CFPB issued an advisory viewpoint on Earned Wage Access (EWA) on Monday afternoon. We have discussed attained wage access services and products before along with state initiatives that are legislative control them. The newest guidance that is federal addresses the question of if/when an EWA system is included in the facts in Lending Act (TILA) and Regulation Z. It concludes that EWA programs that meet specific needs aren’t an expansion of credit and are usually maybe maybe maybe not susceptible to TILA or Reg. Z.
The advisory viewpoint builds upon commentary within the Payday Lending laws issued method back 2017. That guideline proposed that an EWA product which enables a worker to ahead draw accrued wages of the planned payday, recoups the advance through payroll deduction and will not offer recourse up against the worker is probably not a kind of financing. The opinion that is advisory on that analysis and lays down a detail by detail group of requirements for the EWA system which is not an expansion of credit for Reg. Z purposes. Strangely enough, CFPB calls such something A ewa that isвЂњcovered program although the entire point for the viewpoint is the fact that system is not included in Reg.