A03275 Summary:

BILL NOA03275B
 
SAME ASSAME AS S01476-B
 
SPONSOREpstein
 
COSPNSRSimon, Reyes, Taylor, Gottfried, Mosley, D'Urso, Cruz, Blake, Miller MG, Cook, Ortiz, Barron, Glick
 
MLTSPNSRNolan
 
 
Directs the department of financial services to study, evaluate and make recommendations concerning lending practices by financial institutions to landlords acquiring property that includes small business and/or rent-regulated tenants; requires a report on the department's findings and recommendations for legislative action within eighteen months.
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A03275 Actions:

BILL NOA03275B
 
01/29/2019referred to banks
05/30/2019amend and recommit to banks
05/30/2019print number 3275a
06/05/2019reported referred to rules
06/07/2019amend and recommit to rules 3275b
06/13/2019reported
06/13/2019rules report cal.252
06/13/2019ordered to third reading rules cal.252
06/18/2019passed assembly
06/18/2019delivered to senate
06/18/2019REFERRED TO RULES
01/08/2020DIED IN SENATE
01/08/2020RETURNED TO ASSEMBLY
01/08/2020ordered to third reading cal.133
03/11/2020passed assembly
03/11/2020delivered to senate
03/11/2020REFERRED TO BANKS
07/22/2020SUBSTITUTED FOR S1476B
07/22/20203RD READING CAL.875
07/22/2020PASSED SENATE
07/22/2020RETURNED TO ASSEMBLY
12/11/2020delivered to governor
12/23/2020signed chap.351
12/23/2020approval memo.55
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A03275 Committee Votes:

BANKS Chair:Zebrowski DATE:06/05/2019AYE/NAY:21/8 Action: Favorable refer to committee Rules
ZebrowskiAyeLalorNay
PerryAyeFinchNay
AbbateAyeMikulinNay
MillerExcusedSmithNay
WeprinAyeManktelowNay
RodriguezExcusedSalkaAye
BichotteAyeSchmittNay
BlakeAyeSmullenNay
Jean-PierreAye
SeawrightAye
RichardsonAye
DickensNay
De La RosaAye
VanelAye
WrightAye
NiouAye
TaylorAye
BarnwellAye
SternAye
HevesiAye
SayeghAye
BurkeAye
ButtenschonAye

RULES Chair:Gottfried DATE:06/13/2019AYE/NAY:26/0 Action: Favorable
HeastieExcusedKolbAye
GottfriedAyeCrouchAye
LentolAyeFinchAye
GanttExcusedBarclayAye
NolanExcusedRaiaAye
WeinsteinAyeHawleyAye
OrtizAyeGiglioAye
PretlowAyeMalliotakisAye
CookExcused
GlickAye
AubryAye
EnglebrightAye
DinowitzAye
ColtonAye
MagnarelliAye
PerryAye
PaulinAye
TitusAye
Peoples-StokesExcused
BenedettoAye
LavineAye
LupardoAye
ZebrowskiAye

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A03275 Floor Votes:

