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Experts warn against the high costs of applications providing access to employee salaries

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NEW YORK (AP) – When 37-year-old Anna Branch cut her work hours in 2019, she suddenly noticed ads for an app called EarnIn.

“You know how they use you – the algorithms – like they read your mind,” Branch said. “The ad said I could get up to $100 this week and pay it back the next pay period.”

Branch, who worked as an administrative assistant in Charleston, South Carolina, downloaded the app and added a suggested “tip.” The money helped cover her expenses until payday, when the app took the $100 she borrowed plus a $14 tip. Five years later, Branch said she still uses the app, even once a month.

EarnIn is one of several corporations providing this service, billed as access to wages. Apps provide staff with small, short-term loans between paychecks in order that they pays bills and meet each day needs. On payday, the user repays the money from his salary. According to Datos Insights, between 2018 and 2020, transaction volume tripled from $3.2 billion to $9.5 billion.

While wage access apps have been around for over a decade, the pandemic and its aftermath have increased their popularity. Some apps have accessible, human names – like Dave, Clio, Albert and Brigit – while others suggest financial freedom: Empower, FloatMe, FlexWage, Rain. According to the Government Accountability Office, the typical user earns lower than $50,000 a 12 months and has experienced two years of high inflation.

Anna Branch poses for a portrait on Friday, March 29, 2024, in Chattanooga, Tenn. (AP Photo/George Walker IV)

Proponents of the app say they assist people living paycheck to paycheck manage their funds and avoid having to resort to more burdensome options like payday loans or overdrafts. But some analysts, consumer advocates and lawmakers say these apps are literally payday loans in a brand new technological package and will trap users in a never-ending cycle of borrowing that eats away at their earnings.

Critics also say that borrowing costs are usually not all the time transparent. Many of them charge monthly subscription fees, and most charge mandatory fees for fast fund transfers, although there will likely be a free option to receive funds inside one to three business days. The average APR on a loan repaid inside 7 to 14 days was 367%, which is a rate comparable to payday loans, according to data report by the Center for Responsible Lending.

Adding to the confusion is the undeniable fact that some employers have incorporated payroll apps into their payrolls, offering different costs, models and fee structures. For example, Amazon and Walmart don’t all the time charge employees for early access to earned wages outside of regular pay periods.

“They suck you in”

Sheri Wilkins, 60, who works as a house health aide in College Station, Texas, said she has been using the app since 2020 and feels “money dependent.”

The health care skilled who employs Wilkins offers Every dayPay, and Wilkins typically uses the app to submit his each day pay amount ($10.60 per hour) twice a day – once after each of two shifts for which he’s paid individually. He pays a fee of $3.49 every time, for a complete of $7 per day. At $35 per week, the app takes up greater than three hours of her wages per week, or a day and a half of work monthly.

“They trick you into having this money,” Wilkins said. “It’s great to have it – buy groceries and cigarettes – but when it comes time to pay, it only costs $50 or $60.”

Wilkins said she didn’t know the app offered a free option to send money inside one to three days. She said the app all the time directed her to the quick transfer option.

A Every dayPay spokesperson said in a press release that the app offers two no-fee options for many users and a 3rd, which they described as a “small ATM-like fee.”

Matt Bahl, who researches workplace issues for the Financial Health Network, said the growth of the wage access industry is a symptom of widespread financial uncertainty.

Sheri Wilkins talks about her experience using the Every dayPay app outside the clubhouse at her apartment complex in College Station, Texas, Tuesday, March 26, 2024. (AP Photo/Sam Craft)

“This is to help address short-term liquidity challenges,” he said. “But if these challenges are the result of insufficient revenue, it will not solve them. You cannot “technically” get out of material deficits.

Tips

Andrew Lewis, 32, of Bucks County, Pennsylvania, said he uses EarnIn partially to cover unexpected expenses. Lewis works as a process technician at an electronics manufacturing company and said he sometimes uses the app as often as weekly to get money for gas or do something his child or wife needs.

Lewis often pays the “tips” that the apps suggest, he said, but he “doesn’t like them very much,” partly because of the messages.

“Tips help us advocate for millions of members like you,” the EarnIn app says. The company says it uses suggestions to keep the option free.

“I feel a little guilty about how it sounds,” Lewis said.

