By Andrew R. Johnson
Bank of America Corp. has agreed to use a software database
developed by New York's top financial regulator to flag payday
lenders that could be violating state laws, Gov. Andrew Cuomo
announced Monday.
The Charlotte, N.C., bank is the first financial institution to
sign up for the tool.
Bank of America said it plans to use the tool to ensure it isn't
doing business with merchant customers that may be engaged in
illegal lending. The bank also will use the database to identify
payday lenders that may have made illegal loans to its consumer
customers and use the information to notify other financial
institutions that are providing banking services to those
lenders.
"In the coming days and weeks, we will be reaching out to
additional banks asking that they join us in this effort," Benjamin
Lawsky, superintendent of the New York Department of Financial
Services, said. "It is vital that we combat these illegal,
predatory loans, which trap New Yorkers in destructive cycles of
debt."
Write to Andrew R. Johnson at andrewr.johnson@wsj.com
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