DFPI’s proposed Earned Wage Access rules would hurt workers like me

I am writing to express my concern about a rule that the California Department of Financial Protection and Innovation (DFPI) is considering on Earned Wage Access (EWA). The rule as drafted threatens to impose substantial barriers to accessing pay that I’ve already worked for by improperly classifying the service as a loan. I, along with thousands of other workers, have been helped by EWA to not rely on living paycheck to paycheck. With EWA, I’ve been able to pay my obligations on time, as well as save money that I otherwise would be paying in high fees or interest. Payday loans would be impossible to pay back with the high cost of living in my area and I would most likely fall into debt.

I am a medical assistant at a health clinic in Los Angeles and also work as a chef at Universal Studios. EWA is a safe harbor when unexpected expenses arise and ensures that I stay afloat not only for myself, but also for my mother. I am her sole caretaker as she battles stage 3 kidney failure and suffers from depression. Surprise medical expenses require swift access to funds, which can eat into my savings. EWA has been a lifeline that lets me buy groceries to fit my mom’s specialized diet, as well as get gas when funds are low due to emergency expenses all without the need of credit checks or incurring interest fees.

Now, the DFPI is considering regulating EWA as a loan or line of credit. I am currently still working on building my credit back up, meaning I’d now be met with extra fees and high interest rates when trying to get my wages before my paycheck. A recent study from Harvard found that this is the case for countless others as well, with 93% of EWA users having a credit score of less than 670. The state must prevent millions of workers like me from falling back into this reality by clarifying that access to my earned wages is not a loan.

I’ll never forget a road trip to Texas I was able to take with my mother years ago. She had wanted to take a trip out to Houston, Texas to visit her long-time friend, but financial constraints made it impossible. I decided it was time to make the first trip of our lives memorable and, with the help of EWA, I was able to afford gas and we made it happen. It was the first time I’d seen her taking pictures that I’m going to keep for the rest of my life.

Since I’ve been young, I’ve dreamt of starting my own business – years of savings through EWA has enabled me to finally reach that goal. In the next few months, I’ll be launching my welding business. Not only did having immediate access to my money help me build savings and avoid overdraft fees, I’ve been able to use EWA to buy business cards and tools in preparation for my first clients.

Modern expenses do not conveniently fall into paycheck cycles, so it doesn’t make sense why the state is attempting to stifle my options all while asserting that I lack the financial knowledge to manage my money. It is condescending and shows that regulators are out of touch with what everyday people need. I’ve managed to stay afloat and make responsible financial decisions, despite the challenges.

How can accessing my own wages that I’ve already worked for be considered a loan? It doesn’t make sense why I should pay to receive my money that is rightfully mine on my timeline. That’s why I like EWA, which doesn’t make me pay for access to the money I’ve earned.  DFPI – please reevaluate your proposed rules. EWA has been a lifeline to me and millions of other workers like me, and we can’t stand to lose what Earned Wage Access has offered us.

Jorge Ruiz works as a medical assistant at a clinic and chef at Universal Studios in Los Angeles.