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New York Attorney General Sues Cash-Advance Firm for Predatory Lending

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  • Staff Report 

New York’s Attorney General Letitia James recently took legal action against Yellowstone Capital and its associated entities, accusing them of exploiting small businesses with fraudulent loans at exorbitant interest rates, some reaching up to 820%. The lawsuit, filed this past Tuesday, targets the operations that continued under the guise of Delta Bridge following Yellowstone’s closure amid investigations in 2021. This operation allegedly preyed on companies nationwide by offering illegal loans disguised as merchant cash advances.

One notable victim, Manhattan’s City Bakery, reportedly paid over $2,000 daily due to these loans, ultimately leading to its closure. James’s statement emphasized the destructive nature of these loans, highlighting the importance of protecting small businesses, which she considers the economy’s backbone, from such predatory practices.

The lawsuit seeks a court order to halt the operations of Yellowstone, Delta Bridge, and their affiliates, and proposes a lifetime industry ban for co-founder David Glass. Additionally, James aims to secure at least $1.4 billion in compensation for the affected businesses. This action follows previous settlements and penalties against Yellowstone, including a significant $27 million settlement with New Jersey in 2023 to address similar allegations.

Categories: New York StateNews