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NY Coalition Blasts Wall Street’s Latest Scheme – Underwriting Payday Loans to Low-Wage Workers

Press Release

FOR IMMEDIATE RELEASE: August 27, 2025

CONTACT: Andy Morrison, New Economy Project, andy@neweconomynyc.org

NY Coalition Blasts Wall Street’s Latest Scheme: Underwriting Payday Loans to Low-Wage Workers

Labor and Economic Justice Groups Demand Passage of the End Loan Sharking Act (A4918/S1726)

A broad-based coalition of New York organizations released the following statement in response to Wall Street’s securitization deal with DailyPay, a financial technology (or fintech) company recently sued by the NYS Attorney General for making illegal high-interest loans to struggling New Yorkers:

“We are alarmed by Wall Street’s securitization deal with DailyPay—yet another scheme to exploit low-wage workers and extract wealth from communities—and demand that New York policymakers pass the End Loan Sharking Act. Recently, the investment banks Barclays, Citi, and Morgan Stanley closed a $200 million deal backed by fees DailyPay extracts directly from workers’ paychecks—at effective interest rates averaging nearly 400% APR, according to the Attorney General.

“By packaging usurious fees into investment vehicles, Wall Street is not only profiting off working people’s distress; it is also fueling the proliferation of predatory fintech loans. Like subprime mortgage-backed securities that led to the foreclosure crisis and ensuing financial crash, this deal represents another disturbing step in the financialization of everyday life. As the first securitization deal of its kind involving fintech payday loans, the deal demands scrutiny and immediate action by New York’s elected officials—before it becomes normalized.

“DailyPay is one of several companies that claim to offer ‘earned wage access’ (EWA) services, but in reality make short-term loans to low-wage workers at effective interest rates that far exceed New York’s usury cap. Like other payday lenders, EWA companies prey on low-income people and communities of color, driving them deeper into financial instability while fueling racial wealth inequality. The companies have already siphoned over half a billion dollars in predatory fees from New Yorkers’ paychecks since 2019, according to New Economy Project.

“We call on the state legislature to swiftly pass the End Loan Sharking Act. This bill would make clear that New York’s existing usury laws apply to all lenders, no matter what deceptive marketing tactics the industry tries next. Additionally, local governments must enact policies that build, rather than extract, wealth from low-income people and communities of color, including ensuring a living wage for all and expanding access to fair, affordable credit through public banks and community development financial institutions.”

The following groups endorse this statement:

  • Action for a Better Community (ABC)
  • Banana Kelly Community Improvement Association
  • Brooklyn Cooperative Federal Credit Union
  • Citizen Action of New York
  • Consumer Reports
  • Episcopal Diocese of Long Island
  • Ethical Humanist Society of Long Island
  • Genesee Co-op Federal Credit Union
  • Long Island Jobs with Justice
  • Lower East Side People’s Federal Credit Union
  • New Economy Project
  • New Yorkers for Responsible Lending
  • NYS Community Equity Agenda
  • Spirit of Mandela Coalition
  • TakeRoot Justice
  • WESPAC Foundation, Inc.
  • Westchester Cooperative Network
  • Western New York Law Center
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