Links in “Payday Lending/Money Services Businesses”

Governor Cuomo announced the launch of a new database and the cooperation of Bank of America, which will work with the NY's Department of Financial Services to protect consumers against payday lenders. The database serves multiple functions such as providing an additional resource for financial institutions to use as part of their KYC searches. [7/3/14]

New York's Department of Financial Services gets Bank of America to sign up for the software tool the state has developed to flag payday lenders that could be violating state rules. The superintendent pledges that the state will be reaching out to additional banks to join the effort. [6/17/14]

When payday lenders in Ohio were restricted by state law to loans with interest rates of 28%, no more than $500, and with a minimum 31-day payback period, payday lenders began making loans under the Mortgage Loan Act which has no cap on interest rates and permits single lump payments (the case surrounded a borrower who failed to repay a $500, 2-week loan with an interest rate of 235%). A lower court said payday lenders were skirting the law. Ohio's Supreme Court disagreed, saying its justices could not second-guess the intent of legislators. [6/13/14]

A Pennsylvania-based home builder that offers home financing has settled Federal Trade Commission charges that it deceived consumers by advertising low-cost mortgages while hiding fees and not disclosing vital information about the true cost of the mortgages. [6/11/14]

Claiming that Operation Choke Point unfairly targets payday lenders by applying back-room pressure on banks to not service them, the main payday lending trade group has sued banking regulators. [6/9/14]

Operation Choke Point, the Department of Justice program considered by some as a way to enable the administration targets legal companies it finds objectionable, may be moving from payday lenders to other industries, such as gun makers.

As part of its voluntary participation in the Unified Agenda, the CFPB published its regulatory agenda for Spring 2014. The agenda includes rulemakings concerned with mortgages, defining larger participants, debt collection, payday loans and prepaid cards, and privacy disclosures. [5/27]

The CFPB issued a report highlighting illegal actions uncovered by the Bureau’s supervision within non-bank markets. These include payday, debt collection, and consumer reporting markets, which are being federally supervised for the first time. Recent non-bank supervisory activities have resulted in over $70 million in remediation. [5/23]

A series of lawsuits against ten banks and one credit union claim that the financial institutions should have known that their online payday lending accountholders were breaking the law. Specifically, the suits filed in federal courts claim that by processing transactions for these companies the financial institutions helping them to exceed usury ceilings and break other laws. [5/22]

News reports are stacking up about how payday lenders, check cashers, telemarketers, gun dealers and adult entertainers are having their accounts terminated by banks being pressured by regulators, leading to the question of what industry will they feel compelled to shut out next. [5/13]