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ARTICLE · 09 MARCH 2022

DFPI Approves EWA Provider

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On February 11, the California DFPI issued an opinion letter in response to an EWA provider's request for a specific ruling from the DFPI about whether the company's EWA solution is subject...

United StatesFinance and Banking
Moorari K. Shah
Moorari K. Shah
A.J. Dhaliwal
A.J. Dhaliwal
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On February 11, the California DFPI issued an opinion letter in response to an EWA provider's request for a specific ruling from the DFPI about whether the company's EWA solution is subject to licensure under the California Financing Laws (CFL) and California Deferred Deposit Transaction Law (CDDTL). In response, the DFPI concluded that the provider does not originate or facilitate loans subject to the CFL or CDDTL, and that neither the provider nor its employer partners are subject to the CFL or CDDTL's licensing requirements.

DFPI relies upon two necessary elements in reaching its conclusion as to CFL and CDDTL applicability: (1) the funds come from the employer, not the provider, and those funds do not exceed the amount the employer owes a recipient; and (2) the fees charged do not suggest that the product evades California's lending laws.

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