3622 Federal Register / Vol. 90, No. 9 / Wednesday, January 15, 2025 / Rules and Regulations 

1While the terms ‘‘employer’’ and ‘‘employee’’ 

are used throughout, this advisory opinion applies 

more broadly to situations where consumers receive 

payment for work performed. 

2A recent CFPB report describes rapid recent 

growth in one part of this developing market. See 

CFPB, Developments in the Paycheck Advance 

Market, at 3 (July 2024) (hereinafter 2024 Paycheck 

Advance Report). 

U.S. Code citation CMP description New maximum amount 

(4) 12 U.S.C. 1782(d)(2)(A) ..... Tier 1 CMP for inadvertent failure to submit certified statement of insured 

shares and charges due to the National Credit Union Share Insurance 

Fund (NCUSIF), or inadvertent submission of false or misleading statement.

$4,596. 

(5) 12 U.S.C. 1782(d)(2)(B) ..... Tier 2 CMP for non-inadvertent failure to submit certified statement or submission of false or misleading statement.$45,946. 

(6) 12 U.S.C. 1782(d)(2)(C) ..... Tier 3 CMP for failure to submit a certified statement or the submission of a 

false or misleading statement done knowingly or with reckless disregard.

$2,297,385 or 1% of the total assets of the credit 

union, whichever is less. 

(7) 12 U.S.C. 1785(a)(3) .......... Non-compliance with insurance logo requirements ............................................ $157. 

(8) 12 U.S.C. 1785(e)(3) .......... Non-compliance with NCUA security requirements ........................................... $365. 

(9) 12 U.S.C. 1786(k)(2)(A) ..... Tier 1 CMP for violations of law, regulation, and other orders or agreements .. $12,567. 

(10) 12 U.S.C. 1786(k)(2)(B) ... Tier 2 CMP for violations of law, regulation, and other orders or agreements 

and for recklessly engaging in unsafe or unsound practices or breaches of 

fiduciary duty.

$62,829. 

(11) 12 U.S.C. 1786(k)(2)(C) ... Tier 3 CMP for knowingly committing the violations under Tier 1 or 2 (natural 

person).

$2,513,215. 

(12) 12 U.S.C. 1786(k)(2)(C) ... Tier 3 CMP for knowingly committing the violations under Tier 1 or 2 (insured 

credit union).

$2,513,215 or 1% of the total assets of the credit 

union, whichever is less. 

(13) 12 U.S.C. 

1786(w)(5)(A)(ii).

Non-compliance with senior examiner post-employment restrictions ................ $413,388. 

(14) 15 U.S.C. 1639e(k) .......... Non-compliance with appraisal independence requirements ............................. First violation: $14,435 

Subsequent violations: $28,866. 

(15) 42 U.S.C. 4012a(f)(5) ....... Non-compliance with flood insurance requirements ........................................... $2,730. 

(b) The adjusted amounts displayed in 

paragraph (a) of this section apply to 

civil monetary penalties that are 

assessed after the date the increase takes 

effect, including those whose associated 

violation or violations pre-dated the 

increase and occurred on or after 

November 2, 2015. 

[FR Doc. 2025–00737 Filed 1–14–25; 8:45 am] 

BILLING CODE 7535–01–P 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

12 CFR Part 1026 

[Docket No. CFPB–2024–0032] 

Truth in Lending (Regulation Z); 

Consumer Credit Offered to Borrowers 

in Advance of Expected Receipt of 

Compensation for Work 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Advisory opinion rescinding 

previous advisory opinion. 

SUMMARY: The Consumer Financial 

Protection Bureau (CFPB) is issuing this 

advisory opinion to rescind an advisory 

opinion it issued in November 2020 that 

described how one particular type of 

‘‘earned wage’’ product does not involve 

the offering or extension of ‘‘credit’’ as 

that term is defined in the Truth in 

Lending Act and Regulation Z. 

DATES: This advisory opinion is 

applicable January 15, 2025. 

FOR FURTHER INFORMATION CONTACT: 

George Karithanom, Regulatory 

Implementation & Guidance Program 

Analyst, Office of Regulations, at 202– 

435–7700 or at: https://

reginquiries.consumerfinance.gov/. If 

you require this document in an 

alternative electronic format, please 

contact CFPB_Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Advisory Opinion 

A. Background 

One major source of demand for 

consumer credit is derived from the 

mismatch of when American workers 

receive compensation for their labor and 

when they incur expenses. While there 

have long been sources of credit for 

consumers to pay expenses in advance 

of receiving their compensation, there 

are a number of new offerings that seek 

to provide additional choices for 

consumers. 

