Earned Wage Advance (EWA) are small, short-term loans repaid by consumers on their next payday. Some EWA are integrated with employers, who verify that workers are owed wages. The advance (and fees) are then deducted from the employee's next paycheck. Other EWA are marketed directly to consumers, and collect repayment by debiting consumers' bank accounts on payday.
Even when EWA products are marketed as “free," companies often impose a fee to receive an immediate advance and ask for “tips” to complete a transaction. Fees and tips can be very high relative to the amount of the loan, which is compounded when consumers get stuck in a loop of repeated borrowing. |
