Here to put a big lump of coal in the toe of your Christmas stocking, it’s President Donald Trump’s Consumer Financial Protection Bureau!
Big hand for these guys, everyone. They didn’t want to let the holidays come and go without letting the regular folks know just how little they think of us. So, tucked into the Federal Register, effective Wednesday: an advisory opinion that “earned wage access” or EWA products through certain payday loan apps do not count as loans under the Truth in Lending Act.
EWAs are a fancy name for apps like Chime and DailyPay—the ones that allow you to get part of your paycheck early. To use those, you give them direct access to your payroll information and repay the loan advance through a deduction from your paycheck. Those companies don’t work for free, of course, so while this is ostensibly just a process of you shuffling your own money around, hence the “earned wage access,” you’re still paying for the privilege.
But the Trump administration dares to dream: What if you had no idea what this was costing you, or other necessary info? Because that’s what it means to say these things aren’t loans under the Truth in Lending Act. If they aren’t loans, then whatever those apps charge does not technically count as interest rates or fees, and the whole thing just gets to be a delightful little secret to you until you see the fees hit.
Related | Why have rules protecting consumers and workers when you could just not?
The National Consumer Law Center explained that DailyPay, for example, extracts as much as $300 in fees per year from employees and as much as $1,400 over two years. That is a lot of money to pay in order to access your money!
Sure, at least six federal courts have said the opposite. And sure, federal courts are the final arbiters of what statutes say, not agencies, as per the conservatives on the Supreme Court in 2024 when they eliminated the requirement that courts defer to agency interpretations, but pish posh. Everybody knows that those same conservatives are the biggest Secret Santas a Trump administration could ever wish for, so you can likely expect this won’t be seen as some catastrophic government overreach.
Silly rabbit, that’s only for Democratic presidents.
There is no pro-consumer reason to exempt these companies from disclosure requirements. No employee benefits by not knowing how much these things cost. The only benefit is to the payday lenders, who are now allowed to run amok.
Oh well. Soon we won’t even have a CFPB to kick around any longer if the Trump administration has its way. The remaining agency employees have already been doing nothing for months, literally—as in they have been told to do none of the work necessary to protect consumers, because who wants that?
The administration has also completely frozen funding for the agency, and it runs out in a few weeks … forever. On Monday, 21 states sued, arguing that the administration can’t shutter the CFPB by freezing funding in part because it is not the administration’s funding to freeze. The agency gets its money via the Federal Reserve precisely to insulate it from this sort of thing.
But Russell Vought, the Christian nationalist ghoul and Project 2025 architect who directs the Office of Management and Budget, also heads the CFPB, and he has simply refused to accept the money from the Fed.
We’re well past the fiction that this is a government meant to do anything except enable cronyism and financial corruption. Regular folks who live paycheck to paycheck get to suffer, while predatory lenders run wild and free.
Happy holidays, you peons.
