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Milestone opinion from Kansas OSBC states that FlexWage and its EWA clients are not subject to Kansas lending or money transmissions laws.
FlexWage Solutions, the patented inventor of Earned Wage Access (EWA), has received an interpretive opinion from the Kansas Office of the State Bank Commissioner (OSBC) stating that the FlexWage solution does not require a supervised loan license. Additionally, the Kansas OSBC said FlexWage does not require a money transmitter license.
This milestone opinion ensures that employers and partners of FlexWage can trust that the FlexWage EWA solution is the only solution in the market that has received a legal opinion from Kansas’s top financial regulator confirming this qualified distinction.
FlexWage EWA is a voluntary benefit that helps employees manage the ups and downs of cash flow by accessing their earned wages between paydays.
Affirmation That FlexWage Solution is Compliant, Accurate, and Responsible
“As more and more regulatory scrutiny is placed on the providers of Earned Wage Access solutions, we welcome the recognition the Kansas OSBC has provided regarding the FlexWage solution,” said Frank Dombroski, FlexWage Founder, and CEO. “Clarification that our EWA model is not a loan and does not require a money transmitter license affirms that our solution is designed to be compliant, accurate, and responsible.”
Kansas OSBC Evaluation Criteria
The Kansas OSBC evaluated and came to their opinion based on several key attributes of the FlexWage EWA model:
>>> The EWA transactions are employer-funded
>>> There is no advancement of unearned wages
>>> There is no repayment obligation
>>> The fee structure for data services
According to the Kansas OSBC Consumer and Mortgage Lending Division, “Loan, in the UCCC is defined as several mechanisms to either create or defer debt; see K.S.A. 16a-1-301 (27) for the full definition. Since access to already earned wages are employer-funded, FlexWage is not creating a debt for the employee.”
Additionally, the Kansas OSBC stated in emails to FlexWage, “Pursuant to K.S.A. 9-508(h) of the Kansas Money Transmitter Act (KMTA), ‘money transmission’ means to engage in the business of the sale or issuance of payment instruments or of receiving money or monetary value for transmission to a location within or outside the United States by wire, facsimile, electronic means or any other means, except that money transmission does not include currency exchange where no transmission of money occurs. As such, based on the information you have provided, it does not appear that FlexWage Solutions LLC needs to be licensed as a money transmitter under the current KMTA.”
About FlexWage Solutions LLC
FlexWage helps employers attract, engage, and retain employees with financial wellness benefit services. FlexWage’s OnDemand Pay solution is an employer-funded, regulatory-compliant Earned Wage Access solution. It helps employees manage cash flow volatility by accessing their earned wages between pay cycles. FlexWage prevents the high cost and stress of bank overdraft fees, late fees, and short-term loans by providing employees access to their money when they need it. Once established on a more solid footing, employees can focus on financial education, budgeting, and planning solutions with FlexWage’s Sum180 solution. FlexWage provides financial wellness services to partner institutions and directly through employers. Founded in 2009, FlexWage invented and patented Earned Wage Access.
We Are Here To Help You
Navigating Federal and State regulations can be tedious and time-consuming. At FlexWage, staying on top of regulatory compliance is part of who we are and what we do. Want more information about Earned Wage Access Done Right? Then, schedule an introduction call with us today!