On September 8, 2025, the U.S. District Court for the Western District of Washington denied an earned wage access provider’s motion to dismiss a putative class action brought by a servicemember. The plaintiff alleged that the company’s cash advance product violated the Military Lending Act (MLA) and the Truth in Lending Act (TILA).

The servicemember alleged that the company promoted its advances as fee-free and interest-free while requiring a monthly subscription and imposing expedited transfer fees. The complaint further claimed that these charges resulted in triple-digit APRs similar to payday loans and that repayment practices, including automatic debits and repeated withdrawal attempts, worsened financial strain for users.

In its motion, the EWA provider argued that its “non-recourse advances” do not count as credit. The court disagreed stating that, among other reasons, the EWA provider mandates that consumers authorize the company to automatically debit their bank accounts for repayment, a clear indication that they expect to be repaid. The company also moved to arbitrate the suit, arguing its users agreed to arbitrate any disputes when they signed up with its services. The court rejected arbitration, ruling that the MLA applies to the case and accordingly precludes arbitration against covered servicemembers.

Putting It Into Practice: Courts across the country are increasingly allowing TILA claims against earned wage access providers to proceed, raising the possibility that these products may ultimately be classified as credit (previously discussed here). The order adds to this trend by concluding that subscription and expedited transfer fees can plausibly be treated as finance charges. Earned wage access providers should evaluate product structures, disclosure practices, and arbitration provisions in light of these developments.