senate Bill S8538

2019-2020 Legislative Session

Relates to providing financial consumer protections for small businesses

download bill text pdf

Sponsored By

Current Bill Status - In Senate Committee Rules Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jun 09, 2020 referred to rules

S8538 (ACTIVE) - Details

Current Committee:
Senate Rules
Law Section:
General Obligations Law
Laws Affected:
Add §§5-522 & 5-702-a, Gen Ob L; amd §§173 & 380-e, Bank L

S8538 (ACTIVE) - Summary

Relates to providing financial consumer protections for small businesses.

S8538 (ACTIVE) - Sponsor Memo

S8538 (ACTIVE) - Bill Text download pdf


                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  8538

                            I N  S E N A T E

                              June 9, 2020
                               ___________

Introduced  by  Sen.  KAPLAN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

AN ACT to amend the general obligations law  and  the  banking  law,  in
  relation  to  providing financial consumer protections for small busi-
  nesses

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The  general  obligations  law is amended by adding a new
section 5-522 to read as follows:
  § 5-522. APPLICATION TO SMALL BUSINESSES. ALL  RIGHTS  AND  PRIVILEGES
GRANTED  UNDER  THIS  TITLE  TO  PERSONS SHALL ALSO APPLY TO SMALL BUSI-
NESSES. FOR PURPOSES OF THIS SECTION, A SMALL BUSINESS SHALL  BE  DEEMED
TO BE ONE WHICH IS RESIDENT IN THIS STATE, INDEPENDENTLY OWNED AND OPER-
ATED, NOT DOMINANT IN ITS FIELD AND EMPLOYS ONE HUNDRED OR LESS PERSONS.
  §  2.  The  general obligations law is amended by adding a new section
5-702-a to read as follows:
  § 5-702-A. REQUIREMENTS FOR USE OF PLAIN LANGUAGE  IN  SMALL  BUSINESS
LOANS.    A.  FOR THE PURPOSES OF THIS SECTION THE TERM "SMALL BUSINESS"
SHALL MEAN A BUSINESS IN THIS STATE  WITH  NOT  MORE  THAN  ONE  HUNDRED
EMPLOYEES  THAT  IS  A SOLE PROPRIETORSHIP, LIMITED LIABILITY COMPANY OR
CLOSELY HELD CORPORATION ACTING WITHOUT THE ASSISTANCE OF COUNSEL.
  B. EVERY WRITTEN AGREEMENT FOR A LOAN BETWEEN A CREDITOR AND A BORROW-
ER WHO IS A SMALL BUSINESS MUST BE:
  1. WRITTEN IN A CLEAR AND COHERENT MANNER USING WORDS WITH COMMON  AND
EVERY DAY MEANINGS; AND
  2. APPROPRIATELY DIVIDED AND CAPTIONED BY ITS VARIOUS SECTIONS.
  ANY CREDITOR WHO FAILS TO COMPLY WITH THIS SUBDIVISION SHALL BE LIABLE
TO  A  SMALL  BUSINESS WHO IS A PARTY TO A WRITTEN AGREEMENT GOVERNED BY
THIS SUBDIVISION IN AN AMOUNT EQUAL TO ANY ACTUAL DAMAGES SUSTAINED PLUS
A PENALTY OF FIFTY DOLLARS. THE TOTAL CLASS ACTION PENALTY  AGAINST  ANY
SUCH  CREDITOR SHALL NOT EXCEED TEN THOUSAND DOLLARS IN ANY CLASS ACTION
OR SERIES OF CLASS ACTIONS ARISING OUT OF THE USE BY A  CREDITOR  OF  AN
AGREEMENT  WHICH  FAILS TO COMPLY WITH THIS SUBDIVISION. NO ACTION UNDER
THIS SUBDIVISION MAY BE BROUGHT AFTER BOTH PARTIES TO THE AGREEMENT HAVE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

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