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ARTICLE · 01 NOVEMBER 2024

California DFPI Issues Regulations To Classify Earned Wage Access As Loans

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On October 22, 2024, the California DFPI issued final regulations which, when effective, will classify most EWA programs in the market as consumer loans, and which subject EWA providers to registration and regulation under California's consumer-credit laws.

United StatesFinance and Banking
Krista Cooley
Krista Cooley
Francis Doorley
Francis Doorley
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On October 22, 2024, the California Department of Financial Protection (DFPI) issued final regulations which, when effective, will classify most EWA programs in the market as consumer loans, and which subject EWA providers to registration and regulation under California's consumer-credit laws. Although the regulations will classify EWA products as loans for purposes of California's lending laws—and subject most EWA providers to the California Financing Law's regulatory scheme and related practice requirements—the regulations also spare EWA providers from the licensing regime under the California Financing Law. Instead, EWA providers offering their programs in California may choose to register with the DFPI and adhere to reporting and other substantive obligations under the California Consumer Financial Protection Act.

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