Instead of being paid daily or upfront, 

American workers generally provide 

services before employers pay for those 

services some time later—typically on a 

biweekly or semi-monthly wage cycle.1

Employers have a strong incentive to 

delay payment, since these delays 

reduce working capital needs. Nearly 

three-quarters of non-farm payroll 

employees remain paid biweekly or 

even less frequently, and the remainder 

are generally paid their wages weekly. 

To address liquidity challenges, many 

consumers therefore turn to credit 

products, such as payday loans, 

personal installment loans, and credit 

cards. In recent years, American 

consumers have significantly expanded 

their use of products sometimes 

marketed as ‘‘earned wage access’’ or 

‘‘earned wage advance.’’ 2 As these 

paycheck advance products generally 

have features that make them subject to 

the CFPB’s jurisdiction, the CFPB has 

sought to understand these and other 

products, particularly those offered 

online, by engaging in ongoing 

monitoring of the market, including, for 

example, collecting and analyzing data, 

engaging with stakeholders (e.g., market 

participants, consumer groups, and 

States), tracking and studying market 

developments, and conducting market 

research, among other things. 

While many of these products have 

similarities to payday loans, there are 

important distinctions. The CFPB has 

found that there are two emerging 

models of earned wage products: 

employer-partnered and direct-toconsumer. 

For ‘‘employer-partnered’’ products, 

providers contract with employers to 

offer funds in amounts not exceeding 

accrued wages. Those funds are 

recovered via one or more payroll 

deductions, lowering the consumer’s 

paychecks accordingly, with other 

recourse options generally unavailable 

to the provider. In contrast, ‘‘direct-toconsumer’’ products provide funds to 

employees in amounts that are not as 

strictly limited by accrued wages. Some 

of these products limit advances to an 

amount estimated to be below accrued 

wages and do not consider other factors. 

Others consider estimated accrued 

wages as one of several factors when 

determining the amount to advance. 

Still others do not expressly state that 

estimated accrued wages are a factor 

considered despite being marketed as 

earned wage products. Regardless of the 

exact model, funds are generally 

recovered via automated withdrawal 


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Federal Register / Vol. 90, No. 9 / Wednesday, January 15, 2025 / Rules and Regulations 3623 

3This includes, without limitation, prepaid and 

payroll card accounts. 

4As described, direct-to-consumer products lie 

outside the scope of the ‘‘wage advance’’ (12 CFR 

1041.3(d)(7)) and ‘‘no cost advance’’ (12 CFR 

1041.3(d)(8)) exclusions from the CFPB’s 2017 

Payday Rule. Employer-partnered products, 

however, may be (but are not necessarily) within 

the scope of one exclusion or both, with their 

revenue model particularly relevant to that 

determination. See 12 CFR 1041.3(d)(7)(ii)(A), 

(d)(8). 

5See 2024 Paycheck Advance Report, supra note 

2, n.7. Several recently enacted State laws prohibit 

providers of earned wage products, including 

direct-to-consumer products, from compelling 

consumer repayment of earned wage amounts and 

fees through various means, such as lawsuits or 

third-party debt collection. See, e.g., Mo. Rev. Stat. 

§ 361.749(5)(6) (2023); Wis. Stat. § 203.04(2)(f) 

(2023); cf. Mont. Op. Att’y Gen., Vol. 59, Op. 2 (Dec. 

22, 2023) (finding earned wage products do not 

meet the state law definitions of ‘‘consumer loan’’ 

or ‘‘deferred deposit loan’’ when they are ‘‘fully 

non-recourse,’’ among other criteria). 

6Truth in Lending (Regulation Z); Earned Wage 

Access Programs, 85 FR 79404 (Dec. 10, 2020). 

7Regulation Z defines credit at section 12 CFR 

1026.2(a)(14). 

8See 2020 Advisory Opinion, supra note 6, at 

79405–06. 

9The opinion stated that it had no application to 

such products. Id. at 79408 (‘‘This advisory opinion 

applies solely to the question of whether Covered 

EWA Programs (i.e., those meeting all of the 

characteristics described in part I.B above) fall 

under the definition of credit in section 

1026.2(a)(14) of Regulation Z identified above. This 

advisory opinion has no application to any other 

circumstance, and it does not offer a legal 

interpretation of any other provisions of law.’’). 

10 12 CFR 1026.2(a)(14). 

11 15 U.S.C. 1602(f). 

12 12 CFR 1026.2(b)(3). 

