S T A T E O F N E W Y O R K
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10688
I N S E N A T E
August 26, 2026
___________
Introduced by Sen. MYRIE -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the banking law and the financial services law, in
relation to opting the state out of certain provisions of the Deposi-
tory Institutions Deregulation and Monetary Control Act of 1980,
Public Law 96-221
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative findings. The regulation of interest and usury
is among the oldest exercises of the states' police powers. New York, in
its exercise of that police power, has a substantial and longstanding
interest in protecting its residents, its communities, and its economy
from excessive interest and evasions of its lending laws. Before the
Depository Institutions Deregulation and Monetary Control Act of 1980
(DIDMCA) codified federal rate exportation, the law governing an inter-
state consumer-usury dispute generally favored the jurisdiction in which
the consumer resided, entered the transaction, received credit, and
incurred the debt. After DIDMCA, that balance shifted, and in addition
to national banks benefitting from rate exportation, sections five
hundred twenty-one through five hundred twenty-three of the DIDMCA
extended specified federal interest-rate authority to certain state-
chartered institutions. Section five hundred twenty-five of that act,
however, expressly permits a state to provide that it does not want such
provisions to apply with respect to loans made in that state. The legis-
lature finds that in pursuit of its longstanding police power to regu-
late interest and usury in this state, New York elects to not have such
provisions apply to consumer credit transactions, including loans, in
this state. Further, Congress used different geographic language in
sections five hundred twenty-one and five hundred twenty-five. Section
five hundred twenty-one refers to the state where the bank is located;
section five hundred twenty-five refers to loans made in a state.
Accordingly, the legislature finds that the location of an institution
and the place where a transaction is made are distinct inquiries. Relat-
edly, the United States Court of Appeals for the Second Circuit has
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD16307-02-6
S. 10688 2
recognized, in the context of remote high-cost lending, New York's
substantial regulatory interest where consumers apply for loans from New
York, receive extensions of credit in New York, and authorize with-
drawals from accounts located in New York. The legislature thus addi-
tionally finds that a consumer credit transaction may be made in more
than one jurisdiction. In remote and digital lending, material portions
of a transaction occur in New York when a New York consumer is solicited
or applies here, accepts an agreement here, receives funds or access to
credit here, incurs indebtedness here, uses a New York payment account,
or is serviced or collected from here.
This act exercises an election Congress expressly preserved. It does
not regulate the rates charged by a national bank or other federally
chartered institution to the extent federal law preempts such regu-
lation. It simply restores otherwise applicable New York law for covered
transactions to the fullest extent permitted by federal law.
§ 2. Subdivision 7 of section 14-a of the banking law, as added by
chapter 883 of the laws of 1980, is amended to read as follows:
7. (A) Nothing contained in this section nor in any other provision of
this act whereunder this section is added to the banking law shall be
deemed to prohibit the charging of interest at the rates provided or
permitted by United States Public Laws 96-161[, 96-221] and 96-399,
where applicable.
(B) (I) PURSUANT TO SECTION FIVE HUNDRED TWENTY-FIVE OF THE DEPOSITORY
INSTITUTIONS DEREGULATION AND MONETARY CONTROL ACT OF 1980, PUBLIC LAW
96-221, THE STATE OF NEW YORK HEREBY PROVIDES EXPLICITLY THAT THE AMEND-
MENTS MADE BY SECTIONS FIVE HUNDRED TWENTY-ONE, FIVE HUNDRED TWENTY-TWO
AND FIVE HUNDRED TWENTY-THREE OF SUCH ACT SHALL NOT APPLY WITH RESPECT
TO COVERED CONSUMER CREDIT TRANSACTIONS MADE IN THIS STATE ON OR AFTER
THE EFFECTIVE DATE OF THIS PARAGRAPH.
