Maryland's approach to 'earned wage access' (EWA) services, also known as advance-pay or payday loan apps, took a significant turn this week as Governor Wes Moore allowed a bill to regulate these financial products to become law without his signature. The bill, passed by the General Assembly, seeks to make EWA products more accessible while implementing consumer protections, such as limiting fees that can be charged for cash advances and mandating that providers must offer a no-fee cash withdrawal option. Baltimore City Delegate Marlon Amprey, a bill supporter, described a scenario where such services could aid a working parent facing immediate financial hurdles, implying that these products serve as a lifeline for those needing quick cash.
However, Moore expressed concerns in a WYPR article that, without proper limitations, users could spiral into debt cycles. Additionally, he disputed the idea of soliciting loan tips, which the governor finds "inappropriate." His apprehension becomes stark against the backdrop of Assistant Attorney General Wilson Meeks' warning about exorbitant effective interest rates on these loans, as well as data from the Maryland Department of Labor showing that between 2019 and 2024, about 345,000 Marylanders engaged in over 11 million EWA transactions.
According to Maryland Matters, the contentions surrounding the bill included concerns that it sidesteps state laws aimed at protecting consumers from discriminatory and deceptive lending practices with exorbitant interest rates. The Maryland NAACP and the Center for Responsible Lending, part of a coalition opposing the bill, urged Moore to veto it. Whitney Barkley of the Center for Responsible Lending declared that without the governor's signature, the bill's advancement exemplifies the "serious, widespread concerns about these payday loan apps." Moore highlighted that the bill could provide tangible benefits to workers needing immediate funds for unforeseen expenses. Still, he called for borrowing caps and argued against exempting lenders from financial protection laws.
Alongside HB1294, Moore allowed several bills to become law sans signature, tackling issues like clean-energy building standards and boosting oversight of the Department of Information Technology, as reported by Maryland Matters. Noteworthy is the Building Energy Performance Standards clarification bill, initially aimed at providing regulatory flexibility but altered by legislative amendments—amendments which the governor critiqued for introducing "uncertainty" into a complex matter and creating potential operational challenges for the Maryland Department of the Environment in meeting climate goals.
