
(1)  an applicant that is a partnership or
unincorporated association is considered to include all the members
of the partnership or unincorporated association; and
(2)  an applicant that is a corporation is considered
to include all the shareholders, officers, and directors of the
(d)  The license to engage in business at the location
specified in the application must be executed in triplicate by the
commissioner.  The commissioner shall send one copy to the
applicant, file a copy with the Office of Consumer Credit
Commissioner, and file a copy with the county clerk of the county of
the location designated in the license.  For purposes of this
subsection, the location specified in an application may be online.
(e)  If the commissioner refuses to issue a license, the
(1)  notify the applicant of the denial;
(2)  return the license fee to the applicant; and
(3)  retain the investigation fee to cover the costs of
(f)  A license issued under this subchapter remains in effect
until the license expires, is surrendered by the license holder, or
is revoked or suspended by the commissioner.
Sec. 398.053.  LICENSE PROVISIONS AND POSTING.  (a)  A
license under this subchapter must state:
(1)  the name and address of the license holder;
(2)  if the license holder is a partnership or
association, the names of each member of the partnership or
(3)  if the license holder is a corporation, the date of
the license holder's incorporation or formation and the state or
country of formation or incorporation.
(b)  A license holder shall post the license in a conspicuous
place at the location of the license holder's principal office and
on the mobile application or Internet website of the license
Sec. 398.054.  TRANSFER OR ASSIGNMENT OF LICENSE.  A license
may not be transferred or assigned.
Sec. 398.055.  GROUNDS FOR SUSPENSION OR REVOCATION OF
LICENSE; PROCEDURE.  (a)  The commissioner shall revoke, suspend,
or refuse to renew a license issued under this subchapter, after
notice and opportunity for a hearing, if the commissioner
(1)  the license holder has violated or failed to
(B)  a rule adopted under this chapter; or
(C)  an order issued by the commissioner under
(2)  the license holder has been convicted of a crime
for an offense involving moral turpitude, including forgery,
embezzlement, obtaining money under false pretenses, larceny,
extortion, conspiracy to defraud, or any other similar offense;
(3)  a fact or condition exists that, if it had existed
when the license holder applied for a license, would have been
grounds for denying the license; or
(4)  a fact or condition exists that the commissioner
was not aware of when the license holder applied for a license and
would have been grounds for denying the license.
(b)  If the commissioner revokes or suspends a license issued
under this subchapter, the commissioner shall execute in triplicate
a written order to that effect.  The commissioner shall:
(1)  file a copy of the order with the Office of the
(2)  file a copy of the order with the office of the
county clerk of the county in which the principal office of the
(3)  provide a copy of the order to the license holder.
(c)  A hearing under this section must be held not later than
the 30th day after the date the commissioner issues the order of
(d)  If there is a substantial risk of public harm, the
commissioner may, on good cause shown and without notice and a
hearing, suspend a license issued under this subchapter for a
period not to exceed 30 days pending investigation.  For purposes of
this subsection, "good cause" exists only if the license holder:
(1)  has engaged in or is likely to engage in a practice
(2)  engages in a dishonest or inequitable practice
that may cause substantial harm to persons afforded the protections
Sec. 398.056.  SURRENDER OF LICENSE.  (a)  A license holder
may surrender the holder's license by delivering the original
license to the commissioner along with a written or electronic
(b)  The surrender of a license does not affect any civil or
criminal liability of the license holder arising from any acts or
omissions before the surrender of the license.
Sec. 398.057.  REINSTATEMENT OF SUSPENDED LICENSE; ISSUANCE
OF NEW LICENSE AFTER REVOCATION.  The commissioner may reinstate a
suspended license or issue a new license on application to a person
whose license has been revoked if at the time of the reinstatement
or issuance no fact or condition exists that clearly would have
justified the commissioner's denial of an original application for
Sec. 398.058.  INVESTIGATION AND EXAMINATION.  (a) The
commissioner may conduct an investigation as the commissioner
considers necessary to determine whether:
(1)  a provider or another person has violated this
(2)  a license holder has engaged in conduct in a manner
that would justify the revocation of the holder's license.
