Bank of America Will Use Database to Screen for Payday Lenders

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."

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