Earned Wage Access

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On August 28, 2023 (the “Effective Date”), SB 103, signed into law by Missouri’s governor, will become the nation’s second statutory framework for earned wage access (EWA) providers.  The Missouri law closely resembles Nevada’s recently enacted law to license and regulate EWA providers.

SB 103 enacts a new RSMo § 361.749(2), which expressly provides that “[n]o person shall engage in the business of earned wage access services in [Missouri] without first registering as an earned wage access services provider” with the Missouri Division of Finance (the “Division”). … Continue Reading

Earlier this month, the Maryland Office of Financial Regulation (“OFR”) issued guidance (the “Guidance”) to provide clarity on how the OFR views Earned Wage Access (“EWA”) products and describe the requirements entities offering EWA products must adhere to.

Providing some background for the Guidance, EWA is a financial concept that allows employees to access a portion of their earned but unpaid wages before a regular payday. … Continue Reading

On June 13, Nevada’s governor signed into law Senate Bill 290 creating the nation’s first statutory framework for earned wage access (EWA) providers operating in the state.  The law appoints the state’s Commissioner of Financial Institutions to oversee the industry.

Earned wage access products allow consumers to access their earned wages before their scheduled pay date. … Continue Reading

The Government Accountability Office (GAO) has issued a new report entitled “Financial Technology: Products Have Benefits and Risks to Underserved Consumers, and Regulatory Clarity Is Needed.”

The report focuses on the following four types of fintech products:

  • Digital deposit accounts offered by fintech companies through partnerships with banks or credit unions. 
… Continue Reading

Mark Brnovich, the Arizona Attorney General, recently issued an opinion regarding whether earned wage access (EWA) products are “consumer lender loans” under the state’s Consumer Lenders Act (CLA) such that a person who makes, procures, or advertises an EWA product must be licensed as a “consumer lender.”  The AG concluded that an EWA product offered as a no-interest and non-recourse product is not a “consumer lender loan” under the CLA.… Continue Reading

We begin with a discussion of the goals and themes of FTA’s recent summit and AFC’s advocacy regarding retention of the strategic plan option under the Community Reinvestment Act.  We then discuss consumer benefits of buy-now-pay-later (BNPL) and regulatory concerns raised by the CFPB in its BNPL report, state level regulatory issues facing fintechs, the Treasury’s report on bank/fintech relationships and takeaways for fintechs, consumer benefits of earned wage access products and artificial intelligence and regulatory concerns raised by the CFPB, and reactions to the CFPB’s Section 1033 rulemaking.… Continue Reading

PayActiv, which as the first EWA provider began an EWA program about 13 years ago, partners with employers to offer their employees EWA.  We first discuss what EWA is, the structure of the employer model used by PayActiv and other EWA providers, and how employers participate in and employees access their wages in the employer model. … Continue Reading

The CFPB has issued an order terminating the approval order issued in December 2020 to Payactiv, Inc. through the CFPB’s Compliance Assistance Sandbox (CAS) Policy.

The approval order confirmed that  Payactiv’s earned wage access (EWA) program described in the order did not involve the offering or extension of “credit” as defined by section 1026.2(a)(14) of Regulation Z, and that Payactiv therefore had a safe harbor from liability under the TILA and Regulation Z in connection with the specified EWA program. … Continue Reading

A key issue for earned wage access (EWA) programs is whether they constitute “credit” for purposes of federal consumer financial protection laws such as TILA, ECOA, and the CFPA, or under state law.  The Treasury Department’s General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals includes a proposal concerning how EWA programs should be characterized for tax purposes.… Continue Reading

Rising interest rates and inflation are two key factors that are expected to create a more challenging business environment in 2022.  Based on his work at the intersection of technology and financial services, Todd shares his perspective on how this new environment is likely to impact providers of various types of consumer financial services, particularly non-bank fintech companies.  We… Continue Reading