(b)  Notwithstanding any other law, the investigation and
examination authority of the commissioner under Subchapter E,
Chapter 14, applies to an investigation conducted under this
SUBCHAPTER C.  DUTIES AND PROHIBITED ACTIVITIES
Sec. 398.101.  COMPLIANCE REQUIREMENTS.  An earned income
(1)  if the provider takes custody of a consumer's
earned but unpaid income before paying proceeds to the consumer,
ensure the proceeds are insured by the Federal Deposit Insurance
Corporation at the consumer's individual account level;
(2)  comply with National Automated Clearing House
Association rules and ensure that when a debit is initiated to a
consumer's account for a payment and the debit is returned for
insufficient or uncollected funds, that the debit can be
reinitiated only in accordance with Section 398.103(a)(5); and
(3)  comply with applicable privacy and information
Sec. 398.102.  NOTICE REQUIREMENTS.  (a) An earned income
access provider shall provide notice to the consumer of the costs of
earned income access transactions in accordance with rules adopted
by the finance commission.  The notice must be displayed in a clear
(b)  An earned income access provider shall provide, each
quarter, to each consumer to whom the provider has paid proceeds
during the preceding quarter written notice that contains the
(1)  an itemization of transactions and costs;
(2)  the total amount the consumer has paid in fees;
(3)  the process for reporting complaints to the
provider and to the commissioner;
(4)  definitions of terms used in the notice; and
(5)  an explanation of the costs of the services
Sec. 398.103.  EARNED INCOME ACCESS TRANSACTIONS.  (a) An
earned income access provider may not conduct an earned income
(1)  the consumer is 18 years of age or older;
(2)  the transaction is a nonrecourse transaction;
(3)  the provider has a reasonable basis to believe
that the total amount of the proceeds and mandatory fees associated
with the transaction does not exceed a percentage, to be set by the
commissioner, of the consumer's earned but unpaid income;
(4)  the provider does not engage in debt collection
activity or retain the services of another person to engage in debt
collection activity in connection with the earned income access
transaction and does not convey the debt itself;
(5)  if repayment is made by the provider through a
debit of a consumer's account, the debit is made in accordance with
rules of the finance commission;
(6)  the provider charges or receives:
(A)  a fee for the transaction that does not
exceed the earned income access rate cap; or
(B)  no fee for the transaction;
(7)  no portion of the earned but unpaid income to be
paid as part of the transaction is used before receipt by the
consumer to settle or pay down an obligation arising from a prior
earned income access transaction and no proceeds roll over or are
structured in any way to create a continuing obligation of the
(8)  the provider offers the consumer at least one
reasonable option to obtain proceeds at no additional charge to the
consumer and explains in a clear manner how to elect the no-charge
(9)  the provider initiates all payment of proceeds not
later than the next business day after the date on which a consumer
(10)  before a consumer enters into the transaction,
the provider gives the consumer written notice of all fees
associated with the transaction and the full potential cost of the
transaction, including any expediting fees, suggested tips, and
other potential charges a provider may impose on a consumer, and the
cost expressed as an annual percentage rate;
(11)  if the provider offers a consumer the opportunity
to pay an additional amount for an earned income access transaction
voluntarily, such as a tip or donation:
(A)  the provider gives written notice to the
consumer stating that payment of an additional amount is not
required in order for the consumer to receive the proceeds; and
(B)  the provider offers no amount of money by:
(i)  offering the consumer amount options
from which the consumer may select or pre-fill an amount in a form
used in the transaction process; or
(ii)  otherwise using a transaction process
designed to require the consumer to take affirmative action to
avoid or opt out of paying the additional amount;
(12)  the provider does not charge a late fee or
prepayment penalty on the transaction;
(13)  the provider does not obtain a credit report or
otherwise assess credit risk of the consumer before, during, or
after the transaction, except that the provider may verify the
consumer's source of income as part of determining the amount of the
(14)  the provider does not report on the transaction
to a consumer reporting agency at any time before, during, or after
(15)  the provider does not require a consumer to waive
the right to class action proceedings for claims against the
provider to engage in an earned income access transaction;
(16)  the provider gives a consumer written notice of
any amendment to the contract or terms of service for earned income
access transactions and the consumer agrees to the amendment before
proceeding with any earned income access transaction to which the
(17)  if the provider charges a subscription or
membership fee, the fee is optional and for a bona fide group of
services that include earned income access transactions.
(b)  An earned income access transaction made in accordance
with this section is not subject to:
(1)  Subtitles A and B, Title 4;
(3)  the laws of this state governing:
(i)  deductions from wages or payroll; or
(ii)  the purchase, sale, or assignment of,
or an order for, earned but unpaid income.
Sec. 398.104.  MANDATORY TRANSACTION FEES.  Mandatory
transaction fees charged by a provider may not exceed the maximum
allowable amount as set by the commissioner.
Sec. 398.105.  AVAILABLE LEGAL REMEDIES.  Notwithstanding
any other law, a provider may avail itself of any available
contractual or other legal remedies to seek and collect payment of
any outstanding proceeds, charges, fees, or other amounts if a
(1)  provides materially false information during the
process of procuring an earned income access transaction; or
(2)  received the amounts or proceeds through fraud or
Sec. 398.106.  MISLEADING OR DECEPTIVE ADVERTISING.  (a) An
advertisement for an earned income access transaction service may
not be misleading or deceptive.
