Volume 27
Issue 3
Spring '20

Early Wage Access Products: Twenty-First Century Innovations or Harbingers of Debt?

Written By: Alexis Christensen

Abstract

Now more than ever, low-wage workers are struggling to make ends meet. To help cash-strapped households that need money before their next paycheck arrives, fintech companies have begun offering early wage access products (EWAPs), which allow employees to access their earned, but unpaid wages between paychecks. Little is known about how EWAPs function or their impact on consumers. EWAPs may provide necessary relief to financially struggling Americans, but they may also cause more harm than good if left unregulated. This Note examines the structure of EWAPs and how uncertainty in federal regulation of EWAPs has led to state action through two primary means: (1) state enforcement actions and (2) state legislation.

This Note provides consumer-friendly recommendations for regulating these novel products with the goal of encouraging the market to grow while protecting users.

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