Rochester Lawmakers Target Earned Wage Access Payday Lending

Rochester-area state lawmakers are backing a New York bill called the Stop Taking Our Pay (STOP) Act, which would treat most “earned wage access” (EWA) cash-advance apps as loans and bring them under the state’s payday lending and usury rules.

What the STOP Act would do

• Classify EWA advances as loans under New York law, rather than as fee-based “no-interest” wage advances.

• Subject these loans to New York’s 25% annual interest (usury) cap and related consumer-protection rules.

• Effectively pull many paycheck-advance apps into the same regulatory framework as traditional payday lenders operating in the state.

Why Rochester lawmakers are involved

• The bill is sponsored in the Senate by Samra Brouk of Rochester and in the Assembly by Steven Raga of Queens.

• Rochester’s Genesee Co-op Federal Credit Union joined lawmakers in Albany to support the bill, arguing that app-based payday-style advances worsen financial instability in low‑income neighborhoods.

The problem they’re targeting

• Advocates say EWA apps market themselves as “no-interest,” but tips and fees often create effective annual percentage rates in the triple digits; one commonly used product in New York has an APR above 750%.

• Studies cited by lawmakers indicate 75% of users reborrow the same day or the day after repaying, with many doubling how often they borrow within a year, which mirrors a payday-loan debt cycle.

• Because apps pull payments directly from bank accounts, users frequently incur overdraft fees; overdrafts reportedly rise an average of 56% after people start using EWA products.

• Since 2019, the industry has extracted more than $500 million from New Yorkers’ paychecks, according to advocates backing the bill.

How it fits into the larger EWA debate

• Nationally, some regulators and states have treated certain EWA products as non-loan services, while others move to regulate them as credit, creating a patchwork of rules.

• New York already has broader EWA bills (like Assembly Bill 258 and related measures) that would license “income access” services and cap total charges, but the STOP Act is a more aggressive, payday-focused approach, pushed by consumer and labor groups.

If you tell me what you’re most interested in—consumer impact, how it might affect specific apps, or implications for employers—I can zoom in on that piece.