13Pollice v. Nat’l Tax Funding, L.P., 225 F.3d 379, 

410 (3d Cir. 2000) (‘‘Although [TILA] does not 

contain a definition of the term ‘debt,’ we believe 

the term as used in [TILA] should be construed as 

it is defined in the FDCPA.’’). 

14 85 FR 79404 at 79406 (emphasis added). 

15 2020 Advisory Opinion, supra note 6, at 79407 

(emphasis added). 

16See 12 CFR 1041.3(d)(7), 1041.3(d)(8). 

from the consumer’s bank account,3 and 

generally without limit to the provider’s 

ability to seek further recourse as 

necessary.4

Some of the differences between these 

two types of earned wage products, 

however, are starting to erode. For 

example, some direct-to-consumer 

providers are now connecting directly to 

payroll records and recouping funds 

from payroll deductions, and ongoing 

State legal developments may cause 

them to limit their recourse options as 

well.5

Before the CFPB’s market monitoring 

of these products intensified, the CFPB 

issued an advisory opinion in November 

2020,6 that described how one 

particular type of earned wage product 

does not involve the offering or 

extension of ‘‘credit’’ as that term is 

defined in the Truth in Lending Act 

(TILA) and Regulation Z (2020 Advisory 

Opinion).7 The opinion explained that 

an earned wage product is not TILA or 

Regulation Z credit if it meets all of 

several identified conditions, including: 

providing the consumer with no more 

than the amount of accrued wages 

earned; provision by a third party fully 

integrated with the employer; no 

consumer payment, voluntary or 

otherwise, beyond recovery of paid 

amounts via a payroll deduction from 

the next paycheck, and no other 

recourse or collection activity of any 

kind; and no underwriting or credit 

reporting.8 The 2020 Advisory Opinion 

was silent about whether earned wage 

products that do not meet all of these 

conditions are credit under TILA and 

Regulation Z.9

In July 2024, the CFPB proposed an 

interpretive rule on this same topic 

(2024 Proposed Interpretive Rule) and 

voluntarily sought public comment. The 

comment period closed on August 30, 

2024. 

B. Legal Analysis 

The CFPB is rescinding the 2020 

Advisory Opinion for two fundamental 

reasons: (i) its legal analysis is 

significantly flawed in numerous 

respects; and (ii) it engendered 

substantial regulatory uncertainty. 

1. The 2020 Advisory Opinion’s Legal 

Analysis Is Significantly Flawed in 

Numerous Respects 

Section 1026.2(a)(14) of Regulation Z 

defines ‘‘credit’’ as ‘‘the right to defer 

payment of debt or to incur debt and 

defer its payment.’’ 10 TILA defines 

‘‘credit’’ virtually identically as ‘‘the 

right granted by a creditor to a debtor to 

defer payment of debt or to incur debt 

and defer its payment.’’ 11 However, 

TILA and Regulation Z do not define 

‘‘debt.’’ Regulation Z provides that 

undefined terms ‘‘have the meanings 

given to them by state law or 

contract.’’ 12

The first analytical flaw of the 2020 

Advisory Opinion is that its 

consideration of the meaning of ‘‘debt’’ 

under state law was insufficient. It did 

not mention the Regulation Z rule of 

construction that undefined terms have 

the meanings given to them by state law 

or contract. It only cited a portion of the 

definition of debt in a recent edition of 

Black’s Law Dictionary, and did not 

survey the definitions of debt in state 

laws, or other relevant bodies of law, 

including applicable circuit court case 

law on the definition of ‘‘debt’’ in TILA 

and Regulation Z.13

Second, the 2020 Advisory Opinion 

inferred that the consumer does not 

incur a liability when using the 

narrowly limited type of earned wage 

product covered by the opinion, but did 

not sufficiently justify the inference. 

The main rationale provided for the 

inference was that this type of product 

‘‘functionally operates like an employer 

that pays its employees earlier than the 

scheduled payday.’’ 14 The opinion did 

not elaborate on what constitutes 

functional operation, or the relevance of 

the fact that the employer is not literally 

paying the employee’s wages early. 

Third, the 2020 Advisory Opinion did 

not consider all relevant factors as part 

of the ‘‘totality of the circumstances’’ 

approach it applied to determine what 

is ‘‘credit.’’ The opinion stated only that 

‘‘features often found in credit 

transactions are absent from’’ this type 

of product and that transactions 

involving this type of product are 

‘‘[u]nlike many credit 

transactions. . . .’’ 15 The 2020 

Advisory Opinion, however, did not 

consider any of the features of wage 

advance products commonly found in 

credit transactions, including a 

consumer’s receipt of funds, consumer 

repayment of those funds, and the wage 

garnishment tool used to effectuate 

repayment. Nor did the 2020 Advisory 

Opinion explain how its ‘‘totality of the 

circumstances’’ approach derived from 

the definition of ‘‘credit.’’ 

