In an earlier article, we provided an overview of the Consumer Financial Protection Bureau’s (“CFPB”) earned wage access (“EWA”) advisory opinion. In the opinion, the CFPB identified seven requirements for a “Covered EWA Program,” i.e., an EWA program that would “not involve the offering or extension of ‘credit’” under the Truth In Lending Act (“TILA”) and its Regulation Z.
Continue Reading CFPB’s Fee-Free Model Requirement Set Forth In Its Wage Access Advisory Opinion Raises More Questions
CFPB Unveils In First Advisory Opinion That TILA Does Not Apply to Certain Earned Wage Access Products
As we previously explained, the Consumer Financial Protection Bureau’s (“CFPB”) recently finalized Advisory Opinion Policy allows any person or entity to request an advisory opinion from the agency. When the CFPB finalized that Policy on November 30, 2020, it concurrently issued its first two advisory opinions: one addressing earned wage access (“EWA”) programs, and one concerning private education loan products. This article specifically comments on the important EWA advisory opinion.
EWA programs generally allow employees to access wages they have already worked for and accrued, but have not yet been paid. In its EWA advisory opinion, the CFPB stated that EWA programs incorporating several specific features do “not involve the offering or extension of ‘credit,’” and thus, do not fall under the purview of Regulation Z, which implements the Truth In Lending Act (“TILA”).Continue Reading CFPB Unveils In First Advisory Opinion That TILA Does Not Apply to Certain Earned Wage Access Products
CFPB Finalizes Advisory Opinion Program Opening Door for Those Seeking Clarity on Ambiguous Statutory or Regulatory Questions
The Consumer Financial Protection Bureau (“CFPB”) announced in March 2020 that it would develop a new advisory opinion program under which it would publish in the Federal Register responses to questions seeking clarification of ambiguities in federal consumer financial law. On November 30, 2020, the CFPB issued a final Advisory Opinion Policy (“AO Policy”) setting forth specific procedures for its Advisory Opinion Program.
Opinions issued under the AO Policy will be interpretive rules under the Administrative Procedure Act that respond to a specific need for clarity on a statutory or regulatory interpretive question. See 5 U.S.C. § 553(b). Each advisory opinion will include a summary of the material facts or covered products, and the CFPB’s legal analysis of the issue. The CFPB expects that its advisory opinions will apply not only to the requestor, but also “to similarly situated parties to the extent that their situations conform to the summary of material facts or coverage in the advisory opinion.”Continue Reading CFPB Finalizes Advisory Opinion Program Opening Door for Those Seeking Clarity on Ambiguous Statutory or Regulatory Questions
Square Obtains FDIC Charter To Operate Its Own Bank As An Industrial Loan Company
On March 18, 2020, Square Inc., became the first U.S. fintech company to receive conditional approval of an Industrial Loan Company (“ILC”) charter from the Federal Deposit Insurance Corporation (“FDIC”), to pair with its prior charter approval on March 17, 2020 from the Utah Department of Financial Institutions. It became the first new de novo
California Passes Small Business Truth-in-Lending Law
On September 30, 2018, California enacted the nation’s first small business truth-in-lending law when Governor Jerry Brown signed into law SB 1235. The law aims to protect small businesses from predatory lending practices by requiring increased transparency of certain business-purpose loans marketed to small businesses.
SB 1235 draws comparisons to the federal Truth in