California regulators can’t relate to living paycheck to paycheck

OPINION – As a single mother, “kitchen table conversations” with fellow single mothers are vital. We understand one another – the struggles, the fears, and the joy. We also yearn for the same hopes and dreams – to provide the best possible life for our children. While our talks cover an array of topics, one theme is always constant – money.

I work a full time job as a dental office administrator in downtown LA. Every morning I drop my son off at school at 8 am and then head right to work. Even before the pandemic, I was experiencing significant financial hardship – and the pandemic only exacerbated my situation. I wish I could save something for my son’s future, and that is still my goal. However, like many Californians, I’ve been living paycheck to paycheck for several years now.

I first heard about earned wage access (EWA) during a kitchen table conversation with a friend. EWA is a relatively new financial tool that allows workers to access their money as they work. Instead of waiting for a biweekly paycheck, EWA gets you access to your earnings as needed. The best EWA offerings have no mandatory fees or high interest rates, and don’t impact your credit scores. EWA providers like EarnIn offer a product that does not push users into debt. For me, EWA enables me to cover essential or unforeseen expenses without the burden of high fees or interest to make up for later. It’s a simple, safe, and essential financial resource for everyday people. The day I submitted my proof of employment to EarnIn, was the day life got a little easier for my son and me.

If our elected officials would take the time to speak with individuals who actually use EWA, I have no doubt they will understand just how essential, helpful and empowering it is for so many of us.

For the past four years, EWA has helped keep my family afloat. I am thankful that EWA works as it says it would with no catch. Truth be told, I have no idea where my son and I would be without it. EWA is truly a lifeboat.

The California Department of Financial Protection and Innovation has recently proposed a rule (PRO 01-21) that as written, would eliminate EWA services with no mandatory fees as we know it and love it today. I understand that the DFPI is trying to protect consumers, but they are doing the polar opposite with this rule. This past year, my son and I both got sick. I maxed out on sick days, leaving a few of my paychecks for 8 days of work rather than 10. EarnIn kept my lights on.

If our elected officials would take the time to speak with individuals who actually use EWA, I have no doubt they will understand just how essential, helpful and empowering it is for so many of us. Californians want regulations and policies that advance financial inclusion, yet PRO 01-21 as written will set financial inclusion back.

This is an opportunity for California constituents and the government to have a dialogue so our beloved state can be a leader in financial inclusion policy, rather than the other way around. As a Californian working mother, I am urging the DFPI to revisit the proposed rule. EWA works, and meets the needs of my family and thousands of other families across California.

Michelle Alarcon is a mother, Californian, and EWA user and advocate