CFPBFinal Rule
Truth in Lending (Regulation Z): Consumer Credit Offered to Borrowers in Advance of Expected Receipt of Compensation for Work
Finance & BankingLabor & Workplace
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Summary
This regulation requires lenders to be clear and honest about the costs and terms when they offer credit to workers before they receive their paychecks. The rule aims to protect workers from predatory lending practices and helps them understand exactly what they're paying for short-term loans.
Key Points
- 1Lenders must clearly disclose all fees, interest rates, and repayment terms before a worker borrows money against future wages
- 2The rule applies to short-term loans given to workers in advance of their expected paychecks or other work-related compensation
- 3Lenders cannot hide costs in confusing language or small print—all important information must be presented in a way that's easy to understand
- 4Workers are protected from unfair lending practices and have the right to know the total cost of borrowing before they agree to a loan
- 5The Consumer Financial Protection Bureau (CFPB) enforces this rule and can penalize lenders who don't follow the requirements
Key Dates
Published
January 15, 2025
This summary is for informational purposes only. It may not capture all nuances of the regulation. Always refer to the official text for authoritative information.
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