Earned Wage Access - Now with Fees: A Low-Cost Credit Altern

Earned Wage Access - Now with Fees: A Low-Cost Credit Alternative or State Regulatory Minefield? | Hudson Cook, LLP


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We recently wrote about the Consumer Financial Protection Bureau's November 2020 advisory opinion regarding earned wage access (EWA) programs. In that opinion, the CFPB determined that earned wage access programs — when structured properly — are not credit under the Truth in Lending Act and Regulation Z (collectively, "TILA"). The CFPB has further illustrated its interest in EWA programs by issuing a compliance assistance sandbox (CAS) approval order to PayActiv related to certain aspects of its EWA products. Unlike the Bureau's EWA advisory opinion, this one actually contemplates charging fees.
The Bureau's CAS Policy offers certain limited safe harbors to approved programs, subject to good faith compliance with the Bureau's approval order. PayActiv's approval order protects the company from liability under TILA.

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