The Consumer Financial Protection Bureau (CFPB) has issued “compliance assistance sandbox” (CAS) approval for PayActiv regarding its “earned wage access” (EWA) products. EWA products allow employees access to their earned but unpaid wages prior to payday.
A Public Benefit Company, Payactiv can help employees access financial relief between paychecks, a service that is said to be needed by two-thirds of the workforce. While offering various financial services, Payactiv’s EWA is said to be used by over 1 million workers every month.
Issued under the CAS Policy from last year, the CFPB explains that a CAS approval offers an entity confronting regulatory uncertainty a “safe harbor” from liability under specified legal provisions. Entities are offered a safe harbor for specified conduct that the Bureau finds compliant with those legal provisions, subject to good faith compliance with the terms of the approval. The CAS Policy implements the existing safe harbor approval mechanisms provided under the Electronic Fund Transfer Act, the Equal Credit Opportunity Act, or—as in this case—the Truth in Lending Act. The duration of the approval, in this case, is two years.