BUFFALO, N.Y. (AP) — Attorney General Eric Schneiderman is announcing that five companies that have been making collections on short-term "payday" loans will pay more than $300,000 in restitution and penalties under a settlement.
Schneiderman is scheduled to make the announcement Monday morning in Buffalo at the annual convention of the Public Employees Federation. The Buffalo News reports (http://bit.ly/19bmaWQ ) that the loan companies that operated in Erie County have agreed to stop making further collections in New York state.
Payday loans are meant to be repaid on the next payday. They typically have interest rates from 100 percent to 650 percent or more. If a $500, two-week loan is rolled over three times, Schneiderman said the borrower would be charged $500 in interest for an eight-week, $500 loan.
New York caps interest at 16 percent for most non-bank lenders.