By Grace Gedye, CalMatters

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 California 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.

Consumer advocates say some of these apps are essentially high-tech payday loans, and can lock workers into a cycle of debt and reborrowing. State regulators collected data from earned wage access companies and found that the fees and tips customers pay add up to costs similar to those of payday...

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