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N.Y. Issues C-and-Ds To 35 Online Payday Lenders
NEW YORK CITY (8/7/13)--Thirty-five payday lenders have been warned by the New York Department of Financial Services to "companies cease and desist offering illegal payday loans to New York consumers."

The DFS said that its extensive, ongoing investigation uncovered that those companies were offering payday loans to consumers over the Internet in violation of New York law, including some loans with annual interest rates as high as 1,095%.

Payday lending, via the Internet or otherwise, is illegal in New York under both civil and criminal usury statutes. New York state law prohibits unlicensed nonbank lenders from making loans of $25,000 or less with interest rates greater than 16%.

"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," Superintendent Benjamin Lawsky said in a press release. Lawsky said the lenders have two weeks to confirm that they have stopped offering the loans in the state.

Lawsky also sent letters to 117 banks, as well as NACHA, which administers the automated clearing house, asking them to cut off for illegal payday lenders' access to New York customer accounts. The DFS release notes that illegal payday loans made over the Internet are made possible in New York by credits and debits that must pass through the ACH network. Gov. Andrew M. Cuomo is requesting that those banks and NACHA work with DFS to create a new set of model safeguards and procedures to cut off ACH access to payday lenders.

Some credit unions offer members payday loan alternatives.  Under federal rules, credit unions are generally limited to an annual percentage rate of no more than 18%, although there is some flexibility under the National Credit Union Administration's short-term, small amount loan program.

That program permits federal credit unions to charge an interest rate that is a maximum of 10 percentage points above the established usury ceiling at that time. Currently, this amounts to an interest rate ceiling of 28%.

Most credit unions offering payday loan alternatives also limit fees, provide member financial counseling and encourage members to open savings accounts.
 
Use the resource link to read the names of the 35 companies that were the subjects of the C-and-D orders.
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