What Now? Join the Fight to Regulate Payday Loan Apps This Give to the Max Day.

Happy Give to the Max Day, and welcome to the last topic of “Loan Shark Week(ly).” Together with Finneas, we have spent the last few weeks getting up to speed on Payday Loans Apps (aka EWAs). We have discussed their uncanny resemblance to traditional payday loans, how tips and fees factor into interest rates, and how the lack of regulation leads to unaffordable loan stacking. But after all of that, we must ask ourselves,

“What now?” 

These EWA companies are well organized and backed by deep-pocketed financial technology investors and trade associations with lobbyists in nearly every state. They argue that regulating them like lenders would “limit access to earned wages,” when in reality, they are protecting their profits, not workers’ paychecks.
Since lending products are regulated state by state, these companies are trying to appeal to lawmakers by claiming they are not loans, hoping to be excluded from existing protections like Minnesota’s 36% rate cap.
As one Exodus Lending participant put it in a recent listening session, “If it’s not a loan, what is it? A grant?” The question cuts through the spin. These products advance money with the expectation of repayment and fees. That’s what a loan is.