Statement: New York Enacts Strongest Commercial Lending Disclosure Law in the Nation
For immediate release: December 23, 2020
CONTACT:
Caitlin McShane
(415) 225-8855 | [email protected]
Statement from Ryan Metcalf on behalf of the Responsible Business Lending Coalition applauding Governor Cuomo for signing New York State’s Small Business Truth in Lending Act into law today.
December 23, 2020 -- Ryan Metcalf, Head of Regulatory Affairs for Funding Circle U.S. and Spokesperson for the Responsible Business Lending Coalition (RBLC) — a network of nonprofit and for-profit lenders, investors, and small business advocates — released the following statement in response to Governor Cuomo signing the New York State Small Business Truth in Lending Act into law.
“Gov. Cuomo signing the New York State Small Business Truth in Lending Act into law today is a monumental victory for small business owners throughout the state. Not only does the legislation bring novel, common-sense transparency standards to small business financing in New York, it marks the strongest commercial lending disclosure law in the nation.
At a moment in history when small businesses are under serious threat, passage of the New York State Small Business Truth in Lending Act comes just as small business owners need protection the most. Clear and concise language from lenders will allow entrepreneurs to easily shop and compare financing offers, empowering them to make the best financial decisions for their businesses.
Under this law, the Responsible Business Lending Coalition projects that New York small businesses will save between $369 million and $1.75 billion annually. For the state’s 26,000 minority-owned small businesses, cumulative annual savings are expected to be in the hundreds of millions.
The RBLC thanks Governor Cuomo and the Department of Financial Services for their efforts and their commitment to small businesses. We also commend the leadership of Assemblyman Zebrowski and Senator Thomas for authoring the bill.”
The New York State Small Business Truth in Lending Act builds upon similar legislation passed in California. Both bills were inspired by the Responsible Business Lending Coalition’s Small Business Borrowers’ Bill of Rights, a list of fundamental financing rights that all small businesses deserve.
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Responsible Business Lending Coalition
The Responsible Business Lending Coalition (RBLC) is a network of nonprofit and for-profit lenders, investors, and small business advocates that share a commitment to innovation in small business lending and serious concerns about the rise of irresponsible small business lending. The coalition created the Small Business Borrowers' Bill of Rights, the first cross-sector consensus on the rights that small business owners deserve and what financing providers, brokers and lead generators can do to uphold those rights. Over 100 small business lenders, brokers and lead generators, and advocacy organizations have endorsed these standards. Members of the Responsible Business Lending Coalition include Accion Opportunity Fund, Community Investment Management, Funding Circle, LendingClub, Opportunity Finance Network, Opportunity Fund, Small Business Majority, StreetShares, and the Aspen Institute. For more information, visit www.borrowersbillofrights.org
The Responsible Business Lending Coalition (RBLC) is a network of nonprofit and for-profit lenders, investors, and small business advocates that share a commitment to innovation in small business lending and serious concerns about the rise of irresponsible small business lending. The coalition created the Small Business Borrowers' Bill of Rights, the first cross-sector consensus on the rights that small business owners deserve and what financing providers, brokers and lead generators can do to uphold those rights. Over 100 small business lenders, brokers and lead generators, and advocacy organizations have endorsed these standards. Members of the Responsible Business Lending Coalition include Accion Opportunity Fund, Community Investment Management, Funding Circle, LendingClub, Opportunity Finance Network, Opportunity Fund, Small Business Majority, StreetShares, and the Aspen Institute. For more information, visit www.borrowersbillofrights.org
ADDITIONAL STATEMENTS
New York Assemblyman Kenneth Zebrowski:
“Now more than ever, we must be supporting and providing our small businesses with every tool possible to succeed and recover from the COVID-19 pandemic. A lack of uniform disclosures has led to a confusing and complex environment for business owners accessing commercial financing. This legislation will provide clarity through a simple and easily understood disclosure that provides information on the true costs and hidden fees of an offer. A simple and understandable disclosure will level the playing field and ensure business owners are making an informed decision that is best for their business."
Accion Opportunity Fund Vice President of Research & Policy Gwendy Brown:
“Passage of the New York Small Business Truth in Lending Act is a monumental victory for small business owners throughout New York. This new law will equip small businesses with the information needed, like APR and estimated monthly payments, to effectively shop and compare financial offers from different types of lenders and make smart financial decisions for their businesses with greater ease. The COVID-19 pandemic has caused great distress for small businesses, especially business owned by people of color that have experienced unparalleled disparities in keeping their small business open. This legislation could not come at a better time.”
