S 10127 NY

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Bill No.: Summary Actions Committee&nbspVotes Floor&nbspVotes Memo Text LFIN Chamber&nbspVideo/Transcript S10127 Summary: BILL NO S10127 &nbsp SAME AS SAME AS A11302

&nbsp SPONSOR MAY &nbsp COSPNSR &nbsp MLTSPNSR &nbsp Amd §5-501, Gen Ob L; amd §14-a, Bank L; amd §§190.40 & 190.42, Pen L &nbsp Extends the interest rate caps and criminal usury framework to covered services including but not limited to, retail installment contracts, merchant cash advances, invoice financing, revenue-based financing, or any transaction that in substance functions as the advance of funds in exchange for a future payment or obligation, regardless of the label assigned to such transaction.

Go to top S10127 Text:

STATE OF NEW YORK ________________________________________________________________________

10127

IN SENATE

April 30, 2026 ___________

Introduced by Sen. MAY -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary

AN ACT to amend the general obligations law, the banking law and the penal law, in relation to extending the interest rate caps and crimi- nal usury framework to covered services

The People of the State of New York, represented in Senate and Assem- bly, do enact as follows:

1 Section 1. Section 5-501 of the general obligations law is amended by 2 adding a new subdivision 1-a to read as follows: 3 1-a. For the purposes of this section, the term "covered service" 4 shall mean short-term financing contingent upon the payment of interest, 5 fees, tips, renewal charges, ancillary charges or any payment made in 6 connection with a transaction, including but not limited to, retail 7 installment contracts, merchant cash advances, invoice financing, reven- 8 ue-based financing, or any transaction that in substance functions as 9 the advance of funds in exchange for a future payment or obligation, 10 regardless of the label assigned to such transaction. 11 § 2. Subdivision 2 of section 5-501 of the general obligations law, as 12 amended by chapter 883 of the laws of 1980 and as further amended by 13 section 104 of part A of chapter 62 of the laws of 2011, is amended to 14 read as follows: 15 2. No person or corporation shall, directly or indirectly, charge, 16 take or receive any money, goods or things in action as interest on the 17 covered service, loan or forbearance of any money, goods or things in 18 action at a rate exceeding the rate [ above prescribed ] as prescribed in 19 subdivision one of this section . The amount charged, taken or received 20 as interest shall include any and all amounts paid or payable, directly 21 or indirectly, by any person, to or for the account of the lender in 22 consideration for making the covered service, or the loan or forbearance 23 as defined by the superintendent of financial services pursuant to 24 subdivision three of section fourteen-a of the banking law , except such 25 fee as may be fixed by the commissioner of taxation and finance as the 26 cost of servicing loans made by the property and liability insurance 27 security fund.

EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD15589-02-6

S. 10127 2

1 § 3. Subdivision 2 of section 14-a of the banking law, as amended by 2 chapter 155 of the laws of 2012, is amended to read as follows: 3 2. The rate of interest as so prescribed under this section shall 4 include as interest any and all amounts paid or payable, directly or 5 indirectly, by any person, to or for the account of the lender in 6 consideration for the making of a covered service, as defined by section 7 5-501 of the general obligations law, or loan or forbearance as defined 8 by the superintendent , pursuant to subdivision three of this section. 9 § 4. Section 190.40 of the penal law, as amended by chapter 424 of the 10 laws of 1976, is amended to read as follows: 11 § 190.40 Criminal usury in the second degree. 12 A person is guilty of criminal usury in the second degree when, not 13 being authorized or permitted by law to do so, [ he ] such person knowing- 14 ly charges, takes or receives any money or other property as interest on 15 the covered service, as defined by section 5-501 of the general obli- 16 gations law, loan or forebearance of any money or other property, at a 17 rate exceeding twenty-five per centum per annum or the equivalent rate 18 for a longer or shorter period. 19 Criminal usury in the second degree is a class E felony. 20 § 5. Section 190.42 of the penal law, as added by chapter 424 of the 21 laws of 1976, is amended to read as follows: 22 § 190.42 Criminal usury in the first degree. 23 A person is guilty of criminal usury in the first degree when, not 24 being authorized or permitted by law to do so, [ he ] such person knowing- 25 ly charges, takes or receives any money or other property as interest on 26 the covered service, as defined by section 5-501 of the general obli- 27 gations law, loan or forbearance of any money or other property, at a 28 rate exceeding twenty-five per centum per annum or the equivalent rate 29 for a longer or shorter period and either the actor had previously been 30 convicted of the crime of criminal usury or of the attempt to commit 31 such crime, or the actor's conduct was part of a scheme or business of 32 making or collecting usurious loans. 33 Criminal usury in the first degree is a class C felony. 34 § 6. This act shall take effect immediately.

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