DailyPay sues NY Attorney General to prevent lawsuit over their pay product

From Yahoo Finance: 2025-04-07 11:58:00

DailyPay, a company offering faster paychecks for a fee, sued NY Attorney General Letitia James to prevent a potential lawsuit claiming their product is an illegal loan. DailyPay argues their service doesn’t create a debt obligation, with a $3.49 fee similar to ATM withdrawals or Venmo transfers. James’ office had no immediate comment.

The lawsuit against James stems from her probe into the “earned wage access” industry, alleging an overbroad attempt to declare on-demand pay products illegal. DailyPay claims their product does not violate consumer protection and usury laws. Many states continue close monitoring of financial services despite reduced federal oversight.

Founded in 2015, DailyPay provides over 5 million employees with access to its products, including prepaid Visa debit cards, credit monitoring, and financial counseling. The company seeks a declaration that its service complies with New York laws. The case is DailyPay LLC v. James, in the U.S. District Court, Southern District of New York.

Read more: DailyPay sues New York to thwart threatened lawsuit over worker pay product