Hello, Colorado Sun community. I am a reporter at The Colorado Sun writing about politics and policy. And so when I saw that the Colorado legislature is considering regulating earned wage access apps, also known as cash advance apps, I wanted to learn more about them.
Apps like EarnIn, Brigit or MoneyLion sync with a user’s bank account. The app companies extend small short-term loans to workers in between paychecks so they can pay bills or buy groceries. On payday, the app company takes money out of their wages to repay itself. To access the loan immediately, apps charge users fees and/or ask for tips.
Proponents of the apps say they are a consumer-friendly way for people to get paid early in order to cover regular bills like child care and auto loans, which don’t always sync up with monthly or biweekly pay cycles — all for about the same price as an ATM fee.
Critics say they are similar to predatory payday loans, which can lead to consumers becoming dependent on borrowing and racking up fees.
Colorado lawmakers are considering capping the fees at $5 for a loan less than $75 and $7 for a loan more than $75 with no monthly cap. Connecticut caps the fees $4 per loan or $30 per month.
I want to hear from you: Do you or a friend or family member use these apps? What has your experience been like? What do you want state lawmakers to know as they consider how to regulate the app companies?
Email me at taylor@coloradosun.com with “Cash advance apps” in the subject line or share your thoughts via the form below. I’m looking forward to hearing from you.