In 2021, the California Department of Financial Protection and Innovation found that “users often feel pressured to leave (tipping) due to pressure tactics used, such as… claiming that tips are used to support other vulnerable consumers or for charitable purposes.” .

In its report, the department found that Earned Income Access borrowers take out a mean of 36 loans a 12 months. Across 5.8 million transactions, 73% of consumers paid a “tip,” averaging $4.09 per tip. For three dozen loans, that is $147 a 12 months in suggestions alone.

Convenience and no credit checks

Penny Lee, head of industry group the Financial Technology Association, says more individuals are turning to access to wage earners as a convenience that permits them to compensate for “the gap between what a consumer needs to be able to spend… and their wage cycle.”

As with Buy Now and Pay Later loans, the apps don’t perform credit checks and don’t bill you as interest-free. Unlike payday loans or automotive loans, where borrowers pledge their vehicles as collateral, app users do not have to take care of balloon payments, black marks on credit reports or the possibility of losing their automotive in the event that they default. Supporters also say the apps don’t sue or send debt collectors after unpaid debts.

According to FTA, the average cost of using the Earned Wage Access app is between $2.59 and $6.27. The corporations say the fees are comparable to ATM fees and cheaper than overdraft fees that individuals pay in the event that they don’t manage to pay for of their checking account to cover the bill before a withdrawal. The average overdraft fee is over $25 and will be as high as $36.

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However, in its report, the Center for Responsible Lending said that users of the app saw a 56% increase in overdrafts.

A key moment for regulation

Many states have moved to regulate access to wage earners by limiting fees for these products. The industry supports federal laws currently pending in Congress that might preclude regulation of apps under the Truth in Lending Act.

When Connecticut passed a law limiting the fees apps could charge, EarnIn stopped operating in the state. When asked why, EarnIn CEO Ram Palaniappan said it was not “economically viable.”

Both California and Hawaii are currently drafting laws to limit wage access fees.

Rep. Bryan Steil, R-WI, one of the supporters of the federal bill, said it “will ensure that workers across the country can continue to benefit from these services, which will help them better balance work and pay.”

But Hawaii state Sen. Chris Lee, a Democrat who introduced the wage access laws in the state Senate, called rates of interest of greater than 300 percent a “modern day payday program.” Lee said he would really like to see more transparency and protections for staff.

Lauren Saunders, an attorney at the National Consumer Law Center, says this can be a key moment for regulation.

“If people used (access to earned wages) to cover one emergency expense a year, that would be better than being charged overdraft fees, payday loans or car equity loans,” she said. “But being better than terrible predatory products shouldn’t be the bar.”


This article was originally published on : thegrio.com
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After second defeat for Model of the Year, Anok Yai tells British Fashion Council: ‘I don’t want it anymore’, sparking debate

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When Anok Yai was photographed in “The Yard” at Howard University’s 2017 homecoming ceremony, a fashion star was born. After agents began clamoring to find the identity of the then 19-year-old beauty and competing to sign her, Yai became a global sensation; inside the first six months of her profession, she became the first Sudanese model and the second black model, after Naomi Campbell, to open a Prada fashion show. In the seven years since then, covers and accolades have flown steadily, including her first American Vogue cover in 2020, which led to Yai being hailed as one of this generation’s “best.”New supers” — as in supermodels — via Models.com, who awarded her the title of “Model of the Year – Woman” in 2023.

Although Yai has enjoyed success on runways around the world, one accolade has eluded her, and now she says she now not wants it. On Monday as host of the British Fashion Council Fashion Awards 2024Yai was nominated again for the council’s Model of the Year award, her second nomination in as a few years. This is the second time Yai has been omitted from this honor, which recognizes “the global influence of a model who has dominated the industry over the past 12 months,” the organization explains. “With influence that extends beyond the runway, the Model of the Year has made an outstanding contribution to the industry, earning numerous editorial and advertising campaigns throughout the year.”

After losing in 2023 to Paloma Elsesser, the first full-size model to win the award, this 12 months the honor once more passed to Alex Consani, the first transgender winner in the award’s history. Heartily congratulating my friend and colleague from the industry on her groundbreaking achievement partially decided by audience votesYai didn’t hassle hiding her disappointment.