DATE:06/18/2019Assembly Vote  YEA/NAY: 120/28
Yes
Abbate
Yes
Crespo
ER
Gantt
No
LiPetri
Yes
Perry
Yes
Simon
Yes
Abinanti
Yes
Crouch
Yes
Garbarino
Yes
Lupardo
Yes
Pheffer Amato
Yes
Simotas
Yes
Arroyo
Yes
Cruz
Yes
Giglio
Yes
Magnarelli
Yes
Pichardo
No
Smith
No
Ashby
Yes
Cusick
Yes
Glick
No
Malliotakis
Yes
Pretlow
Yes
Smullen
Yes
Aubry
Yes
Cymbrowitz
Yes
Goodell
No
Manktelow
Yes
Quart
Yes
Solages
Yes
Barclay
Yes
Davila
Yes
Gottfried
Yes
McDonald
Yes
Ra
Yes
Stec
Yes
Barnwell
Yes
De La Rosa
Yes
Griffin
Yes
McDonough
No
Raia
Yes
Steck
Yes
Barrett
Yes
DenDekker
Yes
Gunther
Yes
McMahon
Yes
Ramos
Yes
Stern
Yes
Barron
Yes
DeStefano
No
Hawley
No
Mikulin
Yes
Raynor
Yes
Stirpe
Yes
Benedetto
Yes
Dickens
Yes
Hevesi
No
Miller B
Yes
Reilly
No
Tague
Yes
Bichotte
Yes
Dilan
Yes
Hunter
Yes
Miller MG
Yes
Reyes
Yes
Taylor
Yes
Blake
Yes
Dinowitz
Yes
Hyndman
Yes
Miller ML
Yes
Richardson
Yes
Thiele
No
Blankenbush
No
DiPietro
Yes
Jacobson
Yes
Montesano
Yes
Rivera
ER
Titus
No
Brabenec
Yes
D'Urso
Yes
Jaffee
No
Morinello
Yes
Rodriguez
Yes
Vanel
Yes
Braunstein
Yes
Eichenstein
Yes
Jean-Pierre
Yes
Mosley
Yes
Romeo
No
Walczyk
Yes
Bronson
Yes
Englebright
No
Johns
Yes
Niou
Yes
Rosenthal D
Yes
Walker
Yes
Buchwald
Yes
Epstein
Yes
Jones
Yes
Nolan
Yes
Rosenthal L
Yes
Wallace
Yes
Burke
Yes
Fahy
Yes
Joyner
No
Norris
Yes
Rozic
No
Walsh
Yes
Buttenschon
Yes
Fall
Yes
Kim
Yes
O'Donnell
Yes
Ryan
Yes
Weinstein
No
Byrne
Yes
Fernandez
Yes
Kolb
Yes
Ortiz
Yes
Salka
Yes
Weprin
No
Byrnes
No
Finch
No
Lalor
Yes
Otis
Yes
Santabarbara
Yes
Williams
Yes
Cahill
No
Fitzpatrick
Yes
Lavine
Yes
Palmesano
No
Sayegh
Yes
Woerner
Yes
Carroll
No
Friend
No
Lawrence
No
Palumbo
Yes
Schimminger
Yes
Wright
Yes
Colton
Yes
Frontus
Yes
Lentol
Yes
Paulin
No
Schmitt
Yes
Zebrowski
Yes
Cook
Yes
Galef
Yes
Lifton
Yes
Peoples-Stokes
Yes
Seawright
Yes
Mr. Speaker

