For Immediate Release: July 22, 2020
Contact: Emily Mancini, emanciniSD6@gmail.com
SENATOR KEVIN THOMAS ADVANCES LEGISLATION TO STRENGTHEN PROTECTIONS FOR SMALL BUSINESSES AMID COVID-19
CHAIRMAN OF CONSUMER PROTECTION SPONSORS NEW BILL PUSHING FOR GREATER TRANSPARENCY IN SMALL-BUSINESS LENDING
GARDEN CITY, NY — Senator Kevin Thomas (D-Levittown), acting Chairman of the New York State Senate Committee on Consumer Protection, is advancing legislation to strengthen consumer protections and defend small business against predatory lending amid the COVID-19 pandemic.
As COVID-19 has proliferated worldwide, so too have unscrupulous online lenders seeking to take advantage of the crisis at the expense of small businesses. Credit extended for a business or commercial purpose is not covered by the disclosure requirements of the federal Truth in Lending Act, making it difficult for businesses to obtain key financing terms in any standard format. Studies from the Federal Reserve show that online lenders vary significantly in the quality of information that they provide, especially related to costs, allowing some lenders to overcharge or to engage in predatory lending practices that hurt small businesses.
As small businesses begin to reopen their doors, they should have access to the necessary information to make informed, financially-responsible decisions. In response, Senator Thomas is sponsoring new legislation (S5470B/A10118A) that would require providers to disclose critical information regarding the cost of financing and other key terms to borrowers. This comprehensive disclosure will protect small businesses in their dealings with lenders and creditors. It will also allow borrowers to compare the pricing and costs of a commercial financing across several providers, ensuring that they are able to choose the best possible option for their business.
The legislation is currently on the Senate floor calendar.