New York

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On April 14, New York Attorney General Letitia James announced two separate lawsuits against earned wage access providers—one against a company that issues advances directly to consumers, and another targeting a provider that operates through employer partnerships. Both actions allege that the companies engaged in illegal payday lending schemes, charging fees and tips that resulted in annual percentage rates (APRs) far in excess of New York’s civil and criminal usury caps.Continue Reading New York AG Sues Earned Wage Access Companies for Allegedly Unlawful Lending Practices

On March 20, the New York Department of Financial Services (NYDFS) entered into a consent order with a money transmitter, joining a group of state financial regulators acting through a multi-state task force coordinated by the Conference of State Bank Supervisors (CSBS) and the Money Transmitter Regulators Association (MTRA). The regulators alleged that the company violated state money transmission laws by failing to satisfy outstanding transmission liabilities, maintain adequate net worth and permissible investments, and continue licensed operations in a financially sound manner.Continue Reading NYDFS Joins Multistate Action Against Money Transmitter for Financial and Licensing Violations

On March 13, New York Attorney General Letitia James announced the introduction of the Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Business Practices Act). The proposed legislation seeks to extend the state’s existing ban on deceptive business practices to also prohibit unfair and abusive practices, aligning New York with 42 other states. Continue Reading New York Attorney General Proposes Bill to Expand Consumer Protection Law 

On January 22, New York Attorney General Letitia James announced a $1 billion settlement with a now defunct cash advance firm and its officers. The settlement resolves allegations that the firm and its officers repeatedly engaged in fraudulent and deceptive predatory lending practices aimed at small business owners in violation of New York law. Continue Reading New York AG Reaches $1 Billion Settlement with ‘Predatory’ Lender

On January 23, 2025 the New York Department of Financial Services (NYDFS) announced proposed regulations to curb overdraft fees and insufficient funds fees charged by banks in New York. The proposed rules aim to protect consumers from what the NYDFS describes as “exploitative and deceptive banking fees.”Continue Reading New York Proposes Limits on Overdraft and NSF Fees

On March 5, the New York Attorney General filed a lawsuit against a network of over 30 lending companies and their officers alleging their involvement in a predatory “merchant cash advance” lending scheme that exploited New York businesses through fraudulent loans at “sky-high interest rates.” Continue Reading New York Attorney General Brings $1.4 Billion Lawsuit Against Merchant Cash Advance Lenders

In August, a New York federal district court denied a motion to dismiss a CFPB lawsuit against three affiliated companies engaged in the business of purchasing distressed consumer debt and several of the companies’ owners and officers. The CFPB’s lawsuit involves claims against the defendants for violations of the Consumer Financial Protection Act (“CFPA”) and Fair Debt Collection Practices Act (“FDCPA”) based on a theory of vicarious liability as a result of conduct of the companies’ third-party debt collection vendors.Continue Reading NY Federal Court Rules CFPB Vicarious Liability Suit Can Proceed

On May 1, NYDFS settled with a cryptocurrency trading platform over the company’s cybersecurity deficiencies, resulting in a consent order and $1.2 million fine for the crypto company. NYDFS alleged “multiple deficiencies in the Company’s cybersecurity program” discovered during NYDFS examinations in 2018 and 2020. The examinations prompted an investigation, ultimately leading to the consent order and the fine.Continue Reading New York Settles with Crypto Company, Proposes Crypto Legislation

On March 16, NYDFS entered a consent order resolving an examination of a payment service provider that allows merchants to accept Bitcoin payments from customers in exchange for the equivalent value in local currency credited to the merchant’s bank account. The company is licensed by the NYDFS to engage in virtual currency business activity pursuant to 23 NYCRR Part 200. Licensees under Part 200 are required to, among other things, adhere to federal and state laws mandating effective controls to guard against money laundering and certain other illegal activities.Continue Reading NYDFS Examination of Crypto Payment Service Provider Ends in Settlement

On February 1, NY DFS announced the adoption of the final regulation implementing the New York State Commercial Finance Disclosure Law (CFDL) (N.Y. Fin. Serv. Law §§ 801 to 812). The regulations require companies that offer commercial financing less than or equal to $2.5 million (providers) to make standardized disclosures about the commercial financing’s credit terms to recipients of the commercial financing (recipients). The final regulations were effective February 1, 2023, and the compliance date for the final regulation is August 1, 2023 (see our previous post on the regulations here).Continue Reading New York Adopts Final Commercial Financing Disclosure Regulations

On January 23, the NY DFS released updated guidance with regard to better protecting consumers in the event of virtual currency insolvency. This updated guidance applies to entities that DFS has licensed or chartered to hold or maintain virtual currency assets on behalf of their customers. The guidance reiterates that as custodians, such entities must have practices in place to maintain custody and control of virtual currency similar to that of traditional financial service providers. DFS’ previous guidance already required certain practices, such as maintaining books and records, disclosure of certain terms, and protections in place for the assets held. The new guidance sets forth additional requirements and most pertinently, custodians must:Continue Reading NY DFS Releases Custodial Guidance on Crypto Insolvency