Payday loan apps are designed to be a debt trap – much like storefront payday loans. They both draw borrowers into a pattern of repeated borrowing and a succession of fees that pull from already-stretched paychecks, creating demand for the next loan. Payday loan app companies try to evade state credit laws by promoting a legal fiction: they claim that these loans are not loans. As state regulators and attorneys general investigate and challenge industry violations of credit law, these lenders have lobbied state legislatures for exemptions from those laws. This policy brief provides state lawmakers, regulators, and attorneys general with an update on federal and state developments from 2025 and recommendations for protecting borrowers.
The state-by-state chart from this report can also be downloaded separately.