Earned Wage Access

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A new Maryland law deems certain earned wage access (EWA) services to be loans. It then subjects those EWA services to the Maryland Consumer Loan Law and other consumer credit provisions, restricts the acceptance of tips by certain lenders, requires licensing or registration of certain entities offering EWA services, regulates EWA service agreements, and limits the costs and fees associated with obtaining EWA services.… Continue Reading

The Attorney General for the District of Columbia has filed suit against ActiveHours Inc., doing business as EarnIn, alleging that the app-based lender deceptively marketed and provided illegal high-interest loans to more than 20,000 consumers in DC.

In the suit, filed in D.C. Superior Court, Attorney General Brian L. Schwalb alleged that the company falsely claimed that its earned wage advance product is not a loan, and that it can be accessed instantly with no mandatory fees and no interest.… Continue Reading

Today’s podcast, which repurposes a recent webinar, is the conclusion of a two-part examination of the CFPB’s use of a proposed interpretive rule, rather than a legislative rule, to expand regulatory requirements for earned wage access (EWA) products. Part One, which was released last week, focused on the CFPB’s use of an interpretive rule to expand regulatory requirements for buy-now, pay-later (BNPL) products.… Continue Reading

On August 13th, 2024, from 1:30 p.m. to 3:00 p.m. ET, we will hold a webinar covering the CFPB’s BNPL interpretive rule and its proposed earned wage access (“EWA”) interpretive rule.  For more information and to register, click here.

On July 18, 2024, the Consumer Financial Protection Bureau (the “CFPB” or “Bureau”) proposed an interpretive rule that states (1) EWA products fall under the definition of “credit” under the Truth in Lending Act (“TILA”) and Regulation Z and (2) fees for certain tips and for expedited funding are finance charges.… Continue Reading

On April 25, 2024, California’s Department of Financial Protection and Innovation (“DFPI”) released its Annual Report of Activity Under the California Consumer Financial Protection Law for 2023 (“Annual Report”). The Annual Report provides an overview of rulemaking, enforcement, oversight, consumer complaints, and education and outreach for the calendar year 2023 and confirms that 2023 was the most active year yet for the DFPI.… Continue Reading

On May 21, 2024, South Carolina Governor Henry McMaster signed into law the Earned Wage Access Services Act (the “Act”), which will require earned wage access (“EWA”) providers to register annually with the state’s Department of Consumer Affairs and meet certain requirements. The Act also provides exemptions from state lending and other requirements for providers.… Continue Reading

Our special guest is Ian Moloney, Senior Vice President and Head of Policy and Regulatory Affairs with the American Fintech Council (AFC).  After reviewing how EWA products are used by consumers and the differences between employer- and provider-based products, we discuss the regulatory challenges faced by the EWA industry, the regulatory approaches states have taken to EWA, actions taken by the Consumer Financial Protection Bureau related to EWA, and proposed federal legislation dealing with EWA. … Continue Reading

The American Fintech Council (AFC), a trade group whose members include providers of earned wage access (EWA) products, has sent a letter to Director Chopra urging the CFPB to take steps towards development of a “pragmatic regulatory approach” for regulating EWA products. 

In its letter, AFC discusses the “patchwork approach” to regulating EWA products that is emerging at the state level.  … Continue Reading

On December 22, 2023, the Attorney General of Montana released an opinion (the “Opinion”) concluding that certain earned wage access (EWA) products are not “consumer loans” or “deferred deposit loans” under Montana law and do not, therefore, require licensure by the Montana Division of Banking and Financial Institutions. The Opinion only applies to EWA products that are:

  1. fully non-recourse, meaning providers do not: have any legal or contractual right to repayment from consumers, engage in any debt collection activities, sell or assign any balances, or report any non-payment to a consumer reporting agency;
  2. not conditioned on payment of any mandatory interest, fee, or other compensation; and
  3. limited in amount to the consumer’s accrued income.
… Continue Reading