CFPB Confirms Certain Wage Payments Are Not Extensions of “Credit”, by Richard J. Perr, Esq., 1-20-2026

The Consumer Financial Protection Bureau (CFPB) recently issued an advisory opinion clarifying that certain earned wage access (EWA) products, when structured in specific ways, do not constitute “credit” subject to the Truth in Lending Act (TILA) or its implementing Regulation Z.

At the same time, the CFPB formally withdrew a prior proposed interpretive rule issued during the Biden Administration that would have treated many EWA arrangements as credit transactions. While the advisory opinion does not carry the force of law, it reflects the Bureau’s current enforcement and supervisory posture with respect to EWA products that meet the parameters described in the opinion.

According to the advisory opinion, CFPB Acting Director Russell Vought explained that “covered” EWA products—generally speaking those that provide employees access only to wages already earned, do not impose finance charges, and do not create repayment obligations independent of future wages—fall outside the scope of TILA and Regulation Z. These arrangements typically allow employees to receive a portion of accrued wages before payday, with repayment occurring automatically through payroll deduction on the employee’s next regular pay date.

The advisory opinion identifies as examples employer-partnered EWA programs that verify available earned wages using payroll data, limit advances to earned compensation, and do not impose an independent repayment obligation outside of payroll deduction. The CFPB further clarified that EWA products may still qualify as covered where they offer optional expedited delivery or permit voluntary tips, provided those features are not mandatory and do not function as finance charges.

The CFPB’s action signals a return to the agency’s pre-2021 enforcement position and provides greater regulatory clarity for employers, fintech companies, and third-party providers offering EWA services. However, the Bureau emphasized that EWA products that do not meet the criteria outlined in the advisory opinion are not covered by this guidance and may still be subject to TILA, Regulation Z, or other federal and state consumer protection requirements.

This advisory opinion may be influential when evaluating whether advanced wage payments that need to be re-paid after termination are actually “debts” under the Fair Debt Collection Practices Act (FDCPA).

Author: Richard J. Perr, Co-Managing Partner of Kaufman Dolowich’s Philadelphia office and Co-Chair of KD’s Financial Services & Institutions Practice Group