(II) THE ELECTION MADE BY SUBPARAGRAPH (I) OF THIS PARAGRAPH INCLUDES,
WITHOUT LIMITATION AND TO THE EXTENT APPLICABLE, THE FEDERAL INTEREST-
RATE AUTHORITY CODIFIED AT SECTION 1831D OF TITLE 12 OF THE UNITED
STATES CODE AND ANY SUCCESSOR PROVISION DERIVED FROM SECTIONS FIVE
HUNDRED TWENTY-ONE THROUGH FIVE HUNDRED TWENTY-THREE OF THE DEPOSITORY
INSTITUTIONS DEREGULATION AND MONETARY CONTROL ACT OF 1980.
(III) THIS PARAGRAPH SHALL NOT BE CONSTRUED TO AFFECT A LOAN MADE
PURSUANT TO A COMMITMENT ENTERED INTO BEFORE THE EFFECTIVE DATE OF THIS
PARAGRAPH WHERE FEDERAL LAW REQUIRES CONTINUED APPLICATION OF SUCH
FEDERAL INTEREST-RATE AUTHORITY.
§ 3. The financial services law is amended by adding a new article 11
to read as follows:
ARTICLE 11
APPLICABLE INTEREST LIMITATIONS
SECTION 1101. DEFINITIONS.
1102. TRANSACTIONS MADE IN THIS STATE.
1103. APPLICATION OF NEW YORK LAW.
1104. ENFORCEMENT AND REMEDIES.
§ 1101. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE:
1. "APPLICABLE NEW YORK INTEREST LIMITATION" MEANS ANY MAXIMUM RATE OR
OTHER LIMITATION ON INTEREST, FINANCE CHARGES, FEES OR OTHER CONSIDER-
ATION IMPOSED BY THE CONSTITUTION, LAWS OR REGULATIONS OF THIS STATE
THAT WOULD APPLY TO A COVERED CONSUMER CREDIT TRANSACTION IN THE ABSENCE
OF THE FEDERAL INTEREST-RATE AUTHORITY DESCRIBED IN SUBDIVISION SEVEN OF
SECTION FOURTEEN-A OF THE BANKING LAW.
S. 10688 3
2. "CONSUMER" MEANS A NATURAL PERSON WHO IS A RESIDENT OF THIS STATE
AND TO WHOM CREDIT IS OFFERED OR EXTENDED PRIMARILY FOR PERSONAL, FAMILY
OR HOUSEHOLD PURPOSES.
3. "CONSUMER CREDIT TRANSACTION" MEANS A LOAN, CREDIT SALE, ADVANCE,
LINE OF CREDIT, OPEN-END CONSUMER CREDIT PLAN, CREDIT-CARD ACCOUNT,
BALANCE TRANSFER, CASH ADVANCE OR OTHER EXTENSION OF CREDIT TO A CONSUM-
ER. SUCH TERM SHALL NOT INCLUDE CREDIT SECURED BY A FIRST LIEN ON REAL
PROPERTY OR A DWELLING.
4. "COVERED CONSUMER CREDIT TRANSACTION" MEANS A CONSUMER CREDIT TRAN-
SACTION MADE IN THIS STATE FOR WHICH A COVERED STATE-CHARTERED INSTITU-
TION OR A COVERED PARTICIPANT ASSERTS, RELIES UPON, OR WOULD BE ENTITLED
IN THE ABSENCE OF THE ELECTION MADE BY SUBDIVISION SEVEN OF SECTION
FOURTEEN-A OF THE BANKING LAW TO ASSERT OR RELY UPON, FEDERAL INTEREST-
RATE AUTHORITY DERIVED FROM SECTIONS FIVE HUNDRED TWENTY-ONE THROUGH
FIVE HUNDRED TWENTY-THREE OF THE DEPOSITORY INSTITUTIONS DEREGULATION
AND MONETARY CONTROL ACT OF 1980. A TRANSACTION IS NOT EXCLUDED BECAUSE
IT IS OPEN-END CREDIT OR ACCESSED BY A CREDIT CARD OR SIMILAR DEVICE.
