Payactiv received a wonderful holiday present, and it’s one that directly impacts employers and workers, as well. It’s not something that most people would think is exciting, but it’s a bit like receiving an unassuming little present neatly placed under the tree, and opening it to find something magical.
We created Earned Wage Access (EWA) in 2012, in order to bring security, dignity, and savings to American workers. It took some time for Earned Wage Access to get noticed, and to prove that it helps people who have the opportunity to use it.
With every financial innovation there also comes scrutiny. Politicians and regulators need to understand exactly what the innovation is, how it works and how it helps people, and they are always on the lookout to make sure it isn’t harmful to users. New products get introduced into the world and it takes time to evaluate what formal rules and laws should be put into place to make sure all stakeholders are protected and using the products as they are intended.
Payactiv spent many years educating businesses, legislators and regulators about the benefits of EWA, from state and federal lawmakers to industry experts and others. At the end of November, we were honored to learn that the Consumer Financial Protection Bureau (CFPB) issued an important notice called an Advisory Opinion addressing EWA for the first time.
This Advisory Opinion was a holiday present to the EWA industry and, by extension, to you.
This is the first formal opinion by a federal regulator on EWA. EVER. The Opinion praises EWA programs as “an innovative way for employees to meet short-term liquidity needs that arise between paychecks without turning to more costly alternatives like traditional payday loans.” Critically, the CFPB recognized that covered EWA products are not credit, and do not share the features of credit products.
The CFPB listed several elements that EWA programs must meet to fall within the scope of the Advisory Opinion, including:
Further analysis is needed, but we are proud that Payactiv’s Access FREEdom model largely aligns with several of the key elements of the CFPB’s Opinion.
You believed in us.
You believed in our mission.
You believed in our values.
You helped bring Earned Wage Access into the conversation.
Merry Christmas and Happy Holidays from all of us at Payactiv!
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