Requires covered lenders to report to the department of financial services certain information on covered loans; requires the superintendent of financial services to collect and maintain such data and to annually publish a report containing aggregated information regarding covered loans; requires the superintendent of financial services to promulgate rules and regulations to implement such provisions.
STATE OF NEW YORK
________________________________________________________________________
11293
IN ASSEMBLY
May 8, 2026
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Vanel) --
read once and referred to the Committee on Banks
AN ACT to amend the financial services law, in relation to reporting of
covered loans
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The financial services law is amended by adding a new arti-
2 cle 8-A to read as follows:
3 ARTICLE 8-A
4 COVERED LOAN REPORTING
5 Section 820. Definitions.
6 821. Reporting required.
7 822. Form and filing.
8 823. Annual report.
9 824. Regulations.
10 825. Penalties.
11 826. Severability.
12 827. Preemption.
13 § 820. Definitions. For the purposes of this article, the following
14 terms shall have the following meanings:
15 (a) (1) "Covered loan" shall mean any extension of money or credit
16 that exceeds twenty-five thousand dollars or series of extensions of
17 money or credit made within twelve months to the same borrower that
18 exceeds an aggregate of twenty-five thousand dollars made to a resident
19 of this state, for personal use or for commercial purposes, including
20 commercial financing, in exchange for the borrower's agreement to repay
21 an amount greater than the amount financed, extended, or purchased
22 through interest, finance charges, fees, or other compensation for the
23 use of such money or credit.
24 (2) "Covered loan" shall not include:
25 (A) open-end credit plans subject to the federal Truth in Lending Act
26 and Regulation Z that are accessed by the use of a credit card or simi-
27 lar device intended for repeated transactions;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15821-01-6
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1 (B) any extension of credit secured by a mortgage, deed of trust, or
2 other security interest in real property, including home equity lines of
3 credit; or
4 (C) any other extension of credit that is subject to a charter,
5 license, or regulatory regime under this chapter or other provisions of
6 New York state law that provides for ongoing supervision, examination,
7 and enforcement authority by the superintendent, as determined by the
8 superintendent pursuant to rules and regulations.
9 (b) (1) "Covered lender" shall mean any person, including any affil-
10 iate or subsidiary of such person, that:
11 (A) offers or makes a covered loan;
12 (B) purchases or acquires a whole or partial interest in a covered
13 loan or any receivable arising from a covered loan;
14 (C) arranges, brokers, or facilitates a covered loan for a third
15 party; or
16 (D) acts as an agent for a third party in making a covered loan,
17 regardless of whether approval, acceptance, or ratification by the third
18 party is necessary to create a legal obligation for the third party.
19 (2) A person is a covered lender notwithstanding that such person
20 purports to act as an agent, service provider, or in another capacity
21 for another person that is exempt from this article or the laws of this
22 state if any of the following apply:
23 (A) such person holds, acquires, or maintains, directly or indirectly,
24 the predominant economic interest in a covered loan;
25 (B) such person markets, brokers, arranges, or facilitates a covered
26 loan and holds the right, requirement, or first right of refusal to
27 purchase or acquire a covered loan or any receivable or interest in a
28 covered loan; or
29 (C) the totality of the circumstances indicate that such person is a
30 covered lender, and the covered loan is structured to evade the require-
31 ments of this article. Circumstances that weigh in favor of such a find-
32 ing include, without limitation, where such person:
33 (i) indemnifies, insures, or protects another person that is not
34 subject to this article for any costs or risks related to such covered
35 loan;
36 (ii) predominantly designs, controls, or operates the program for such
37 covered loan; or
38 (iii) holds the trademark or intellectual property rights in the
39 brand, underwriting system, or other core aspects of a covered lender.
40 (3) Covered lender shall not include any exempt financial entities.
41 (c) "Automatic debit authorization" shall mean authorization by a
42 borrower to a covered lender to withdraw funds directly from such
43 borrower's deposit account.
44 (d) "Exempt financial entities" shall mean any of the following:
45 (1) Any bank, savings bank, savings and loan association, trust compa-
46 ny, private banker, credit union, investment company organized under
47 article twelve of this chapter, national bank, federal savings associ-
48 ation, federal savings and loan association, federal credit union,
49 federal trust company, and foreign banking corporation licensed by the
50 comptroller of the currency to transact business in this state or by the
51 United States;
52 (2) Any person organized under and conducting transactions subject to
53 articles nine, twelve-B, twelve-D, twelve-E and fourteen-B of the bank-
54 ing law;
55 (3) Any person organized under and conducting transactions subject to
56 article nine, nine-A, ten or eleven of the personal property law;
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1 (4) Any person making loans under programs of the United States
2 Department of Agriculture, United States Department of Housing and Urban
3 Development, or any other federal government program that provides fund-
4 ing or access to funding for single-family housing developments or
5 grants to low-income individuals for the purchase or repair of single-
6 family housing;
7 (5) Nonprofit housing organizations making loans, or loans made under
8 housing programs that are funded in whole or in part by federal or state
9 programs if the primary purpose of such programs is to assist low-income
10 borrowers with purchasing or repairing housing or the development of
11 housing for low-income New York state residents; or
12 (6) Any person that extends money or credit to another person on a
13 nonrecourse basis in exchange for a contingent right to receive an
14 amount of the potential proceeds of any award, judgment, settlement,
15 verdict, or other resolution from a pending legal action, unless such
16 person requires repayment in the event that such other person does not
17 prevail in their civil proceeding.
