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Colorado alleges EarnIn Cash advances topped 1,000% APR. Posted: September 9, 2026 Experts share their tips and advice on BadCredit.org, with the goal of helping subprime consumers. Its articles follow strict editorial guidelines. Key takeaways. Cash advances with alleged APRs topping 1,000% are at the center of Colorado's lawsuit against EarnIn. Colorado Attorney General Phil Weiser filed the lawsuit, accusing EarnIn of illegal, high-cost lending, deceptive practices, and violations of Colorado's payday lending and consumer credit laws. Through the lawsuit filed Aug. 27, Colorado is seeking money back for affected consumers, civil penalties, and a court order stopping EarnIn's alleged unlawful practices. But the court has not awarded those remedies, and the state's allegations remain unproven. EarnIn, a financial technology company, offers consumers advances called "Cash Outs" through its website and mobile app. The company says the service can "make any day payday" by allowing consumers to access money they have already earned. "EarnIn... acted as a third-party lender and charged illegally high rates." - Colorado Attorney General Phil Weiser But Colorado alleges that EarnIn operated as a third-party lender through its direct-to-consumer Cash Out product, which the lawsuit says violated multiple state lending and consumer protection laws. "EarnIn was not working with companies here in providing consumers with funds but acted as a third-party lender and charged illegally high rates, used deceptive design strategies to extract some charges, and trapped consumers in repeat borrowing," Weiser said. EarnIn maintains that Cash Outs are earned-wage access products, not loans. EarnIn describes Cash Outs as nonrecourse. In other words, its user agreement says the company has no legal or contractual claim against consumers who do not repay the advances. EarnIn also says it does not use collections or report unpaid Cash Outs to credit bureaus. But consumers must resolve an outstanding payment before they can receive another Cash Out. BadCredit.org reached out to EarnIn for comment on the lawsuit but did not receive a response by press time. Colorado says EarnIn APRs topped 1,000%. EarnIn requires customers to authorize automatic repayment from their bank accounts and may make additional debit attempts if the first one fails, according to the complaint. EarnIn says consumers can receive their money in one to three business days at no cost. Those who want it faster can pay a Lightning Speed fee, which varies by transaction. EarnIn says expedited funds can generally arrive within minutes. Colorado argues that tips and Lightning Speed fees should count as finance charges when calculating the cost of the advances. Colorado's math puts EarnIn's APRs at several hundred percent and, in some cases, above 1,000%. The state generally caps payday loan APRs at 36%. The lawsuit alleges that EarnIn exceeded that limit, failed to provide required loan disclosures, and operated without a supervised lender license. EarnIn says Cash Outs aren't loans. EarnIn disputes Colorado's classification of Cash Outs as loans. It says Lightning Speed is optional and consumers can choose a free transfer. Tips were also described as optional when the company collected them in Colorado. The complaint alleges that many customers got caught in a cycle of high-cost borrowing and reborrowing. One Colorado customer allegedly took out 1,151 Cash Outs and paid $4,038.50 in Lightning Speed fees. The advances carried an average calculated APR of 1,421%. Another Colorado customer allegedly took out 1,033 Cash Outs, paying $8,561.22 in tips and fees at an average calculated APR of 1,539%. 0.0% of EarnIn transactions in Colorado allegedly included a tip or Lightning Speed fee In just over two years, EarnIn made more than 3.1 million Cash Outs to 56,778 Colorado consumers, according to the complaint. The company advanced approximately $300 million and collected more than $16 million in tips and Lightning Speed fees between January 2023 and July 2025. That works out to about 56 transactions for each Colorado consumer, on average, though some returned to the service far more often. And more than 92% of those transactions came with either a tip or an expedited-transfer fee. The lawsuit says that brought the average calculated APR to nearly 388%. The complaint says EarnIn continues offering Cash Outs in Colorado, although the company stopped collecting tips from Colorado consumers in July 2025. Colorado says EarnIn made 'no tip' hard to find. The lawsuit alleges that EarnIn's app gave customers a push toward tipping while making the no-tip option harder to find. Customers who did not want to tip allegedly had to tap through the app numerous times to find that option. Along the way, messages such as "pay it forward" made it sound like their tips would help other customers, Colorado alleges. The money actually went to EarnIn, according to the complaint. EarnIn has since stopped using some of the language and imagery cited in the lawsuit. It also stopped collecting tips from Colorado consumers in July 2025. But the attorney general alleges that the earlier designs were unfair and deceptive and violated Colorado's consumer protection laws. Colorado consumers who believe EarnIn treated them unfairly can contact the Colorado Attorney General's Office. Senior Credit Writer Lucy Lazarony is a veteran financial journalist with nearly 30 years of experience covering credit, credit cards, and consumer finance. Widely recognized for her ability to demystify complex financial topics, Lucy has established herself as a trusted authority in the credit space. She previously served for seven years as a staff writer at Bankrate.com, where she contributed in-depth reporting, trend analysis, and consumer-focused guidance on credit cards and lending products. Her work has since appeared in top-tier publications, including Investopedia, Next Avenue, the National Endowment for Financial Education (NEFE), and Credit.com, reinforcing her reputation as a leading voice in personal finance journalism. Lucy holds a bachelor's degree in journalism from the University of Florida, where she developed the investigative and reporting skills that continue to shape her career. Her excellence in storytelling has been recognized by the Florida Press Club, earning awards for Education Reporting (2016) and Arts News Reporting (2015). Across her career, Lucy has helped millions of readers make informed financial decisions, offering clarity on credit scoring, responsible credit card use, debt management, and consumer rights. Her work remains a cornerstone resource for individuals seeking transparent, accurate, and actionable financial information.

