Ex-talk show host turned payday lender pitchman Montel Williams has agreed to pull his name from the MoneyMutual brand, after the New York Department of Financial Services slapped the company with a big fine for illegal loan practices.
According to a statement from DFS Superintendent Benjamin Lawsky, MoneyMutual is ponying up a $US2.1 million fine and is quitting the payday lending business in New York after regulators incovered “sky-high interest rates — sometimes in excess of 1,300 per cent,” he said in a statement.
Lawsky said the loans were up to 82 times greater than the legal limit in New York. Williams, for his part, is taking his brand back, and is removing his endorsement for payday loans to New York consumers.
The private equity firm that backed MoneyMutual (also going by the name Selling Source), London Bay Capital LLC, is still on the hook for ongoing investigation liabilities, Lawsky’s office said.
It appears MoneyMutual wasn’t the only usurious player in the payday lending game, Lawsky’s office stated: in August 2013, DFS sent out cease-and-desist letters to 35 online lenders engaging in what it called usurious loans, and most of them have quit operating in New York in the time since. The DFS didn’t highlight any continuing operations.
You can get a look at Montel’s work as a pitchman below: