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CFPB Launches Inquiry into Employer-Driven Debt

  • On June 9, the CFPB launched an inquiry into practices and financial products that may result in employees being in debt to their employers. The agency is seeking data and worker experiences with these practices and products, with a particular emphasis on whether consumers have meaningful choice in accepting employee-driven debt products. The agency also seeks to understand the terms and conditions of these products, and whether they have the effect of limiting labor market mobility.
  • Specific examples of employee-driven debt include training repayment agreements that require workers to pay for training if they separate from a job voluntarily or involuntarily before a certain time period and debt to an employer incurred for essential supplies or equipment required by their jobs.
  • In a statement, CFPB Director Rohit Chopra said, “The labor market operates at its best when workers are able to move freely within it. Our inquiry is about studying the effects of an emerging form of debt that may have the potential to trap employees in place.”