Assembly Bill A9078

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9078
 
                           I N  A S S E M B L Y
 
                             January 16, 2020
                                ___________
 
 Introduced by M. of A. TAYLOR -- read once and referred to the Committee
   on Consumer Affairs and Protection
 
 AN  ACT  to  amend the general business law, in relation to establishing
   the New York state loan shark act
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section  1.  Short  title. This act shall be known and may be cited as
 the "New York state loan shark act".
   § 2. The general business law is amended by adding a new section 517-a
 to read as follows:
   § 517-A. MAXIMUM CREDIT CARD INTEREST RATES. 1. FOR  THE  PURPOSES  OF
 THIS  SECTION "ANNUAL PERCENTAGE RATE OF INTEREST" OR "ANNUAL PERCENTAGE
 RATE" SHALL MEAN THE ANNUAL PERCENTAGE RATE FOR A LOAN OF CREDIT  CALCU-
 LATED  ACCORDING  TO  THE PROVISIONS OF THE FEDERAL TRUTH IN LENDING ACT
 (15 U.S.C. § 1601, ET SEQ.) AND THE REGULATIONS  PROMULGATED  THEREUNDER
 BY  THE  FEDERAL  RESERVE BOARD, AS SAID ACT AND REGULATIONS ARE AMENDED
 FROM TIME TO TIME.
   2. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, BUT EXCEPT AS  PROVIDED
 IN SUBDIVISION FOUR OF THIS SECTION, THE ANNUAL PERCENTAGE RATE APPLICA-
 BLE  TO  ANY  EXTENSION  OF  CREDIT  SHALL NOT EXCEED FIFTEEN PERCENT ON
 UNPAID BALANCES, INCLUSIVE OF ALL FINANCE CHARGES.
   3. ANY FEES THAT ARE NOT CONSIDERED FINANCE CHARGES UNDER SECTION  ONE
 HUNDRED  SIX  OF THE FEDERAL TRUTH IN LENDING ACT (15 U.S.C. § 1605) MAY
 NOT BE USED TO EVADE THE LIMITATIONS OF SUBDIVISION TWO OF THIS SECTION,
 AND THE TOTAL SUM OF SUCH FEES  MAY  NOT  EXCEED  THE  TOTAL  AMOUNT  OF
 FINANCE CHARGES ASSESSED.
   4.  (A) THE SUPERINTENDENT OF FINANCIAL SERVICES MAY ESTABLISH A MAXI-
 MUM ANNUAL PERCENTAGE RATE OF INTEREST  EXCEEDING  THE  FIFTEEN  PERCENT
 ANNUAL  RATE  UNDER  SUBDIVISION  TWO  OF THIS SECTION FOR PERIODS WHICH
 SHALL NOT EXCEED EIGHTEEN MONTHS, UPON A DETERMINATION THAT:
   (I) MONEY MARKET INTEREST RATES HAVE  RISEN  OVER  THE  PRECEDING  SIX
 MONTH PERIOD; AND
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11766-01-9
              

 A. 9078                             2
 
   (II) PREVAILING INTEREST RATE LEVELS THREATEN THE SAFETY AND SOUNDNESS
 OF  INDIVIDUAL  LENDERS,  AS  EVIDENCED  BY ADVERSE TRENDS IN LIQUIDITY,
 CAPITAL, EARNINGS, AND GROWTH.
   (B)  THE LIMITATION IN SUBDIVISION TWO OF THIS SECTION SHALL NOT APPLY
 WITH RESPECT TO ANY EXTENSION OF CREDIT BY A CREDIT UNION, AS DEFINED BY
 SECTION TWO OF THE BANKING LAW.
   5. (A) KNOWINGLY TAKING, RECEIVING, RESERVING, OR CHARGING OF AN ANNU-
 AL PERCENTAGE RATE OR FEE GREATER THAN THAT PERMITTED BY SUBDIVISION TWO
 OF THIS SECTION SHALL BE DEEMED A VIOLATION OF  THIS  SECTION,  AND  THE
 CREDITOR  SHALL  BE SUBJECT TO A FORFEITURE OF THE ENTIRE INTEREST WHICH
 THE NOTE, BILL, OR OTHER EVIDENCE OF SUCH OBLIGATION CARRIES WITH IT, OR
 WHICH HAS BEEN AGREED TO BE PAID THEREON.
   (B) IF AN ANNUAL PERCENTAGE RATE OR FEE GREATER  THAN  THAT  PERMITTED
 UNDER  SUBDIVISION TWO OF THIS SECTION HAS BEEN PAID, THE PERSON BY WHOM
 IT HAS BEEN PAID, OR THE LEGAL REPRESENTATIVE OF SUCH  PERSON,  MAY,  BY
 BRINGING  AN ACTION NOT LATER THAN TWO YEARS AFTER THE DATE ON WHICH THE
 USURIOUS COLLECTION WAS LAST MADE, RECOVER BACK FROM THE  LENDER  IN  AN
 ACTION  OF DEBT, THE ENTIRE AMOUNT OF INTEREST, FINANCE CHARGES, OR FEES
 PAID.
   6. ANY CREDITOR WHO VIOLATES THIS SECTION  SHALL  BE  SUBJECT  TO  THE
 PROVISIONS OF SECTION FIVE HUNDRED THIRTEEN OF THIS ARTICLE.
   §  3.  This  act shall take effect on the ninetieth day after it shall
 have become a law; provided that the provisions of this act shall  apply
 to contracts entered into, altered, modified, extended, or renewed on or
 after  such  effective date. Effective immediately, the addition, amend-
 ment and/or repeal of any rule or regulation necessary for the implemen-
 tation of this act on its effective date are authorized to be  made  and
 completed  by the superintendent of financial services on or before such
 effective date.