Pay advance company that backed efforts to change Colorado lending laws now faces AG lawsuit. EarnIn maintains its earned-wage access products are not loans - and shouldn't face payday restrictions. PUBLISHED: September 6, 2026 at 4:00 AM MDT UPDATED: September 6, 2026 at 4:02 AM MDT For the past two legislative sessions, an emerging financial technology company that offers a different kind of paycheck advance has backed efforts to carve its industry out of Colorado's regulations on payday loans and lending. But so far, the effort hasn't been successful. And now the company, EarnIn, is facing a lawsuit filed by the Colorado Attorney General's Office under the same laws it was lobbying to change. The lawsuit, filed Aug. 27 against EarnIn, is the first of its kind in Colorado. It accuses the company of violating state law by charging effective interest rates for pay advances that were, on average, 10 times higher than those allowed for payday loans. Lawyers from the attorney general's office allege that EarnIn used deceptive practices to rake in tips. They contend that its "earned-wage access" products - which, in exchange for a fee, provide instant, small-dollar payments to customers - should be treated like loans. If the lawsuit succeeds, it would refute the claims by the industry, and some lawmakers, that the payments aren't a loan but a new type of financial product that needs its own bespoke regulations. The industry spent more than $500,000 on lobbying in recent years in Colorado, alongside thousands more in campaign donations, as it backed efforts to create that proposed oversight framework. In a statement, Attorney General Phil Weiser said the California-based EarnIn had acted "as a third-party lender and charged illegally high rates, used deceptive design strategies to extract some charges, and trapped consumers in repeat borrowing." The lawsuit targets one type of earned-wage access product, which is directly marketed to consumers and is accessible through smartphone apps. Customers receive payments as an "advance" on their wages, usually in small dollar amounts that are then repaid automatically to the company - typically when customers' paychecks hit their bank account. The suit does not challenge a similar product that's offered directly through employers. Between January 2023 and July 2025, EarnIn loaned roughly $300 million to Colorado consumers and collected more than $16 million in combined tips and fees for "lightning speed" transfers, the attorney general's office wrote. (EWA companies also often offer free transfers that are delivered a few days later.) When weighing those fees as interest, the lawsuit alleges, the loans carried an average annual interest rate of 388%, far above the 36% threshold that voters set for payday lenders in 2018. A $3.50 fee for a $50 advance, for instance, translates to an annual interest rate of 365%. Many of EarnIn's loans went to repeat customers: Fewer than 57,000 Coloradans took out more than 3.1 million loans between early 2023 and summer 2025, the suit alleges. The filing also describes three customers who each took out hundreds of loans and paid thousands of dollars in fees during that period, with the fees amounting to average annual interest rates that ranged from 1,421% to more than 2,200%. In a statement Wednesday, David Durant, EarnIn's general counsel and chief legal and regulatory officer, said the company "firmly disagreed" with the lawsuit's allegations. He said the lawsuit "seeks to take away a financial tool that nearly 200,000 Coloradans have relied on, while protecting the overdraft fees and late payment penalties Coloradans turn to when they can't wait for payday." "EarnIn's Cash Out product is not a loan. Our customers access a portion of the pay they've already earned, with no obligation to repay, no interest, no mandatory fees, and no advance on future earnings," Durant wrote. Growing legal challenges, new laws. Colorado's lawsuit joins a growing list of legal challenges to the earned-wage access industry. Attorneys general in New York, Minnesota and Washington, D.C., have filed similar lawsuits in recent years, as have private attorneys elsewhere. As that legal opposition has mounted, state legislatures have debated - and, in some cases, passed - laws that carve earned-wage access services out of existing loan regulations. The EWA companies argue, as Durant did, that what they offer isn't a loan at all and should be regulated using specifically crafted rules. Critics have countered that the products are just a modern spin on payday lending and should be treated as such. While a consumer can technically avoid repaying the loan without penalty, EarnIn has direct access to a customer's bank account to secure repayment; that access can be difficult to revoke, the state's lawsuit alleges. As with other EWA companies, a customer cannot use the app again until they've repaid the service. Ninety-two percent of customers either paid a fee or left a tip - which, the suit alleges, were intentionally crafted to be difficult to avoid. In one case, it took 13 clicks to reduce a suggested $11 tip to $0, the AG's office wrote. When factoring in tips and fees, customers repaid 99.23% of the money owed to EarnIn, according to the lawsuit. In its bid to set its own regulatory framework, the industry has backed legislation in Colorado that would've required EWA companies to receive licensure before operating in the state. The latest bill, in 2026, would have applied both to direct-to-consumer products and to those provided through employers, and it would have effectively exempted EWA services from the more stringent requirements levied against payday lenders. As a result, the measure also would have made moot much of the state's forthcoming lawsuit against the company, said Andrea Kuwik of the Bell Policy Center, which opposed the legislation. Indeed, EarnIn knew that the attorney general was investigating it as the company and others like it lobbied lawmakers, the lawsuit indicates. In January 2025, shortly before lawmakers first debated an EWA bill, Weiser's office agreed to hold off on suing EarnIn, legal filings show. Durant, the company's general counsel, said that EarnIn had worked for a year with Weiser's office and that the office "preferred a legislative solution." "The legislation we backed last session would have licensed EWA providers, put them under state supervision, and capped what providers can charge," Durant wrote. "Supporting more oversight of our own product is the opposite of trying to avoid it, and it's the same position we've taken in states across the country." Lawrence Pacheco, a spokesman for the AG's office, said that the prior agreement not to sue EarnIn was unrelated to the legislative debate. $500,000 spent on lobbying. Amid that debate, EarnIn and four other companies spent more than $500,000 on lobbying in Colorado in the past two years. EarnIn also donated $7,500 to outside spending committees backing Republican and Democratic candidates in late 2025 and early 2026, part of more than $41,000 in donations from four of the companies to spending committees supporting candidates from both parties and to lawmakers who sponsored the legislation. All of that money was donated starting in late 2024, weeks before lawmakers first debated the industry's regulations. The companies' lobbying did not pay off. In a repeat of the 2025 debate, this year's bill cleared an initial committee vote only to die before reaching the House floor. Rep. Sean Camacho, a primary sponsor of the EWA bills, said he was aware the attorney general's office was "looking into certain companies for certain practices" ahead of the legislative debate earlier this year. That's why "we wanted to run this bill, because we wanted to make sure best practices" were enshrined in state law, he said. "What we were trying to do is protect working people by having a comprehensive framework in which EWA operates," Camacho, a Denver Democrat, said. "We understand people need access to capital and traditional lending sources. This is a new thing in the marketplace, and from our view, it was unregulated and needed some work." But consumer-protection groups, which opposed the legislation, had long maintained that direct-to-consumer EWA services could always be regulated under existing rules. The lawsuit affirmed that the companies have "really predatory, deceptive practices that should be following Colorado's payday consumer protections," said Kuwik, Bell's policy and research director. She said the legislature may need to set specific rules for employer-integrated EWA products, meaning those pay advances that are offered as part of an employer's benefits package. But she said the state's lawsuit made clear that direct-to-consumer advances, like EarnIn's, should be treated like payday loans. "The suit that they brought... just has all of (that) specific information about EarnIn that, again, just really validates everything that we've been saying," Kuwik continued. The lawsuit seeks a ruling that would prohibit EarnIn from violating state lending laws, and it also seeks refunds for excess charges and other penalties and fees.