FOR IMMEDIATE RELEASE: April 16, 2025
CONTACT: Raquel Villagra, New Economy Project, raquel@neweconomynyc.org
“We applaud New York State Attorney General Letitia James for taking strong action against MoneyLion and DailyPay, financial technology (“fintech”) lenders that target working New Yorkers with triple-digit interest, debt-trap payday loans. Operating through smartphone apps, these and other so-called Earned Wage Access (EWA) companies market high-cost, short-term loans as “free,” while hitting users with deceptive “expedite fees” and coercive “tips” that function as disguised interest—resulting in effective APRs averaging over 330%.
“Our state’s usury laws, which make it a felony to charge more than 25% APR on a loan, have long protected New Yorkers and kept predatory payday lenders out of the state. But EWA lenders have made a mockery of these protections, deliberately structuring their products to evade our laws and exploit New Yorkers. Last year, the Consumer Financial Protection Bureau affirmed that EWA products are, in fact, loans.
“The economic toll of these fintech payday loans is staggering—and growing. A New Economy Project analysis estimates that since 2019, payday loan apps have siphoned more than $500 million from New Yorkers—primarily low-income workers—through hidden fees, coercive tipping schemes, and deceptive practices that sidestep our state’s strong interest rate limits.
“The U.S. Government Accountability Office found that EWA apps are primarily used by people earning less than $50,000 annually, meaning these fees have disproportionately burdened low-wage workers already struggling to make ends meet amid New York’s affordability crisis. Like brick-and-mortar payday lenders, EWA companies prey on low-income people and communities of color, extracting usurious profits while driving them deeper into debt.
“New York has a proud and longstanding history of protecting workers from the financial instability and fee drain caused by payday lending. The Attorney General’s action strikes a critical blow against financial predators. New York must enact policies that build, rather than extract, wealth from low-income New Yorkers and communities of color—such as a living wage and access to fair, affordable credit through public banks and New York’s robust network of community development financial institutions (CDFIs).”
The following groups endorse this statement:
AARP
Action for a Better Community (ABC)
Alternatives FCU
Banana Kelly Community Improvement Association
Brooklyn Cooperative Federal Credit Union
Center for New York City Neighborhoods
Chhaya
Citizen Action of New York
Community Service Society of New York
Consumer Reports
CUNY SLU Community and Worker Ownership Project
Empire Justice Center
Episcopal Diocese of Long Island
Ethical Humanist Society of Long Island
Genesee Co-op Federal Credit Union
Long Island Housing Services, Inc.
Long Island Progressive Coalition
Lower East Side People’s Federal Credit Union
Mobilization for Justice
New Economy Project
New York Public Interest Research Group (NYPIRG)
New Yorkers for Responsible Lending
NYS Community Equity Agenda
Retail Wholesale & Department Store Union
Social Equity Empowerment Network (SEEN) NY
Small Business Majority
Strong Economy for All Coalition
TakeRoot Justice
WESPAC Foundation, Inc.
Westchester Cooperative Network