CCLP testifies in opposition of Earned-Wage Access Services

CCLP testifies in opposition of Earned-Wage Access Services

by Chris Nelson| Feb 20, 2026

Consumer Protections, Equity work, Family Economic Security, Income, Legislative Updates, Research and Policy Analysis, Testimony

On Thursday, February 19, 2026, CCLP Research & Policy Analyst, Chris Nelson, provided testimony in opposition to House Bill 26-1046, Regulated Earned-Wage Access Services, an industry-supported bill offering inadequate regulation of Earned-Wage Access providers, putting vulnerable Coloradans at risk of ongoing financial exploitation.

Thank you, Mr. Chair and Finance committee members,

My name is Chris Nelson, and I serve as the Research & Policy Analyst for the Colorado Center on Law and Policy, an antipoverty organization advancing the rights of every Coloradan. I'm speaking today in opposition to HB26-1046.

One thing that I think most people here can agree on is that too many Coloradans are struggling to make ends meet. Our organization looks to the Self-Sufficiency Standard, which calculates the income different types of families need to cover their basic needs, without any public or private assistance. The standard indicates that nearly one in four working families struggle to even meet their basic needs in Colorado.

So, we recognize that Earned-Wage Access (EWA) Products can be one tool used to bridge financial gaps in certain circumstances. However, we also need to recognize the risks these products carry and regulate them accordingly, to prevent the ongoing exploitation of financial desperation among those most vulnerable.

While we have concerns about both EWA models and their treatment under this bill, our greatest concerns are with "direct-to-consumer" products, as they are the most likely to be used by lower-income Coloradans. Research shows that consumers can become heavily reliant on these services. The Center for Responsible Lending found that over one-quarter of those who used EWA products in Colorado between January 2021 and June 2024 took out 25 or more of these loans each year. They also found that 75 percent of EWA consumers take out another EWA loan either the day of, or one day after, repaying a prior loan.

Additionally, it is common for consumers to use EWA products from multiple companies at the same time. Among the most frequently used EWA providers, roughly one of three Colorado users used three or more apps in the same month. Since there is no system in place to prevent consumers from promising the same wages to different providers, financially desperate consumers often stack these loans and find themselves trapped in cycles of repeated use, incurring fees, and falling deeper into debt.

This is why it's crucial to protect consumers by regulating direct-to-consumer EWA providers like payday lenders, capping the annual percentage rate at 36%, and ensuring that the same wages are not promised to multiple providers.

CCLP also has concerns over the allowance of tips under this bill. Deeper conversations could be had about tipping culture, but tips are intended to supplement the income of service workers, not offset costs of app development or other business expenses. I've heard repeatedly that tipping is optional. However, the U.S. Government Accountability Office has found a lack of transparency on tipping, which many consumers do not recognize as optional.

While we appreciate some components of this bill, it does not go far enough to protect financially vulnerable Coloradans and sets a dangerous precedent for EWA regulation. We respectfully request a no vote on HB26-1046. Thank you.

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