Earned Wage Access Law Impacting CT Consumers

A new survey found Connecticut residents are feeling the pinch of a state law passed last year, blocking earned wage access, services allowing workers early access to a portion of their wages before payday.

In the survey, 67% of people said being able to get some of their pay early helped them afford everyday expenses like groceries, housing and transportation.

Jennifer Dineen, associate professor in residence of public policy at the University of Connecticut, said while some are going without essentials, others are taking on debt to pay bills.

"They might take out a payday loan or an advance," Dineen pointed out. "Some people mentioned they might pay the bill late, which can often add fees. They might use a credit card. And while some people say they would pay that before the interest kicked in, most said they would not be able to."

A General Assembly bill would bring back earned-wage access. Senate Bill 1396 received support but has sizable opposition. Some people worry allowing earned-wage access will lead to payday lenders taking advantage of people. However, the report noted more people have been using payday loans since earned-wage access ended than when it was allowed.

While more than 91% of people surveyed were aware of earned-wage access ending, they said they have been unable to find another way to make ends meet. More people said they have fallen behind on their bills.

Dineen stressed most of the people using these services were families, using the money to help them get by.

"They weren’t looking to finance 'extras,'" Dineen emphasized. "They really were looking to pay their rent. Food and groceries were the largest mentioned reason, or transportation costs which again is crucial for being able to continue working."

Connecticut is one of many states regulating earned-wage access. Major concerns from the National Conference of State Legislatures and consumer advocates are about the fees, how often people use the service and whether they should be subject to loan disclosure requirements.

This story written and reported by Edwin J. Viera of Public News Service, a statewide news service for Connecticut.