(b)  An advertisement for an earned income access
transaction service must clearly and accurately disclose the costs
(c)  The finance commission may adopt rules governing
advertising of earned income access transaction services
consistent with the purposes of this section.
Sec. 398.107.  APPROVAL OF CHANGES IN CONTROL.  (a) An
action that would result in a change of control of the business of a
license holder may not be taken without the prior approval of the
commissioner as specified by this section.
(b)  Before a proposed change of control, the person desiring
to acquire control of the business of a license holder must file a
written application with the commissioner and pay an investigation
(c)  The application must contain information the
commissioner prescribes as necessary or appropriate for the purpose
of making the determination required by Subsection (d).
(d)  On receipt of an application and payment of the fee
under Subsection (b), the commissioner shall approve the change of
control, unless the commissioner determines the change of control
to be against the public interest.
(e)  For a six-month period beginning on the date of
qualification and for an additional period the commissioner may
prescribe, Subsections (b), (c), and (d) do not apply to a transfer
of control by operation of law to the legal representative of a
person who has control of a license holder.  After the expiration of
the period prescribed by this subsection, the legal representative
must file an application with the commissioner that complies with
the requirements of this section.
(f)  On application of a license holder or a person who may
exercise control over the license holder, the commissioner may, in
the commissioner's discretion, determine whether the ownership,
control, or holding of the voting stock constitutes or would
constitute control of the license holder for purposes of this
Sec. 398.108.  BOOKS, ACCOUNTS, AND RECORDS.  (a) A license
holder shall maintain books, accounts, and records in sufficient
detail to enable the commissioner to determine whether the license
holder is in compliance with this chapter and rules adopted by the
(b)  A license holder shall maintain for inspection the
license holder's books, accounts, and records for at least six
years after the date the final entry of an earned income access
transaction is recorded in those books, accounts, and records.
(c)  The preservation of a photographic reproduction or
records in photographic form constitute compliance with the
Sec. 398.109.  ANNUAL AND OTHER REPORTS.  (a) Not later than
January 1 of each year, an earned income access provider shall file
a report with the commissioner containing, for the preceding
(1)  any information the commissioner requires
concerning the provider's earned income access business;
(2)  any information the commissioner requires
concerning any business entity with which the earned income access
business is operationally or financially consolidated; and
(3)  the provider's earned income access business
(b)  In addition to the report required under Subsection (a),
the commissioner may require a provider to submit a regular or
special report if the commissioner considers the report necessary
for the proper supervision of providers under this chapter.
(c)  A report under Subsection (a) or (b) must:
(1)  be in the form prescribed by the commissioner; and
(2)  be subscribed and affirmed by the provider as true
Sec. 398.110.  REPRESENTATION REGARDING LICENSURE.  (a) A
provider may not, directly or indirectly, make a representation
that the provider is licensed under Subtitle A, Title 3.
(b)  A provider licensed under Subchapter B may make a
representation that the provider is licensed as an earned income
access provider under this chapter.
Sec. 398.151.  CRIMINAL OFFENSE.  (a) In this section,
"person" includes a member, officer, director, or employee of an
(b)  A person commits an offense if the person:
(1)  violates or knowingly participates in a violation
(2)  knowingly makes an incorrect statement of a
material fact in an application, report, or statement filed under
(3)  knowingly fails to state a material fact necessary
to give the commissioner information lawfully required by the
commissioner under this chapter; or
(4)  refuses to permit an investigation or examination
(c)  An offense under this section is a Class B misdemeanor.
SECTION 6.  Section 411.095(a), Government Code, is amended
(a)  The consumer credit commissioner is entitled to obtain
criminal history record information as provided by Subsection (a-1)
that relates to a person who is:
(1)  an applicant for or holder of a license or
registration under Chapter 180, 342, 347, 348, 351, 353, 371, 393,
[or] 394, or 398, Finance Code;
(2)  an employee of or volunteer with the Office of
(3)  an applicant for employment with the Office of
(4)  a contractor or subcontractor of the Office of
Consumer Credit Commissioner; or
(5)  an officer, director, owner, or employee of a
person described by Subdivision (1) or another person having a
substantial relationship with that person under Chapter 180, 342,
347, 348, 351, 353, 371, 393, [or] 394, or 398, Finance Code.
SECTION 7.  A person engaging in business as an earned income
access provider on the effective date of this Act must obtain a
license in accordance with Chapter 398, Finance Code, as added by
this Act, not later than January 1, 2026.
SECTION 8.  Sections 398.102 and 398.103, Finance Code, as
added by this Act, apply only to an earned income access transaction
made on or after the effective date of this Act.
SECTION 9.  (a) Except as provided by Subsection (b) of this
section, this Act takes effect September 1, 2025.
(b)  Section 398.151, Finance Code, as added by this Act,