New York State Shutting Down Payday Lenders

dollar_sign1New York State Taking Action Against Payday Lenders

Following close on the heels of recent regulatory action by the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency regarding short term loans (also referred to as “payday loans” and “cash advances”), New York Governor Andrew Cuomo’s office issued cease and desist letters to 35 online payday lenders doing business with New York State residents.

Governor Cuomo has also solicited the cooperation of NACHA, The Electronic Payments Association which administers the Automated Clearing House (“ACH”), and several banks, in an effort to limit the ability of payday lenders to access the accounts of New York State residents.

Complying with the New York State Law

Payday loans are already illegal in New York State – as are any loans on amounts under $250,000 with an interest rate above 16% – but online payday lending operations have been lending to New York residents despite the prohibition.

Payday lenders must at all times ensure that their lending practices comply with all state laws applicable to individuals that obtain the loan products and services.  This mandate applies to Internet-based lenders, as well as brick-and-mortar operations.  Entities that fail to comply with the requirements of applicable law could find themselves facing regulatory action from numerous state attorneys general, which could result in significant fines and court-directed changes to business practices.

If you are interested in learning more about this topic, or need to review your payday or cash advance lending practices based on recent regulatory action, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

Attorney Advertising

Share:

David Klein

David Klein is one of the most recognized attorneys in the technology, Internet marketing, sweepstakes, and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

Trending Topics

Trending Topics

Blog

Temu on Trademark Rampage

Let it be known: Temu will use all legal means necessary to protect its trademark rights. Since its stateside launch last September, Temu has already

Read More »
ai tcpa
Blog

The Impact of AI on TCPA Litigation

On November 15, 2023, the Federal Communications Commission (“FCC”) voted in favor of undertaking a formal inquiry to evaluate the impact that artificial intelligence (“AI”)

Read More »
gambling advertising
Blog

Gambling Advertising and the Law

In late August, DraftKings was fined $94,440 in Maryland for allegedly advertising to underage fantasy sports players. A little over one month later, PointsBet was

Read More »