What the CFPB Earned Wage Access Advisory Means for Payroll Professionals

For payroll professionals, the Consumer Financial Protection Bureau (CFPB) earned wage access advisory represents a long-awaited shift from ambiguity to clarity.

For the first time, there is federal-level guidance explaining how EWA must be structured to function as non-credit early wage access—giving payroll teams a more predictable compliance and operational landscape.

Why this matters

There are now three clear levels of employer analysis for selecting the right EWA program for an employer. 

• Does the EWA model align with federal standards  – this is what the CFPB clarified this past week.  

• Is the EWA model compliant with specific state wage and hour laws in which the employer has employees, namely wage assignment.

• What are the employer’s preferences regarding fees for its employees.

Does the CFPB consider earned wage access credit under the Truth and Lending Act and Regulation Z?

The CFPB clarifies that providers that settle as part of the payroll process, or that offer completely free products, are not creditors under the Truth in Lending Action and Regulation Z. 

From a payroll standpoint, the CFPB’s logic is straightforward:

• The employee is not taking out a loan

• Some providers are not creditors

• Payday simply reflects less net pay because wages were accessed earlier

This distinction is foundational for payroll teams responsible for compliance, audits, and wage-and-hour accuracy.

How should EWA programs calculate earned wages?

According to the CFPB, access limits must be based on the actual accrued value of wages earned, determined using payroll or timekeeping data—not estimates or employee self-reporting.

For payroll professionals, this matters because:

• It preserves payroll accuracy

• It prevents over-advances

• It reduces correction cycles at payday

• It aligns EWA with existing payroll controls

In practice, EWA works best when it behaves like  payroll —just on a faster cadence.

Why payroll settlement models matter for compliance and scale

One of the most important takeaways for payroll leaders is how EWA settlement models matter.

The CFPB makes clear that EWA models aligned with payroll settlement—rather than post-payday bank account debits—are not credit under the Truth in Lending Act and Regulation Z. However, the Advisory Opinion is silent on how states may treat wage assignment.

Payroll-process settlement:

• Reduces wage-and-hour risk

• Avoids failed ACH pulls and overdrafts

• Creates a clean audit trail

• Minimizes payroll escalations

For multi-state employers, this consistency is critical. The more EWA resembles a payroll workflow, the easier it is to scale without introducing compliance friction.

What happens if payroll deduction or settlement fails?

The Advisory Opinion explains that EWA models previously analyzed as non-credit typically avoid any recourse against employees when payroll settlement fails—for example due to termination, garnishment, or administrative error—keeping payroll teams out of recovery or collections activity..

For payroll professionals, this is a critical safeguard:

• Payroll is not pulled into recovery or collections activity

• Statutory deductions remain prioritized

• Payroll teams avoid reputational and employee relations issues

This reinforces that compliant EWA is designed to reduce payroll risk, not transfer it.

Why federal clarity matters for payroll leaders now

Historically, regulatory uncertainty has been a major blocker. In fact, 63% of employers report they have avoided offering EWA due to regulatory concerns (Everest Group, January 2026).

The CFPB advisory resolves the federal question and complements existing state frameworks, giving payroll teams a clearer path forward:

• Federal clarity first

• Then state-by-state wage and lending review

• Then operational selection based on payroll fit

This shift allows payroll leaders to move from “Can we offer EWA?” to “Which EWA model works best for our payroll structure?”

Why Chime Enterprise aligns with the CFPB’s Covered EWA framework

Chime Enterprise’s earned wage access model is built to align with the CFPB’s definition of non-credit EWA because it is free to employees. 

Chime Enterprise does not pursue employees through collections, credit reporting, or debt sales if settlement issues arise, and it does not assess employee credit risk. The program is completely free, avoiding many of the compliance and administrative challenges associated with fee-based or deduction-heavy models.

Want to learn more about how Chime Workplace™ is built for the latest CFPB announcement? Let’s connect.