New York Attorney General’s Lawsuits Against MoneyLion and DailyPay: Practical Takeaways for Earned Wage Access Providers
On April 14, 2025, New York Attorney General Letitia James brought actions against earned wage access (“EWA”) providers MoneyLion Inc. and DailyPay, Inc. Like similar enforcement actions in other states, New York is alleging that EWA products are really disguised loans in violation of the state’s licensing and usury laws. James points to the companies’ advertisements, tipping processes, disclosures concerning maximum advance amounts, internal business plans labeling advances as “loans,” and the way in which they time electronic repayment debits to consumer pay dates to assert that the providers’ EWA products are disguised payday loans and their related practices predatory. New York is seeking both consumer redress and civil monetary penalties.
Both MoneyLion and DailyPay have refuted these claims, and DailyPay has filed its own action against New York seeking declaratory judgment that EWA products—at least employer integrated models—do not constitute loans under the state’s laws.
While the claims asserted by James are not necessarily novel, they evince a hostile view of EWA products in general. Notably, James has chosen to pursue both a direct-to-consumer model (MoneyLion) and an employer-integrated model (DailyPay), and takes aim not only at marketing claims and disclosures, but also the inherent structure of EWA products itself.
At the same time, there are three distinct proposals related to EWA regulation currently pending in the New York State legislature. One proposal would create an EWA regulatory structure that requires licensing and imposes substantive term restrictions but otherwise exempts EWA products from the state’s overall credit regulations. In contrast, several pending bills explicitly define EWA products as loans and set low annual interest rate caps.
Judicial resolution of these lawsuits or enactment of one of the pending EWA-related bills by the state legislature will likely clarify the status of EWA in New York going forward. In the interim, EWA providers should review their practices related to marketing and new customer acquisition, as well as the longer-term outlook for the New York market, in light of these developments. Contact Chris Napier and Shelby Schwartz to discuss these issues or other regulatory matters in the fintech space.
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About The Authors
Chris Napier is a Partner at Mitchell Sandler. His practice focuses on providing regulatory counseling, strategic advice and representation during government enforcement matters, including matters involving commercial, consumer and alternative credit products; money transmission and payments; deposit issues; and partnerships between fintech companies, depository institutions, and lenders.
Shelby Schwartz is Counsel at Mitchell Sandler. Her practice focuses on financial regulatory and compliance matters, with a concentration on deposit accounts, financial data privacy, and state lending laws. She advises a wide variety of financial services providers, from banks to financial technology companies. Shelby has successfully assisted clients in responding to regulatory inquiries and enforcement matters, including those brought by the Consumer Financial Protection Bureau, the Department of Justice, and various state regulators. She regularly assists clients in assessing their deposit account fee structures and deposit account agreements, analyzing data breach obligations, developing privacy policies, and developing financial products and services within appropriate regulatory models.
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