The Unaffiliated | Why Democrats, consumer groups are at odds over Colorado payday borrowing
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A bipartisan effort to legalize and regulate so-called “earned wage access” services in Colorado has raised alarm from consumer protection advocates who say the products are a lot like payday loans under a new name.
Earned wage access services give workers an advance on their paycheck for a flat transaction fee — typically about $3, on cash advances that range from $35 to $200. The company providing the advance is then repaid directly out of the employee’s next pay check — either by their employer or out of the employee’s bank account through an automatic withdrawal.
House Bill 1020, sponsored by Rep. Sean Camacho, D-Denver, and Democratic Majority Leader Monica Duran of Wheat Ridge, would regulate EWA services for the first time in Colorado — something the bill’s supporters and detractors agree is needed.
Supporters say getting cash through an EWA isn’t quite the same as taking out a bank loan. EWA services don’t directly impact a consumer’s credit, and the money borrowed doesn’t accrue interest over time. The industry also argues it isn’t a loan because there’s no recourse — the debtor has no personal liability to repay the money owed if the withdrawal doesn’t go through. They also have a free option for those willing to wait; expedited charges only kick in if borrowers need money immediately.
But, consumer protection advocates say, they can still trap low-income borrowers in a cycle where they are seeking advances on their pay multiple times per month to pay the bills, only to have less left in their paychecks as early access fees accumulate.
“What we have seen is that it ends up being pretty costly for consumers,” Chris deGruy Kennedy, the president of the Bell Policy Center, a progressive think tank, told The Colorado Sun in an interview. “You do it once, and you paid $3.50, it’s hardly the end of the world. But you get into these cycles of paying to get paid.”
Moreover, because the companies are repaid so quickly, the Consumer Financial Protection Bureau found that the typical user is effectively paying over 100% annual percentage rate interest per transaction to borrow money for just a few days. Under Proposition 111, approved by 77% of Colorado voters in 2018, payday loans are limited to 36% APR.
At a hearing Monday, Camacho said the bill would simply put “guardrails” around a business practice that’s already happening as more and more people sign up for services such as Payactiv and DailyPay.
As introduced, it would require providers to be licensed with the Colorado Attorney General’s Office and file annual reports on their operations. It would also limit fees to $7 per transaction — a cap that Camacho said would be reduced to $4 through a future amendment — and require providers to cover bank overdraft fees if they trigger one by withdrawing more money than a consumer has in their account.
“EWA is a financial services game changer for low-income workers” who live paycheck to paycheck, Camacho said. “EWA gives Coloradans the flexibility to manage their bills.”
The backlash to the measure has pitted Camacho and Duran — a top House Democrat — against progressive groups like the Bell Policy Center and labor unions, including the Colorado AFL-CIO, who are seeking stronger consumer protections, including a monthly cap on transactions and a provision that would regulate EWA companies under the same laws that payday lenders already are.
“HOW IS THAT NOT A LOAN?”
The House Finance Committee delayed a vote until Thursday. But even as Duran and Camacho said they were trying to work out a compromise, they pushed back forcefully during Monday’s hearing against comparisons to payday lending.
“This isn’t a loan — this is accessing your own money that you have earned through your employer if you need it,” Duran said.
Industry groups, too, chafe at the characterization. They say EWA products are a consumer-friendly way for people to get paid early in order to cover regular bills like child care and auto loans, which don’t always sync up with monthly or biweekly pay cycles — all for about the same price as an ATM fee.
“If we go away, there are only worse options,” said Ryan Naples, a lobbyist with EWA firm DailyPay. “If we go away, the need does not.”
To critics, the ATM analogy falls flat. Paying an ATM fee once doesn’t increase the likelihood that you’ll do so again, said Andrew Kushner, senior policy counsel with the Center for Responsible Lending. But much like payday loans, earned wage access products can lead to consumers becoming dependent on borrowing.
“If you take $100 out of your paycheck today, pay that $4 or $5 fee, that’s $105 less in your paycheck in 10 days,” Kushner said. “That’s going to make you return to use the service again.”
House Democrats on the Finance Committee appeared divided Monday — not just over the bill, but over the very nature of what they were being asked to regulate.
“At the root, is this not somebody getting access to money they’re not yet entitled to, and it is then paid back?” said Rep. Yara Zokaie, a Fort Collins Democrat. “How is that not a loan?”
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The weird politics of zoning
A familiar dynamic played out at the statehouse last week, with Democrats advancing a bill that would relax local zoning restrictions on housing, and Republicans voting in lockstep against it.
But while those political battle lines have become the norm in Colorado lately, it’s worth noting that that hasn’t been the case historically — and in much of the country, it still isn’t.
The cover story in the latest Atlantic, for instance, blamed progressives — not conservatives — for killing the American dream of homeownership through restrictive zoning laws.
The origins of modern zoning, the article notes, can be traced in part to a grassroots backlash to businesses building industrial environmental hazards next to where people live. Fast-forward to the present day, the Atlantic reported, and studies have found that the more politically liberal a city is in California, the fewer housing permits it issues. Meanwhile, housing construction across the conservative Sun Belt has long been more abundant and more affordable than the more liberal coasts.
That history, however, does not necessarily translate to consistent ideological positions in state and local politics today.
