On December 23, the CFPB issued an advisory opinion in the Federal Register clarifying the regulatory treatment of earned wage access (EWA) products under Regulation Z, as implemented by TILA. The advisory opinion stated that certain EWA products, referred to as “Covered EWA,” do not constitute credit under Regulation Z, provided they meet four key criteria: (i) advances are limited to wages already earned and verified by payroll records; (ii) payment occurs exclusively through the employer’s payroll process instead of direct account withdrawals; (iii) providers give clear notice that they will not pursue debt collection, credit reporting, or seek payment from personal accounts if payroll deductions are insufficient; and (iv) providers do not assess individual workers’ creditworthiness. The CFPB emphasized that these products function more like early wage payments rather than extensions of credit, as workers are simply accessing funds they have already earned.
Additionally, the CFPB formally withdrew a previously proposed interpretive rule that would have classified all EWA products as credit and addressed the treatment of related fees and tips. The advisory opinion clarified that, for Covered EWA, expedited delivery fees and tips are not finance charges under Regulation Z because the provider does not impose them directly or indirectly. However, the CFPB noted that in certain scenarios, such as when providers make it difficult to avoid these charges, they could be considered finance charges. The CFPB emphasized that its guidance does not address whether other types of EWA products are credit.
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