Maryland Fights Payday Lenders For Our Vulnerable Families

In Maryland, we believe in fighting for our most vulnerable families. That’s why, the O’Malley-Brown Administration is taking tough steps to stop unscrupulous financiers from preying on Maryland families.

Payday loans—where lenders charge sky-high rates that grossly exceed the legal limits—contribute to a vicious cycle of debt for vulnerable consumers. They are also one of the leading sources of complaints we receive each year. Through our efforts, we are combating illegal payday lending and continuing to crack down on unlicensed online lenders to protect our hard-working families.
Our Division of Financial Regulation is working with Maryland consumers and local banks to identify lenders around the country that are facilitating this unscrupulous behavior by processing the illegal payday transactions and debiting consumers’ bank accounts for monthly payments. We are working together with federal bank regulators to identify the banks involved and stop the activity. Additionally, I have issued a Final Order against Western Sky Financial, LLC finding the company used predatory tactics and charged excessive interest rates. While the company has appealed the decision, it is prohibited from collecting or attempting to collect on any loans made to Maryland consumers. Numerous states have initiated similar actions including one by the New York State Attorney General just last week.

Check out yesterday’s Baltimore Sun story on our continuing fight against unlicensed lenders. It’s key point: “Maryland’s financial regulator is trying to stop illegal online payday loans by going after the banks that help make the loans possible. …Maryland is one of 15 states that effectively ban such loans by capping the interest rate that can be charged on small loans.”

As long as unlicensed lenders keep wrangling to prey on Maryland consumers, we’ll keep working to stop them.

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