D.C. Attorney General Sues EarnIn Over Deceptive Marketing Practices
Snapshot: Washington, D.C., Attorney General Brian Schwalb has filed a lawsuit against fintech company EarnIn, accusing it of misrepresenting its "cash out" product as earned wage access (EWA) while allegedly operating as a high-interest loan scheme. The lawsuit underscores the growing scrutiny on EWA products, particularly their marketing practices and fee structures.
At the center of the allegations is EarnIn’s “Lightning Speed” feature, which provides instant access to wages for fees ranging from $3.99 to $5.99 per transaction. Schwalb’s office claims these fees, coupled with optional “tips” that default between $1 and $14 per transaction, often amount to an effective interest rate exceeding 300%—far above D.C.’s legal cap of 24%.
The AG’s office criticized EarnIn for burying fee disclosures in fine print and misleading users with advertisements promising “no fees” and “no interest.” Since 2016, around 20,000 D.C. residents have used EarnIn for over a million transactions, often without realizing the high costs involved, the lawsuit alleges.
EarnIn operates without the required lending license in D.C., according to the AG’s office, which is seeking to permanently ban the company from the district, alongside restitution and penalties. Former D.C. AG Karl Racine, now counsel for EarnIn, defended the company, claiming the lawsuit misunderstands the product’s value to consumers.
Critics like Lauren Saunders of the National Consumer Law Center commended the AG’s actions, labeling EWA products as “high-cost lending in disguise.” Conversely, Phil Goldfeder, CEO of the American Fintech Council, argued that EWA products are not loans and play a vital role for underbanked consumers.
The debate reflects broader regulatory tensions. While the Consumer Financial Protection Bureau recently stated that EWA payments charging fees could be classified as loans under U.S. law, fintech advocates insist these tools provide essential financial flexibility for underserved communities.
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