Senate Bill S10127

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10127
 
                             I N  S E N A T E
 
                              April 30, 2026
                                ___________
 
 Introduced  by  Sen.  MAY  --  read  twice and ordered printed, and when
   printed to be committed to the Committee on Judiciary
 
 AN ACT to amend the general obligations law, the  banking  law  and  the
   penal  law, in relation to extending the interest rate caps and crimi-
   nal usury framework to covered services
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Section 5-501 of the general obligations law is amended by
 adding a new subdivision 1-a to read as follows:
   1-A. FOR THE PURPOSES OF THIS  SECTION,  THE  TERM  "COVERED  SERVICE"
 SHALL MEAN SHORT-TERM FINANCING CONTINGENT UPON THE PAYMENT OF INTEREST,
 FEES,  TIPS,  RENEWAL  CHARGES, ANCILLARY CHARGES OR ANY PAYMENT MADE IN
 CONNECTION WITH A TRANSACTION, INCLUDING  BUT  NOT  LIMITED  TO,  RETAIL
 INSTALLMENT CONTRACTS, MERCHANT CASH ADVANCES, INVOICE FINANCING, REVEN-
 UE-BASED  FINANCING,  OR  ANY TRANSACTION THAT IN SUBSTANCE FUNCTIONS AS
 THE ADVANCE OF FUNDS IN EXCHANGE FOR A  FUTURE  PAYMENT  OR  OBLIGATION,
 REGARDLESS OF THE LABEL ASSIGNED TO SUCH TRANSACTION.
   § 2. Subdivision 2 of section 5-501 of the general obligations law, as
 amended  by  chapter  883  of the laws of 1980 and as further amended by
 section 104 of part A of chapter 62 of the laws of 2011, is  amended  to
 read as follows:
   2.  No  person  or  corporation shall, directly or indirectly, charge,
 take or receive any money, goods or things in action as interest on  the
 COVERED  SERVICE,  loan  or forbearance of any money, goods or things in
 action at a rate exceeding the rate [above prescribed] AS PRESCRIBED  IN
 SUBDIVISION  ONE  OF THIS SECTION. The amount charged, taken or received
 as interest shall include any and all amounts paid or payable,  directly
 or  indirectly,  by  any  person, to or for the account of the lender in
 consideration for making the COVERED SERVICE, OR THE loan or forbearance
 as defined by the  superintendent  of  financial  services  pursuant  to
 subdivision  three of section fourteen-a of the banking law, except such
 fee as may be fixed by the commissioner of taxation and finance  as  the
 cost  of  servicing  loans  made by the property and liability insurance
 security fund.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD15589-02-6
 S. 10127                            2
 
   § 3. Subdivision 2 of section 14-a of the banking law, as  amended  by
 chapter 155 of the laws of 2012, is amended to read as follows:
   2.  The  rate  of  interest  as so prescribed under this section shall
 include as interest any and all amounts paid  or  payable,  directly  or
 indirectly,  by  any  person,  to  or  for  the account of the lender in
 consideration for the making of a COVERED SERVICE, AS DEFINED BY SECTION
 5-501 OF THE GENERAL OBLIGATIONS LAW, OR loan or forbearance as  defined
 by the superintendent, pursuant to subdivision three of this section.
   § 4. Section 190.40 of the penal law, as amended by chapter 424 of the
 laws of 1976, is amended to read as follows:
 § 190.40 Criminal usury in the second degree.
   A  person  is  guilty of criminal usury in the second degree when, not
 being authorized or permitted by law to do so, [he] SUCH PERSON knowing-
 ly charges, takes or receives any money or other property as interest on
 the COVERED SERVICE, AS DEFINED BY SECTION 5-501 OF  THE  GENERAL  OBLI-
 GATIONS  LAW,  loan or forebearance of any money or other property, at a
 rate exceeding twenty-five per centum per annum or the  equivalent  rate
 for a longer or shorter period.
   Criminal usury in the second degree is a class E felony.
   §  5.  Section 190.42 of the penal law, as added by chapter 424 of the
 laws of 1976, is amended to read as follows:
 § 190.42 Criminal usury in the first degree.
   A person is guilty of criminal usury in the  first  degree  when,  not
 being authorized or permitted by law to do so, [he] SUCH PERSON knowing-
 ly charges, takes or receives any money or other property as interest on
 the  COVERED  SERVICE,  AS DEFINED BY SECTION 5-501 OF THE GENERAL OBLI-
 GATIONS LAW, loan or forbearance of any money or other  property,  at  a
 rate  exceeding  twenty-five per centum per annum or the equivalent rate
 for a longer or shorter period and either the actor had previously  been
 convicted  of  the  crime  of criminal usury or of the attempt to commit
 such crime, or the actor's conduct was part of a scheme or  business  of
 making or collecting usurious loans.
   Criminal usury in the first degree is a class C felony.
   § 6. This act shall take effect immediately.