We called EarnIn the safest cash advance app in this category back in March. “Least predatory model,” we said. Voluntary tips, no guilt-tripping, the closest thing to fair in a crowded field of apps that charge payday-loan money for payday-loan speed. Colorado’s Attorney General just filed a lawsuit that says we — and EarnIn’s own marketing — had the tipping model backwards.

On Aug. 27, 2026, Colorado Attorney General Phil Weiser sued Activehours Inc., which does business as EarnIn, alleging the company ran an unlicensed high-cost lending operation disguised as a tip-based earned-wage-access product. Weiser filed alongside Martha Fulford, the state’s Uniform Consumer Credit Code Administrator, in Denver District Court. This isn’t a shot across the bow from some think tank. It’s a state regulator with subpoena power saying, in a formal complaint, that the app we ranked “safest” was operating without the lending license Colorado requires for exactly this kind of product.

Quick Verdict

Who’s suing	Colorado AG Phil Weiser and UCCC Administrator Martha Fulford, filed Aug. 27, 2026 in Denver District Court
The core claim	EarnIn’s “Cash Out” product is an unlicensed high-cost consumer loan, not a fee-free wage advance
Scale alleged	3.1 million transactions to Colorado consumers, Jan. 2023–July 2025; ~$300 million advanced; $16M+ collected in tips and expedited-transfer fees
The APR math	State calculates an average 387.69% APR across those transactions — above both Colorado’s 12% UCCC cap and the 36% payday-loan cap
The dark-pattern claim	App allegedly required multiple taps to decline a tip, buried the $0 option, and used guilt-based prompts like “pay it forward” — tips went to EarnIn, not other users
What this changes for us	We’re pulling our “safest” ranking pending the outcome — see below

What Colorado Actually Alleges

Strip away the legal language and the complaint makes three claims that matter to anyone using this app right now.

First: EarnIn’s Cash Out advances are loans, full stop, regardless of what the company calls them. Colorado’s UCCC defines a loan broadly enough to catch products that charge for the time value of money even when the fee is dressed up as optional. The state says EarnIn’s tips function exactly like interest — they’re the actual price of borrowing, not a gratuity.

Second: the price is high. The state’s own math puts the average APR across the 3.1 million Colorado transactions at 387.69% — comfortably past the 12% cap Colorado sets for consumer loans under the UCCC, and past the 36% ceiling under the state’s voter-approved payday lending law too. That’s not a rounding difference. That’s the same order of magnitude as the payday lenders EWA apps have spent years insisting they’re nothing like.

Third — and this is the part that should sting anyone who read our earlier review — the “voluntary” tip wasn’t really voluntary. The complaint alleges EarnIn built the tipping flow with what the state calls dark patterns: extra taps and screens standing between a user and the $0 option, a default tip pre-selected, and messaging like “pay it forward” implying the money helps other users when it went straight to EarnIn. Our March review claimed the app let users “tip $0 multiple times without restricting access or guilt-tripping” them — a claim that, in hindsight, took EarnIn’s interface at face value instead of scrutinizing how the tip flow was actually built. Colorado’s complaint says the guilt-tripping was the point — just built into the interface instead of a customer service rep.

Is Earned Wage Access a Loan?

It depends on the state, and that’s exactly the problem this lawsuit is about. Earned wage access (EWA) products let workers draw against wages they’ve already earned before their scheduled payday, typically for a flat fee, an optional tip, or both. Nine states had passed laws explicitly declaring qualifying EWA products are not loans as of last year, provided they meet conditions like fee caps and a no-cost option; three more joined in early 2026. Colorado hasn’t passed one of those laws — and its AG is arguing that in the absence of a carve-out, existing lending law applies, tip or no tip.

That patchwork is the whole story here. The same EarnIn product that might be structured to comply with, say, Missouri’s EWA statute is now being sued as an unlicensed loan in Colorado. As of March 2026, 12 states had enacted EWA-specific laws — meaning 38 states, including Colorado, had none. If you’re using one of these apps, the legal category your advance falls into changes at the state line, and most users have no idea which side of that line they’re on.

This Isn’t EarnIn’s Industry’s First Lawsuit

Colorado didn’t invent this legal theory. New York Attorney General Letitia James sued MoneyLion in April 2025 over nearly identical allegations — that its Instacash advances were payday loans in disguise. The state’s complaint cites a specific $50, ten-day advance where fees and a pressured tip worked out to an APR exceeding 350%, and says similar fee structures pushed annualized rates as high as 750% on other transactions. That case is still working through a venue dispute as of this writing. We flagged the MoneyLion suit in our cash advance apps roundup back in March and told readers to avoid the app “until the NY AG lawsuit shakes out.” EarnIn was the app we pointed people toward instead.

