US agency says apps that let workers access paychecks before payday are providing loans

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.