Bill Text: NY A01978 | 2021-2022 | General Assembly | Introduced

---

Bill Title: Expands consumer protections for usury and interest to small businesses.

Spectrum: Strong Partisan Bill (Democrat 11-1)

Status: (Introduced - Dead) 2022-01-05 - referred to banks [A01978 Detail]

Download: New_York-2021-A01978-Introduced.html

---

                STATE OF NEW YORK
        ________________________________________________________________________

                                          1978

                               2021-2022 Regular Sessions

                   IN ASSEMBLY

                                    January 14, 2021
                                       ___________

        Introduced  by  M. of A. NIOU, PEOPLES-STOKES, BARRON, KIM, ENGLEBRIGHT,
          FRONTUS, RICHARDSON, FALL, SAYEGH, SOLAGES, PRETLOW -- Multi-Sponsored
          by -- M.  of A. MANKTELOW -- read once and referred to  the  Committee
          on Banks

        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:

     1    Section 1. The general obligations law is  amended  by  adding  a  new
     2  section 5-522 to read as follows:
     3    §  5-522.  Application  to small businesses. All rights and privileges
     4  granted under this title to persons shall  also  apply  to  small  busi-
     5  nesses.  For  purposes of this section, a small business shall be deemed
     6  to be one which is resident in this state, independently owned and oper-
     7  ated, not dominant in its field and employs one hundred or less persons.
     8    § 2. Section 173 of the banking law is amended by adding a new  subdi-
     9  vision 4 to read as follows:
    10    4.  All  rights  and  privileges granted under this section to persons
    11  shall also apply to small businesses. For purposes of this  subdivision,
    12  a  small  business  shall  be deemed to be one which is resident in this
    13  state, independently owned and operated, not dominant in its  field  and
    14  employs one hundred or less persons.
    15    §  3. Section 380-e of the banking law, as separately amended by chap-
    16  ters 349 and 1072 of the laws of 1968, is amended to read as follows:
    17    § 380-e. Effect of usury. The knowingly taking, receiving,  reserving,
    18  or  charging  by a savings and loan association of interest, as computed
    19  pursuant to this article, at a rate greater than such rate  of  interest
    20  as  may  be authorized by law shall be held and adjudged a forfeiture of
    21  the entire interest which the note or other  evidence  of  debt  carries
    22  with  it,  or  which has been agreed to be paid thereon. If such greater

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00970-01-1
        A. 1978                             2

     1  rate of interest has been paid, the person paying the same or his  legal
     2  representatives  may recover from the savings and loan association twice
     3  the entire amount of the interest thus paid.  Nothing  in  this  section
     4  shall be deemed to affect the powers of any savings and loan association
     5  with  respect  to  loans  or  investments it is authorized to make.  The
     6  rights and privileges granted under this section  shall  also  apply  to
     7  small  businesses.  For purposes of this section, a small business shall
     8  be deemed to be one which is resident in this state, independently owned
     9  and operated, not dominant in its field and employs one hundred or  less
    10  persons.
    11    § 4. This act shall take effect immediately.