New York Assemblymembers Yuh-Line Niou and Crystal Peoples-Stokes have introduced a bill to apply consumer usury protections to small businesses. Bill A. 3638 defines a small business as “one which is resident in this state, independently owned and operated, not dominant in its field and employs one hundred or less persons.”
The penalty for violating the usury statute is the forfeiture of the entire interest on the note.
The civil usury interest rate cap is 16% in New York State. The criminal usury interest rate cap is 25%.
The bill has been referred to the Committee on Banks. Yuh-Line Niou and Peoples-Stokes introduced this bill as one of several addressing the small business finance industry. A. 3636, another of theirs, would prohibit the inclusion of a confession of judgment in a contract or agreement for a financial product or service. That bill is also sitting in the Committee on Banks.