CT’s earned wage access bill leaves me with none

I am devastated by the fact that the Connecticut Banking Department has created a reality that fails to provide citizens with safe options to protect their financial well-being. The recently introduced legislation, HB 5140, on a service called earned wage access (EWA) unfortunately doesn’t fully address the issue and needs to be amended and fixed.

For years, I had used EWA to receive the wages I’d already worked for before my next paycheck. The service gave me the ability to support a family of six while paying my rent, my car note, insurance, utility bills, as well as any other expenses that came up.

I make a decent salary, but the reality is that all of these expenses don’t line up evenly between my biweekly pay periods. It’s almost impossible to spend the same amount of money between the two halves.

Last year, my tires blew out on the freeway. Because I’d already budgeted out how I planned to spend my current paycheck, I had no extra funds to pay for a tow truck and was left stranded on the side of the road. Using EWA, I was able to withdraw a small amount of my earned income to call a tow truck and get my car off of Interstate 84.

Unfortunately, state regulations introduced by the Department of Banking at the beginning of the year now restrict access to EWA. The safe app I was using no longer offers this service. This is a huge problem for me.

As a result, this month I had to dip into my rent savings to pay for an oil change. Now, I will be short on my light bill unless I scramble to borrow $50 from a friend in the next few days.

In January, I spoke at a policy forum hosted by the state legislature’s Black & Puerto Rican Caucus where they called on constituents to voice their concerns on issues that mattered to us and recently I testified before the legislature’s Banking Committee on this topic. At both hearings I brought up the devastating effect that the state’s new rules on EWA were having on my financial well-being.

After more than a month of being left out to dry without EWA, the state legislature introduced a bill, HB5140, that still qualifies the service as a loan, restricting its access unless the service is employer-provided.

My employer does not partner with any EWA provider to allow me to access my earned wages. I don’t understand why my employer should have the power to referee my financial independence. This service should be available to all workers — regardless of their employer’s decision to allow it.

Recently I testified at a Banking Committee hearing for the proposed legislation, where multiple ‘consumer advocacy’ groups testified against EWA, claiming the service was disguised to trick customers into paying high and hidden fees. Well, I’m not fooled.

Upon doing some research into a couple of the consumer advocacy groups, namely the Center for Responsible Lending (CRL) and AARP, I learned that they are funded by the same institutions that have high fees and offer expensive loans.

As one of two customers who testified and who have actually been impacted by the new rules and proposed legislation, I urge the legislators who will vote on this bill to listen to the tens of thousands of families that have had the rug pulled out from under them, instead of the lawyers and ‘consumer advocates,’ to create responsible regulations that will truly protect our financial well-being.

The proposed legislation, as written, puts workers in a box of what financial options we have and must be amended or killed. I’ve felt hopeless without any affordable alternatives to turn to since these new rules went into place, and I strongly urge the Banking Committee and the entire General Assembly to amend and fix HB 5140 to address the need for this product for consumers.

Tominica Beach lives in Shelton.