“Alex, I love you and I’m so proud of you,” she wrote X, early Tuesday morningadding: “British Fashion Council, thank you, but I don’t want it anymore.”

How Some she accused Yai of having sour grapes over her subsequent losses, others, etc Teen Vogue editor Aiyana Ishmael, they argue that the model’s disillusionment and self-defense should simply be considered a mirrored image of her humanity.

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“When we ask ourselves why we want Yai to accept her loss calmly, we must also ask ourselves if this is a response to society’s expectations for Black women,” Ishmael wrote, quoting writer and executive coach Janice Sutherland comment on stereotypes that deal with the “perceived strength and resilience” of Black women. “While these characteristics are undoubtedly empowering, they should not be used as a reason to deny Black women space to express vulnerability, pursue changing aspirations, or seek the support they need without judgment,” notes Sutherland.

“I remember in 2019 when a photographer called me a cockroach,” she said already deleted thread on X. Feeling unable to react while others on set treated the insult as a joke, Yai recalled feeling as if “I can not react the way I want because ultimately I’m young, I’m alone, I’m black… whatever I do , will impact me, my family and other black models.”

With this in mind, Yai’s disappointment at not being recognized for her achievements can simply be taken literally, relatively than interpreted as an try and undermine the achievements of Consani, the winner of Model of the Year. Yai said the same thing second postwriting: “If you saw the effort Alex put in; You’ll understand how proud I’m of her. But Alex may be proud and I may be exhausted at the same time. “It doesn’t diminish how much we love each other.”

Kerry Washington is celebrating a

As a member of a marginalized community, Consani undoubtedly empathizes. Actually, she she used her acceptance speech on Monday night to thank “black trans women who have truly fought for the space I am in today” and to thank “Dominique Jackson, Connie Fleming, Aaron Rose Phillips and many others” for enabling her own rise in the industry.

“Now, more than ever, there needs to be an important conversation about how to truly support and uplift each other in this industry, especially those who have been treated as nonessential,” Consani continued. “Because change is more than possible, it is necessary.”

Change is slowly but surely happening, as evidenced by the strong black representation amongst this 12 months’s Fashion Award winners. Winning designers included Grace Wales Bonner (British menswear designer) and Priya Ahluwalia (New establishment menswear), while special awards went to A$AP Rocky (BFC cultural innovator) and Issa Rae (Pandora change leader). Photographer Tyler Mitchell also received recognition, winning the Isabella Blow Award for fashion creator.

As for Yai, she may now not seek approval from the British Fashion Council, but she need look no further than The Yard to search out it. The supermodel returned to the spot where she was found during Howard’s 2024 “Yardfest” Homecoming celebration, much to the delight of students in attendance.

“I’m a black trans woman and there’s not a lot of representation,” McKenzie Cooper-Moore, a junior marketing major and emerging model, told Howard’s newspaper: Hill. “She is one of the top models today, she is a black woman and she or he is uncompromisingly black. That’s really cool. I actually admire her.


This article was originally published on : thegrio.com
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Prince Harry downplays divorce rumors as he discusses the public’s fascination with his marriage to Meghan Markle

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Surprise – Meghan Markle and Prince Harry usually are not attached at the hip. Recently, the Duke and Duchess of Sussex have made separate public appearances.

This week, Markle made a rare solo appearance at the Paley Honors fall gala in Los Angeles to support the godfather of the couple’s daughter, Princess Lilibet, Tyler Perry, who was honored that evening. Meanwhile, on the East Coast, Prince Harry appeared at the New York Times’ DealBook Summit 2024, where he spoke about his fascination with the society surrounding his relationship.

During the conversation, moderator Andrew Ross Sorkin asked Prince Harry how he deals with the constant attention on every thing he and his wife do, noting that articles about the couple’s separate appearances on each coasts have been circulating throughout the Internet.

“Is this normal for you? When the article comes out – she’s in California, you’re in New York – they say, “Well, what’s going on with these two, right?” In a way, is it good that he is so interested in you?” – Sorkin asked.

“No, this is certainly not a great thing. Apparently we now have bought or moved home 10 (or) 12 times. Apparently we have been divorced perhaps 10 (or) 12 times. So it’s just an issue of, “What?” – Prince Harry replied, laughing.

