Income-Based Advances

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.

For more information, see California Code of Regulations, title 10, section 1004.

A licensee of any state agency other than the Department is not subject to registration under the CCFPL to the extent it is acting under the authority of the other state agency’s license.

A licensee offering to provide or providing income-based advances within the scope of its California Financing Law (CFL) or California Deferred Deposit Transaction Law (CDDTL) license is exempt from CCFPL registration.

A payroll service provider, when verifying available earnings or performing other related facilitation activities on behalf of a provider, consumer’s employer, or a person contractually obligated to pay a consumer in connection with income-based advances is exempt from CCFPL registration, provided that the payroll service provider does not provide the funds for the income-based advances or control the activities of the provider.

For more information, see Financial Code section 90002 and California Code of Regulations, title 10, section 1010.

Yes, to the extent the products they provide meet the definition of income-based advance, which does not distinguish from whom the amount advanced will be collected.  Employer-integrated products may meet the definition of “obligor-based advances,” which are income-based advances in which the provider intends to collect the amounts that have accrued to the benefit of the consumer directly from the consumer’s employer or a person contractually obligated to pay the consumer for labor or services. 

For more information, see California Code of Regulations, title 10, section 1004.

Yes.  Gross income from income-based advances includes interest, fees, or other forms of costs charged or received in connection with providing income-based advances to California residents, as described in the definition of “charges” in California Code of Regulations, title 10, section 1004.  Optional payments made by a consumer in connection with the provider’s provision of an income-based advance to the consumer are also “charges” and should be reported as gross income from income-based advances in the registration application or future annual reports. 

Other “charges” that should be reported as gross income include subscription fees, expedited funds fees, account transfer fees, and consumer payments for optional or discretionary services elected by the consumer. 

Yes.  An income-based advances registrant is required to file an annual report on or before March 15 of each calendar year, starting in 2026.

Yes.  While CFL and CDDTL licensees may be exempt from CCFPL registration when offering income-based advances within the scope of their licenses, they are still required to file the CCFPL Income-Based Advances annual report, which is separate from the annual reports required under the CFL and CDDTL.