Consumer Financial Protection Bureau Acting Director Russell Vought announced on December 23, 2025, that “Covered EWA” products—employer-partnered earned wage access plans that allow workers early access to accrued pay without credit-based underwriting—are not credit under the Truth in Lending Act (TILA) and Regulation Z. The advisory opinion also formally rescinds the 2024 proposed interpretive rule that sought to treat many EWA models as consumer credit, a move seen as a reset of controversial regulation.
Defining Covered EWA
The CFPB outlined core criteria for qualifying as Covered EWA:
- Access only to wages already earned, not exceeding the accrued amount.
- No legal recourse against workers if repayment via payroll falls short.
- No credit risk analysis or underwriting.
- Optional expedite fees and voluntary tips are explicitly not considered finance charges.
The agency noted that its guidance “resolves regulatory uncertainty” for the rapidly growing EWA market and clarified that products outside these bounds were not addressed by the opinion.
Industry Applauds Clarity
Ian P. Moloney, Chief Policy Officer at the American Fintech Council (AFC), praised the CFPB’s action as “a constructive first step” that brings much-needed clarity. “Responsible EWA services provide workers access to the wages they’re entitled to when they need it most,” he said.
Moloney stressed the importance of distinguishing EWA from credit, noting that optional expedite fees and tips should not trigger finance charge classification. He also welcomed the rollback of the 2024 proposal, calling it a recognition of the rule’s legal inaccuracies and stating, “By formally rescinding the 2024 proposed interpretive rule…the CFPB is appropriately acknowledging the inaccuracies in that proposal and resetting the conversation around how EWA operates.”
Beyond immediate outcomes, Moloney underscored the need for long-term regulatory stability: “AFC will continue to advocate for thoughtful bipartisan federal EWA legislation that protects consumers, preserves access to safe and transparent products, and supports responsible innovation in modern financial services.”
State-by-State EWA Oversight
As earned wage access (EWA) rules evolve, employers and providers face a growing patchwork of state laws. States including Nevada, Missouri, Wisconsin, South Carolina, and Kansas have adopted licensing or registration regimes, while California now classifies EWA transactions as loans under its lending laws. Newer statutes in Arkansas, Indiana, Maryland, and Utah impose consumer protections such as mandatory no-cost options, fee transparency, and bans on credit checks or late fees.
Effective dates range from mid-2024 through early 2026, and pending bills in states like New York, Texas, and Georgia signal continued momentum. These measures aim to safeguard consumers while clarifying compliance obligations for payroll professionals and fintech providers.
Big Picture: Federal-State Coordination
The CFPB’s advisory opinion supplies federal guardrails for a specific class of EWA, easing TILA compliance burdens for providers. But as state regulatory landscapes continue to evolve—covering licensing, fee caps, transparency, and non-recourse clauses—businesses offering EWA must stay agile.
For payroll administrators, fintech firms, and tax professionals, navigating the patchwork of state laws alongside federal opinion will be critical. As Moloney remarked, the need for durable legislative clarity remains key: “We will continue to work with regulators and policymakers to provide durable, consistent regulatory clarity.”
With the CFPB and multiple state officials now laying out frameworks, the emerging regulatory architecture may offer a stable foundation for EWA services—preserving access to early wages while promoting consumer protection and financial innovation.
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