Debit card companies reach payday loan agreement
ALBANY, N.Y. (AP) — New York's financial regulators are working with Visa and MasterCard to stop illegal payday loans through debit card transactions.
The Department of Financial Services says Wednesday they've reached agreement with Visa and MasterCard to provide information to card companies about payday lenders that are using debit cards to circumvent New York laws to recover loans.
Benjamin Lawsky, the department's superintendent, sent 20 cease-and-desists letters to payday lenders accused of making or collecting payday loans from New Yorkers. Of the 20, Lawsky says, 12 appear to be using the debit card tactic.
Visa and MasterCard will work with DFS to stop processing illegal payday loans collected from New Yorkers or made in New York.