CFPB Says Certain Earned Wage Access Products Are Not Credit

On December 23, the CFPB issued an advisory opinion concluding that certain earned wage access (EWA) products fall outside the definition of credit under the Truth in Lending Act (TILA) and Regulation Z. In so doing, the Bureau formally withdrew a Biden-era proposed interpretive rule that would have treated all EWA products as consumer loans subject to federal lending requirements.

Under the advisory opinion, so-called “covered” EWA products do not constitute credit when they are limited to advances of wages already earned and are repaid exclusively through employer-facilitated payroll deduction. The CFPB further specified that providers must have no legal or contractual recourse if repayment fails, must not engage in debt collection or credit reporting activity, and must not assess an employee’s credit risk. The Bureau characterized these arrangements as early wage payment rather than deferred repayment of a debt.

The CFPB also stated that expedited delivery fees and voluntary tips are not finance charges for covered EWA products, reasoning that such amounts are not imposed by the provider. The advisory opinion expressly does not address direct-to-consumer EWA products or other non-covered arrangements, and cautions that its conclusions should not be extended beyond the narrow circumstances described.

The opinion marks another shift in the Bureau’s approach to earned wage access, reinstating core elements of guidance first issued in 2020 and later rescinded.