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ARTICLE · 18 JANUARY 2021

CFPB Issues Compliance Assistance Sandbox Approval For Earned Wage Access Product

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The CFPB has issued an approval order through its Compliance Assistance Sandbox Policy to Payactiv in connection with its earned wage access program.

United StatesFinance and Banking
James Kim
James Kim
Mark J. Furletti
Mark J. Furletti
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The CFPB has issued an approval order through its Compliance Assistance Sandbox Policy (CAS Policy) to Payactiv in connection with its earned wage access (EWA) program.

The approval order confirms that Payactiv's EWA program described in the order does not involve the offering or extension of "credit" as defined by section 1026.2(a)(14) of Regulation Z, and therefore, Payactiv has a safe harbor from liability under TILA and Regulation Z in connection with the specified EWA program. EWA products provide employees with access to earned but as yet unpaid wages. Such products typically involve an EWA provider (such as Payactiv) that enables employees to request a certain amount of accrued wages, disburses the requested amounts to employees prior to payday, and later recoups the funds through payroll deduction or bank account debits on the subsequent payday. The approval order is limited to Payactiv's EWA program that recovers funds through payroll deductions, and

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