California Regulator Investigates Links Between High-Cost Lenders and Consumer Finance Sites
The state’s top financial regulator launched an investigation Wednesday of high-cost consumer lenders following the failure of several bills in the Legislature that would have tightened oversight of the industry.
The Department of Business Oversight sent letters to 20 high-interest lenders, asking about their use of so-called lead generators — companies that operate websites connecting consumers to their firms.
The DBO’s questions include how many customers come through lead generators, how those loans to those customers are underwritten and how many of those customers wanted to borrow less than $2,500. Under state law, lenders can charge dramatically higher rates on loans of $2,500 or more than for smaller loans.
DBO Commissioner Jan Lynn Owen said she wants to make sure lenders and lead generators aren’t pushing customers who want to borrow less money into larger, higher-interest loans. Her office has recently alleged that practice by several lenders.
Read the full story on LATimes.com.