October 12, 2021 — Comments

The 96 undersigned consumer, labor, civil rights, legal services, faith, community and financial organizations and academics write to express concerns about the treatment of earned wage access (EWA) products. While free earned wage advances may be a better option for consumers than costly payday loans, these products are not without risks. Viewing earned wage advances, especially fee-based ones, as something other than credit will lead to evasion of consumer protection and fair lending laws.

We urge the CFPB to regulate fee-based earned wage access products as credit. The CFPB should rescind the Bureau’s November 2020 EWA Advisory Opinion or to revise its unsound reasoning to prevent evasions of credit laws. The CFPB should also revisit the December 2020 Compliance Assistance Sandbox Approval Order regarding PayActiv for the same reason, and to order PayActiv to cease misusing the order. We also urge the Bureau to eliminate or significantly alter the “innovation” programs adopted in the last few years, which have resulted in a secretive, one-sided process for industry to seek exemptions from or skewed interpretations of critical consumer protection laws without any input from consumers, competitors, or the general public.