‡ Indicates voting via videoconference
DATE:03/11/2020Assembly Vote  YEA/NAY: 90/43
Yes
Abbate
Yes
Crespo
Yes
Galef
Yes
Lifton
Yes
Peoples-Stokes
No
Smith
Yes
Abinanti
No
Crouch
ER
Gantt
No
LiPetri
Yes
Perry
No
Smullen
Yes
Arroyo
Yes
Cruz
No
Garbarino
Yes
Lupardo
Yes
Pheffer Amato
Yes
Solages
No
Ashby
No
Cusick
No
Giglio
Yes
Magnarelli
Yes
Pichardo
No
Stec
Yes
Aubry
Yes
Cymbrowitz
Yes
Glick
No
Malliotakis
Yes
Pretlow
Yes
Steck
No
Barclay
Yes
Darling
No
Goodell
No
Manktelow
Yes
Quart
Yes
Stern
Yes
Barnwell
Yes
Davila
Yes
Gottfried
Yes
McDonald
No
Ra
Yes
Stirpe
Yes
Barrett
Yes
De La Rosa
Yes
Griffin
ER
McDonough
Yes
Ramos
No
Tague
ER
Barron
ER
DenDekker
ER
Gunther
Yes
McMahon
No
Reilly
Yes
Taylor
Yes
Benedetto
No
DeStefano
No
Hawley
No
Mikulin
Yes
Reyes
Yes
Thiele
ER
Bichotte
ER
Dickens
Yes
Hevesi
No
Miller B
ER
Richardson
Yes
Vanel
Yes
Blake
Yes
Dilan
Yes
Hunter
Yes
Miller MG
Yes
Rivera
No
Walczyk
No
Blankenbush
Yes
Dinowitz
Yes
Hyndman
No
Miller ML
Yes
Rodriguez
Yes
Walker
No
Brabenec
No
DiPietro
Yes
Jacobson
ER
Montesano
ER
Rosenthal D
Yes
Wallace
Yes
Braunstein
Yes
D'Urso
Yes
Jaffee
No
Morinello
Yes
Rosenthal L
No
Walsh
Yes
Bronson
ER
Eichenstein
Yes
Jean-Pierre
Yes
Mosley
Yes
Rozic
ER
Weinstein
Yes
Buchwald
Yes
Englebright
No
Johns
Yes
Niou
Yes
Ryan
Yes
Weprin
Yes
Burke
Yes
Epstein
No
Jones
Yes
Nolan
No
Salka
Yes
Williams
No
Buttenschon
Yes
Fahy
Yes
Joyner
No
Norris
Yes
Santabarbara
Yes
Woerner
No
Byrne
Yes
Fall
Yes
Kim
Yes
O'Donnell
No
Sayegh
Yes
Wright
No
Byrnes
Yes
Fernandez
No
Kolb
Yes
Ortiz
ER
Schimminger
Yes
Zebrowski
Yes
Cahill
ER
Finch
No
Lalor
Yes
Otis
No
Schmitt
Yes
Mr. Speaker
Yes
Carroll
No
Fitzpatrick
Yes
Lavine
No
Palmesano
Yes
Seawright
Yes
Colton
No
Friend
No
Lawrence
No
Palumbo
Yes
Simon
Yes
Cook
Yes
Frontus
Yes
Lentol
Yes
Paulin
Yes
Simotas

‡ Indicates voting via videoconference
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A03275 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         3275--B
 
                               2019-2020 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 29, 2019
                                       ___________
 
        Introduced by M. of A. EPSTEIN, SIMON, REYES, TAYLOR, GOTTFRIED, MOSLEY,
          D'URSO,  CRUZ,  BLAKE, M. G. MILLER, COOK, ORTIZ -- Multi-Sponsored by
          -- M. of A. NOLAN -- read once and referred to the Committee on  Banks
          --  committee  discharged,  bill amended, ordered reprinted as amended
          and recommitted to said committee --  reported  and  referred  to  the
          Committee  on  Rules  --  Rules  Committee  discharged,  bill amended,
          ordered reprinted as amended and recommitted to the Committee on Rules
 
        AN ACT to direct the department of financial services to study, evaluate
          and make recommendations concerning  lending  practices  by  financial
          institutions to landlords acquiring property that includes small busi-
          ness tenants and/or rent-regulated tenants
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. 1. For the purposes of this act:
     2    (a) "financial institution" shall include, but not be  limited  to,  a
     3  commercial  bank,  trust  company, savings institution, credit union, or
     4  any other entity authorized to originate and service loans;
     5    (b) "small business" shall mean a business that meets  the  definition
     6  of  a  small  business  as  defined  by the United States Small Business
     7  Administration; and
     8    (c) "mezzanine debt" shall mean debt carried by a borrower that may be
     9  subordinate to the primary lien and/or common  shares  and  reported  as
    10  assets for the purposes of financing such primary lien.
    11    2.  The  department  of  financial  services  is hereby authorized and
    12  directed to prepare or have prepared a study to review  the  process  in
    13  which  financial  institutions  provide  loans to landlords acquiring or
    14  refinancing property that includes rent-regulated and/or small  business
    15  tenants. Such study shall examine and report by type of lender, range of
    16  building  sizes,  and any other criteria, trends in predatory equity and
    17  shall include, but not be limited to:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02520-06-9

