New York Leads Multistate Investigation of Payroll Advance Industry
On August 6, 2019, the New York Superintendent of Financial Services announced a multistate investigation into the on-demand pay or “payroll advance industry.” The New York Department of Financial Services (DFS) will lead the investigation, joined by 10 other states (Connecticut, Illinois, Maryland, New Jersey, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, and Texas) and Puerto Rico.
The DFS is concerned with allegations of unlawful online lending. The DFS states that its investigation focuses on whether companies are in violation of state banking laws, including limits on the amount of interest that can be charged on a loan, licensing laws, and other applicable laws related to payday lending and consumer protection laws. The DFS is sending out letter requests for information to members of the industry.
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Lia Coniglio, Esq., is Managing Editor of PayState Update and Manager of State Payroll Information Resources for the APA.