Fintech Groups Seek More Time to Comment on CFPB's Proposed Rule on Earned Wage Access

The American Fintech Council ("AFC"), Financial Technology Association ("FTA") and the Innovative Payments Association ("IPA") requested comment deadline extensions for the CFPB's Interpretive Rule on Earned Wage Access ("EWA"). (See previous coverage.)

In a joint letter, the AFC and FTA emphasized that the proposed interpretive rule introduces complex requirements for EWA providers. The AFC and FTA stressed that EWA providers require more time to "develop robust regulatory guardrails" and test and responsibly implement necessary changes to avoid causing harm to both providers and users.

The AFC and FTA asserted that the proposed rule introduces a "significant shift" in the CFPB's position on EWA services. Specifically, they said that the classification of EWA services as "credit" under Regulation Z and imposition of finance charges and disclosure requirements deviates from the CFPB's prior interpretation. They said that the proposed rule reverses the CFPB's 2020 advisory opinion, which excluded certain earned wage products from "credit" classification due to their non-debt nature.

Further, the AFC and FTA argued that the proposed rule relies on unprecedented legal and textual arguments to justify its stance on EWA services, and this "simple novelty" alone warrants an extension of the comment period.

The IPA highlighted that the proposed rule "is complex and it will require additional time for the IPA to gather the feedback needed from its members to offer substantive comments to the CFPB."

The AFC and the FTA requested a 30-day extension of time to provide additional comments. The IPA requested a 45-day extension of time to provide additional comments.