New York State's Superintendent of Financial Services has given notice to 35 online lenders that are using claims of tribal immunity from state and federal regulations to skirt consumer financial protections. Consumer advocates say that such payday lenders are using Native American tribes as "shields" to circumvent laws prohibiting usury.

The FDIC is working in collaboration with other regulators and law enforcement in an attempt to clamp down on online payday lenders that are not in compliance with lending laws.

"I think the writing is on the wall," said Alan S. Kaplinsky, leader of the Consumer Financial Services practice group at Ballard Spahr. "Online lenders who fail to comply with applicable state laws in the borrowers' states are going to be under siege from not only state attorneys general and departments of banking but more importantly the Department of Justice, the Federal Trade Commission and the CFPB. By focusing on the banks that provide access to the ACH system, the Feds have figured out a potentially more effective way of dealing with the problem than bringing enforcement actions against hundreds of online payday lenders."

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