As the youngest child of Princess Diana and King Charles, the Duke of Sussex is not any stranger to life in the highlight. Having seen how the excessive media attention directly affected his mother and even played a task in her death in 1997, Prince Harry noticed how life in the public eye modified his relationship with the press.

“I have been experiencing something of life since I was a child. I have seen stories written about me that were not entirely based on reality. I saw stories about my family members, friends, strangers and all sorts of people,” he explained. “And I think when you grow up in that environment, you start to question the validity of the information, but also what other people think about it and how dangerous it can be over time.”

Ultimately, Prince Harry said he ignores false narratives online because he expects the media and social media trolls to twist and twist his words at any time.

I feel sorry for the trolls the most,” he continued. “Their hopes just get built and built they usually say, ‘Yes, yes, yes, yes, yes,’ after which it doesn’t occur. That’s why I feel sorry for them. Really.

“The Duke and Duchess have now developed as individuals – not just as a couple,” a royal source explained. according to People magazine. “The Duke seems focused on his patronage work and the Duchess seems focused on her entrepreneurship.”

Meghan Markle and Prince Harry help Tyler Perry celebrate his birthday

This article was originally published on : thegrio.com
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Nia Long and Larenz Tate Have the ‘Love Jones’ Reunion We’ve Been Waiting For, But There’s an Elephant in the Room

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Those of us who’ve been waiting to seek out out whether Nina Mosley and Darius Lovehall, the black and sexy leads of the 1997 cult romantic comedy “Love Jones,” ended up together will finally get our wish this holiday season. Leading actors Nia Long and Larenz Tate – still black and still hot, we’d add – teamed up for Walmart’s “Love Jones”-themed holiday ad, featuring variations Dionne Farris’ now iconic song “Hopeless” as the opening soundtrack.

In the Walmart Holiday x Love Jones spot titled “Give a Gift That Shows You Get It,” the gift-giving begins early when Nina (Nia) finds a Walmart box on the steps of her house and unwraps it to seek out a record player. Confirming that the gift is indeed from him, Darius (Larenz) repeats certainly one of his lines from the hit movie in which he asks, “Do you mind if I play something for you?”

Whether the poet Darius (Larenz) remains to be attempting to be “the blue in (Nina’s) left thigh… trying to become the funk in (her) right” stays unknown, but nostalgia hits when the two start dancing to the Isley Brothers classic: ” Stay in the groove with you, part 1.” To ensure this moment doesn’t go undocumented, a young woman, presumably the daughter of the fictional couple, appears at the door to capture the moment on camera, clearly taking a cue from her photographer mother, Nina. It’s an uplifting return to a black cinema classic that a lot of us would love to revisit in the era of sequels.

That said, the elephant in the otherwise romantic room is Walmart. The big-box retailer dampened a number of holiday spirit this yr with its post-election announcement that it was “phasing out” most of its DEI initiatives, which is essentially being interpreted as a preview of comparable industry policies to return under the incoming Trump administration. Among the now abandoned initiatives are a $100 million racial equity center launched in 2020 in response to the police killing of George Floyd, in addition to prioritizing 51% of BIPOC, LGBTQ, veterans and women products. – reported the Houston Herald..

“It’s after the DEI programs end that the marketing department will definitely (know) how to change the narrative,” commented one YouTube viewer. “This ad won’t let me forget that Walmart discontinued all DEI efforts,” one other commenter said.

Walmart clearly still sees value in attracting black consumers, as evidenced by the Gen X-friendly spot starring Tate and Long (notably, the spot was produced likely months before the election and subsequent DEI rollback). The company was sensible to think about our annual purchasing power it’s estimated to eclipse $1 trillion by 2030, in response to McKinsey & Co.

“Serving Black consumers can help brands better serve customers, especially as the country’s increasingly diverse demographics continue to grow,” said Shelley Stewart III, McKinsey senior partner and global leader for repute and engagement.

To that end, while many viewers welcome the return of Darius and Nina (some have even called for an official, if long overdue, sequel), the dichotomy between promotion and Walmart practice has not gone unnoticed.

“Walmart needs to rethink its DEI policies,” a YouTube commentator said. “We play it in our faces, using characters and actors we love!”

Kerry Washington is celebrating a

This article was originally published on : thegrio.com
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