Press Release: NY State AG Sends Cease and Desist Letters to 35 Online Payday Loan Companies

Press Release Date: August 6, 2013
In addition to the companies below, letters were sent to 117 banks, NYS collection agencies, and NACHA, which administers the Automated Clearing House (“ACH”) network.

The following 35 companies received cease and desist letters today from Superintendent Lawsky for offering illegal payday loans to New Yorkers. DFS’s investigation found that a number of these companies were charging interest rates in excess of 400, 600, 700, or even 1,000 percent.
· ABJT Funding, LLC
· Advance Me Today
· American Web Loans
· Archer Direct, LLC
· Bayside Loans
· BD PDL Services, LLC,
· Blue Sky Finance, LLC
· BS Financial Group Inc.
· Cash Jar
· Cash Yes
· Discount Advances
· DMA Financial Corp.
· Eastside Lenders, LLC
· Fast Cash Personal Loans
· Golden Valley Lending
· Government Employees Credit Center, Inc.
· Great Plains Lending, LLC
· Horizon Opportunities, LLC
· Loan Point USA Online
· MNE Services, Inc.
· MobiLoans, LLC
· MyCashNow.com, Inc.
· National Opportunities Unlimited, Inc.
· Northway Broker Ltd.
· PayDayMax Ltd.
· Peak 3 Holding, LLC
· Plain Green, LLC
· Red Rock Tribal Lending, LLC
· SCS Processing
· SFS, Inc.
· Sonic Cash
· Sure Advance, LLC
· Tribal Credit Line
· United Consumer Financial Services, Inc.
· Western Sky Financial, LLC

A full copy of the cease and desist letter from Superintendent Lawsky is available below:

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August 5, 2013

RE: Illegal Online Payday Loans Offered and Sold to New York Consumers

Based upon an investigation by the New York State Department of Financial Services (“the Department”), it appears that your company and/or its subsidiaries, affiliates or agents are using the Internet to offer and originate illegal payday loans to New York consumers. This letter serves as notice that these payday loans violate New York’s civil and criminal usury laws. Pursuant to the New York Financial Services Law, effective immediately, your company, its subsidiaries, affiliates, agents, successors and assigns are directed to CEASE & DESIST offering and originating illegal payday loans in New York.

Debt collectors are reminded that, pursuant to the provisions of General Obligations Law § 5-511, loans offered in New York with interest rates above the statutory maximum, including payday loans made by non-bank lenders, are void and unenforceable. Attempts to collect on debts that are void or unenforceable violate General Business Law § 601(8) and 15 U.S.C. §§ 1692e(2) and1692f(1) of the Fair Debt Collection Practices Act.

Under the New York General Obligations Law § 5-501 and the New York Banking Law § 14-a, it is civil usury for your company to make a loan or forbearance under $250,000 with an interest rate exceeding 16 percent per annum. Further, under New York Penal Law §§ 190.40-42, your company commits criminal usury every time it makes a loan in New York with an interest rate exceeding 25 percent per annum. In addition, under the provisions of General Obligations Law § 5-511, usurious loans offered by non-bank lenders are void and unenforceable; therefore, collection of debts from payday loans violates New York General Business Law § 601(8) and 15 U.S.C. §§ 1692e(2) and 1692f(1) of the Fair Debt Collection Practices Act. Further, insofar as your company has made payday loans in New York, your company has violated § 340 of the New York Banking Law, which prohibits unlicensed non-bank lenders from making consumer loans of $25,000 or less with an interest rate greater than 16 percent per annum.

Within 14 days of the date of this letter, your company is directed to confirm in writing to the Department that your company and its subsidiaries, affiliates or agents no longer solicit or make illegal payday loans in New York, and outline the steps taken to cease offering these loans to New York consumers. Should your company, its subsidiaries, affiliates, agents, successors or assigns fail to comply with this directive by August 19, 2013, the Department will take appropriate action to protect New York consumers.

Very truly yours,
Benjamin M. Lawsky
Superintendent of Financial Services

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Source: NYS Attorney General
Link to press release: NYS Attorney General Press Release

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