Could Trump’s comeback be the regulatory reset the EWA industry has been waiting for?

Trump’s back for round two, and the shake-ups are already in full swing — politically and financially. His ‘out with the old, in with the new’ mantra extends beyond policies; it’s also about clearing out the old guard and putting fresh faces in charge of government departments.

While his deregulation stance could create a more welcoming regulatory environment for the banking and crypto industries, it also brings potential risks. A regulatory rollback could rattle banking stability and slow fintech-bank collaborations.

But for the earned wage access (EWA) sector, the new administration is expected to bring clarity, ending the uncertainty that kept providers on edge.

The landscape and ongoing tug: As new payment models like Buy Now, Pay Later (BNPL)  and EWA took off in recent years, the Consumer Financial Protection Bureau (CFPB) has been watching how they affect consumers. The main debate around EWA, however, remains and revolves around one big question: Is it your earned money delivered ahead of payday or a loan in disguise?

In July 2024, the Consumer Financial Protection Bureau issued an interpretive rule stating that many paycheck advance products — often branded as “earned wage” offerings — are consumer loans under the Truth in Lending Act (TILA). As a result, federal and state regulators have been locked in that argument, with different states opting for individual, fragmented regulatory routes.

States such as Kansas, Missouri, and Nevada require EWA providers to register their companies and categorize wage advances as distinct products — steering clear of classifying them as loans. On the other hand, California and Connecticut took a different approach, treating wage advances as loans.

EWA providers like Payactiv, DailyPay, and EarnIn support state regulations similar to those in Kansas and Nevada. It was EarnIn, based in California, that challenged the state’s regulation in 2023, arguing it could force companies to change their models and limit options for customers living paycheck to paycheck.

Conversely, some EWA providers, like the New York-based Clair, argue that EWA falls squarely within lending rules.

“We agree with California legislators that EWA is a loan and lending regulations should apply. If you’re paying some amount every time you advance funds, isn’t that similar to interest payments?” Nico Simko, the CEO and co-founder of Clair asked during our interview in 2023.

The winds of change in 2025: Consumer advocacy groups like the Financial Technology Association (FTA) have repeatedly challenged the CFPB’s interpretive rule leading to the blanket classification of EWA products as loans. The organization calls for shaping policy through legislative discussions rather than regulatory mandates.

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