NY regulator subpoenas websites to curb payday lending: NYT

Reuters News
Posted: Dec 02, 2013 11:56 PM

(Reuters) - New York State's financial regulator, Benjamin Lawsky, sent subpoenas to 16 lead generator websites that sell sensitive consumer data to payday lenders, the latest development in a broader crackdown on the payday lending industry, the New York Times reported.

Government authorities are trying to choke off the supply of borrowers to online lenders that offer short-term loans with annual interest rates of more than 400 percent, the newspaper said.

The subpoenas sent by Lawsky's office seek information about the websites' practices and their links to the lenders, the paper said, citing a copy of the confidential document it reviewed. (http://link.reuters.com/zeg25v)

Payday lenders provide small short-term loans at high interest rates to help borrowers get to the next paycheck. But they have come under scrutiny from U.S. authorities in recent years amid concern about lax oversight.

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Lawsky's office could not be reached for comment by Reuters outside of regular U.S. business hours.

Last month, payday lender Cash America International was fined to settle civil allegations that it improperly pursued some customers' debt and overcharged military service members.

(Reporting by Chandni Doulatramani in Bangalore; Editing by Supriya Kurane)