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Wage Assignment Fact Sheet & FAQ
The Wage Assignment & Consumer Protections Bill (SB2804 / HB5776) addresses a debt collection practice called wage assignments. Wage assignments are a way that non-traditional lenders, such as payday lenders, access a borrower’s wages when they default on a loan. Unlike a wage garnishment, a wage assignment does not go through the courts. Instead, the lender sends a notice directly to the borrower, letting them know that they will be taking a portion of their wages.
Under federal law, a borrower can stop a wage assignment at any time and for any reason. However, the current notice that a borrower receives is misleading and does not communicate a borrower’s rights under federal law to stop the wage assignment.
The Wage Assignment & Consumer Protections Bill will create a clearer wage assignment notice – ensuring that borrowers know their rights under federal law to stop a wage assignment at any time, and for any reason.