Maryland HB 1294: Commercial Law - Credit Regulation - Earned Wage Access and Credit Modernization

Bill Text

WES MOORE, Governor Ch. 847 
 
– 1 – 
Chapter 847 
(House Bill 1294) 
 
AN ACT concerning 
 
Commercial Law – Credit Regulation – Earned Wage Access and Credit 
Modernization 
 
FOR  the  purpose  of  subjecting  certain  earned wage  access  products  to  the  Maryland 
Consumer  Loan  Law  and  other  provisions  that  regulate  entities  that  provide 
consumer credit, revolving credit, and closed end credit; restricting the acceptance of 
tips  by  certain  lenders  under  certain  circumstances;  providing  for  the  licensing  or 
registration  of  certain  entities  offering  earned  wage  access  products  with  certain 
exemptions;  regulating  earned  wage  access  service  agreements;  limiting  the  costs 
and  fees  associated  with  obtaining  an  earned  wage  access  product;  and  generally 
relating to consumer lending and earned wage access. 
 
BY repealing and reenacting, with amendments, 
 Article – Commercial Law 
 Section 12–101, and 12–301, 12–901, and 12–1001 
 Annotated Code of Maryland 
 (2013 Replacement Volume and 2024 Supplement) 
 
BY adding to 
 Article – Commercial Law 
Section  12–128,  12–318, and 12–319,  12–927,  and  12–1031;  and  12–1501  through  
12–1507 to be under the new subtitle “Subtitle 15. Earned Wage Access” 
 Annotated Code of Maryland 
 (2013 Replacement Volume and 2024 Supplement) 
 
 SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 
That the Laws of Maryland read as follows: 
 
Article – Commercial Law 
 
12–101. 
 
 (a) In this subtitle the following words have the meanings indicated. 
 
 (b) “Borrower” means a person who borrows money under this subtitle. 
 
 (c) “Commercial loan” means a loan which is made: 
 
  (1) Solely to acquire or carry on a business or commercial enterprise; or 
 
  (2) To any business or commercial organization. 

Ch. 847 2025 LAWS OF MARYLAND  
 
– 2 – 
 
 (d) “Effective rate of simple interest” means the yield to maturity rate of interest 
received or to be received by a lender on the face amount of a loan, computed in accordance 
with § 12–107 of this subtitle. 
 
 (e) “Interest” means, except as specifically provided in § 12–105 of this subtitle 
OR § 12–1501 OF THIS TITLE, any compensation directly or indirectly imposed by a lender 
for  the  extension  of  credit  for  the  use  or  forbearance  of  money,  including  any  loan  fee, 
origination fee, service and carrying charge, investigator’s fee, time–price differential, and 
any amount payable as a discount or point or otherwise payable for services. 
 
 (f) “Lender” means a licensee or a person who makes a loan subject to this 
subtitle. 
 
 (g) “Licensee” means a person that is required to be licensed to make loans subject 
to this subtitle, regardless of whether the person is actually licensed. 
 
 (h) (1) “Loan” means a loan or an advance of money or credit subject to this 
subtitle, regardless of whether the loan or advance of money or credit is or purports to be 
made under this subtitle. 
 
  (2) “Loan” does not include: 
 
   (i) A loan or advance of money or credit subject to Subtitle 3 of this 
title, unless a written election is made under § 12–101.1 of this subtitle; 
 
   (ii) A plan or loan for which a written election is made under Subtitle 
3, Subtitle 4, Subtitle 9, or Subtitle 10 of this title; or 
 
   (iii) An  installment  sale  agreement  as  defined  in  §  12–601  of  this 
title. 
 
 [(h–1)] (I) “Mobile home” has the meaning stated in § 11–501  of  the Financial 
Institutions Article. 
 
 [(i)] (J) “Person” includes an individual, corporation, business trust, statutory 
trust, estate, trust, partnership, association, two or more persons having a joint or common 
interest, or any other legal or commercial entity. 
 
 [(j)] (K) “Point”  means  a  fee,  premium,  bonus,  loan  origination  fee,  service 
charge, or any other charge equal to 1 percent of the principal amount of a loan which is 
charged by the lender at or before the time the loan is made as additional compensation for 
the loan. 
 
 [(k)] (L) “Simple  interest”  means  interest  charged  on  the  principal  amount 
loaned to the borrower. 

 WES MOORE, Governor Ch. 847 
 
– 3 – 
 
 [(l)] (M) “Stated rate of interest” means the annual rate of interest stated in 
percentage which appears on the face of the bond, draft, mortgage, deed of trust, security 
agreement, promissory note, or other instrument which evidences the indebtedness. 
 
 (N) (1) “TIP” MEANS  A  VOLUNTARY  PAYMENT  BY  A  CONSUMER TO  A 
LENDER OR THIRD PARTY WHO PROVIDES OR ARRANGES A LOAN: 
 
   (I) MADE AT THE TIME OF THE TRANSACTION IN RECOGNITION 
OF THE LENDER’S OR THIRD PARTY’S PROVISION OR ARRANGEMENT OF THE LOAN; 
 
   (II) MADE AT THE SOLE DISCRETION OF THE CONSUMER; AND 
 
   (III) THAT DOES NOT AFFECT THE WILLINGNESS OF THE LENDER 
OR  THIRD  PARTY  TO  PROVIDE  OR  ARRANGE  THE  LOAN  OR  ANY  FUTURE  LOAN OR 
AFFECT THE TERMS OF ANY LOAN. 
 
  (2) “TIP” DOES  NOT  INCLUDE  ANY PAYMENT  MAD