On December 23, 2025, the CFPB issued an advisory opinion affirming that “covered” earned wage access (EWA) services fall outside the definition of “credit” under TILA’s Regulation Z, and that optional expedited delivery fees and voluntary tips are not “finance charges” under TILA’s Regulation Z, withdrawing a Biden Administration July 2024 proposed interpretive rule identifying EWA services as credit, which was never adopted. Companies offering EWA services allow employees to access wages that they have already earned in advance of their scheduled pay dates.
Whether EWA services should be considered credit subject to TILA has been a subject of debate leading to regulatory and legal action in recent years. For example, as previously reported by us, a CFPB December 2020 advisory opinion clarified that some earned wage access services do not involve an offer of “credit” under Regulation Z, and, alongside the CFPB’s similar December 2020 compliance assistance sandbox approval to an EWA company, provided them with a “safe harbor” for specified legal conduct in response to regulatory uncertainty. The new guidance supplants the December 2020 advisory opinion, which had been rescinded briefly in 2025. And as also reported by us, in April 2025, New York State’s Attorney General sued two EWA companies, arguing that transaction fees—typically amounting to no more than five dollars per transfer—constitute impermissibly high annual interest between 250%-750%, depending on the amount of the transfer and the recoupment timeline.
“Covered EWA” services which are not considered credit under the recently-released CFPB guidance are transactions which (i) do not exceed the accrued cash value of the wages the worker has earned up to the date of the transaction and (ii) use a payroll process deduction in connection with the worker’s next payroll event. The EWA provider must also warrant to the worker that the provider (a) has no legal or contractual recourse if the payroll process deduction is insufficient to cover the advance, (b) will not engage in debt collection activities, (c) will not place the transaction amount as debt with or sell it to third parties, and (d) will not report activity to consumer reporting agencies. Lastly, the EWA provider must not assess the credit risk of consumers requesting transfers.
Click here for Goodwin’s detailed analysis of the advisory opinion.
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