The New York Department of Financial Services (NY DFS) announced it is leading a multistate investigation into the payroll advance industry and allegations of unlawful online lending. According to the NY DFS press release, "The investigation focuses on 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 NY DFS is sending out letter requests for information to members of the payroll advance industry. The NY DFS is teaming with the following regulators: 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.
The NY DFS announced in late April 2019 the creation of a new Consumer Protection and Financial Enforcement Division. This multistate investigation reflects a move by DFS to prioritize and expand its investigations of nonbank consumer financial services providers, including those that the DFS does not supervise and examine.
The NY DFS press release is available at https://www.dfs.ny.gov/reports_and_publications/press_releases/pr1908061.