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On August 27, 2026, the Colorado Attorney General and the state’s Uniform Consumer Credit Code Administrator announced a lawsuit against an earned wage access (EWA) provider, alleging that its direct-to-consumer cash advance product constitutes high-cost payday lending in violation of the Colorado Uniform Consumer Credit Code, the Deferred Deposit Loan Act, and the Colorado Consumer Protection Act.
The complaint alleges that the provider characterized its advances as access to wages already earned rather than loans, while requiring consumers to authorize repayment from their bank accounts on or around payday. According to the state, the provider made more than 3.1 million advances totaling approximately $300 million to nearly 57,000 Colorado consumers between January 2023 and July 2025. The complaint alleges that tips and expedited-transfer fees resulted in an average APR of approximately 388%. Specifically, the state alleges that the provider:
- Made unlicensed and high-cost loans. The advances allegedly qualify as supervised loans and payday loans under Colorado law, subjecting the provider to licensing requirements, rate limitations, and other lending restrictions.
- Failed to provide required credit disclosures. Because the provider allegedly did not treat the advances as loans, the state claims consumers did not receive required disclosures concerning finance charges and APRs.
- Used “dark patterns” to encourage tipping. The complaint alleges that the app used default tip amounts, repeated prompts, and additional steps for selecting a $0 tip to steer consumers toward making purportedly voluntary payments.
- Made misleading pricing representations. The state alleges that advertising promising same-day access with no interest or hidden fees was misleading because consumers generally had to pay an expedited-transfer fee to receive funds immediately.
The state seeks injunctive relief, consumer restitution, disgorgement, civil penalties, attorneys’ fees, and other relief.
Putting It Into Practice: The lawsuit highlights the continuing divide over whether and under what circumstances EWA products should be regulated as credit. Several states have adopted EWA-specific frameworks that expressly exclude compliant products from traditional lending laws, as previously discussed (here and here). Colorado’s complaint instead focuses on the substance of the product, including repayment practices, fees, tipping design, and the provider’s ability to obtain repayment. EWA providers should review product structures, fee and tip practices, repayment mechanisms, disclosures, and state licensing requirements as states continue developing different approaches to EWA regulation.
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