Community Investment Management Managing Partner Jacob Haar:
"The pandemic has made it clear that we all have a stake in the financial health of our small business community. We applaud Governor Coumo for signing into law New York’s Small Business Truth in Lending Act, which protects small business owners by requiring disclosure of the true cost of financing. This law provides New York small business owners with easy-to-understand information, such as APR and total loan cost, which they need to make informed financial decisions and identity responsible capital that empowers them to succeed."
LendingClub Head of Public Policy and former New York State Superintendent of Banks Richard Neiman:
“We applaud New York’s leadership in creating the strongest transparency standards in small business financing, to empower small businesses to choose the most affordable financing for them. By passing the Small Business Truth in Lending Act, New York is applying lessons learned from the 2008 crisis to help us face a new economic crisis today.”
New York State Community Development Financial Institutions Coalition Chair Linda MacFarlane:
“As we wait for the Coronavirus vaccine to roll out, New York’s small businesses are struggling to hang on. Unfortunately, some lenders have made it hard for small businesses to compare the true cost of their offers. CDFI Coalition members around the state offered strong support for the NYS Small Business Truth in Lending Act’s requirements that lenders disclose annual percentage rate (APR) and repayment terms. We commend Governor Cuomo for signing this bill and giving small business borrowers the tools they need to make good financial decisions.”
Upstate New York Black Chamber of Commerce Co-Founder/President and CEO Anthony Gaddy:
“For business owners and entrepreneurs, passage of the New York State Small Business Truth in Lending Act now protects our businesses and our livelihoods from deceptive lending practices. This is especially true for Black and minority business owners. Because of systemic disparities and the lack of access to traditional lending, Black and minority communities have been more susceptible to alternative lending sources where access to capital may be more favorable, but borrowers are exposed to less than favorable practices, along with unclear terms and conditions. Time is of the essence to bring these practices into the light. The UpState New York Black Chamber of Commerce thanks Governor Cuomo for signing this bill into law.”
“Now more than ever, we must be supporting and providing our small businesses with every tool possible to succeed and recover from the COVID-19 pandemic. A lack of uniform disclosures has led to a confusing and complex environment for business owners accessing commercial financing. This legislation will provide clarity through a simple and easily understood disclosure that provides information on the true costs and hidden fees of an offer. A simple and understandable disclosure will level the playing field and ensure business owners are making an informed decision that is best for their business."
Accion Opportunity Fund Vice President of Research & Policy Gwendy Brown:
“Passage of the New York Small Business Truth in Lending Act is a monumental victory for small business owners throughout New York. This new law will equip small businesses with the information needed, like APR and estimated monthly payments, to effectively shop and compare financial offers from different types of lenders and make smart financial decisions for their businesses with greater ease. The COVID-19 pandemic has caused great distress for small businesses, especially business owned by people of color that have experienced unparalleled disparities in keeping their small business open. This legislation could not come at a better time.”
Community Investment Management Managing Partner Jacob Haar:
"The pandemic has made it clear that we all have a stake in the financial health of our small business community. We applaud Governor Coumo for signing into law New York’s Small Business Truth in Lending Act, which protects small business owners by requiring disclosure of the true cost of financing. This law provides New York small business owners with easy-to-understand information, such as APR and total loan cost, which they need to make informed financial decisions and identity responsible capital that empowers them to succeed."
LendingClub Head of Public Policy and former New York State Superintendent of Banks Richard Neiman:
“We applaud New York’s leadership in creating the strongest transparency standards in small business financing, to empower small businesses to choose the most affordable financing for them. By passing the Small Business Truth in Lending Act, New York is applying lessons learned from the 2008 crisis to help us face a new economic crisis today.”
New York State Community Development Financial Institutions Coalition Chair Linda MacFarlane:
“As we wait for the Coronavirus vaccine to roll out, New York’s small businesses are struggling to hang on. Unfortunately, some lenders have made it hard for small businesses to compare the true cost of their offers. CDFI Coalition members around the state offered strong support for the NYS Small Business Truth in Lending Act’s requirements that lenders disclose annual percentage rate (APR) and repayment terms. We commend Governor Cuomo for signing this bill and giving small business borrowers the tools they need to make good financial decisions.”
Upstate New York Black Chamber of Commerce Co-Founder/President and CEO Anthony Gaddy:
“For business owners and entrepreneurs, passage of the New York State Small Business Truth in Lending Act now protects our businesses and our livelihoods from deceptive lending practices. This is especially true for Black and minority business owners. Because of systemic disparities and the lack of access to traditional lending, Black and minority communities have been more susceptible to alternative lending sources where access to capital may be more favorable, but borrowers are exposed to less than favorable practices, along with unclear terms and conditions. Time is of the essence to bring these practices into the light. The UpState New York Black Chamber of Commerce thanks Governor Cuomo for signing this bill into law.”
