District courts have wrongly sought to “shoehorn” earned wage access services into federal lending laws, trade groups for EWA providers told a U.S. appeals court weighing several EWA lawsuits.
The American Fintech Council and Financial Technology Association filed amicus briefs Friday in two cases pending before the U.S. Court of Appeals for the Ninth Circuit.
Federal judges in Seattle and San Francisco ruled last year that separate lawsuits against EWA providers Cleo AI and Empower Finance could proceed with claims based on the Truth in Lending Act and Military Lending Act, setting up the appeals. In August, San Francisco-based Empower rebranded as Tilt Finance.
Judges “have attempted to shoehorn EWA services” into those two laws, the AFC and FTA wrote in their identical briefs in both cases. “Those attempts should be rejected: the relevant text and context make clear that TILA and the MLA apply only to products that (unlike EWA) involve both a “debt”—i.e., a legal obligation to repay a sum of money—and finance charges.”
The earned wage access industry has surged over the past decade as fintech providers have offered workers a way to access their wages before a regularly scheduled payday. Dozens of EWA companies offer their service either through employers or directly to workers.
The complaints against Cleo AI and Empower have sparked at least four appeals pending this year before the 9th Circuit over complaints filed by active-duty military members. California-based EWA providers Dave and Kikoff have appealed two similar cases against them to the appeals court.
In four rulings from 2025, federal courts in California and Seattle found that EWA providers had provided military service members credit. As a result, the judges either denied motions to compel arbitration of the disputes or declined the EWA companies’ effort to dismiss the complaints.
The plaintiffs, active duty military members in the Army and Navy, have also argued that the Military Lending Act prohibits mandatory arbitration for EWA disputes.
The AFC counts multiple EWA providers as members, including Cleo, DailyPay and EarnIn. The FTA’s membership includes EWA firms Chime and MoneyLion.
In their briefs, the trade groups warned that affirming the district courts’ decisions “would render EWA in violation of federal lending laws and likely require EWA providers to stop offering the service or fundamentally restructure it to be less consumer friendly.”
If the 9th Circuit finds that EWA providers are lenders, “increased compliance costs and regulatory burdens will materially change the economics” of EWA services and “drive some providers from the market,” the groups wrote.
“Those that remain may be effectively forced or incentivized to act like lenders by imposing interest, charging penalties for nonpayment, and pursuing customers for payment, including through debt collectors and lawsuits — practices that EWA providers do not engage in today,” the FTA and AFC warned.
Two attorneys representing plaintiffs in the cases did not respond to messages Monday seeking comment on the amicus briefs.
In its brief to the appeals court last month, Empower noted that the Consumer Financial Protection Bureau had issued an EWA advisory opinion in December “persuasively rejecting the line of district court decisions” treating EWA payments as credit and expedited delivery fees as finance charges.
In a joint statement Friday, the FTA and AFC said that “federal courts should not disrupt the ongoing, nationwide EWA policymaking process by applying ill-fitting laws designed for credit to EWA products.”
“When courts misapply lending laws to non-loan products, they risk cutting off access to safe, transparent financial tools and putting consumers toward harmful alternatives,” AFC CEO Phil Goldfeder said in the statement.
