The state has ordered 35 online companies to stop offering illegal payday loans to New York consumers, Gov. Andrew Cuomo and Benjamin Lawsky, the superintendent of financial services, announced this morning. An investigation by the state Department of Financial Services found that the businesses were offering payday loans over the Internet in violation of state law, with some annual interest rates as high as 1,095 percent.
Payday loans are small, short-term loans that are typically structured as an advance on a consumer’s next paycheck. Lenders often may debit only the interest and finance charges – even though consumers may believe they are paying down principal, which effectively extends the length of the loan. In most cases, consumers must contact lenders if they want to pay off the loan. It is illegal in New York under civil and criminal usury statutes. Lenders may offer loans on the Internet, hoping to avoid prosecution.
Illegal payday loans over the Internet are made possible in New York by credits and debts that must pass through the Automated Clearing House network. Lawsky sent letters to 117 banks and NACHA — The Electronic Payments Association, which administers the Automated Clearing House network and whose board includes representatives from a number of those banks — asking that they work with the state and cut off access to New York customer accounts for illegal payday lenders.
“Illegal payday lenders swoop in and prey on struggling families when they’re at their most vulnerable – hitting them with sky-high interests rates and hidden fees,” Cuomo said in a statement. “We’ll continue to do everything we can to stamp out these pernicious loans that hurt New York consumers.”
Lawsky also sent a letter today to all debt collection companies operating in the state that directs them not to collect on illegal payday loans from the 35 companies DFS’s investigation has identified to date. In February, Superintendent Lawsky sent letters to all debt collectors in New York stating it is illegal to try to collect a debt on a payday loan since such loans are illegal in New York and any such debts are void and unenforceable.
“Companies that abuse New York consumers should know that they can’t simply hide from the law in cyberspace. We’re going to use every tool in our tool-belt to eradicate these illegal payday loans that trap families in destructive cycles of debt,” he said.
The following 35 companies received cease and desist letters today from Superintendent Lawsky for offering illegal payday loans to New Yorkers:— ABJT Funding, LLC, www.dollarpremier.com
— Advance Me Today, www.advancemetoday.com
— American Web Loans, www.americanwebloan.com
— Archer Direct, LLC, www.archerdirectservices.com
— Bayside Loans, www.baysideloans.com
— BD PDL Services, LLC, www.bottomdollarpayday.com
— Blue Sky Finance, LLC , www.extrafundscash.com
— BS Financial Group Inc., www.paydayaccelerated.com
— Cash Jar, www.cashjar.com
— Cash Yes, www.cashyes.com
— Discount Advances, www.discountadvances.com
— DMA Financial Corp., www.qloot.com
— Eastside Lenders, LLC, www.eastsidelenders.com
— Fast Cash Personal Loans, www.fast-cash-personal-loans.com
— Golden Valley Lending, www.goldenvalleylending.com
— Government Employees Credit Center, Inc., www.cashdirectexpress.com
— Great Plains Lending, LLC, www.greatplainslending.com
— Horizon Opportunities, LLC, www.paydaycashlive.com/horizon-opportunities-PAYDAY-LOAN
— Loan Point USA Online, www.loanpointusaonline.com
— MNE Services, Inc., www.ameriloan.com
— MobiLoans, LLC, www.mobiloans.com
— MyCashNow.com, Inc., www.mycashnow.com
— National Opportunities Unlimited, Inc., www.itsmypayday.com
— Northway Broker Ltd., www.myzip19.com
· PayDayMax Ltd., www.paydaymax.com
— Peak 3 Holding, LLC, www.peak.3.holdings.pay.day.loans.750cashs.com
— Plain Green, LLC, www.plaingreenloans.com
— Red Rock Tribal Lending, LLC, www.castlepayday.com
— SCS Processing, www.everestcashadvance.com
— SFS, Inc., www.oneclickcash.com
— Sonic Cash, www.soniccash.com
— Sure Advance, LLC, www.sureadvance.com
— Tribal Credit Line, www.quickcredit911.com
— United Consumer Financial Services, Inc., www.ezpaydaycash.com
— Western Sky Financial, LLC, www.westernsky.com