“We are deeply disappointed with the Interpretive Rule released by the Consumer Financial Protection Bureau (CFPB) related to Earned Wage Access (EWA) that reverses its previous guidance and is contrary to the established language and interpretation of the Truth in Lending Act (TILA). Millions of families across the country rely on this product and responsible industry participants have followed CFPB guidance for years. This interpretive rule creates uncertainty, limits competition, harms consumer access, and will actually serve to help payday and predatory lenders.

Simply put, EWA is not a loan nor an “advance” and should not be regulated as such. EWA is a safe, reliable alternative to high-cost debt products like predatory and payday loans and enables consumers to access the money they have already earned on their own terms, often at no charge. Unlike the provision of credit or a loan, EWA is non-recourse and does not require a credit check, underwriting, base fees on creditworthiness; charge a fee in installments, charge interest, late fees, or penalties; or impact a user’s credit score.

We are equally disheartened that the CFPB chose to utilize an informal, non-binding, interpretative rule as opposed to a formal rulemaking process. While interpretive rules are helpful for understanding supervisory expectations at the time of issuance, they do not carry the same effect as formal rulemaking and often leave market participants without the clarity and long-term regulatory expectations they need to safely serve their consumers.

In a February letter to Director Rohit Chopra at the CFPB, we urged them to explore the possibility of a rulemaking to ensure consumers are protected without losing important financial options. We stand in strong opposition to the newly issued interpretive rule and urge the Bureau to rescind it in favor of a more formal process. AFC remains committed to finding a productive avenue for responsible EWA providers and consumers, including through potential legal action.”

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