New York Subpoenas Websites in an Effort to Curb Payday Lenders

December 3, 2013
New York Times  
payday lending news

New York Superintendent of Financial Services Benjamin Lawsky recently sent subpoenas to 16 lead generator websites that sell sensitive consumer data to payday lenders to gather information about the websites' practices and connections to the lenders. This comes after Lawsky sent cease-and-desist letters in August to 35 online lenders for writing loans that violate state usury caps.

State officials say the lead generator websites appear to be online lenders at first glance and prompt customers to enter private financial data in applications; but Lawsky is worried that consumer information is being given to swindlers, with some consumers complaining that they were inundated with calls after applying for an online payday loan. Although New York and 14 other states have implemented interest rate caps, they can be difficult to police when lenders are on the Internet reaching consumers across the country.

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