Fourth, the opinion’s claim that it was 

supported by certain statements in the 

2017 Payday Rule is unpersuasive. The 

Payday Rule did not make a 

determination as to whether earned 

wage products are credit, stating only 

that some product constructs ‘‘may not 

be’’ credit. The CFPB declined to 

perform the more detailed analysis 

necessary to come to a considered 

conclusion on the boundaries of TILA 

and Regulation Z at that time because 

the rulemaking was based on the CFPB’s 

UDAAP authority, not TILA and 

Regulation Z. Some earned wage 

products may not be covered by the 

Payday Rule because of its ‘‘wage 

advance’’ and ‘‘no cost advance’’ 

exclusions.16 However, these exclusions 

can only apply to earned wage products 

to the extent that such products are 

TILA and Regulation Z credit. As a 

result, the CFPB’s earlier decision to 

exclude certain earned wage product 

constructs from the Payday Rule has no 

impact on the credit status of such 

products under TILA or Regulation Z. 


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3624 Federal Register / Vol. 90, No. 9 / Wednesday, January 15, 2025 / Rules and Regulations 

17U.S. Gov’t Accountability Off., GAO–23– 

105536, Financial Technology: Products Have 

Benefits and Risks to Underserved Consumers, and 

Regulatory Clarity is Needed 36–37 (2023) (citing 

industry requests for clarification). The CFPB has 

acknowledged the need for clarification in this area. 

See, e.g., Letter from Rohit Chopra, Dir., Consumer 

Fin. Prot. Bureau, to Michael Clements, Dir. of Fin. 

Mkts. and Cmty. Inv., U.S. Gov’t Accountability 

Off., (Feb. 13, 2023) in U.S. Gov’t Accountability 

Off., GAO–23–105536, supra, at 51; Letter from 

Seth Frotman, Acting General Counsel, Consumer 

Fin. Prot. Bureau, to Beverly Brown Ruggia, N.J. 

Citizen Action, et al., at 2 (Jan. 18, 2022). 

18See, e.g., Off. of the Att’y Gen., State of Ariz., 

Opinion No. I22–005 (Dec. 16, 2022), available at 

https://www.azag.gov/sites/default/files/2022-12/ 

I22-005.pdf. 

19See, e.g., ZayZoon, Comment Letter on Cal. 

Dep’t of Fin. Prot. and Innovation Notice of 

Proposed Rulemaking [PRO 01–21], at 4 (May 17, 

2023), https://dfpi.ca.gov/wp-content/uploads/sites/ 

337/2023/08/46-PRO-01-21-ZayZoon-US-Inc.- 

5.17.23_Redacted.pdf; Innovative Payments Ass’n, 

Comment Letter on Cal. Dep’t of Fin. Prot. and 

Innovation Notice of Proposed Rulemaking [PRO 

01–21], at 4 (May 11, 2023), https://dfpi.ca.gov/wpcontent/uploads/sites/337/2023/08/10-PRO-01-21- 

Innovative-Payments-Association-5.11.23_

Redacted.pdf. 

20See Consumer Fin. Prot. Bureau, Payactiv 

Approval Order, at 5 (Dec. 30, 2020), https://

files.consumerfinance.gov/f/documents/cfpb_

payactiv_approval-order_2020-12.pdf. 

21See id. 

22See id. at 4 n.15. 

23See Consumer Fin. Prot. Bureau, Order to 

Terminate Sandbox Approval Order (June 30, 2022), 

cfpb_payactiv_termination-order_2022-06.pdf. 

24 12 U.S.C. 5512(b)(1). 

25 15 U.S.C. 1640(f). 

26 44 U.S.C. 3501–3521. 

27 5 U.S.C. 801–808. 

2. The 2020 Advisory Opinion 

Engendered Substantial Regulatory 

Uncertainty 

In the months and years following 

issuance of the 2020 Advisory Opinion, 

it became increasingly evident that it 

failed to clarify the status of earned 

wage products under TILA and 

Regulation Z. Indeed, in 2023, the U.S. 

Government Accountability Office 

issued a report recommending that the 

CFPB clarify their status.17 This 

muddying of the waters flowed directly 

from the extreme narrowness of the 

opinion. Few if any of the products in 

the market at the time of or subsequent 

to issuance fit the mold outlined by the 

opinion. As a result, stakeholders were 

left to speculate about the CFPB’s view 

about the credit status of the many 

products actually being offered. 

