WeVote
Log In

Bill

Bill

S 8939

Relates to the interest rate cap on cash advances against wages or salary

2025 Regular Session Introduced by Jabari Brisport and 6 co-sponsors

The bill treats wage advances as loans and requires all related charges, including tips and fees, to count toward the interest-rate cap.

REFERRED TO JUDICIARY
0
WeVote Research Nonpartisan
Bill Summary · S 8939

Overview

  • Bill: S 8939 (New York)
  • Session: 2025-2026
  • Introduced by: Sen. Samra Brouk (with multiple co-sponsors)
  • Committee: Judiciary
  • Sponsor line underlined: Co-sponsors include Zellnor Myrie, Liz Krueger, Shelley Mayer, Cordell Cleare, Jabari Brisport, Kristen Gonzalez
  • Effective date: Immediate

Main purpose and intent

  • The bill, titled the “stop taking our pay act,” seeks to regulate and cap the interest rate and finance charges on cash advances of wages or salary.
  • It codifies that wage and cash advances are loans subject to the state’s interest rate cap for loans.
  • It broadens the definition of “loan” to include extensions of credit or advances on a borrower’s future or potential income, including future pay, salary, and earned but unpaid wages or income.
  • It clarifies that all finance charges, including money paid or payable in connection with the loan (voluntary or otherwise), must be counted toward the interest rate cap. This includes tips, subscription costs, and other charges, with limited exception for certain insurance servicing costs.

Key provisions and changes

  • Section 3 adds a new subdivision (1-a) defining “Loan”:
    • Encompasses any credit extension or wage/salary advance based on a borrower’s future earnings or potential income.
  • Section 3 further expands the calculation of interest:
    • The interest rate cap applies to all charges associated with the loan or forbearance, including:
    • Tips
    • Subscription costs
    • Any other amounts paid or payable to the lender
    • Excludes only those specific fees fixed by the Commissioner of Taxation and Finance as the cost of servicing loans tied to the Property and Liability Insurance Security Fund (per existing or referenced framework).
  • Section 2 Legislative intent:
    • Reiterates that wage and cash advances are loans subject to the general obligation law’s interest rate cap (section 5-501).
    • Defines finance charges broadly to include any amount paid or payable in connection with the loan, regardless of denomination.

Who and what is affected

  • Financial service providers and lenders offering wage or salary cash advances in New York.
  • Borrowers who receive wage or salary cash advances (employees or workers who receive advances against future pay).
  • The measure potentially affects fee structures, tips, subscription charges, and other ancillary costs tied to wage advances.
  • Regulators, including the Superintendent of Financial Services, who would interpret and enforce the broadened definition of finance charges and the scope of the interest cap.

Procedural and timeline aspects

  • Status: Referred to the Senate Judiciary Committee as of January 16, 2026.
  • Effective date: Immediate upon enactment (the act “shall take effect immediately”).
  • The bill codifies existing law and clarifies current interpretations rather than creating a separate regulatory framework, aiming for retroactive or immediate application to wage/cash advance transactions.

Practical implications

  • Lenders would need to ensure that the total annualized interest rate and all related charges on wage/ salary cash advances do not exceed the statutory cap.
  • Borrowers would gain protection from high combined charges on wage advances, potentially reducing exploitative fee structures.
  • The broad definition of a loan and finance charges could close loopholes where certain charges were not previously counted toward the rate cap.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.