IPA Calls for Clarity in California EWA Rulemaking

The Innovative Payments Association (IPA) is urging the California Department of Financial Protection and Innovation (DFPI) to clarify its proposed regulations for Earned Wage Access (EWA) providers.

The IPA, which represents a number of EWA providers, argues that the current draft of the rule may create confusion and unnecessary burdens on businesses. Specifically, the IPA is concerned about the rule's reporting requirements and fee definitions, which could lead to misleading information for consumers.

The association believes that not all EWA transactions should be treated as loans under California law. They argue that many EWA models do not resemble credit and should be exempt from the California Financing Law (CFL).
The IPA is calling on the DFPI to:

• Clarify the distinction between EWA fees and payroll card fees.
• Acknowledge the diversity of EWA models.
• Recognize that not all EWA transactions are loans.
  
  

The IPA hopes that these revisions will help create a more equitable and effective regulatory framework for EWA providers in California.

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