Senate Bill S8814

                                
 
BILL NUMBER: S8814

SPONSOR: METZGER
 
TITLE OF BILL:

An act to amend the banking law, in relation to the maximum rate of
interest permitted during a declared state of disaster emergency

 
SUMMARY OF PROVISIONS:

Section one amends Section 14-a of the banking law to both lower the
maximum rate of interest to ten percent, and further lower the maximum
interest rate to five percent during a declared state of disaster emer-
gency, which shall continue for 120 days after the state of disaster
emergency has ended.

Section two provides the effective date.

 
JUSTIFICATION:

As of March 2020, the total credit card debt in the United States is
              

over $438 billion. This equates to an average household debt of over
$6,500. As of the most recent Comptroller report in 2018, New York was
ranked fourth in highest credit card debt. Many New Yorkers are struggl-
ing to pay off their balances while providing for their families and
dealing with financial emergencies. This is especially true during the
COVID-19 pandemic, with many New Yorkers losing sources of income and
employment and facing severe financial stress.

Currently, state law provides for a general maximum interest rate of
sixteen percent, which imposes a significant financial burden on New
Yorkers and makes it more difficult to pay off credit card debt. This
bill would reduce the general maximum interest rate to 10 percent, and
during a state of emergency, would cut the maximum rate in half, to five
percent, to provide some relief for those who have been struggling with
mounting credit card balances.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None to the state.

 
EFFECTIVE DATE:
Immediate.