Consumer Financial Protection Bureau Issues an Approval Order to Facilitate Employee Access to Earned but Unpaid Wages

Consumer Financial Protection Bureau

WASHINGTON, D.C. — The Consumer Financial Protection Bureau recently issued a compliance assistance sandbox (CAS) approval order to PayActiv regarding specific aspects of some of its earned wage access (EWA) products. EWA products allow employees access to their earned but unpaid wages prior to payday.

Issued under the CAS Policy from last year, a CAS approval offers an entity confronting regulatory uncertainty a “safe harbor” from liability under specified legal provisions. Entities are offered safe harbor for specified conduct that the Bureau finds compliant with those legal provisions, subject to good faith compliance with the terms of the approval.

The CAS Policy implements the existing safe harbor approval mechanisms provided under the Electronic Fund Transfer Act, the Equal Credit Opportunity Act, or—as in this case—the Truth in Lending Act. The duration of the approval in this case is two years.

A copy of PayActiv’s CAS application can be found here: https://files.consumerfinance.gov/f/documents/cfpb_payactiv_approval-request_2020-12.pdf.

A copy of the CAS approval order issued to PayActiv can be found here: https://files.consumerfinance.gov/f/documents/cfpb_payactiv_approval-order_2020-12.pdf.

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