Earned Wage Advance (EWA) providers market a means for workers to access their wages before payday, usually for a fee. In reality, there are two very different types of products that are marketed as EWA, one of which—sometimes called “faux EWA”— is simply a payday loan dressed up in “fintech” marketing.
While low-wage workers can benefit from true EWA programs that are properly designed and regulated, they can instead be harmed when products are allowed into the marketplace without guardrails that keep their use and cost within reasonable bounds.
States should regulate all EWA products as credit and require compliance with consumer protections that prevent the predatory lending debt traps commonly associated with payday loans. as credit and require compliance with consumer protections that prevent the predatory lending debt traps commonly associated with payday loans.
Learn more about EWA products and watch a short video below: