Bill > S01726

This bill provides comprehensive updates to New York's laws regarding interest rates and financial arrangements, significantly expanding the definition of "financing arrangement" to include a wide range of financial transactions such as merchant cash advances, revenue-based financing, earned wage access, rent-to-own agreements, buy-now pay-later transactions, and income-sharing agreements. The legislation establishes a default interest rate of 6% per annum, with broader provisions about how interest is calculated and what can be considered part of the interest charge, including fees, insurance premiums, and other ancillary charges. The bill empowers the Attorney General to create rules and guidance for interpreting these financing arrangements and gives legal mechanisms to prevent and penalize usurious lending practices. Notably, the bill introduces stricter definitions of criminal usury, making it a felony to charge interest rates exceeding 25% per annum, and provides protections for borrowers by allowing recovery of excess interest charges. The legislation aims to create more transparency and consumer protection in various financial transactions, covering everything from small personal loans to more complex financial arrangements, and ensures that lenders cannot circumvent interest rate limitations through creative fee structures or alternative financial products.

Justice

https://www.nysenate.gov/legislation/bills/2025/S1726