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NYS Small Business Truth in Lending Act

December 24, 2020 - 12:37pm

Press release:

ALBANY -- Governor Andrew Cuomo has signed legislation that protects the interests of New York’s small businesses who are taking out loans to survive the coronavirus pandemic and other emergencies.

The New York State Small Business Truth in Lending Act, Chapter 369 of the Laws of 2020, helps borrowers by requiring clear and comprehensive disclosures from all lenders.

The NYS Community Development Financial Institutions (CDFI) Coalition has been working with members across the state to build support for this common sense measure since it passed the Assembly and Senate in July.

“As we wait for the coronavirus vaccine to roll out, New York’s small businesses are struggling to hang on,” said Linda MacFarlane, chair of the NYS CDFI Coalition and executive director of Community Loan Fund of Capital Region.

“Unfortunately, some lenders have made it hard for small businesses to compare the true cost of their offers. CDFI Coalition members around the state are pleased to see that this measure will require lenders to disclose annual percentage rate (APR) and repayment terms.”

“CDFIs know too well how harmful predatory lending can be for small businesses, particularly during a crisis,” said Hubert VanTol, president of PathStone Enterprise Center in Rochester and vice chair of the NYS CDFI Coalition.

“That’s why we’re so pleased that Governor Cuomo signed the signed the NYS Small Business Truth in Lending Act. Now more than ever, New York businesses should be able to trust all lenders to clearly disclose their terms, so borrowers can compare loans on an ‘apples-to-apples’ basis.”

“Small businesses account for the vast majority of New York’s businesses and employ over half of the state’s workforce, but they are closing in record numbers due to COVID shutdowns,” said Kimberlie Jacobs, president/CEOCommunity Capital New York in Westchester County and CDFI Coalition board member.

“The provisions in this new law will deliver significant savings for small business borrowers. The Responsible Business Lending Coalition estimates that the NYS Small Business Truth in Lending Act will save New York’s small businesses more than $369 million annually in unnecessary finance charges. Minority-owned small businesses alone could save as much as $130 million a year.”

According to Carolynn Welch, executive director of the Westminster Economic Development Initiative in Buffalo and member of the Coalition, “CDFIs often help businesses get out from under crushing debt -- but sometimes, the damage has been done. Small businesses deserve straightforward disclosures from all financing providers so that they can make informed decisions and avoid debt traps.”

“The NYS Small Business Truth in Lending Act was endorsed by a wide range of lenders and small business advocates,” said Eric S. Levine, Esq., CEO of Alternatives Federal Credit Unionof in Ithaca and a member of the Coalition. “Fair and honest lenders have nothing to fear regarding transparency and the adoption of standard terms to describe the cost of loans.”   

“The provisions of the New York State Small Business Truth in Lending Act (A.10118 / S.5470b) will help small business owners who are trying to recover from all of the setbacks of 2020,” Coalition Chair MacFarlane said.

“We applaud Governor Cuomo, Assemblyman Kenneth Zebrowski and Senator Kevin Thomas for their leadership, the NYS Department of Financial Services, the Responsible Business Lending Coalition, and CDFIs around the state who worked to give our small businesses the tools they need to keep their businesses going, support their employees and serve the needs of their communities.”

The New York State CDFI Coalition represents the institutions that make innovative financing possible, foster financially vibrant and healthy communities, and strengthen all regions of New York State.

July 24, 2020 - 1:57pm

Press release:

Small businesses seeking loans to recover from the COVID-19 pandemic will soon have the information they need to make better borrowing decisions, thanks to the NYS Small Business Truth in Lending Act.

“The NYS Small Business Truth in Lending Act will bring common-sense transparency standards to small business financing at a time when it’s needed most,” said Linda MacFarlane, the nonprofit association’s Chair, who serves as the executive director of the Community Loan Fund of the Capital Region Inc.

One of her clients, a certified Minority Business Enterprise, needed cash to add to his inventory, and borrowed money from an online source. He then saw the daily repayment withdrawals from his bank account were much higher than he agreed to — and the debt service nearly closed down his store. Her client was told he must not have read the fine print in the agreement, and learned that overall interest was in the triple digits. The Community Loan Fund stepped in, paid off the loan and gave him a line of credit for new inventory and a small loan for store remodeling. 

“CDFIs are committed to offering loans in a fair, affordable and transparent manner,” MacFarlane said. “Unfortunately, some lenders have made it hard for small businesses to compare the true cost of their offers.CDFI Coalition members around the state are pleased to see that this measure will require lenders to disclose annual percentage rate (APR) and repayment terms.”

“Fair and honest lenders have nothing to fear with regard to transparency and the adoption of standard terms to describe the cost of loans,” said CDFI Coalition Board Member Kim Jacobs, president/CEO of Community Capital New York based in Elmsford. “This is a great opportunity for Governor Cuomo to help protect the small businesses in our state who are already overwhelmed dealing with the impacts of COVID-19 by swiftly signing this measure into law. We applaud NYS Senator Kevin Thomas and Assemblyman  Ken Zebrowski for their leadership on this important issue.”

“The passage of the New York State Small Business Truth in Lending Act (A10118 / S5470) represents a victory for New York’s small business owners,” said Dafina Williams, senior vice president of Public Policy at Opportunity Finance Network (OFN) and Executive Committee member of the Responsible Business Lending Coalition (RBLC).

“Bringing much-needed transparency to commercial lending, this bill equips entrepreneurs with the tools needed to easily compare financing options – allowing them to make the best financial decisions for their businesses. The RBLC thanks Assemblyman Zebrowski and Senator Thomas for their leadership and urges Governor Cuomo to promptly sign New York’s first-ever small business lending transparency bill into law.” 

The NYS Community Development Financial Institutions (CDFI) Coalition represents the institutions that make innovative financing possible, foster financially vibrant and healthy communities, and strengthen all regions of New York State.

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