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Senate Bill S8939

2025-2026 Legislative Session

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

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Current Bill Status - In Senate Committee Judiciary Committee

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2025-S8939 (ACTIVE) - Details

Current Committee:
Senate Judiciary
Law Section:
General Obligations Law
Laws Affected:
Amd §5-501, Gen Ob L

2025-S8939 (ACTIVE) - Summary

Clarifies that all wage and cash advances against salary or future pay are loans subject to the interest rate cap in the general obligations law.

2025-S8939 (ACTIVE) - Sponsor Memo

2025-S8939 (ACTIVE) - Bill Text download pdf 

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8939
 
                             I N  S E N A T E
 
                             January 16, 2026
                                ___________
 
 Introduced  by  Sen.  BROUK  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Judiciary
 
 AN ACT to amend the general obligations law, in relation to the interest
   rate and finance charges on cash advances of wages or salary
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section  1.  This  act  shall  be  known and may be cited as the "stop
 taking our pay act".
   § 2. Legislative intent. It is the intent of the legislature that this
 act clarify and codify existing law, including that  (i)  all  wage  and
 cash  advances  are  loans subject to the interest rate cap set forth in
 section 5-501 of the general obligations law; and (ii)  finance  charges
 include  any  amount  paid or payable in connection with a loan, whether
 voluntary or otherwise, regardless of how such  amount  is  denominated,
 including, but not limited to, tips and subscription costs.
   § 3. Subdivision 2 of section 5-501 of the general obligations law, as
 amended  by  chapter  883  of the laws of 1980 and as further amended by
 section 104 of part A of chapter 62 of the laws of 2011, is amended  and
 new subdivision 1-a is added to read as follows:
   1-A.  "LOAN" SHALL INCLUDE ANY EXTENSION OF CREDIT OR ADVANCE OF MONEY
 ON A BORROWER'S FUTURE, EARNED, OR POTENTIAL SOURCE OF MONEY,  INCLUDING
 FUTURE PAY, SALARY, AND EARNED BUT UNPAID WAGES OR INCOME.
   2.  No  person  or  corporation shall, directly or indirectly, charge,
 take or receive any money, goods or things in action as interest on  the
 loan  or  forbearance  of any money, goods or things in action at a rate
 exceeding the rate  above  prescribed.  The  amount  charged,  taken  or
 received  as interest shall include any and all amounts paid or payable,
 directly or indirectly, VOLUNTARY OR OTHERWISE, by any person, to or for
 the account of the lender [in consideration for making],  INCLUDING  ANY
 DISCOUNT APPLIED TO ANY AMOUNTS ADVANCED, IN CONNECTION WITH the loan or
 forbearance  as  defined  by  the  superintendent  of financial services
 pursuant to subdivision three of section fourteen-a of the banking  law,
 INCLUDING  FEES, CHARGES, TIPS, SUBSCRIPTION COSTS, AND ANY OTHER AMOUNT
 PAID OR PAYABLE, except such fee as may be fixed by the commissioner  of
 taxation and finance as the cost of servicing loans made by the property
 and liability insurance security fund.
   § 4. This act shall take effect immediately.

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