How CFPB Earned Wage Access Order Benefits Fintech Cos.

By Joseph Reilly, Carolee Hoover and Alexander Gershen (February 9, 2021, 11:47 AM EST) -- The Consumer Financial Protection Bureau recently issued a groundbreaking approval order to PayActiv Inc. regarding PayActiv's earned wage access, or EWA, product under the CFPB's compliance assistance sandbox policy, the crux of which confirmed that PayActiv's EWA product did not constitute an extension of credit under Regulation Z, which implements the Truth-in-Lending Act.

While the approval order, the first of its kind under the compliance assistance sandbox policy, only formally applies to PayActiv's EWA product, the decision signals a willingness by the CFPB to consider fintech products with "innovative mechanism[s]" that provide consumers with greater financial flexibility and lower-cost alternatives to...

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