New York’s Department of Financial Services (DFS) said last week it is leading a multistate investigation of the payroll advance industry as a means of examining unlawful online lending allegations.
“High-cost payroll loans are scrutinized closely in New York, and this investigation will help determine whether these payroll advance practices are usurious and harming consumers,” Financial Services Superintendent Linda A. Lacewell said. “Protecting consumers is our top priority and New York is leading the charge to expand the investigation of illegal online lending by including regulators from ten additional states and Puerto Rico.”
Lacewell said the agency would also partner with peer regulators to safeguard consumers from predatory lending and scams ensnaring families in endless cycles of debt.
The scope of work, officials said, is rooted in determining whether companies are in violation of state banking laws, including usury limits, licensing laws and other applicable laws regulating payday lending and consumer protection laws.
The following regulators have joined DFS in investigating the payroll advance industry:
Connecticut Department of Banking;
Illinois Department of Financial Professional Regulation;
The Office of the Commissioner for Financial Regulation in the State of Maryland;
New Jersey Department of Banking and Insurance;
North Carolina Office of the Commissioner of Banks;
North Dakota Department of Financial Institutions;
Oklahoma Department of Consumer Credit;
Puerto Rico Comisionado de Instituciones Financieras;
South Carolina Department of Consumer Affairs;
South Dakota Department of Labor and Regulation’s Division of Banking; and
Texas Office of Consumer Credit Commissioner.