18 (e) "Commercial financing" shall have the same meaning as defined in
19 section eight hundred one of this chapter.
20 (f) "Finance charge" shall have the same meaning as defined in section
21 eight hundred one of this chapter.
22 (g) "Factoring transaction" shall have the same meaning as defined in
23 section eight hundred one of this chapter.
24 (h) "Open-end financing" shall have the same meaning as defined in
25 section eight hundred one of this chapter.
26 (i) "Closed-end financing" shall have the same meaning as defined in
27 section eight hundred one of this chapter.
28 (j) "Sales-based financing" shall have the same meaning as defined in
29 section eight hundred one of this chapter.
30 § 821. Reporting required. (a) Any covered lender shall, within thirty
31 days of originating, acquiring, or refinancing a covered loan, report to
32 the department the following information on a form prescribed by the
33 superintendent:
34 (1) the identity of each covered lender of such covered loan and their
35 respective interest therein, including the state of incorporation of
36 each covered lender;
37 (2) the borrower of such covered loan and their zip code;
38 (3) the date of origination, acquisition, or refinancing of such
39 covered loan;
40 (4) whether such loan is for personal, family, or household use or for
41 commercial use;
42 (5) for commercial financing, the arrangement type of such covered
43 loan, including whether such covered loan constitutes open-end financ-
44 ing, closed-end financing, sales-based financing, a factoring trans-
45 action, or a hybrid or combination thereof, or another arrangement
46 determined by the superintendent to constitute a covered loan;
47 (6) the amount financed, extended, or purchased under such covered
48 loan;
49 (7) the amount actually disbursed to the borrower under such covered
50 loan;
51 (8) the repayment frequency and contractual duration or term of such
52 covered loan, where applicable;
53 (9) the contractual pricing terms applicable to such covered loan,
54 including, as applicable:
55 (A) annual percentage rates;
56 (B) repayment percentages based on sales or revenue;
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1 (C) finance charges;
2 (D) fees; and
3 (E) other pricing metrics prescribed by the superintendent;
4 (10) whether such covered loan involves:
5 (A) automatic debit authorization;
6 (B) a confession of judgment;
7 (C) fees or charges arising from prepayment or payoff; or
8 (D) the refinancing of one or more prior covered loans;
9 (11) the late fees, penalties or other charges associated with such
10 covered loan; and
11 (12) any other information requested by the superintendent.
12 (b) The information required pursuant to subsection (a) of this
13 section shall be submitted electronically or in writing on a form
14 prescribed by the superintendent pursuant to section eight hundred twen-
15 ty-two of this article. Such form shall be affirmed as true and accurate
16 under penalty of perjury.
17 § 822. Form and filing. (a) The department shall prescribe the form,
18 contents, filing instructions, and manner of submission for reports
19 required pursuant to section eight hundred twenty-one of this article by
20 regulation and shall provide an option to file such reports electron-
21 ically.
22 (b) When two or more covered lenders have an interest in the same
23 covered loan, any such covered lender may file such report on behalf of
24 all other covered lenders.
25 (c) The department may charge a fee for filing such report, provided
26 that such fee does not exceed twenty-five dollars.
27 (d) Notwithstanding the public officers law, a report filed under this
28 article shall be confidential and not subject to public disclosure.
29 (e) Nothing in this article shall prohibit the department from
30 publishing aggregated or anonymized information pursuant to this arti-
31 cle.
32 (f) The department may disclose such information only to:
33 (1) the borrower or the borrower's authorized representative;
34 (2) the covered lender or the covered lender's authorized represen-
35 tative;
36 (3) the attorney general or a law enforcement agency;
37 (4) another state or federal regulator for supervisory, regulatory, or
38 enforcement purposes; or
39 (5) as otherwise ordered by a court of competent jurisdiction.
40 (g) Any recipient of a report filed pursuant to this section shall
41 maintain the confidentiality of such information.
42 (h) Nothing in this section shall limit the department's use of infor-
43 mation contained in a report filed pursuant to this section for supervi-
44 sory or enforcement purposes.
45 § 823. Annual report. (a) The superintendent shall collect and main-
46 tain data submitted pursuant to sections eight hundred twenty-one and
47 eight hundred twenty-two of this article and shall annually publish a
48 report on the department's website containing aggregated information
49 regarding covered loans reported pursuant to such sections during the
50 preceding year.