Worse still, the 2020 Advisory 

Opinion has been widely cited in 

support of legal conclusions that it did 

not reach. For example, it has 

erroneously been cited for the general 

propositions that no-fee earned wage 

products are not credit,18 and that 

employer-partnered earned wage 

products are also not credit.19

In addition, some regulatory 

uncertainty may have resulted from the 

near-contemporaneous issuance of an 

‘‘Approval Order’’ that gave one 

provider a temporary safe harbor from 

liability under TILA and Regulation Z 

with respect to a specific product that 

did not satisfy all the conditions that the 

2020 Advisory Opinion identified as 

taking such a product outside the reach 

of TILA and Regulation Z.20 The 2020 

Advisory Opinion applied only to 

products that had all of the numerous 

characteristics identified above, 

including that they were free to 

consumers. In contrast, the Approval 

Order encompassed earned wage 

transactions in connection with which 

the consumer incurred fees.21 However, 

it was never of general interpretative 

applicability,22 and was terminated 

even before its temporary status 

expired.23

II. Regulatory Matters 

This is an advisory opinion issued 

under the CFPB’s authority to interpret 

TILA and Regulation Z, including under 

section 1022(b)(1) of the Consumer 

Financial Protection Act of 2010, which 

authorizes guidance ‘‘as may be 

necessary or appropriate to enable the 

Bureau to administer and carry out the 

purposes and objectives of the Federal 

consumer financial laws. . . .’’ 24 By 

operation of TILA section 130(f), no 

provision of TILA sections 130, 108(b), 

108(c), 108(e), or section 112 imposing 

any liability would apply to any act 

done or omitted in good faith in 

conformity with this advisory opinion, 

notwithstanding that after such act or 

omission has occurred, the advisory 

opinion is amended, rescinded, or 

determined by judicial or other 

authority to be invalid for any reason.25

The CFPB has determined that this 

advisory opinion would not impose any 

new or revise any existing 

recordkeeping, reporting, or disclosure 

requirements on covered entities or 

members of the public that would be 

collections of information requiring 

approval by the Office of Management 

and Budget under the Paperwork 

Reduction Act.26

Pursuant to the Congressional Review 

Act,27 the CFPB will submit a report 

containing this advisory opinion and 

other required information to the United 

States Senate, the United States House 

of Representatives, and the Comptroller 

General of the United States prior to the 

rule’s published effective date. The 

Office of Information and Regulatory 

Affairs has designated this advisory 

opinion as not a ‘‘major rule’’ as defined 

by 5 U.S.C. 804(2).] 

Rohit Chopra, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2025–00381 Filed 1–14–25; 8:45 am] 

BILLING CODE 4810–AM–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 732, 734, 740, 742, 744, 

748, 750, 762, 772, and 774 

[Docket No. 250107–0002] 

RIN 0694–XC112 

Public Briefing on Framework for 

Artificial Intelligence Diffusion 

AGENCY: Bureau of Industry and 

Security, U.S. Department of Commerce. 

ACTION: Notification of public briefing 

on regulatory action. 

SUMMARY: On January 10, 2025, the 

Office of the Federal Register posted for 

public inspection a Bureau of Industry 

and Security (BIS) interim final rule: 

‘‘Framework for Artificial Intelligence 

Diffusion’’ (RIN 0694–AJ90). This 

document announces that, on January 

15, 2025, BIS will host a virtual public 

briefing on this rule. This document 

also provides details on the procedures 

for participating in the virtual public 

briefing. 

DATES: Virtual public briefing: The 

virtual public briefing will be held on 

January 15, 2025. The public briefing 

will begin at 12 p.m. Eastern Standard 

Time (EST) and conclude at 1 p.m. EST. 

Deadline to register: Register by 9 a.m. 

EST on January 15, 2025, for virtual 

participation. 

ADDRESSES: To attend this event 

virtually, register at: https://

events.gcc.teams.microsoft.com/event/ 

a0c17530-aae8-43e0-b64ce2f9bafbbcf4@44cf3ec3-840c-4086-b7dee3bc9a6c2db4. 

Recordkeeping: A summary of the 

briefing will be posted for the record at: 

https://regulations.gov under the 

regulations.gov ID for this notice (BIS– 

2025–0001). 

FOR FURTHER INFORMATION CONTACT: For 

questions on this virtual public briefing, 

contact Hillary Hess, Regulatory Policy 

Division, Office of Exporter Services, 

Bureau of Industry and Security, U.S. 

Department of Commerce at 202–482– 

2440 or by email: RPD2@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: 


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