NCLC submitted a letter analyzing Nevada SB 290. The letter explains that the bill and other industry legislation would exempt various fintech payday loans from lending laws based on the disingenuous assertion that they are not loans. But both employer-based EWAs and direct-to-consumer tip-based advances are a form of payday loan covered by Nevada law. Nevada does not have fee limits for payday loans, but it does have some protections that should govern all payday loans. The protections in the bills promoted by industry are not meaningful and primarily codify the current business model.
The letter recommends that states that prohibit or tightly regulate payday loans should not authorize a new category of fintech payday loan. Given the existence of the payday loan industry in Nevada, if the state wishes to treat employer-based earned wage advances or tip-based advances differently, there are much more meaningful ways to achieve consumer protections than the current proposals.