5. "COVERED STATE-CHARTERED INSTITUTION" MEANS A STATE-CHARTERED
INSURED DEPOSITORY INSTITUTION, INSURED SAVINGS ASSOCIATION, STATE-CHAR-
TERED CREDIT UNION, INSURED BRANCH OF A FOREIGN BANK, OR OTHER INSTITU-
TION WITHIN THE SCOPE OF SECTIONS FIVE HUNDRED TWENTY-ONE THROUGH FIVE
HUNDRED TWENTY-THREE OF THE DEPOSITORY INSTITUTIONS DEREGULATION AND
MONETARY CONTROL ACT OF 1980. SUCH TERM DOES NOT INCLUDE A NATIONAL
BANK, FEDERAL SAVINGS ASSOCIATION, FEDERAL CREDIT UNION, OR OTHER FEDER-
ALLY CHARTERED INSTITUTION, EXCEPT TO THE EXTENT CONGRESS AUTHORIZES
APPLICATION OF STATE LAW.
6. "COVERED PARTICIPANT" MEANS A PERSON OTHER THAN A CONSUMER THAT,
WITH RESPECT TO A COVERED CONSUMER CREDIT TRANSACTION, MARKETS, SOLIC-
ITS, ARRANGES, FACILITATES, UNDERWRITES, FUNDS, SERVICES, ADMINISTERS,
PURCHASES, ACQUIRES, OWNS A LEGAL OR BENEFICIAL INTEREST IN, SECURI-
TIZES, COLLECTS, OR ENFORCES SUCH TRANSACTION, OR RECEIVES A MATERIAL
PORTION OF THE REVENUES, INTEREST OR FEES ARISING THEREFROM.
§ 1102. TRANSACTIONS MADE IN THIS STATE. 1. A CONSUMER CREDIT TRANS-
ACTION IS MADE IN THIS STATE WHEN THE CONSUMER IS A RESIDENT OF THIS
STATE AT THE TIME THE ACCOUNT IS OPENED OR THE TRANSACTION IS CONSUM-
MATED AND ONE OR MORE MATERIAL ACTS NECESSARY TO CREATE, FUND, USE,
SERVICE, REPAY, COLLECT OR ENFORCE THE OBLIGATION OCCURS IN THIS STATE.
2. MATERIAL ACTS UNDER SUBDIVISION ONE OF THIS SECTION INCLUDE, BUT
ARE NOT LIMITED TO:
(A) SOLICITATION, MARKETING OR DELIVERY OF AN OFFER TO THE CONSUMER IN
THIS STATE BY ANY MEANS;
(B) THE CONSUMER'S SUBMISSION OF AN APPLICATION, ACCEPTANCE OR AUTHOR-
IZATION FROM THIS STATE;
(C) EXECUTION, ACCEPTANCE, FORMATION OR DELIVERY OF THE AGREEMENT IN
THIS STATE;
(D) DELIVERY TO OR RECEIPT BY THE CONSUMER OF FUNDS, PURCHASING POWER
OR ACCESS TO CREDIT IN THIS STATE;
(E) THE CONSUMER'S INCURRENCE OF INDEBTEDNESS OR USE OF CREDIT IN THIS
STATE;
(F) DELIVERY OR ACTIVATION OF A CREDIT CARD OR OTHER ACCESS DEVICE IN
THIS STATE;
(G) BILLING, SERVICING, REPAYMENT OR COLLECTION DIRECTED TO THE
CONSUMER IN THIS STATE; OR
(H) THE USE OF A DEPOSIT ACCOUNT, PAYMENT ACCOUNT, PAYROLL ACCOUNT OR
OTHER ACCOUNT LOCATED IN THIS STATE TO RECEIVE PROCEEDS OR MAKE REPAY-
MENT.
S. 10688 4
3. A CONSUMER CREDIT TRANSACTION MAY BE MADE IN MORE THAN ONE STATE. A
TERM IN AN AGREEMENT STATING THAT A TRANSACTION IS MADE, LOCATED OR
GOVERNED EXCLUSIVELY IN ANOTHER JURISDICTION SHALL NOT CONTROL THE
DETERMINATION UNDER THIS SECTION AND SHALL NOT WAIVE OR ALTER THIS ARTI-
CLE.
