Montana Attorney General Affirms EWA is Not a Loan

Joining a growing number of states that have affirmed earned wage access (EWA) is not a loan product, Montana Attorney General Austin Knudsen recently outlined in the Montana Administrative Register that EWA products are not loans.

The question presented in the Register is whether an EWA product meets the definition of a consumer loan or a deferred deposit loan under Montana law. In his December 22, 2023 response, Attorney General Knudsen stated definitively that EWA is not a loan so long as the EWA product is fully nonrecourse; does not condition a transaction on any interest, fees, or other consideration or expenses; and limits transactions to income already earned by the consumer. Payactiv’s EWA program is fully compliant with these parameters.

Thousands of working Montanans rely on EWA to help pay bills and unexpected expenses that arise between paychecks, and they prefer it to high cost and predatory alternatives like payday loans, bank overdraft, and credit card debt. Payactiv is proud to partner with employers across Montana to provide this critical financial wellness tool to their employees.

The decision from Attorney General Knudsen joins a growing number of states that have recently determined non-recourse EWA products are not loans, including Nevada, Missouri, and Arizona.

In the upcoming state legislative sessions that commence this month, several additional states are set to take up legislation to follow suit in an effort to encode meaningful consumer protections and a new licensing or registration system for EWA providers.