Hourly Wage Workers Steered From Payday Loans - OppLoans

Hourly Wage Workers Steered From Payday Loans - OppLoans Hourly Wage Workers Steered From Payday LoansInside Subprime: August 21, 2019By Aubrey SitlerHourly wage workers are largely underserved by traditional financial institutions, a major population that turns to alternative financial products like  payday loans. That’s why some consumer advocates and companies say they could benefit from faster payments.There are tens of millions of hourly workers across the country. They represent almost 60 percent of the nation’s total workforce.Early wage access companies and advocates say that getting cash quicker to employees is better for the worker. That’s because hours worked can change drastically from week to week, so cashflow can be a major obstacle. Most of those early workers also don’t have any extra cash for emergency expenses. Nearly three quarters of hourly workers dont have at least $500 in savings.And companies are responding to the rapidly growing market. Walmart and Visa have each partnered with payroll apps to offer employe es advance wages in exchange for a monthly or per-transaction fee.“These funds are for work that they’ve already done that they can use to navigate life’s unexpected events,” Walmart spokeswoman Michelle Malashock told Bloomberg Law. “When our associates are more financially secure, they are better able to do their jobs.”Walmart says about 350,000 of its employees regularly use their payroll app. The app has conducted more than 5 million transactions comprising about $900 million since the Walmart program was launched at the end of 2017.Despite a lot of positive feedback, some people are sounding the alarm against early wage access apps. Opponents of early wage access draw comparisons to payday loans,  especially because workers are charged fees for accessing their own money.To keep up with the ever-changing market, several states have started to regulate the early wage access industry. New York and California are some of the first states to do so.In California, a bill p assed by the state Senate recently limits early pay transaction fees at $14 per month and keeps those transactions to three to a pay period and half of a worker’s unpaid earnings.But, still, as Bloomberg stated, “Early pay providers in those states get around those limits by requiring users to sign agreements allowing them to automatically debit the fronted funds from their bank accounts on payday.”Learn more about payday loans  scams, and cash advances by checking out our city and state financial guides, including  Illinois, Chicago, Ohio, Texas, and more.Visit  OppLoans  on  YouTube  |  Facebook  |  Twitter  |  LinkedIn