On November 2, 2021, the House Financial Services Committee Task Force on Financial Technology held a hearing entitled “Buy Now, Pay More Later? Investigating Risks and Benefits of BNPL and Other Emerging Fintech Cash Flow Products” to further its important exploration of cash flow and earned wage access products.
Following the hearing, Gusto submitted a comment to share our perspective on how we designed our financial products to promote financial inclusion and provide a borrower-friendly and fully transparent substitute for high-cost credit or payday loans.
The comment highlights Cashout, Gusto’s lending product that was launched in 2019 to provide a responsible option for small business employees to have early access to funds between paychecks with an affordable and easy repayment schedule and fully transparent terms and conditions of use. Gusto Cashout is a direct to consumer loan that enables consumers to access their estimated earned wages at low or no cost and is automatically repaid on the borrower’s next payday. Because Gusto Cashout is structured like a loan, unlike other earned wage access products, it comes with appropriate Truth in Lending Act and other disclosures to ensure that consumers understand the product and its terms. We have created significant guardrails to ensure that Gusto Cashout is responsible credit with a fast and simple repayment schedule, including capping the amount a customer can access, restricting customers from having more than one Cashout at a time, and ensuring that customers can only access Cashout two times per month.
Gusto is committed to promoting responsible financial products that prioritize transparency and improve financial health. Read the full comment here: