In Minnesota, two-thirds of users of the apps — known in the industry as “earned wage access” apps — experienced increased overdraft fees after borrowing money. The average user overdrafted their bank account more than 9 times in the three months after their initial payout, according to the analysis by the Center for Responsible Lending. Rather than charging exorbitant interest rates like payday lenders, the apps make money off of instant transfer fees and “tips.” The Center for Responsible Lending advocates a federal crackdown on payday lenders and similar businesses, including earned wage access apps.
