US agency says apps that let workers access paychecks before payday are providing loans
Associated Press
NEW YORK (AP) — The Consumer Financial Protection Bureau says apps that allow workers to access their paychecks in advance, often for a fee, are providing loans and therefore subject to the Truth in Lending Act. If enacted, a rule proposed by the agency could provide clarity to a fast-growing industry known as Earned Wage Access that has been compared to payday loans. The agency wants borrowers to be able to “easily compare products” and to prevent “race-to-the-bottom business practices.” Earned Wage Access apps have been around for more than a decade, but they gained popularity in the years prior to the pandemic and since.