4. AN OPEN-END CONSUMER CREDIT PLAN, INCLUDING A CREDIT-CARD ACCOUNT,
IS MADE IN THIS STATE WHEN THE ACCOUNT IS OPENED IN ACCORDANCE WITH
SUBDIVISION ONE OF THIS SECTION. EACH ADVANCE, PURCHASE, CASH ADVANCE OR
BALANCE TRANSFER UNDER AN ACCOUNT OPENED ON OR AFTER THE EFFECTIVE DATE
OF THIS ARTICLE IS PART OF THE COVERED CONSUMER CREDIT TRANSACTION. A
CONSUMER'S TEMPORARY PRESENCE OUTSIDE THIS STATE WHEN USING SUCH ACCOUNT
DOES NOT ALTER THE LOCATION OF THE ACCOUNT.
§ 1103. APPLICATION OF NEW YORK LAW. 1. NOTWITHSTANDING ANY OTHER
PROVISION OF LAW, A COVERED CONSUMER CREDIT TRANSACTION MADE IN THIS
STATE ON OR AFTER THE EFFECTIVE DATE OF THIS ARTICLE IS SUBJECT TO THE
APPLICABLE NEW YORK INTEREST LIMITATION AND TO THE OTHERWISE APPLICABLE
LAWS OF THIS STATE CONCERNING THE CHARGING, TAKING, RECEIVING, RESERV-
ING, COLLECTION AND ENFORCEMENT OF INTEREST.
2. NO COVERED STATE-CHARTERED INSTITUTION OR COVERED PARTICIPANT SHALL
CHARGE, TAKE, RECEIVE, RESERVE, COLLECT, ATTEMPT TO COLLECT OR ENFORCE
AN AMOUNT PROHIBITED BY THE LAW APPLICABLE UNDER SUBDIVISION ONE OF THIS
SECTION.
§ 1104. ENFORCEMENT AND REMEDIES. 1. THE SUPERINTENDENT AND THE ATTOR-
NEY GENERAL MAY EACH ENFORCE THIS ARTICLE. IN ADDITION TO ANY POWER
PROVIDED BY LAW, EITHER MAY INVESTIGATE A SUSPECTED VIOLATION, ISSUE
SUBPOENAS, REQUIRE PRODUCTION OF RECORDS, SEEK AN INJUNCTION, OBTAIN
RESTITUTION OR REFUND OF UNAUTHORIZED INTEREST OR FEES, OBTAIN DISGORGE-
MENT, REQUIRE CORRECTION OF ACCOUNT AND CREDIT-REPORTING INFORMATION,
AND OBTAIN SUCH OTHER EQUITABLE RELIEF AS A COURT DEEMS APPROPRIATE.
2. AFTER NOTICE AND AN OPPORTUNITY TO BE HEARD, THE SUPERINTENDENT MAY
IMPOSE, AND A COURT IN AN ACTION BROUGHT BY THE ATTORNEY GENERAL MAY
AWARD, A CIVIL PENALTY NOT EXCEEDING TWO THOUSAND FIVE HUNDRED DOLLARS
FOR EACH VIOLATION OR TEN THOUSAND DOLLARS FOR EACH KNOWING OR WILLFUL
VIOLATION. IN DETERMINING THE AMOUNT, CONSIDERATION SHALL BE GIVEN TO
THE SERIOUSNESS OF THE VIOLATION, CONSUMER HARM, GOOD FAITH, HISTORY OF
PREVIOUS VIOLATIONS, ABILITY TO PAY, COOPERATION AND SUCH OTHER MATTERS
AS JUSTICE MAY REQUIRE.
§ 4. If any clause, sentence, paragraph, subdivision, section or part
of this act or its application to any person or circumstance is adjudged
invalid or preempted, such judgment shall not affect, impair or invali-
date any other clause, sentence, paragraph, subdivision, section, part
or application that can be given effect without the invalid or preempted
provision or application.
§ 5. This act shall take effect on the one hundred eightieth day after
it shall have become a law. 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 on or before such effective date.
