Indiana has passed earned wage access (EWA) legislation into law.
“Indiana’s HEA 1125 codifies the industry’s best practices into law, including recognizing that On-Demand Pay is a unique financial product, and mandating appropriate consumer protections,” EWA provider DailyPay said in a Tuesday (May 6) news release emailed to PYMNTS.
The company added that Indiana joins other states, including California, Nevada, Utah, Arkansas, Missouri, Kansas and South Carolina.
“We applaud Indiana legislators for responding to the realities facing working people in the state and ensuring continued access to a crucial financial option with common-sense guardrails that allow consumers and businesses to benefit,” DailyPay Vice President of Public Policy Ryan Naples in a statement.
Last month, PYMNTS reported that DailyPay was expanding its services to Canadian customers.
The company will make its On-Demand Pay platform available to new and existing clients with operations in Canada, DailyPay said in an April 30 press release.
“Expanding into Canada is a major step in our mission to better serve our multinational clients and partners and to provide On-Demand Pay to everyone, everywhere,” DailyPay Vice President of International Josh Durodola said in a statement.
Earned wage access offers paycheck-to-paycheck households an alternative to high-risk loan options and bank overdraft fees when they don’t have the savings to pay for unexpected expenses, according to the PYMNTS Intelligence and The Clearing House collaboration, “Living Paycheck to Paycheck: Real-Time Payments for Financial Health.”
In April, the New York State attorney general sued DailyPay and MoneyLion, alleging illegal and deceptive conduct and abusive lending practices.
The lawsuits claim that the companies’ services are payday loans, adding that fees on these short-term loans can amount to annual interest rates of as much as 750%.
They also alleged that the lenders use abusive tactics to push borrowers to take out new loans to cover gaps created by earlier ones.
“While many New Yorkers are worried about making ends meet, DailyPay and MoneyLion are making tremendous profits by extracting workers’ hard-earned wages,” New York Attorney General Letitia James said in the release. “I’m suing DailyPay and MoneyLion because New Yorkers deserve to keep the money they earn, not have it taken by predatory lenders.”
