2022 Policy Platform
New Yorkers for Responsible Lending (NYRL), a statewide coalition of 160 non-profit organizations, promotes economic justice as a matter of racial and community equity.
NYRL’s policy platform addresses the economic challenges and injustices that New Yorkers face in light of the economic impact of the COVID-19 crisis, which disproportionately affects communities of color, and it reflects NYRL members’ experiences working in communities across New York State.
- Pass the Consumer and Small Business Protection Act (CSPA): NYRL strongly supports A2495A(Niou)/S6414(Comrie) to amend New York’s primary consumer protection statute (GBL § 349) to conform with the majority of state consumer protection laws that broadly prohibit unfair business practices. Reform is needed now more than ever, in the wake of the COVID-19 crisis and the emergence of bad actors seeking to exploit vulnerable New Yorkers with unfair products and practices. The bill enhances access to justice for consumers and small businesses harmed in financing, mortgages and housing, insurance, student loans, and other transactions. The bill also simplifies pleading requirements and updates the outdated damages cap set 40 years ago.
NYRL’s Workgroup Priorities:
- Protect Consumers Facing Debt Collection, Including Abusive Collection Lawsuits: The COVID-19 crisis has caused widespread financial distress leaving millions of New Yorkers, particularly in communities of color, unable to pay bills (including increased medical debts). This distress will result in a spike of debt collection lawsuits against New Yorkers who are least able to defend themselves or afford prohibitively high judgments. NYRL will monitor any legislation as it arises related to debt collection, including legislation related to debt settlement companies.
- Keep Payday Loans and Other Predatory and Usurious Financial Products Out of NYS and Encourage Safe Alternatives: The COVID-19 crisis is not an excuse to permit harmful financial products to enter the NY market. These products lead to an inescapable debt trap that strip assets from lower-income consumers. NYRL strongly opposes any effort to evade NY’s strong usury laws, including attempts to expand check casher services, permit access to high-cost credit, or introduce novel, high-cost loan products in previously unregulated contexts such as pension advances, litigation funding, or employer wage advances. Our state must also be vigilant against the new wave of credit services through fintech and other means that threaten New York’s interest rate cap.
- Curb Predatory Auto Lending: Many New Yorkers depend on personal vehicles, and some car dealers take advantage of this by offering high interest loans, often without regard for the credit history of the borrower. The car-buying experience should be made more transparent and equitable. NYRL supports legislation to address predatory subprime auto lending, impose caps on interest-rate markups, and require clear disclosure of all fees and add-ons. NYRL also supports A819(Zebrowski)/S3237(Sanders), which restores the interest rate cap for auto lending that applies to most other consumer transactions in NYS.
- Prohibit the Use of Credit Report Data and Other Socioeconomic Factors in Insurance Rating and Underwriting: NYRL supports A3082(Peoples-Stokes)/S5904(Parker) which bans the use of credit reports and other socioeconomic factors in the underwriting and pricing of home and automobile insurance. Insurers’ use of this data often has a disparate impact on communities of color and disproportionately burdens lower-income New Yorkers with higher insurance costs. The NYS Department of Financial Services (DFS) recently banned the use of education and occupation as ratings factors for auto insurance pricing, but the use of credit report data continues to have serious discriminatory impacts.
- Homeowners’ Insurance Data Disclosure: NYRL supports requiring residential property insurers to disclose data regarding the geographic locations of policies written, premiums collected, and losses incurred Transparency regarding where insurers are writing homeowners’ policies will help ensure fair access to affordable, quality insurance for homeowners in low-income communities and communities of color.
- Foreclosure Statute of Limitations Legislation: NYRL supports legislation to address recent appellate decisions which have upended longstanding laws, and effectively permit foreclosing lenders to avoid statutes of limitations and clog court dockets with long-abandoned, stale claims. A7737B(Weinstein)/S5473D(Sanders) would correct these recent aberrational decisions and restore the well-established precedents they jettisoned. This bill—a reconciled version of prior competing bills—would stop foreclosing plaintiffs from playing fast-and-loose with statutes of limitations, and would re-establish consistency and certainty for homeowners who would otherwise have to defend claims that are often more than a decade old.
