On August 6, New York's financial regulatory agency took aim at online payday lenders, who "offer short-term loans at interest rates that
often exceed 500 percent annually." As the New York Times reported, the state's financial regulator sent letters to 35 of the online lenders, instructing them to “cease
and desist” from offering loans that violate local usury laws. At that time, the state regulator ordered the lenders to halt the “illegal” loans within two
weeks. He also sent a letter to 117 banks asking them to cut off the lenders’
access to the electronic payments system.
Last week, two Native American tribes sued the regulatory agency over New York's crackdown on online lending. The suit, filed in the US District Court for the Southern District of New York, alleges that only Congress can regulate the tribes' activity. Bloomberg has the story.