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Governor Cuomo Announces Department of Financial Services Notifies loan companies to not ever Seek Collection on Illegal payday advances

Governor Cuomo Announces Department of Financial Services Notifies loan companies to not ever Seek Collection on Illegal payday advances

Governor Andrew M. Cuomo announced that the New York State Department of Financial Services has sent letters to all debt collectors in New York stating that it is illegal to attempt to collect a debt on a payday loan since such loans are illegal in New York today. Payday advances are short-term loans, typically an advance on a paycheck, with exceptionally high interest levels that violate brand brand brand New York’s criminal usury legislation, which limits interest to 25 %. Taking into consideration the costs on a basis that is annual the attention price is as high as 400 %.

“Today’s notification will remind collectors into the declare that such practices are unlawful in ny,” Governor Cuomo said. “Studies plainly reveal that payday advances aren’t an answer if you have low incomes, but alternatively a high expense financial obligation trap. That’s why these are generally unlawful in nyc, as well as the State continues to protect customers from the deceptive loans.”

Superintendent of Financial Services Benjamin M. Lawsky said, “All debt enthusiasts in ny should be aware of it is unlawful to try and gather loan that is payday. We shall aggressively enforce what the law states to guard all New Yorkers and particularly low earnings people that are all many times mistreated by unscrupulous loan providers and collectors.”

Lenders effort to skirt brand New York’s prohibition on payday financing by providing loans on the internet, looking in order to avoid prosecution.