Senate Bill S8538

2019-2020 Legislative Session

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee


  • Introduced
    • In Committee Assembly
    • In Committee Senate
    • On Floor Calendar Assembly
    • On Floor Calendar Senate
    • Passed Assembly
    • Passed Senate
  • Delivered to Governor
  • Signed By Governor

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2019-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

2019-S8538 (ACTIVE) - Summary

Relates to providing financial consumer protections for small businesses.

2019-S8538 (ACTIVE) - Sponsor Memo

2019-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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