The Consumer Financial Protection Bureau (CFPB) issued a Request for Information (RFI) regarding employer-driven debt. Specifically, the CFPB is interested in “debt incurred to an employer or an associated entity, taken on in pursuit or in the course of employment.” Comments must be received by Wednesday September 7, 2022.
The CFPB is seeking input from all workers, including independent contractors and others who are not considered “employees” under the Fair Labor Standards Act.
One example of an employer-driven debt product is “Training Repayment Agreements.” In these agreements, the worker is required to repay their employer or a third-party entity for the costs of employer-required training, if they separate within a set time period. Another example is debt owed to an employer, or third-party entity, for the upfront purchase of equipment or supplies that are required by the employer, but that it does not provide or pay for.
The CFPB plans to analyze the information received to better understand the “relationship between labor practices and the market for consumer financial products or services” and to identify “priority areas for future action.”
The CFPB continues to demonstrate an interest in this area. In January of 2022, the U.S. Department of Transportation announced that it will be working with the CFPB and the U.S. Department of Labor to create a Truck Leasing Task Force, focused on investigating “predatory truck leasing arrangements.” In March of 2022, the agency released a blog post discussing the results of a roundtable event it hosted interviewing worker organizations and labor unions. As a result of those talks, the agency stated that it will “continue to analyze information about [employer-driven] debts and their collection by employers and third-party debt collectors to determine how best to address harm to workers” as well as “any potential violations of federal consumer financial law.”
Ballard Spahr LLP’s Labor and Employment and Consumer Finance attorneys are prepared to answer questions regarding the RFI or more generally about employer-driven debt products.