By Monica Duran and Sean Camacho

Across Colorado, too many families are doing everything right, yet still cannot make ends meet every month. Inflation has driven up the cost of groceries, rent, childcare and gas, while wages remain unchanged. For nearly 40%of Coloradans living paycheck to paycheck, just one unexpected expense — a car repair, a medical bill, a broken furnace — can send a household into crisis. This was further compounded for the hundreds of thousands of Coloradans who suddenly lost access to critical benefits during the longest government shutdown in history.

We can’t always predict what’s around the corner, and emergencies don’t wait for payday. That’s why we are sponsoring House Bill 1046: so hardworking Coloradans have safe and responsible options to access their own wages in case of an emergency and don’t have to turn to predatory products that trap families in cycles of debt.

The reality is many workers are paid biweekly or even monthly, but bills don’t arrive on that schedule. When cash runs short between paydays, too many Coloradans are forced to choose between buying groceries or keeping the lights on. 

In the past, predatory products like payday loans exploited this gap, with APRs exceeding 400%. We are proud Colorado rightly put an end to payday lending. We also have a responsibility to ensure working people have well-regulated, transparent and worker-friendly options to manage their finances.

House Bill 1046 establishes a robust, consumer-centered regulatory framework to enable Coloradans to use Earned Wage Access (EWA) services. EWA services allow workers to access a portion of their wages they have already earned, before payday, when they need it, for free or for a fee of around $3.50 for an immediate transfer. This is similar to the fees consumers are charged for immediate fund transfers by their banks or apps like Venmo or Apple Pay, and is far less than most ATM fees.

Our bill establishes a clear regulatory framework, requires licensing for all providers, increases transparency and provides strong consumer protections that go beyond what currently exists at the state or federal level. House Bill 1046 specifically prohibits interest charges, late fees, credit checks, or credit reporting and requires a free option. These services are also non-recourse and allow consumers to cancel EWA services at any time without a cancellation fee. Providers are also prohibited from attempting to recoup unpaid outstanding proceeds.

This approach isn’t untested. A dozen other states, including California and Maryland, have passed legislation to regulate EWA to maintain access to this benefit, and Colorado’s bill includes some of the strongest consumer protections in the country.

Today, more than 1,000 employers in Colorado — from school districts to health care providers to military bases — offer EWA as a benefit. More than 150,000 Colorado workers have used it to cover unexpected expenses.

That’s because for too many Coloradans, the only other options are far from ideal — if they’re even available. An estimated 20% of workers in the state are underbanked, meaning they lack access to traditional financial services such as banks, standard loans and credit cards. For those who can get a credit card, consumers pay an average of $25 to $45 in interest on a $100 purchase. Bank overdraft fees are around $35, and payday loans charge exorbitant rates and fees almost impossible to repay. The reality is many Coloradans also don’t have a family member or friend to ask for financial assistance. 

When you compare those options to a free advance on your own wages from an EWA service, the choice is clear. Without responsible EWA options, families facing a short-term cash crunch may be pushed back toward the very products we know cause harm. 

At its core, House Bill 1046 is about dignity and having the freedom and the right to access wages you have already earned. To stand on your own two feet and control your financial future, without risking debt. We know what financial independence means. Both of us, one a survivor of domestic abuse who was forced into becoming a homeless single mom to escape their abuser, and the other a veteran and child of hardworking parents who often did not have the financial resources to make ends meet, connect deeply with this concept — as we believe many Coloradans do.

Our lived experiences are why this policy matters to us, and we are proud to carry this bill. Colorado led the nation by ending payday lending. Now we have the opportunity to continue to lead by enacting smart financial safety net and consumer protection policies that ensure workers have access to the wages they’ve earned, on fair terms, with real protections.

Majority Leader Monica Duran, D-Wheat Ridge, represents District 24 in the Colorado House. Sean Camacho is an officer in the U.S. Air Force Reserve, an attorney, and represents Denver’s House District 6.