Payday loan marketer loses Montel Williams as pitchman in New York, to pay $2.1M penalty

Economic IndicatorsAssociated Press

An online company is losing Montel Williams as its celebrity pitchman in New York while agreeing to stop generating leads in the state for payday loans with interest rates sometimes topping 1,000 percent.

New York regulators say the Las Vegas-based company has agreed to pay a $2.1 million penalty. Williams has signed an agreement saying he'll stop endorsing MoneyMutual loans in New York.

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The state says an investigation found the company Selling Source marketed illegal loans to New Yorkers while doing business as MoneyMutual.

New York's annual interest rate limit is 16 percent. A consent order says the company acknowledges its typical annual percentage rate on a 14-day loan is "between 261 percent and 1,304 percent."

A spokesman says the investigation found no violation of law by Williams.

Calls to Selling Source haven't been returned.