CFPB Grants Historic Approval To Payactiv, Approving Payactiv's Earned Wage Access (EWA) Program Under Regulatory Sandbox Policy

On December 30, 2020, the Consumer Financial Protection Bureau ("CFPB") granted approval to Payactiv, Inc. ("Payactiv") to offer its earned wage access ("EWA") program under the CFPB's Policy on the Compliance Assistance Sandbox, among the first approvals under the CFPB's regulatory sandbox.

In its approval order, the CFPB granted approval to various aspects of Payactiv's EWA program and grants Payactiv a safe harbor from liability under the Truth in Lending Act ("TILA") and Regulation Z.

Payactiv's EWA program allows employees to access wages they have already earned, but have not yet been paid by their employer. Such programs provide critical short-term monetary flexibility to meet needs that may arise between paychecks and help employees avoid more costly alternatives like payday loans and high-interest credit card debt. The CFPB's order confirms that Payactiv's EWA program neither creates a debt obligation nor involves an extension of credit to the employee.