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Providers of earned wage access and other income-based advances to California consumers are subject to registration with the Department of Financial Protection and Innovation (DFPI) under the California Consumer Financial Protection Law (CCFPL), effective February 15, 2025. Law Offices of Alan Abergel, P.C. ("LOAA") advises California income-based advances providers on DFPI registration, compliance obligations, and regulatory defense. The firm represents providers; it does not represent consumers.
Determining whether a given product constitutes an income-based advance subject to registration as opposed to a loan, a payroll deduction arrangement, or another product outside the CCFPL's registration requirement, requires analysis of the advance structure, collection mechanics, recourse provisions, and the product's relationship to the consumer's income. LOAA provides income-based advance legal opinions addressing this analysis for providers evaluating new or existing products.
Income-based advances are advances based on income the provider has reasonably determined to have accrued to the benefit of the consumer but that has not, at the time of the advance, been paid to the consumer. The advance is scheduled for collection in a single payment within 34 days from the date the advance was made and on a date that corresponds to the anticipated date the consumer’s income will be paid. As part of the contract, the provider warrants that the provider and any business partners have no legal or contractual claim or remedy against the consumer and will not engage in debt collection activities for failure to repay the amount due on the collection date.
LOAA advises income-based advance providers on regulatory compliance and contracts and disclosures drafting and revision.
Registration with the DFPI under the CCFPL involves several components. As DFPI earned wage access registration counsel, LOAA assists providers with DFPI CCFPL registration requirements.
Determining whether a given product constitutes an income-based advance subject to registration as opposed to a loan, a payroll deduction arrangement, or another product outside the CCFPL's registration requirement, requires analysis of the advance structure, collection mechanics, recourse provisions, and the product's relationship to the consumer's income. LOAA provides income-based advance legal opinions addressing this analysis for providers evaluating new or existing products.
Income-based advance providers may be subject to investigation or enforcement by the DFPI, the Federal Trade Commission, or the Consumer Financial Protection Bureau. Recurring issues in this area include operation without required registration, failure to maintain no-recourse treatment in practice, fee or tip structures alleged to function as disguised finance charges, collection activity inconsistent with no-recourse warranties, and marketing claims regarding product cost or features. LOAA represents providers in DFPI investigations, civil investigative demands, examinations, and administrative proceedings, as well as related FTC and CFPB matters.
Law Offices of Alan Abergel, P.C. advises California earned wage access and income-based advance providers on DFPI registration, agreements and disclsoures drafting, payroll advance compliance, and regulatory defense. Attorney Alan Abergel is licensed in California and Texas. Contact LOAA to discuss your income-based advance business's legal services needs.
Disclaimer: The information on this page is provided for general informational purposes only and does not constitute legal advice. No attorney-client relationship is created by reading this content. Every legal matter is unique, and you should consult directly with a qualified attorney regarding your specific circumstances.
"I engaged Alan to help me through the complexities of obtaining my Lenders License. He was very knowledgeable about the process and provided me with a high level of service.I worked quickly getting him all the information needed and he worked at my pace. He was responsive to e-mails and questions and followed up with the DFPI to make sure everything was filed correctly.I had read online that this process could take as long as 6 months however Alan completed the assignment in less than 3 I will be retaining his services in the future to ensure my company remains in compliance."
-Petroleum Realty Group Inc.
"I hired Alan to represent me as a mortgage broker before the California Department of Real Estate. I couldn't be more pleased with Alan's services from start to finish. Alan was clear and concise. Alan's communication throughout the process was professional. I received the results I hoped for. Thank you Alan. I'll definitely recommend you to ALL and use your services again in the future shall I need anything!"
-Anonymous
"Very helpful in assisting in obtaining an OCCC Texas Motor Vehicle Sales Finance License. Very knowledgeable in answering all questions the OCCC asked for on their questionnaire. Highly recommended and would re-hire for any future assistance regarding motor vehicle and finance business. God Bless!"
-Raul
