New Economy Project vehemently opposes S3332/A258, a blatant attempt to eviscerate New York’s usury laws and sanction predatory lending under the sham pretense of regulating so-called earned wage access (EWA) services. This bill is a gift to Big Tech predators, weakening longstanding consumer and worker protections and opening the floodgates to a new breed of payday lending schemes that trap low income communities and communities of color in endless cycles of debt.

EWA companies use deceptive marketing to obscure their staggering costs, which average over 330% APR. They falsely market their products as “free” while hitting users with costly “expedite fees” for instant access and pressuring them into so called “tips” that function as disguised interest, among other exploitative tactics. Despite peddling short-term, high-cost loans, they brazenly claim they are not lenders—an outright legal sham crafted to dodge regulation and exploit working people with impunity.

New York’s strong usury laws cap interest at 25%, effectively keeping payday lending out of our state. S3332/A258 would gut these vital protections just as the federal administration is dismantling the Consumer Financial Protection Bureau—which last year affirmed that EWA is lending—and rolling back critical consumer protections. At a time when financial predators are being handed a free pass, this bill would open the floodgates to unchecked exploitation in New York.

California regulators have exposed the dangers of EWA products, revealing:

• Sky-High Interest Rates: APRs averaging over 330%.
• Repeat Borrowing: Users took an average of 36 loans per year, some as many as 100.
• Small, Short-Term Advances: Most loans were $40 to $100 and lasted just 10 days.

New York has long protected workers from the financial instability and fee drain caused by predatory payday loans. Instead of legalizing these exploitative practices, the state should advance real solutions for financial stability: establish a living wage tied to inflation, pass the End Loan Sharking Act (S1726/A4918) to prevent fintech and other predatory lenders from skirting usury laws, and support public banks and community development financial institutions (CDFIs) that provide fair, responsible loans to low-income and communities of color.

For these reasons, New Economy Project strongly opposes S3332/A258.

For questions, please contact Andy Morrison at 212-680-5100 x210 or andy@neweconomynyc.org.