Louisiana has enacted a law that establishes a financial services oversight regime for earned wage access services, also known as on-demand pay services, which allow workers to access earned but unpaid income before payday. The bill (HB 368) became law without the governor's signature on July 1, 2025. The law will impose substantive requirements on providers. Louisiana joins Arkansas, Indiana, Kansas, Maryland, Missouri, Nevada, South Carolina, Utah, and Wisconsin, each of which have adopted similar legislation. California has also adopted regulations (but not laws) for earned wage access services.
Exemptions
The law does not impose any licensing or registration obligations on persons engaging in the business of offering and providing earned wage access services to a consumer who resides in Louisiana (i.e., acting as a "provider"), but it does impose conduct requirements.
Louisiana excludes from the definition of the term "provider" any entity that reports a consumer's payment or nonpayment of outstanding proceeds, fees, or tips to consumer reporting agencies (as defined in the Fair Credit Reporting Act). This exclusion could incentivize an entity to furnish information to consumer reporting agencies, because such conduct could enable the entity to avoid the substantive requirements applicable to providers through the law. Given that earned wage access services typically do not involve consumer repayment obligations and a number of other states expressly prohibit such reporting, an entity offering such services should carefully consider the basis of any such report about a consumer's payment or nonpayment and exercise caution.
Periodic Reporting
Providers who charge fees for earned wage access services must submit to the Louisiana Office of Financial Institutions (OFI) an annual report that includes data relating to earned wage access transactions in the state. The first required report will be due no later than March 1, 2027. If a provider fails to timely submit their annual report, they will not be authorized to utilize the provisions of the new law, and any agreement that the provider enters into with a consumer for consumer-directed earned wage access services, credit agreements, promissory notes, or other contracts will be a nullity.
Enforcement
Although providers charging fees must submit periodic reports to the OFI, the reports are not deemed actions subject to the OFI's jurisdiction. Instead, the attorney general, pursuant to Louisiana's Unfair Trade Practices and Consumer Protection Law, will enforce the new law.
Conduct Requirements
The law imposes substantive conduct requirements on providers, including:
- No credit scores. Providers may not require credit scores from credit reports to determine a consumer's eligibility for earned wage access services.
- Consumer disclosures. Before entering into an agreement with a consumer, a provider must inform the consumer of their rights under the agreement and fully and clearly disclose all fees associated with the earned wage access services.
- No-cost option. Whenever a provider offers a consumer the option of receiving proceeds for a fee or solicits a tip, the provider must offer the consumer at least one reasonable option for obtaining earned wage access at no cost and clearly explain how to select that option.
- Delivery methods. Providers may provide proceeds to a consumer by any method agreed upon by the consumer and provider.
- Compliance with privacy laws. Providers must comply with all local, state, and federal privacy and information security laws.
- Advertising practices. A provider may not advertise, or cause to be advertised, statements about the provider's earned wage access services that are false, misleading, or deceptive, or that omit information necessary to make the statement not false, misleading, or deceptive.
- Tip practices. Providers who solicit, charge,
or receive tips must:
- Clearly and conspicuously disclose in their agreements for earned wage access services with consumers that tips are voluntary and that the offering of earned wage access services (including the amount of proceeds a consumer may request and the frequency proceeds are provided to a consumer) is not contingent on the size of the tip or whether a consumer tips at all
- Clearly and conspicuously disclose immediately before each transaction that the tip may be zero and is voluntary
- Refrain from misleading consumers about the voluntary nature of tips or representing that tips will benefit any specific individuals
- No interest or penalties. Providers may not charge late fees, deferral fees, interest, or other charges for a consumer's nonpayment of outstanding proceeds, fees, or tips.
- No credit card payments. Providers may not accept payments via credit card or charge card.
- No sharing fees or tips with employers. Providers may not share with an employer any fees (including expedited delivery fees, subscription or membership fees, and fees paid by an employer on the consumer's behalf to entitle the consumer to receive proceeds at reduced or no cost to the consumer) or tips received from or charged to a consumer for earned wage access services.
- Overdraft fees. A provider who seeks payment by debiting a consumer's account at a depository institution must comply with the applicable provisions of the Electronic Fund Transfer Act and must reimburse the consumer's overdraft or nonsufficient-funds fees caused by the provider in certain circumstances.
- No debt collection. Providers may not compel or attempt to compel a consumer to pay outstanding proceeds, fees, or tips through civil suits against the consumer; unsolicited, outbound telephone calls; third-party collections on the provider's behalf; or sales to third-party collectors or debt purchasers.
Relation to Other Laws
The law clarifies that providers who comply with its substantive requirements are not deemed to be engaged in lending, money transmission, or debt collection in the state, or in violation of the state's laws governing minimum or overtime wages, deductions from payroll, or the sale of, assignment of, or an order for earned but unpaid income. To the extent this clarification applies to a provider, it may not apply to an entity that is excluded from the term "provider" (e.g., on the grounds that the entity reports a consumer's payment or nonpayment of outstanding proceeds, fees, or tips to consumer reporting agencies). Additionally, as noted above, a provider who fails to timely submit their annual report might be unable to utilize these clarification provisions.
Compliance Timelines
The law becomes effective August 1, 2025. The law does not include a grandfathering provision.
Next Steps
Providers should promptly evaluate their systems, procedures, and disclosures for compliance with Louisiana's new requirements. Familiarity with Louisiana's law is also important for industry participants because this law, along with laws and regulations in other states, may shape similar legislation pending in other states.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
