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Early Wages for a Fee Seen as Better Than Payday Loans in Calif.

May 14, 2019, 9:31 AM

California is on track to become the first state to regulate early wage access companies in a bid to encourage an industry seen as an alternative to payday loans.

The state Senate passed a bill May 13 to put consumer protections and other guardrails in place on an industry that doesn’t fit neatly into existing regulatory frameworks for lending or money transmission. Pay advance companies work with employers to offer consumers the ability to receive a portion of their paychecks early in exchange for monthly or per-use fees.

The number of pay advance startups is growing after the largest U.S. ...