NCLC and the Center for Responsible Lending submitted this brief to provide the Court with factual evidence concerning the similarities in product design, function, and consumer harms between Cleo AI, Inc.’s “Cash Advances,” often marketed as “Earned Wage Access,” and traditional payday loans.
These products function as loans—app-based payday loans. Payday Loan Apps (“PLAs”) operate as a financial technology iteration of the same high-cost, short-term lending model long associated with storefront payday lenders.
Drawing on their research and expertise, the groups explain how the structure and operation of these app-based payday loans, including associated fees, fit squarely within the definitions of credit under the Military Lending Act, based on the statute’s text, its implementing regulations, and regulatory guidance. Advocates also document the consumer harms associated with these loans and the public interest in protecting borrowers, particularly active-duty servicemembers and their eligible dependents.
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