Certain earned wage access (EWA) programs just received meaningful federal support. In an advisory opinion, the Consumer Financial Protection Bureau (CFPB) states that "Covered" EWA providers—those that use a payroll processing system instead of directly debiting the customer's bank account—are not "credit" products subject to the Truth in Lending Act (TILA) and its implementing Regulation Z, and that typical expedited delivery fees and tips are not regulated as credit "finance charges." Although the advisory opinion is nonbinding and does not carry the force of law, the CFPB's position strengthens the legal footing for EWA programs that align with the CFPB's articulated framework, particularly in defending against federal TILA and Regulation Z theories in private litigation, while state laws and state regulators continue to shape how EWA products are treated across jurisdictions.
The practical takeaway is that the federal view now favors a defined EWA model, while providers must still navigate a fragmented and evolving state landscape. The advisory opinion effectively reinstates and modestly expands the policy approach first reflected in the CFPB's 2020 advisory opinion, reversing the intervening rescission. For EWA providers seeking additional guidance, the CFPB plans to reinstate the Compliance Assistance Sandbox, a program that grants time-limited regulatory exemptions, "shortly after" publishing the advisory opinion. Notably, the CFPB's guidance comes at a time when numerous states have adopted or proposed new regulatory frameworks for EWA, underscoring that the product continues to receive sustained and increasingly sophisticated regulatory attention.
"Covered EWA" Products Are Not Regulated Credit Products
The advisory opinion concludes that "Covered EWA" products are exempt from TILA and Regulation Z. To qualify, a provider must meet specific criteria, including (i) limiting transactions to wages already earned; (ii) relying on payroll data rather than worker representations; (iii) using payroll deduction in connection with the next payroll event; (iv) not assessing credit risk; and (v) providing disclosures that the provider has no legal claim against the worker if payroll funds are insufficient and will not engage in debt collection or credit reporting.
Covered EWA providers must therefore have access to a worker's payroll data and cannot withdraw funds from a worker's personal bank account. Although these criteria are commonly associated with employer-sponsored EWA programs, direct-to-consumer models may also qualify if they meet the same requirements. The CFPB does not conclude that non-covered programs are automatically treated as credit. Instead, the CFPB emphasizes that Covered EWA programs function more like early wage delivery than lending.
Expedited Delivery Fees and Tips Are Not "Finance Charges"
The CFPB regulates finance charges—fees "imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit." Because Covered EWA products are, by definition, not credit products, the fees associated with Covered EWA cannot be finance charges. The advisory opinion concludes that typical expedited delivery fees and tips are not finance charges, even for EWA providers that extend lines of credit.
A finance charge must be "imposed" by the creditor. If an EWA provider offers both free delivery and expedited delivery, the additional fee for expedited services is optional, not "imposed" on the consumer as a condition to receive credit. Because tips are a voluntary gratuity, tips are similarly not a condition imposed on the consumer. Thus, expedited delivery fees and tips are not regulated finance charges that a credit provider must report to the CFPB. The advisory opinion does not discuss subscription fees, which Regulation Z independently exempts as "participation" charges.
However, the CFPB cautions that not all fees and tips are exempt from regulation. Fees and tips that are coercive or difficult to avoid may qualify as finance charges. The CFPB recommends that EWA providers with atypical fees seek approval from the CFPB, such as through the forthcoming Compliance Assistance Sandbox program.
Compliance Considerations for EWA Providers
The advisory opinion extends beyond the CFPB's 2020 guidance, which primarily addressed free, employer-sponsored programs. Because Covered EWA programs do not create debt or credit liability, they do not have to be free to consumers to remain outside Regulation Z. Providers that do not fall within the Covered EWA framework should evaluate whether their programs more closely resemble traditional credit in structure or economic effect.
Although the CFPB notes alignment between its approach and many state EWA frameworks that do not classify EWA as credit, there is no national consensus. Several states regulate certain EWA programs as loans or under bespoke licensing regimes, often imposing fee, disclosure, reporting, and supervisory requirements. Roughly a dozen states now require EWA providers to obtain licenses or registrations, with corresponding obligations that must be integrated into compliance and risk management programs.
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The authors thank law clerk Michaela R. Bevan for her assistance in writing this post.
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