In Texas, Republicans in the legislature have been pushing to limit local zoning powers and allow more housing, while Democrats have helped kill some bills in the name of local control. In California, Democratic Gov. Gavin Newsom has backed efforts to promote density, to the dismay of cities led by his own party. In Arizona, the effort to allow more housing has been bipartisan — although Democratic Gov. Katie Hobbs did veto one such effort saying it went too far in limiting local governments’ ability to regulate housing. Meanwhile, in Utah, Republican-led efforts have been stymied in part by Democrats siding with local governments.
Bottom line: The politics of zoning in 2025 are profoundly confusing. And Colorado is no exception.
At last week’s hearing on House Bill 1169, the conservative Common Sense Institute joined advocacy groups on the political left in support of a YIGBY, or “Yes In God’s Backyard” measure that would allow housing to be built on church-owned land — at its core, a free market solution to the state’s housing crisis.
But in the yearslong debate over land use in Colorado, Republicans have largely sided with local control and regulatory power, while Democrats have found themselves more aligned with free-market think tanks like the Common Sense Institute and the Mercatus Center.
Last year, only a handful of Colorado Republicans supported any of the efforts to override local zoning rules, including measures to allow accessory dwelling units and block occupancy limits. No Republican voted for Gov. Jared Polis’ signature land use bill promoting density near transit.
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COLORADO LEGISLATURE
The Democratic vacancy committee in Colorado Senate District 17 will convene March 18 to select a replacement for Sen. Sonya Jaquez Lewis, who resigned from the legislature last week amid an ethics investigation.
Katie Wallace, a longtime Democratic campaign and policy staffer whose resume includes stints with the Colorado Senate Democrats’ campaign arm and U.S. Rep. Yadira Caraveo, announced she will seek the appointment.
“I am running for State Senate to fight for middle and working class Coloradans, take on the climate crisis, and protect our civil liberties and democracy,” she said in a written statement.
Wallace has been endorsed by Reps. Karen McCormick, Kyle Brown and Javier Mabrey, as well as Sen. Judy Amabile.
Whoever is selected by the vacancy committee will serve two years before they must run for reelection to the seat.
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More from Michael Dougherty on his bid to become Colorado’s attorney general
We’re sharing more from our conversation with Boulder County District Attorney Michael Dougherty, who announced this morning that he’s running in 2026 to be Colorado’s next attorney general.
The following has been edited for clarity and length.
The Unaffiliated: Why attorney general and what do you hope to do if elected?
Michael Dougherty: I moved to Colorado in 2009 from New York City, where I was serving as a leader and prosecutor in the Manhattan District Attorney’s Office, to work for the Attorney General’s Office. Republican Attorney General John Suthers offered me a position heading up the DNA Justice Review Project to identify wrongful convictions. And then I had the honor of John quickly promoting me to head of the entire criminal justice section for the Attorney General’s Office. I’ve seen firsthand the important role the attorney general can and must play when it comes to public safety, consumer protection, protecting water and environment, but also standing up and fighting for Colorado. That’s something that I’ve always felt very passionate about — the role, importance and impact of the Attorney General’s Office — especially now, when the fight includes standing up and fighting for Coloradans when we’re being harmed by the Trump and Musk administration.
Unaffiliated: You obviously have a ton of criminal bona fides, but the Attorney General’s Office works mostly in the civil law space. What is your experience in that realm?
Dougherty: I have a ton of experience dealing with violent crime and public safety, criminal justice reform, consumer protection, financial crimes and environmental crimes. Those are all things that the attorney general plays a key role in. Over the last seven years, I’ve maintained a really strong partnership with Colorado Attorney General Phil Weiser, including bringing a civil action last year against Four Star Realty for misconduct they were engaging in against tenants. We were able to secure a $1 million settlement for all the victims. The Attorney General’s Office handles so many different areas of law. What’s really key in answering that question is leadership experience. I bring not only my experience from the District Attorney’s Office in Boulder and different work I’ve done around the state, but having served in the leadership of the Manhattan DA’s office, which at the time was 1,300 people.
Unaffiliated: How would you operate the Attorney General’s Office differently than Weiser has?
Dougherty: One of the things he’s done that would be a priority for me as a candidate, but then also as attorney general, is getting all around the state of Colorado. I appreciate how much of that Phil Weiser has done. There’s things we could build on at the Attorney General’s Office in terms of increasing the focus on public safety, making sure law enforcement is getting the training and support they need. I do think there’s more that we could be doing on the consumer protection side. And then environmental justice. Public corruption should be a priority of the Attorney General’s Office. Another priority would be starting up a conviction integrity unit to be available to the entire state, and the ongoing scandal and indictment involving the analyst from the state’s lab highlights why that unit would be so important.
Unaffiliated: One of the most high profile things Weiser has done as attorney general is prosecute the first responders involved in the death of Elijah McClain. How do you feel like that was handled?
Dougherty: I appreciated the dedication of the Attorney General’s Office to fighting for justice. Their staff worked incredibly hard. I was very honored to be able to hire the lead prosecutor from that case into my office in Boulder County. I think there were things that could have been handled better earlier on in that investigation and process. I say that because I’m always focused on whether people can have trust in the justice system and in government. And I think we’re at an all-time low in this country when it comes to that.
ENDOUGHERSMENTS
Dougherty is starting off with a list of endorsements from Democrats, including from Jefferson County District Attorney Alexis King, who was rumored to be interested in running for attorney general next year.
His other backers include state Sen. Judy Amabile, state Rep. Karen McCormick, civil rights attorney Siddhartha Rathod and former U.S. Attorney Bob Troyer.
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Corrections & Clarifications
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