Two state AGs, two different EWA providers, the same core allegation: an optional-sounding fee that functions as interest, wrapped around a product marketed as fundamentally different from a payday loan. That’s a pattern, not a coincidence, and it’s worth remembering the next time an app’s pricing page uses the word “optional.”

Why the CFPB Isn’t Going to Bail You Out Here

Historically, a federal agency stepping in with guidance or enforcement might settle questions like “is this a loan” faster than 50 states litigating it state by state. That’s not the environment right now. The CFPB has spent 2026 under direct pressure to loosen fintech oversight rather than tighten it, and the bureau’s own watchdog just confirmed the practical cost of that shift.

The Federal Reserve and CFPB’s joint Office of Inspector General reported on Aug. 26, 2026 that workforce and contract cuts left roughly 17,100 consumer complaints requiring manual routing, with about 22% pending for more than 30 days. Translation: if you file a complaint about a cash advance app with the CFPB right now, there’s a real chance it sits in a queue rather than getting worked. State AGs — Colorado, New York — are doing the enforcement the federal backstop isn’t currently positioned to do quickly. That’s not a knock on any individual regulator. It’s just where the actual leverage sits in September 2026, and it’s why this Colorado case, not a federal rulemaking, is the thing to watch.

What This Means If You Use EarnIn

EarnIn hasn’t been found liable for anything yet — this is a complaint, not a verdict, and the company will get to respond in court. But a few things are true regardless of how the case resolves:

1. Check what you’re actually tipping, every time. Don’t trust a pre-filled amount. Screenshot the fee screen if you want a record of what you agreed to, and look specifically for how many taps it takes to get to $0.
2. Do the annualized math on your own advances. We walked through this calculation before — add up the tip plus any expedite fee, divide by the advance amount, multiply by 365, divide by days until repayment. If a $100 advance with a $5 tip repaid in five days looks fine as a dollar amount, it’s still functioning like a 365% loan.
3. Don’t assume “least predatory” is a permanent label. We’re revising that call. Brigit’s flat monthly subscription and Dave’s transparent fee schedule don’t carry the same tipping-dark-pattern allegation, which is a meaningfully different risk profile right now, whatever their other tradeoffs.
4. If you’re using EarnIn every pay period, the app isn’t the actual problem. A recurring cash-flow gap needs a budgeting approach built for tight months, not a repeat advance — lawsuit or no lawsuit, repeat borrowing at any APR above 300% compounds against you.

What Happens Next

Colorado is asking the court to stop EarnIn’s direct-to-consumer Cash Out product from operating in the state without a license, refund the fees and tips collected, and impose civil penalties under the UCCC and the state’s payday lending act. None of that happens quickly — expect motions, an EarnIn response disputing the loan characterization, and probably months before a substantive ruling. The Colorado complaint explicitly doesn’t touch EarnIn’s employer-integrated product, only the direct-to-consumer app most people actually download.

Watch for two things in parallel: whether other states follow Colorado’s theory the way Colorado followed New York’s, and whether Congress’s Earned Wage Access Consumer Protection Act — which cleared a House committee vote in July — actually reaches a floor vote. That bill would set a single federal standard for what counts as a loan versus a wage advance. Right now nobody has one, and that ambiguity is exactly what let EarnIn market a fee structure as a tip for three years before a regulator formally disagreed.

The Bottom Line

We got this one wrong by trusting the interface EarnIn showed us over the incentive structure behind it. A $0 tip button that exists is not the same as a $0 tip button that’s easy to find, and Colorado’s complaint — 3.1 million transactions, $300 million advanced, an average APR north of 387% — is a much bigger sample size than any individual user could ever evaluate. Until this resolves, treat every EWA app’s “optional” fee as a number you calculate yourself, not one you take from the app’s own framing. That includes the ones we’ve recommended. Especially the ones we’ve recommended.

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Lawsuit filing details and allegations from the Colorado Attorney General’s Aug. 27, 2026 press release and reporting by American Banker, Consumer Finance Monitor, and the Longmont Leader. MoneyLion lawsuit details from Banking Dive. State EWA law count from American Banker’s regulation tracker. CFPB complaint-backlog figures from the Federal Reserve/CFPB Office of Inspector General’s Aug. 26, 2026 report. This is an active lawsuit — allegations are unproven claims, not findings of fact, and EarnIn has not been found liable for anything as of publication.