By Maren Hurley-Matz 

Last week, a second federal court in New York joined a growing number of courts rejecting the fintech industry’s tired claim that so-called “earned wage access” (EWA) cash advances aren’t loans. In Freeman v. Bridge It, active-duty service members sued EWA company “Brigit” for making high-cost loans in violation of the federal Truth In Lending Act and Military Lending Act, which caps interest rates for service members at 36%. 

U.S. District Judge Lewis J. Liman—a Trump appointee—denied Brigit’s motion to dismiss, calling the fintech’s “Instant Cash” product “substantially similar” to payday loans. As the court put it: “In effect, the consumer agrees to the payment of sums in the future ‘for the privilege of obtaining cash…today.’” In other words, this is a loan in every sense that matters—money now, repayment later with added cost.

This ruling reinforces what economic justice advocates—and working New Yorkers who’ve used these products—have long warned: EWA companies market “instant” cash advances to low-wage workers while charging high fees and driving repeat borrowing, resulting in steep costs for those least able to afford them. In response, state Senator Samra Brouk and Assemblymember Steve Raga have introduced the Stop Taking Our Pay (STOP) Act to clarify and reaffirm that EWA advances are loans subject to New York’s existing 25% interest cap—targeting the same legal maneuver these companies have used to evade protections like the Military Lending Act. New Economy Project co-drafted the legislation, and it has the backing of a growing coalition of community and labor groups from across the state. 

Brigit’s attempts to dress up its predatory loans as something other than lending collapsed under the court’s scrutiny. Judge Liman rejected the idea that calling the product “non-recourse”—or pointing to the worker’s theoretical ability to cancel repayment—means no debt is created. In reality, companies like Brigit already collect repayment directly from workers’ paychecks over 97% of the time. The court emphasized that their direct access to workers’ bank accounts is “undoubtedly more valuableto the creditor and provides greater security” than going to court.

The court also dismantled another EWA industry fiction: that fees and tips are optional. In reality, these deceptive charges function as disguised interest and are finance charges under federal lending laws—pushing the cost of the loans into triple-digit APRs and violating New York’s usury cap. The “free” option exists only if the borrower is willing to wait days to access funds; getting money instantly, as the product is marketed, requires paying a fee. As the court noted, “maximizing [short-term] liquidity is not just an important part of Instant Cash, but its defining feature. The name says it all: Instant. Cash.” 

This is now the twelfth federal court to reach the same conclusion: EWA cash advances are loans and associated fees are finance charges subject to state and federal lending laws. The industry’s self-serving legal theories are quickly unraveling.

Nonetheless, the EWA industry is expanding rapidly, and so is the harm to low-wage workers and communities of color. EWA companies have extracted more than $650 million in fees from working New Yorkers in recent years. New York Attorney General Letitia James recently brought suit against two major earned wage access players, DailyPay and MoneyLion, for systematically violating New York’s usury and consumer protection laws. According to the lawsuit against DailyPay, one New Yorker took out more than 400 loans and was hit with over $1,400 in fees over a two-year period. That’s the payday loan debt trap working exactly as designed.

The courts are clear. Albany should make it unmistakable: EWA cash advances are payday loans, and payday lenders have no place in New York. Pass the STOP Act now, and ensure that Big Tech-backed predators can no longer exploit New Yorkers.