In May, a video featuring a young woman named Brooklyn in heart-shaped glasses implored viewers to tell the California Department of Financial Protection and Innovation how important a company named EarnIn was to their day-to-day life.

EarnIn is part of a relatively new app-based industry that provides cash advances to people based on their wages or income, often calling itself “earned wage access.” The company wanted its users to send stories and comments to the department because it is poised to impose new first-in-the-nation rules on the industry.

EarnIn got its wish: More than 50,000 customers wrote in, said David Durant, general counsel at EarnIn, before the company decided to “slow down the encouragement.”

How earned wage access works

Software or apps from companies like EarnIn provide cash to workers based on how much they’ve earned, in advance of their payday. So, for example, you could get some of your pay daily rather than all of it every two weeks, minus fees or other charges. People turn to the apps when they need money for some groceries, a bill that’s due, or an emergency car repair before their wages land in their bank account.

The industry has two main business models. Some companies, such as FlexWage and DailyPay, plug into a company’s payroll system and are more like an employer-provided benefit. Other companies, including EarnIn and Brigit, offer smartphone apps that connect to your bank account, detect past wages, provide some amount of cash, and then...

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