Earlier in the day this week, California’ Department of Financial Protection & Innovation announced it had entered into memorandums [sic] of understanding with five wage that is earned organizations. They have earned but haven’t yet received through their employer payroll, a service that providers say can help employees pay their bills on time or cover unexpected expenses without overdraft charges or credit card fees, and can be an alternative to payday lending” if you haven’t heard of a “earned wage access company” until now, the DFPI’s press release explains that these companies “give employees access to wages. Based on the MOUs, workers aren’t getting an advance regarding the complete gross amount of their earned wages. Instead, workers receive a “limited to a percentage thereof”.
The MOUs need the firms to supply quarterly reports to the DFPI also to submit to assessment by the DFPI. The thing I find interesting is the fact that in stepping into the MOUs, the DFPI doesn’t simply just take a posture on perhaps the businesses are susceptible to licensing under California’s Financing Law, Cal. Fin. Code В§ 22000 et seq. Certainly, the MOUs provide:
“Nothing in this Memorandum shall stop the Department from asserting at any time later on that the advance pay product made available from Company to Ca customers calls for licensure or enrollment aided by the Department under any legislation underneath the Department’s jurisdiction.”
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