New York Sues DailyPay and MoneyLion, Alleging Abusive Lending Practices

Core Viewpoint - The New York State Attorney General has filed lawsuits against earned wage access providers DailyPay and MoneyLion, accusing them of illegal and deceptive practices akin to payday lending, with fees leading to annual interest rates as high as 750% [1][2]. Group 1: Legal Allegations - The lawsuits claim that the companies employ abusive tactics to encourage borrowers to take out new loans to cover previous debts [2]. - The Attorney General stated that these companies profit significantly by taking advantage of workers' wages, emphasizing that New Yorkers should retain their earned income rather than fall victim to predatory lending [2]. Group 2: Company Responses - DailyPay has filed a lawsuit seeking declaratory relief against the New York State Attorney General, arguing that its services do not constitute loans and thus are not subject to state usury laws [3]. - DailyPay's Chief Legal and Strategy Officer highlighted that other states have implemented consumer protection legislation for earned wage access services, suggesting that the Attorney General's actions may push consumers towards more harmful financial options [4]. Group 3: Legal Objectives - The lawsuits aim to terminate the payday lending practices of these companies in New York, seek restitution for affected borrowers, and impose civil penalties and costs [5].