Arizona AG Opinion: EWA Not a Loan

As earned wage access (EWA) becomes more widespread, some states are considering regulatory frameworks that create important consumer protections, while also enabling the EWA industry to continue to provide users access to their pay on-demand. 

Earlier this week, Arizona Attorney General Mark Brnovich issued an Opinion on EWA  confirming that non-recourse EWA products that do not levy a “finance charge” are not considered consumer loans and are not subject to licensure as commercial lenders in the state. 

While the Opinion does not address any specific EWA programs by name, Payactiv’s EWA program fits squarely within this framework as a no-interest and non-recourse EWA product that does not impose a finance charge. 

The Opinion Reaffirms EWA is Not a Loan

The Opinion explains that EWA is not a consumer loan for two reasons. 

• First, EWA represents a payment of wages already earned by the employee and does not allow recourse against the employee in the event the EWA provider is unable to recoup the disbursed funds. 
• Second, an EWA product does not fit the state’s definition of a “consumer loan” so long as the provider does not impose a finance charge. The Opinion indicates that “a fee for an expedited transfer of an EWA payment” or “interchange revenue from money spent using a payment card” do not constitute finance charges under Arizona law. 

Notably, Payactiv offers the most free options for users to access their earned wages of any provider in the industry, and users can also choose a voluntary expedited funds transfers option with a nominal fee.

Why It Matters: First Attorney General Opinion on EWA

This is the first public opinion on EWA by an attorney general from any state, and it follows guidance from the Consumer Financial Protection Bureau (CFPB) and other state regulators who have come to similar conclusions that EWA is not a loan so long as the program meets a specific set of criteria. While the Arizona Attorney General of course only analyzed Arizona law, the text of the Arizona statute at issue is similar to the laws in other states.  

While there is no change to Payactiv’s business, operations, or partnerships in Arizona or any other state as a result of this Opinion, it provides additional regulatory clarity for Payactiv and the broader EWA industry. As the pioneer of this payroll innovation, Payactiv has a long-standing history of working with policymakers on creating regulations for EWA that create protections for consumers while also allowing the industry to grow and thrive. This Opinion from the Arizona Attorney General is an important step to affirm EWA is not a loan and to assure employers and users that they will be able to access their earned wages when they need it.