Dear advocate,

Sign the petition: We cannot allow fintech companies to undo efforts to protect consumers. Hold Silicon Valley accountable. Regulate digital payday lenders.

In recent years, many harmful financial products and practices have been pushed on communities of color and low-income communities in the name of “access to credit” and “financial innovation.” In reality, these products are nothing more than traditional predatory financial products cloaked in a digital veneer.

Now, financial tech (fintech) companies like EarnIn and PayActiv push loans right through phone apps, calling them “advances” on paychecks, with fees loaded on top–all the same predatory hallmarks of payday loans.

These apps are being falsely marketed to people, especially working women of color, as a risk-free, low-cost way to deal with an emergency expense.  They hide the true cost behind “tips” or expedite fees, but end up collecting these fees from users at predatory lending levels. Recently, California’s financial regulator found these cash advance apps carry annual interest rates over 300%, making them as costly as predatory payday loans. And just like payday lenders, these apps trap working people in a cycle of debt that they struggle to get out of.

Why is this possible? Fintech companies have found loopholes in state consumer credit laws designed to protect borrowers—claiming that earned wage advances are not loans or that the companies themselves don't count as lenders as defined by law, and by disguising the true cost of their products to side step interest rate caps.

Silicon Valley companies are working to codify their predatory lending models. We can't let them get away with this; we need to keep all Americans from being exploited by digital payday lenders.

Sign the petition: We cannot allow fintech companies to undo efforts to protect consumers. Hold Silicon Valley accountable. Regulate digital payday lenders.

The Center for Responsible Lending (CRL) is a leading nonprofit, nonpartisan organization focused on financial fairness and opportunity. Fighting for economic justice for low- and middle-income families, military personnel and veterans, and people of color is our mission and highest priority.

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