51 (b) Such report shall include distributions categorized by:
52 (1) personal, family, or household purposes; and
53 (2) commercial financing by arrangement, including but not limited to:
54 (A) open-end financing;
55 (B) closed-end financing;
56 (C) sales-based financing;
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1 (D) factoring transactions;
2 (E) hybrid or combined commercial financing arrangements; and
3 (F) other arrangements determined by the superintendent to constitute
4 covered loans.
5 (c) The report shall include, for each category described in
6 subsection (b) of this section:
7 (1) the total number and contractual amount financed, extended, or
8 purchased under covered loans;
9 (2) the geographic distribution of borrowers by zip code;
10 (3) the geographic distribution of covered lenders by state of incor-
11 poration;
12 (4) the average and median contractual amount financed, extended or
13 purchased under covered loans;
14 (5) the average and median amount actually disbursed to borrowers
15 under covered loans;
16 (6) distributions categorized by contractual pricing terms applicable
17 to covered loans, including, as applicable:
18 (A) annual percentage rates;
19 (B) repayment percentages based on sales or revenue;
20 (C) finance charges;
21 (D) fees; and
22 (E) other pricing metrics prescribed by the superintendent;
23 (7) distributions categorized by repayment frequency, where applica-
24 ble;
25 (8) distributions categorized by contractual duration or term of such
26 covered loan, where applicable;
27 (9) distributions categorized by late fees, penalties, or other charg-
28 es associated with covered loans;
29 (10) the number and percentage of covered loans involving fees or
30 charges arising from prepayment or payoff of a covered loan;
31 (11) the number and percentage of covered loans involving automatic
32 debit authorization;
33 (12) the number and percentage of covered loans involving confessions
34 of judgment;
35 (13) the number and percentage of covered loans involving the refi-
36 nancing of one or more prior covered loans;
37 (14) the number of covered lenders referred to the attorney general
38 for enforcement action; and
39 (15) the number of covered lenders subject to enforcement actions by
40 the superintendent.
41 (d) The superintendent may publish additional arrangement-specific
42 metrics, analyses, and distributions relevant to particular categories
43 of covered loans, including relating to reconciliation provisions,
44 repayment practices, refinancing activity, or other features associated
45 with particular arrangement types.
46 (e) The superintendent may establish additional reporting categories,
47 methodologies, ranges, and metrics necessary to carry out the purposes
48 of this section.
49 § 824. Regulations. The superintendent may promulgate such rules and
50 regulations as are necessary to implement, administer, and enforce the
51 provisions of this article, including but not limited to regulations
52 relating to:
53 (a) reporting forms, filing procedures, and electronic submission
54 requirements;
55 (b) the classification and categorization of covered loans and commer-
56 cial financing arrangements;
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1 (c) methodologies, ranges, and standards for reporting contractual
2 pricing terms and other required information;
3 (d) the avoidance of duplicative or inconsistent reporting where
4 multiple covered lenders have an interest in the same covered loan;
5 (e) standards for determining whether a person is a covered lender or
6 whether a transaction constitutes a covered loan under this article;
7 (f) recordkeeping and retention requirements relating to reports filed
8 pursuant to sections eight hundred twenty-one and eight hundred twenty-
9 two of this article;
10 (g) the publication of aggregated or anonymized annual reports pursu-
11 ant to section eight hundred twenty-three of this article; and
12 (h) such other matters as the superintendent deems necessary to carry
13 out the purposes of this section.
14 § 825. Penalties. A violation of the provisions of this article shall
15 be a violation of this chapter and may be subject to civil penalties,
16 injunctive relief and other corrective action or enforcement measures
17 imposed by the superintendent in regulation.
18 § 826. Severability. If any provision of this section or the applica-
19 tion thereof to any person or circumstances is held to be invalid, such
20 invalidity shall not affect other provisions or applications of this
21 section which can be given effect without the invalid provision or
22 application, and to this end, the provisions of this section are severa-
23 ble.
24 § 827. Preemption. This section shall not apply to the extent that it
25 is preempted by federal law. Nothing in this section shall be construed
26 to require any act prohibited, or prohibit any act required, by federal
27 law.
28 § 2. The superintendent of financial services shall promulgate rules
29 and regulations necessary to implement the provisions of section one of
30 this act no later than one year after this section shall have become a
31 law.
32 § 3. This act shall take effect immediately; provided, however, that:
33 (a) section one of this act shall take effect on the one hundred
34 eightieth day after the superintendent of financial services has promul-
35 gated the rules and regulations required under section two of this act;
36 and
37 (b) the superintendent of financial services shall notify the legisla-
38 tive bill drafting commission upon the occurrence of the promulgation of
39 the rules and regulations provided for in section two of this act in
40 order that the commission may maintain an accurate and timely effective
41 data base of the official text of the laws of the state of New York in
42 furtherance of effectuating the provisions of section 44 of the legisla-
43 tive law and section 70-b of the public officers law.
44 Effective immediately, the addition, amendment and/or repeal of any
45 rule or regulation necessary for the implementation of this act on its
46 effective date are authorized to be made and completed on or before such
47 effective date.
