The Consumer Financial Protection Bureau (CFPB) has issued an advisory opinion that revokes a previous opinion from November 2020 regarding earned wage products. The 2020 opinion had stated that certain earned wage access programs did not qualify as "credit" under the Truth in Lending Act and Regulation Z, but the CFPB found this analysis flawed and contributing to confusion in the financial market. The Bureau concluded that the 2020 opinion failed to provide clarity, as few products actually met its criteria, leading to widespread misunderstanding about the classification of such products. The rescinded opinion was officially effective as of January 15, 2025.
Simple Explanation
The Consumer Financial Protection Bureau (CFPB) changed its mind about a rule from 2020, which said that some ways people could get their pay early weren't like borrowing money. They realized this made things confusing, so they canceled that old rule to make things clearer.