Steven Raga, Samra Brouk Push STOP Act to End Debt Traps for Workers

NEW YORK - A statewide coalition of lawmakers, consumer advocates, and community groups on Tuesday unveiled the Stop Taking Our Pay (STOP) Act, a proposed bill aimed at cracking down on app-based payday lenders accused of trapping low-wage workers in cycles of high-interest debt.

The legislation S8939/A9644 is sponsored by State Senator Samra Brouk of Rochester and Assemblymember Steven Raga of Queens. It would regulate so-called “Earned Wage Access” (EWA) apps under New York’s usury laws, which cap interest rates at 25 percent annually.

Supporters say EWA companies market themselves as offering “no-interest” advances on earned wages, but instead charge deceptive fees and tips that translate into triple-digit effective interest rates. According to the New York State Attorney General, some loans carry annual percentage rates exceeding 750 percent.

Advocates say the apps require direct access to users’ bank accounts, ensuring repayment while leaving workers vulnerable to overdraft fees and repeat borrowing. Since 2019, the industry has extracted more than $500 million from New Yorkers’ paychecks, with overdrafts increasing an average of 56 percent after use of an EWA product.

At a Capitol press conference, organizers also released new polling from the Community Service Society of New York showing 88 percent of New Yorkers support regulating payday loan apps under state usury laws. The poll found particularly high usage among young people, Black and Latino New Yorkers, and workers earning under $50,000 annually.

Queens resident Jose Bedoy shared his experience of using the app Dave, saying what initially appeared to be financial relief turned into months of repeated borrowing and mounting fees just to access his own wages.

The announcement comes as the New York State Attorney General’s Office files lawsuits against payday lending apps DailyPay and MoneyLion, alleging they pushed tens of thousands of New Yorkers into illegal, high-interest loans. It also follows federal action under the Biden administration, when the Consumer Financial Protection Bureau proposed classifying EWA products as loans an effort critics say has since been undermined by rollbacks under the Trump administration.

With federal consumer protections weakened, backers of the STOP Act argue Albany must act swiftly to close loopholes exploited by fintech lenders. Speakers also urged state leaders to address broader economic pressures, including stagnant wages, the racial wealth gap, and rising living costs.

In addition to passing the STOP Act, advocates called for increased state investment in community development credit unions and support for legislation such as the New York Public Banking Act, which they say would expand access to responsible, affordable credit in historically underserved communities.