The Office of Financial Regulation is offering guidance on how it defines and classifies Earned Wage Access products, as well as what’s required of entities offering such products.

What is an Earned Wage Access product?

Earned Wage Access allows consumers to obtain access to wages that they have earned but not yet received via employer payroll. These products commonly come in two varieties: products employers offer as an employee benefit or products independent third parties offer consumers. In both circumstances, the amount the consumer is offered is limited to the amount they’ve earned, but not been paid.

One-time or Subscription Earned Wage Products

Earned Wage Access products can also be divided into one-time transactions or subscription-based products depending upon how frequently the consumer obtains the advance.

How does Maryland law classify the Earned Wage Access product?

Whether an Earned Wage Access product is classified as a loan or not under Maryland law depends upon certain factors.

More detailed guidance from the Office of Financial Regulation can be viewed here.

As a new and evolving product, the Office of Financial Regulation says it will be monitoring the use and provision of Earned Wage Access products, paying particularly attention to the fees that providers charge. It will also be monitoring this product for any practices that are deceptive, unfair, or abusive.