Tags: Benjamin Lawsky, mark it zero, online lenders
This is not ‘Nam. This is banking. There are rules.
Benjamin Lawsky, superintendent of the New York Department of Financial Services, has sent 35 lenders cease-and-desist orders, barring them from offering short-term, high-rate loans in the state.
“The department has uncovered dozens of out-of-state lenders who have used the Internet to solicit and provide illegal payday loans to consumers in New York,” one of the letters said. “Typically these lenders charge fees that, when annualized, result in interest rates far in excess of the legal limit.”
Mr. Lawsky’s office also sent letters to more than 100 banks, including Bank of America Corp. and J.P. Morgan Chase & Co., warning them they might be enabling the activities by allowing the lenders to deduct payments directly from a consumer’s bank account through a system called the automated clearing house network. A Bank of America spokeswoman declined to comment. J.P. Morgan couldn’t be reached for comment.
New York Scrutinizes Online Lenders [WSJ]