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Comments due on CFPB RFI on employer-driven debt


The CFPB has announced an inquiry into practices and financial products that may leave employees indebted to their employers. In a Request for Information to be published in the Federal Register, the CFPB seeks data about, and worker experiences with, these emerging practices and financial products referred to as employer-driven debt. The CFPB is interested in knowing whether consumers have a meaningful choice in accepting employer-driven debt products. The CFPB also wants to understand the terms and conditions for these products, including whether they might impede someone from seeking a better-paying job.

Employer-driven debt can cover an array of products and practices, including an employee’s up-front purchase of equipment and supplies that is essential for their work or that the employer requires. In other instances, workers may have to agree to debt products where the debt must be repaid if the employee leaves the employer before a certain date. For example, a company may provide training to a new hire, and require that the training’s cost be paid back if the employee leaves or is fired within a set period. Employer-driven debt comprises an emerging set of products and services, which the CFPB will study to better understand the potential impact on individual borrowers, jobseekers, and the broader labor market. Two potential areas of focus for the CFPB include (1) workers' understanding of employer-driven debt arrangements and (2) how and whether default on employer-driven debt could threaten continued or future employment.

The CFPB is seeking input from the public on debt obligations incurred by consumers in the context of an employment or independent contractor arrangement. Areas of inquiry include prevalence, pricing and other terms of the obligations, disclosures, dispute resolution, and the servicing and collection of these debts. Comments will be accepted through September 7, 2022.

COMMENT PERIOD UPDATE: In a Federal Register notice published on 9/2/2022, the CFPB extended the comment period to end on 9/23/2022.

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