The American Fintech Council (AFC) has expressed significant disappointment with the Consumer Financial Protection Bureau's (CFPB) recent Interpretive Rule on Earned Wage Access (EWA). AFC CEO Phil Goldfeder stated that the rule contradicts previous guidance and the established interpretation of the Truth in Lending Act (TILA).
"We are deeply disappointed with the Interpretive Rule released by the Consumer Financial Protection Bureau (CFPB) related to Earned Wage Access (EWA) that reverses its previous guidance and is contrary to the established language and interpretation of the Truth in Lending Act (TILA)," said Goldfeder. "Millions of families across the country rely on this product, and responsible industry participants have followed CFPB guidance for years. This interpretive rule creates uncertainty, limits competition, harms consumer access, and will actually serve to help payday and predatory lenders."
Goldfeder emphasized that EWA should not be classified as a loan or an advance. "Simply put, EWA is not a loan nor an 'advance' and should not be regulated as such," he stated. He described EWA as a safe alternative to high-cost debt products like payday loans, allowing consumers to access their earned money without credit checks or additional fees.
The AFC also criticized the CFPB's decision to issue an informal interpretative rule instead of undergoing a formal rulemaking process. "We are equally disheartened that the CFPB chose to utilize an informal, non-binding, interpretative rule as opposed to a formal rulemaking process," said Goldfeder. He argued that while interpretive rules can clarify supervisory expectations temporarily, they lack long-term regulatory certainty.
In February, AFC had sent a letter to CFPB Director Rohit Chopra urging for a formal rulemaking process to ensure consumer protection without eliminating important financial options. Goldfeder reiterated their opposition to the new interpretive rule and called for its rescission in favor of more formal proceedings.
"AFC remains committed to finding a productive avenue for responsible EWA providers and consumers, including through potential legal action," concluded Goldfeder.
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