CFPB's New Rule Classifies Paycheck Advances as Loans

Earned wage access apps must now disclose all fees under the Truth in Lending Act, sparking industry backlash and potential legal challenges.

The CFPB's interpretive rule requires paycheck advance apps to disclose fees and categorize advances as loans.
Industry representatives argue the rule will harm workers by reducing access to earned wage products.
Consumer advocates support the rule, claiming it will prevent predatory lending practices.
The industry is preparing to sue the CFPB, citing potential conflicts with previous guidance and legal standards.
The CFPB aims to enhance transparency and competition in the short-term lending market.