The Consumer Financial Protection Bureau proposed an interpretive rule affecting earned wage products, or paycheck advance products, ensuring that employees are aware of costs and fees for these services, according to today’s CFPB release. 

Paycheck advance products allow employees real-time access to earned wages. 

“Paycheck advance products are often marketed to and designed for employers, rather than employees,” CFPB Director Rohit Chopra said in the release. “The CFPB’s actions will help workers know what they are getting with these products and prevent race-to-the-bottom business practices.” 

The proposal makes it clear that these paycheck advance products are consumer loans and fall under the Truth in Lending Act, according to the release. 

Under the proposal, employees receiving earned wage access must receive key disclosures and fees must be in line with the Truth in Lending Act, according to the release. 

The CFPB will accept comments regarding this proposal until Aug. 30, according to the release.  

KeyBank, TD Bank and Santander are among financial institutions that offer earned wage access.  

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