CFPB Says Earned Wage Products Are Not Loans Under TILA

The CFPB has issued a new advisory opinion stating that many employer-partnered earned wage access (EWA) products are not “credit” and therefore are not loans subject to the Truth in Lending Act (TILA) and Regulation Z, so long as they meet specific conditions.​

What the CFPB Just Said

• On December 23, 2025, the CFPB released an advisory opinion concluding that “covered” earned wage access products fall outside the definition of “credit” under TILA and Regulation Z.​

• The Bureau simultaneously withdrew a July 2024 proposed interpretive rule that would have treated most EWA products as credit subject to TILA.​

When EWA Is Not a Loan Under TILA

For an EWA product to be treated as not credit under this advisory opinion, it must satisfy tight structural limits:

• The advance cannot exceed the worker’s already earned wages or accrued cash value of wages.​

• Repayment must occur solely through employer-facilitated payroll deduction or employer-settlement mechanisms tied to the next paycheck, not through independent collection.​

• The provider must have no legal or contractual recourse against the worker if the paycheck is insufficient (no debt collection, no litigation, no secondary recovery).​

• The provider must not assess the employee’s credit risk and must not report repayment behavior to consumer reporting agencies.​

Under this framework, the CFPB also indicates that expedited delivery fees and “tips” paid to third parties are not treated as finance charges for these covered structures, because they are not imposed by the provider itself.​

What Is Not Covered

• The opinion focuses on “employer-partnered” or similar covered EWA structures and does notresolve the status of direct-to-consumer EWA apps that pull funds directly from the consumer’s bank account.​

• The CFPB explicitly notes that products falling outside the covered conditions are not automatically classified as loans or as non-loans; their credit status under TILA remains a separate, fact-specific legal question.​

Regulatory Reversals and Context

• In 2020, under the prior Trump administration, the CFPB issued an advisory opinion stating that certain no-fee employer-partnered EWA products were not credit; that opinion was rescinded in early 2025 by the then-Biden-era CFPB, which also proposed to treat most EWA products as credit in a 2024 interpretive rule.​

• The new December 2025 opinion reverses that 2024 proposal and reaffirms, in expanded form, that many EWA constructs are outside TILA, while industry groups and consumer advocates remain sharply divided over whether these products function as de facto payday loans.​

Practical Implications

• For employers and providers offering covered EWA models, TILA and Regulation Z disclosure, APR calculation, and other loan-related requirements generally will not apply under this CFPB interpretation.​

• Providers of EWA models that charge mandatory fees, use bank debits for repayment, or retain recourse/collection rights will need separate legal analysis, because those products are not squarely addressed by this advisory opinion and may be treated as loans under TILA or under state law.​