Earned Wage Access: An Innovation in Financial Inclusion?

They point to several areas of concern: the lack of fee transparency, the lack of a cap on total fees, the potential for fees to stack up and result in APRs similar or even greater than those of traditional payday lending products, and the potential for overuse leading to a cycle of dependency that leaves workers worse off than when they started. [...] The reforms after the 2008 financial crisis included the 2010 creation of the CFPB along with the Dodd-Frank Wall Street Reform and Consumer Protection Act (which also transferred rulemaking authority under the Truth in Lending Act (TILA) to the CFPB). [...] The paucity and the content of the existing studies point to the need for future research and highlight several questions. [...] The researchers found that Minu users on average have about 12% lower probability of leaving the company in the next pay cycle compared to the baseline of non-users (controlling for demographic variables).60 The researchers also found that the strength of this relationship may differ depending on the age of the worker, job rank, and intensity of use of EWA. [...] whether the impact is the result of the tools themselves, the synergistic effect of the tools in combination with EWA, or that users are paying attention to and using the tools because they were marketed alongside EWA.