Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—AFC warns states of profit-driven database mandates, (Jan 27, 2026)
Organizations Mentioned:American Fintech Council
American Fintech Council (AFC) releases a white paper warning states against profit-driven database mandates and criticizes companies seeking profit over consumer protection.
American Fintech Council (AFC), an association representing fintech companies and banks, has released a white paper, Company Profit Over Consumer Protection, highlighting conflict-of-interest risks, questioning the efficacy of the databases, and detailing the company’s aggressive multi-state lobbying efforts to expand database requirements to new products, including Earned Wage Access (EWA).
Several states restrict the number or amount of the payday or title loan obligations a borrower may have at one time. As payday lenders do not report loan performance to credit bureaus, states have sought to manage these restrictions by monitoring consumer loan numbers through centralized databases established by statute. These databases are intended to allow both lenders to verify borrower eligibility for new loans and the state to check that lenders are complying. In recent years, legislation that would expand the role of payday loan databases to monitor non-loan Earned Wage Access (EWA) products, has increasingly been implemented in different states.
According to the white paper, payday lending databases have not delivered clear consumer-protection benefits and involve concerns about conflicts of interest and regulatory risk. AFC warns that expanding these systems—particularly to non-loan products like EWA—could impose unnecessary costs and burdens while reinforcing a single vendor’s market dominance. AFC examines the growth of state-mandated payday lending databases and raises concerns about the sole provider of these systems, Catalis. AFC also states that the costs of database systems ultimately fall on consumers, whether funded by state budgets, lender fees, or charges to borrowers.
The white paper emphasizes that states are increasingly considering laws that would subject non-loan EWA products to payday-style database reporting. AFC notes that EWA is not a loan and does not involve interest, finance charges, or credit underwriting. The paper argues that payday-style databases are not designed to regulate EWA and that such proposals risk stifling innovation.
“Including earned wage access services, which are not loans, in a database of lenders is counter to all principles of transparency, regulatory clarity, and consumer protection,” said Phil Goldfeder, AFC CEO. “These proposals would not help consumers; in fact, they would increase confusion in the marketplace and threaten to limit the very benefits EWA services provide to workers—all while creating extra costs and regulatory hurdles for responsible providers. What EWA users and providers need are clear and transparent rules that respect EWA’s fundamental differences from traditional credit products and account for the significant benefits responsible EWA offers.”
State payday database monopoly. According to the white paper, every existing state payday lending database is operated by Catalis. Some states contract with Catalis for more than one database. The paper states that Catalis’ revenue model relies on per-transaction verification fees, creating incentives to broaden the scope and geographic reach of these databases. According to AFC, this conflict of interest has resulted in wasted taxpayer dollars, higher compliance costs, and significant privacy concerns, without reducing cycles of debt or improving regulatory outcomes.
The AFC reports that Catalis routinely advocates statutory provisions that limit competition and effectively ensure the company is awarded contracts. The paper cites past legislative activity in California, where a Catalis subsidiary was identified as the sponsor of a payday database bill that included proposed amendments favoring vendors already operating in multiple states.
AFC argues that Catalis’ dual role as both operator and chief proponent of database legislation raises ethical and antitrust concerns and outlines their lobbying efforts. Between 2023 and 2025, Catalis spent an estimated $528,237 to $638,226 on lobbying efforts. The paper reviews activity in at least 12 states, where Catalis has lobbied on payday lending, EWA oversight, and government software procurement.
The paper included examples where the company lobbied specific states.
Ian P. Moloney, AFC’s Chief Policy Officer, stated that “Catalis has poured over half a million dollars into lobbying efforts under the guise of consumer protection, when, in fact, it is seeking to increase its revenue.” According to Moloney, “[s]ound consumer protection policy should be evidence-based and focused on real outcomes, not on entrenching a single vendor’s business model.”
Companies: American Fintech Council
IndustryNews: CommunityDevelopment FinTech Loans