CFPB Restores and Enhances 2020 Interpretation that Earned Wage Access Is Not "Credit"

In late December, the Consumer Financial Protection Bureau (CFPB) issued a new advisory opinion (2025 AO) on earned wage access (EWA) stating that "covered earned wage access" (Covered EWA) does not meet Regulation Z's definition of "credit" and that expedited delivery fees and tips, in the normal course, are not "finance charges." EWA is a financial service that allows employees to receive a portion of wages they have already earned before their scheduled payday. The 2025 AO largely reverts back to the CFPB's 2020 Advisory Opinion (2020 AO), which the CFPB withdrew in May 2025, with some notable changes and an updated legal analysis. The 2025 AO also formally withdraws the CFPB's 2024 proposed interpretive rule, which criticized the 2020 AO and would have defined most EWA products as consumer credit under the Truth in Lending Act (TILA) and Regulation Z. The 2025 AO could have a significant impact on the ongoing debate about the appropriate legal treatment of EWA.

Key Takeaways

• The 2025 AO focuses on EWA products with specific characteristics. The 2025 AO draws a distinction between Covered EWA and non-Covered EWA. Covered EWA products rely on payroll data to determine transaction amounts and use a payroll deduction to recoup each EWA advance. The definition of Covered EWA excludes products that do not have access to payroll data or debit consumer bank accounts.
• Covered EWA products do not resemble extensions of "credit." Drawing on the common meaning of "debt," the 2025 AO finds that Covered EWA is not "credit" as defined by Regulation Z, because consumers do not incur a liability or obligation to which they have the right to defer payment. Instead, Covered EWA facilitates early access to wages that consumers have already earned, and to which they are already entitled. The payroll deduction ensures that the consumer is not paid twice for the same work.
• CFPB leaves open question for non-Covered EWA products. While the 2025 AO states that Covered EWA is not "credit," it clarifies that the CFPB is not implying that non-Covered EWA is "credit." This is important because the CFPB intentionally avoids addressing the application of Regulation Z to every potential type of EWA in the 2025 AO, such as those that do not use payroll data or debit consumers' bank accounts.
• Product fees, when voluntary, are not "finance charges." The 2025 AO reverts to the previous conclusion in the 2020 AO that when a consumer has the option to receive EWA for free, an optional fee for an additional service is not a "finance charge" under Regulation Z, although the CFPB notes there may be some exceptions to this general rule. As a result, providers will not be required to provide Regulation Z disclosures for most products with such fees, even non-EWA single payment products that have no other fees. The 2025 AO focuses on expedited delivery fees and tips charged by non-Covered EWA providers, but it also notes that Regulation Z clarifies that subscription fees are not finance charges. This is a departure from prior indications from the CFPB that it would narrowly interpret the exception to the definition of finance charge for periodic fees in 12 C.F.R. § 1026.4(c)(4).
• Expansion of 2020 interpretation. The 2020 AO only applied to "employer-partnered" (EP) EWA. It excluded "direct-to-consumer" (D2C) EWA and EWA products that were not free to consumers. The 2025 AO removes these limitations and applies the guidance more broadly to EWA programs with specific characteristics. The CFPB notes that fee restrictions are neither supported by the text of TILA and Regulation Z nor representative of the evolution of the EWA market. The 2025 AO also provides that many of the historic differences between EP EWA and D2C EWA have eroded over time.

Covered EWA products are not "credit"

The 2025 AO indicates that EWA products that are Covered EWA are not "credit" under Regulation Z, because they do not provide consumers with the right to defer payment of debt. Covered EWA has the following characteristics:

1. Transactions do not exceed the accrued cash value of the wages earned up to the time of the transaction, as determined based on actual payroll data (not estimated or consumer-provided data);
2. Provider uses a payroll deduction to obtain reimbursement for the EWA advance;
3. Provider clearly and conspicuously explains to the consumer, and the consumer warrants in the contract, that (a) the provider has no legal or contractual claim or remedy against the consumer if the payroll deduction is insufficient to cover the full amount of the transaction, and (b) it will not engage in any debt collection activities, place any outstanding balance as a debt with or sell it to a third party, or report to a consumer reporting agency concerning the transaction; and
4. Provider does not assess the credit risk of consumers.

The CFPB distinguishes EWA from consumer "debt" as understood by its common meaning. Instead, the 2025 AO states, "Covered EWA offers consumers access to money that they are owed by virtue of work that they have already performed. Rather than the consumer's repayment of a debt, the provider's payroll process deduction from the payroll event associated with that work serves to ensure the consumer is not effectively compensated twice for the same work."

Whether expedited delivery fees and tips are "finance charges" depends on the facts

Even if non-Covered EWA was determined to be credit under Regulation Z, the 2025 AO clarifies that an expedited delivery fee or tip associated with the product, in the normal course, is generally not a finance charge, because it is optional and not "imposed" by the EWA provider. The CFPB states that since an expedited delivery fee is triggered by a consumer opting to obtain EWA more quickly than via ACH, instead of choosing free ACH delivery, the fee is not "directly or indirectly imposed" by the EWA provider. Likewise, the CFPB explains that since a consumer voluntarily pays a tip, a bona fide tip for EWA services is inherently not "imposed" by the EWA provider. Where it is not clear that the line from "voluntary" to "imposed" has been crossed, such as when it is too challenging for consumers to avoid the fee or tip, the fee could be a finance charge. The CFPB encourages providers to request clarification from the CFPB by applying for an Approval under the Policy on the Compliance Assistance Sandbox (which the CFPB says it will update soon).

Our Take

Since the issuance of the 2024 proposed interpretive rule, the debate about the legal treatment EWA has intensified. Several federal courts held that certain EWA programs are credit under TILA and the Military Lending Act, but those decisions were largely premised on the reasoning of the withdrawn 2024 proposed interpretive rule. Whether and how future courts will rely on this new guidance remains to be seen. Additionally, many states continue to debate EWA legislation and policymakers may now refer to this guidance as they develop state-specific rules. Finally, the CFPB's guidance on finance charges is relevant to all products with similar fees, not just EWA.

Eric Goldberg, Melissa Baal Guidorizzi, and Michael Treves have extensive experience advising on product development, compliance, and enforcement matters, helping clients navigate complex challenges in the financial services sector. For more insights, contact Eric, Melissa, Michael, or another member of Davis Wright Tremaine's financial services team or sign up for our alerts.