Colorado Attorney General Philip Weiser and Uniform Consumer Credit Code Administrator Martha Fulford have sued Activehours, Inc., doing business as EarnIn, alleging that EarnIn’s direct-to-consumer “Cash Out” earned-wage-access product is a consumer loan subject to Colorado’s lending laws.

The complaint, filed on August 27, 2026, in the Denver District Court for the City and County of Denver, alleges that EarnIn made more than 3.1 million transactions to Colorado consumers between January 2023 and July 2025, advancing approximately $300 million and collecting more than $16 million in tips and expedited-transfer fees. It challenges the substance of these transactions and fees, the processes by which they were assessed, and the company’s failure to obtain a supervised lender license.

Asserting that in substance EarnIn’s transactions are loans and the tips and expedited transfer fees are interest or finance charges, the state calculates that the transactions between January 2023 and July 2025 carried an average APR of 387.69%, violating the 12% rate limit on consumer loans in Colorado’s Uniform Consumer Credit Code (UCCC) as well as the 36% rate limit in Colorado’s Deferred Deposit Loan Act (DDLA), Colorado’s law applicable to payday loans.

The state also asserts other violations of the UCCC (including the failure to provide disclosures and the failure to obtain a supervised lender license) and DDLA (including the failure to comply with written agreement and disclosure requirements as well as the failure to provide a right to cancel and the failure to obtain a supervised lender license).

Attacking the processes by which EarnIn’s supposedly optional tips and expedited-transfer fees are assessed, the state alleges that EarnIn designed its mobile application with “roadblocks” that made it difficult for consumers to decline a tip and used messaging and visual cues designed to encourage consumers to pay. The complaint characterizes these practices as unfair and deceptive “dark patterns” under the Colorado Consumer Protection Act.

Colorado is not alone in scrutinizing EWA products, but the states have taken sharply different approaches. As of March 2026, 12 states had enacted EWA-specific laws or regulations. Some expressly provide that compliant EWA is not a loan or credit; others have imposed a separate regulatory regime; and California has subjected income-based advances to registration and regulatory oversight.

The federal picture is equally unsettled. The CFPB’s current position is that a narrowly defined category of “Covered EWA” is not credit under Regulation Z. That position is important, but it does not resolve the Colorado case because the CFPB’s advisory opinion addresses federal Truth in Lending Act issues and expressly does not determine whether an EWA product is a loan under state law. 

The Colorado lawsuit therefore presents an important test of how states without EWA statutes may treat direct-to-consumer EWA products that involve fees, tips, and automated repayment from a consumer’s bank account. For additional information, see our more detailed discussion of the complaint available here.