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Illustration: Sarah Grillo/Axios

When is a loan not a loan? When it's a "nonrecourse cash advance."

Why it matters: By advancing money while calling the interest a "fee" or a "tip," companies like Earnin and Wagestream can skirt regulations that cap interest rates.

What's happening: Earnin is an app that fronts users as much as $100 per day. When you sign up, you hand over your bank account information and tell Earnin when you get paid. Earnin automatically debits your bank account for the amount it lent (they would say "advanced"). This week, the company said it would start helping users negotiate down their health care bills.

  • Earnin users can leave an optional tip for its services. As the New York Post reported, and Axios confirmed, the recommended tip can work out to an interest rate of 469%. If a loan charged that much, it would be illegal in many states, including New York.
  • U.K.-based Wagestream, which closed a $51 million funding round this week, works on a similar model, but with a flat fee of about $2 for each use of the service.
  • "Merchant cash advance" companies provide a similar service for small businesses, offering upfront cash in exchange for a cut of future credit card sales. They, too, claim to simply charge a fee, rather than an interest rate. But they act like extremely aggressive lenders. And now they're being investigated by the FTC.

The bottom line: In principle, your credit isn't damaged, and these companies can’t come after you, if they can’t recoup their money. Plus, the CEOs of both Earnin and Wagestream tell Axios that their companies aren't lenders, because they are giving you money you've already worked for. But then: If it’s already your money, it’s unclear why you would need to pay for it.

Go deeper

Broncos and 49ers the latest NFL teams impacted by coronavirus crisis

From left, Denver Broncos quarterbacks Drew Lock, Brett Rypien and Jeff Driskel during an August training session at UCHealth Training Center in Englewood, Colorado. Photo: Justin Edmonds/Getty Images

The COVID-19 pandemic has thrown the NFL season into chaos, with the Denver Broncos' quarterbacks sidelined, the San Francisco 49ers left without a home or practice ground and much of the Baltimore Ravens team unavailable, per AP.

Driving the news: The Broncos confirmed in a statement Saturday night that quarterbacks Drew Lock, Brett Rypien and Blake Bortles were identified as "high-risk COVID-19 close contacts" and will follow the NFL's mandatory five-day quarantine, making them ineligible for Sunday's game against New Orleans.

Updated 5 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: WHO: AstraZeneca vaccine must be evaluated on "more than a press release."
  2. Politics: McConnell temporarily halts in-person lunches for GOP caucus.
  3. Economy: Safety nets to disappear in DecemberAmazon hires 1,400 workers a day throughout pandemic.
  4. Education: U.S. public school enrollment drops as pandemic persists.
  5. Cities: Surge in cases forces San Francisco to impose curfew — Los Angeles County issues stay-at-home order, limits gatherings.
  6. Sports: NFL bans in-person team activities Monday, Tuesday due to COVID-19 surge — NBA announces new coronavirus protocols.
  7. World: London police arrest more than 150 during anti-lockdown protests — Thailand, Philippines sign deal with AstraZeneca for vaccine.

Tony Hsieh, longtime Zappos CEO, dies at 46

Tony Hsieh. Photo: FilmMagic/FilmMagic

Tony Hsieh, the longtime ex-chief executive of Zappos, died on Friday after being injured in a house fire, his lawyer told the Las Vegas Review-Journal. He was 46.

The big picture: Hsieh was known for his unique approach to management, and following the 2008 recession his ongoing investment and efforts to revitalize the downtown Las Vegas area.