        A. 3275--B                          2
 
     1    (a) whether and how financial institutions are considering the follow-
     2  ing factors when reviewing a landlord's loan application:
     3    (i) debt service coverage ratio;
     4    (ii) capitalization rate;
     5    (iii) gross rent multiplier;
     6    (iv) loan to value; and
     7    (v) net operating income, including income and expenses;
     8    (b) whether and how financial institutions are including the following
     9  factors in their underwriting calculations of debt:
    10    (i) sources of income, including residential rent, commercial rent and
    11  maintenance  from cooperative apartment owners, and how financial insti-
    12  tutions verify the accuracy of such information;
    13    (ii) current rent charged and projected rent increases to  be  charged
    14  in the future;
    15    (iii)  the  number  and  size  of units in a building and whether such
    16  units are used for residential, commercial or another use;
    17    (iv) whether any preferential rent is charged and any  projections  to
    18  terminate such preferential rent in the future;
    19    (v)  the  number of vacant units in a property, including whether such
    20  units are classified as market rate, deregulated or  rent-regulated  and
    21  how many vacant units are used for commercial or another non-residential
    22  use;
    23    (vi)  whether  individual  apartment improvements will be performed on
    24  any vacant units;
    25    (vii) the number of rent-regulated units at the time  of  loan  origi-
    26  nation and how the financial institution verifies those numbers with the
    27  division of housing and community renewal;
    28    (viii)  any  projected  construction  or  major  capital  improvements
    29  planned for the property;
    30    (ix) projections of any turnover in rent-regulated apartments;
    31    (x) number of buildings financed in the loans; and
    32    (xi) whether the property has received  any  government  operating  or
    33  capital subsidies and explanation of any such subsidies;
    34    (c)  whether  financial  institutions  are  considering only currently
    35  established rents and reasonable maintenance costs when determining  the
    36  net  operating  costs  for the property such that they are acting in the
    37  best interest of the long-term affordability and stability of the  local
    38  community;
    39    (d)  whether financial institutions are adequately examining the types
    40  of capital improvements included in the landlord's plans for the proper-
    41  ty;
    42    (e) whether financial institutions are using accurate appraisal values
    43  and appropriately doing so;
    44    (f) whether financial institutions are ascertaining whether the  land-
    45  lord is taking on more debt than the property can support, including any
    46  mezzanine debt on such property;
    47    (g)  whether financial institutions are considering a landlord's addi-
    48  tional private equity including the source of such equity;
    49    (h) whether financial institutions are considering a landlord's  addi-
    50  tional debt on the building or buildings including debt from other lend-
    51  ers  and  whether  financial  institutions  are  considering  any  other
    52  outstanding debt a landlord has outside of the loan applied for;
    53    (i) how financial institutions are evaluating public records of  land-
    54  lords  and  property  managers  including,  but not limited to liens and
    55  violations against them;

        A. 3275--B                          3

     1    (j) whether and how financial institutions monitor the number of rent-
     2  regulated units in a building prior to and after a loan disbursement;
     3    (k)  whether  mortgages  include  clauses  that require a certain debt
     4  service coverage ratio or  debt  yield  which  are  predicated  on  rent
     5  increases or tenant turnover;
     6    (l)  whether  financial  institutions  consider  the use of additional
     7  financing, including mezzanine debt, and how this financing is  factored
     8  into the underwriting of the loan, including examining the risks associ-
     9  ated with transactions in which mezzanine debt is used;
    10    (m)  whether  the  use of mezzanine debt to finance projects involving
    11  rent-regulated and/or small business tenants is advisable, and if  there
    12  is  increased  risk of foreclosure as short-term interest rates rise and
    13  the cost of mezzanine financing increases; and what can happen  to  such
    14  tenants  and  small  businesses if there is more debt on a property than
    15  the property can support;
    16    (n) after consideration of the aforementioned factors in this section,
    17  the primary reasons financial institutions deny landlords' loan applica-
    18  tions; and
    19    (o) any other criteria the  department  of  financial  services  deems
    20  necessary to understand the nature and frequency of predatory equity.
    21    §  2.  No  later than eighteen months after the effective date of this
    22  act, the department of financial services shall report to  the  legisla-
    23  ture and the governor on the findings of the study conducted pursuant to
    24  section  two of this act including on the scope, nature and frequency of
    25  involvement in predatory equity throughout the  financial  industry  and
    26  any legislative recommendations deemed to be necessary.
    27    § 3. This act shall take effect immediately.
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