New York Finance Lenders License Legislation Introduced

NY SB 6688 by Sen. James Sanders, Chairman of the New York Senate Banking Committee, was introduced on Sept. 6, 2019. Similar to the California lenders license, this bill would require licensure of companies offering commercial financing products in New York State. (See more on this topic in the cover story on p. 14.)

The Legislative and Regulatory Subcommittee of the ELFA Legal Committee is guiding our industry response. ELFA members with New York based resources able to join in this advocacy should contact Scott Riehl, ELFA Vice President, State Government Relations.

Subcommittee Submitted Summary

• The bill requires businesses making or soliciting commercial financing products to businesses in New York to be licensed by the New York Department of Financial Services.
  
  
• Commercial financing products are defined as:
  

  Loans or lines of credit under $500k
  Purchase transactions (Factoring Receivables) under $500k
  Commercial leasing under $500k

• “Making or soliciting” is defined broadly and includes marketing, bank partnerships, referrals (brokers for compensation) and traditional lending or purchasing of receivables.
  
  
• Exemptions:
  

  Less than five financing products per year
  Banks and credit unions

• The bill includes a licensure regime with requirements for application, condition for issuance, changes of control, grounds for suspension or revocation, examination and recordkeeping.
  
  
• There is a section that prohibits advertising any statement or representation with regard to rates, terms, costs or conditions that are false, misleading or deceptive.
  
  
• The bill prohibits confessions of judgment.


• The bill provides that DFS should provide regulations to implement these requirements.

The bill can be found at http://bit.ly/2VxamcY.