Contact: Maren Hurley-Matz, New Economy Project, maren@neweconomyproject.org

“Stop Taking Our Pay” Coalition unites groups from 21 states where payday lending is illegal to oppose federal bill that would shield payday loan apps from state laws

Today, two dozen community, labor, and faith-based organizations, along with community development credit unions, from 21 states where payday lending is categorically illegal announced the launch of the Stop Taking Our Pay (STOP) Coalition to confront so-called “earned wage access” (EWA) payday loans. The coalition is taking aim at the rapidly expanding EWA industry, which has drained billions of dollars in predatory fees from workers’ paychecks in recent years.

The announcement comes as the House Financial Services Committee is set to vote on the so-called Earned Wage Access Consumer Protection Act (H.R. 9330) Tuesday. Despite its name, the bill would do the opposite: create a federal safe harbor for EWA payday lenders and strip states of their ability to regulate these products under their own lending, usury, and consumer protection laws. Alarmingly, the bill would allow EWA companies to sidestep state usury laws, which cap interest rates and effectively ban payday lending in 21 states and Washington, D.C.

“Let’s be clear: so-called earned wage access is payday lending by another name, designed to extract wealth from working people—and it must be stopped,” said Maren Hurley-Matz, an Equal Justice Works Fellow with New Economy Project, which is coordinating the STOP Coalition. “State usury laws are the most effective protection against predatory lending, and this coalition is ready to stand up to Big Tech and defend our communities from systemic wealth extraction.”

Aggressively marketed online and in workplace breakrooms, companies like EarnIn, DailyPay, MoneyLion, Dave, and Brigit peddle high-cost payday loans through phone apps, with effective annual percentage rates exceeding 330 percent on average. Workers take out small-dollar advances and are then hit with a cascade of deceptive fees—“tips,” subscription charges, and expedited transfer fees—that leave them short on payday and drive repeat borrowing, overdraft fees, and other financial harm. 

EWA companies disingenuously claim their products aren’t loans so they can avoid laws that limit interest rates and fees. In reality, they advance cash and then collect it back—plus steep fees—directly from workers’ bank accounts or paychecks on payday. Fourteen federal courts have already rejected this workaround, finding that EWA advances operate like loans regardless of how they’re labeled.

The industry is now turning to Congress and state legislatures—seeking federal preemption and pushing state-level carveouts under the guise of licensing—in an effort to legalize an exploitative business model that would otherwise be prohibited.

Backed by Silicon Valley venture capital and Wall Street investors, EWA companies have aggressively targeted workers earning under $50,000 a year—disproportionately low-wage workers and people of color—since the pandemic. They push repeated advances through slick apps, steering workers into a debt cycle, with many using multiple apps at once. The model depends on this churn: a steady stream of fees that strips wages from paychecks and wealth from communities, while profiting Silicon Valley and Wall Street.

The STOP Coalition is calling on federal and state policymakers to reject efforts to legitimize EWA payday loans, enforce existing usury laws that have long protected working people from predatory lending, and address the root causes of poverty and income inequality through living wages and responsible lending in historically redlined communities of color.

“Payday lenders have been barred from doing business in North Carolina since 2001, and it’s unconscionable that Congress would allow payday lending back into the state through the Earned Wage Access Consumer Protection Act,” said Jason Pikler, director of the North Carolina Justice Center’s Housing, Consumer & Energy project.  “Far from protecting consumers, the Act would allow Internet payday lenders to circumvent North Carolina’s interest-rate caps and target vulnerable North Carolina consumers with impunity. Congress must reverse course and not allow Earned Wage Access companies to evade state lending laws.” 

“EWA lenders profit from deceptive fees that can amount to APRs above 300% and are sometimes disguised as ‘voluntary tips.’ The debt trap economy is evolving faster than regulators can stop it. It’s unacceptable that Congress is considering exempting EWA companies from common-sense lending laws and interest-rate caps,” said Beverly Brown-Ruggia, Executive Director of New Jersey Citizen Action. “We urge Congressman Josh Gottheimer, who sits on the House Financial Services Committee, and the entire New Jersey Congressional delegation to reject H.R. 9930, which allows anti-consumer and anti-worker predatory payday lending to thrive.”

“EWA apps make payday loans. Arizona voters have already said no to payday lending because it is a loan product intentionally designed to trap working families in endless debt. No means no,” said Kelly Griffith, Executive Director of the Southwest Center for Economic Integrity. 

“New Mexicans saved $52 million in excessive fees and interest on small loans during the first year after the state enacted a law capping annual interest rates at 36%,” says Kristina Fisher, Associate Director of Think New Mexico. “We urge lawmakers to oppose any attempts to undermine New Mexico’s strong law protecting borrowers from high-cost loans.”

“Working people deserve financial products that help them build stability, not products that trap them in cycles of repeat borrowing and drain their paychecks through hidden fees,” said Anusha Thotakura, Executive Director at Citizen Action/Illinois. “Illinois has long recognized that predatory lending harms families and communities. Calling these products ‘earned wage access’ doesn’t change what they are: loans that should be subject to the same consumer protections as any other form of credit, not exempted simply because they’re offered by Big Tech-backed companies.”

“Our organization has worked with Minnesotans across the state who have used payday loan apps and what we are hearing from folks is clear. These are loans and ought to be regulated as such,” says Anne Leland, Executive Director at Exodus Lending.

“‘Earned wage access’ apps are payday loans in tech wrapping. No one should have to pay to access THEIR wages,” says Robin McKinney, Executive Director of CASH Campaign of Maryland.

“Payday Loan Apps extend extremely costly, exploitative loans that only trap consumers in debt. Congress must not give lenders a free pass from federal or state laws that are designed to protect us all,” said Nadine Chabrier, senior policy counsel at the Center for Responsible Lending, which is a partner of the coalition.

Organizations in the STOP coalition include: Arkansas Nonprofit Initiative, Bell Policy Center, CASH Campaign of Maryland, Citizen Action/Illinois, CoPIRG, Community Legal Services of Philadelphia, Credit Union Association of New Mexico, Economic Progress Institute RI, Episcopal Diocese of Long Island, Episcopal Diocese of New York, Exodus Lending, Georgia Watch, Genesee Co-op Federal Credit Union, Guadalupe Credit Union, Hope Policy Institute, Lower East Side People’s FCU, Mid-Minnesota Legal Aid, North Carolina Justice Center, New Economy Project, New Jersey Citizen Action, Southwest Center for Economic Integrity, Think New Mexico, Tzedek DC, and Vermont Legal Aid.