- Making DFS Mortgage Servicing Regulations Enforceable: NYRL supports A2428(Dinowitz)/S2143(Kavanagh) to amend Banking Law 12-D and establish a private right of action for violations of the NYS Department of Financial Services’ strong mortgage servicing regulations (Part 419). Unlike their federal parallels, there is no mechanism for borrowers to enforce these state regulations, meaning that the regulations are regularly violated by servicers with impunity. This common-sense legislation would incentivize mortgage servicers to comply with the regulations by permitting homeowners injured by their violations to enforce the regulations by bringing affirmative claims or asserting violations as a defense to foreclosure actions.
- Tax Lien Foreclosure Reform: Across the State, struggling homeowners are threatened by varying tax lien sales and foreclosure procedures with one common failing—the absence of basic consumer protections applicable to mortgage foreclosures, such as mandatory pre-foreclosure notices and a settlement conference process. Tax lien sales and the subsequent foreclosures disproportionally impact seniors and communities of color. NYRL will continue to work with the judiciary to establish a pilot project to provide settlement conferences in tax lien foreclosure cases. We also would support legislation for a property taxpayers’ “bill of rights” that would ensure that no home is needlessly lost to tax foreclosures without providing homeowners with basic due process and consumer protections that provide an opportunity to negotiate a positive resolution.
- Mortgage Default Registry Legislation: NYRL supports A3081(Peoples-Stokes)/S3933(Kennedy). Some localities have enacted well-intentioned registries, which require lenders to document which properties in the municipality are secured by mortgages in default. While these registries can be a helpful tool in policing vacant and abandoned properties and ensure that mortgage servicers satisfy their obligation to maintain these properties, premature registration can result in excessive fees, which are passed along to borrowers and make it more difficult to cure mortgage arrears. This legislation would prohibit registration on these default registries before the filing of a notice of pendency (also known as a “lis pendens”) at the beginning of a formal foreclosure action.
- Ban the Practice of Transcript Withholding: NYRL supports A6938A(Epstein)/S5924A(Thomas), which would ban the use of withholding transcripts as a debt collection tool for debts owed directly to higher education institutions. Currently, students who owe debt to their college or university cannot obtain their transcript to resume or complete their education, which has a disparate impact on first-generation college students and people of color.
- Increased Funding for the Education Debt Consumer Assistance Program (EDCAP): NYRL supports increased funding of 3.5 million dollars in FY23 for EDCAP to provide unbiased, one-on-one student loan debt consumer assistance to New Yorkers. EDCAP’s services will be vital as student loan payments resume, borrowers face servicer changes, and the temporary Public Service Loan Forgiveness waiver relief is implemented.
- Greater Accountability of For-Profit Higher Education Institutions: NYRL supports A3308B(Epstein)/S299A(Thomas), which increases accountability of for-profit institutions by enhancing disclosure and transparency concerning fees, costs of attendance, average student debt loads, post-graduation performance, and profits. Nearly half of student loan defaults in New York emanate from for-profit schools because these schools often leave students with degrees that don’t actually help graduates obtain good jobs. Enhanced disclosures will help potential students see through slick marketing to make informed decisions about where they can get the best return on their educational investments.
- Protections for Borrowers of Private Student Loans: NYRL supports A6226(Zebrowski)/S5136A(Thomas), which would require debt collectors to provide basic information as part of a lawsuit to collect on a private student loan, and would prohibit robo-signing of documents in collection lawsuits. This bill will would also protect co-signers of student loans—who are primarily older consumers—by requiring enhanced disclosures, providing a simpler process for co-signers to be released from liability, and prohibiting the acceleration of a loan based on a co-signer’s death or bankruptcy.
- Ensure Student Loan Collection Suits are Brought in the Borrower’s County: It has been a long-standing practice for the Office of the Attorney General, when suing borrowers for defaulted education debt, to file suit exclusively in Albany County Supreme Court, regardless of where the student lives or attended college. That has meant that borrowers must travel all the way to Albany to appear in court and defend their cases. NYRL supports a change in this practice to ensure that NYS borrowers are sued in the county where they reside.
- Federal Advocacy: NYRL will continue to advocate with stakeholders at the federal and state levels to ensure that New Yorkers benefit from all available relief, with an immediate focus on the proper implementation of the latest Public Service Loan Forgiveness waiver relief.