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A payday lending executive who New York prosecutors say violated the state's usury laws is set to be arraigned Tuesday in a Manhattan court.
August 12 -
Regulatory constraints make it hard for banks to offer payday and other short-term loans, so why not refer those potential customers to credit unions who can? Some banks -- including Bank of America, TD and South State -- have decided this is a good strategy and helped start a credit union in South Carolina to do the job.
July 17 -
Two men who said they ran a payday loan brokerage in Tampa, Fla., have agreed to settle Federal Trade Commission charges that they stole hundreds of thousands of dollars from consumers' bank accounts.
July 11
New York Attorney General Eric Schneiderman has
Under an agreement announced Friday, Forster & Garbus will pay a $10,000 penalty for filing claims against consumers who were behind on paying off the short-term, high-interest loans. The firm also agreed to pay restitution costs to consumers for existing cases involving payday loans.
"Debt collection firms must make certain that the underlying loan is not a payday loan before filing a lawsuit, and they will be held responsible if they fail to do so," Schneiderman said in a press release Friday. "Ignorance is no excuse."
Payday loans violate a state interest-rate cap of 16% on loans from unlicensed firms, the attorney general said in the release. Payday loans often carry triple-digit interest rates, when calculated on an annual basis.
His office found that Commack, N.Y.-based Forster & Garbus initially received the collection requests from a firm called NCEP. No additional information was provided about NCEP.
Forster & Garbus was unaware that some of its collections claims contained payday loan debt, according to the release. The accounts in question were the result of a coding error from a client, said Ron Forster, a senior partner at Forster & Garbus, in an interview.
"We don't want to do payday loans, and we don't do payday loans," Forster said. "There's a lot of publicity around this, but I'm in agreement with the attorney general."
As part of the settlement, Forster & Garbus agreed to verify in writing that future collection claims do not contain payday loan debt.
The settlement comes just days after Cyrus Vance, the district attorney for Manhattan,
