Governor Cuomo Approves New York State Disclosure Law…Compliance Requirements to be Established in Rulemaking

In a Memorandum filed with Senate Bill SB-5470-B, New York State Governor, Andrew Cuomo acknowledged SFNet’s and other’s opposition to the measure noting that “there is no strong consensus as to the best approach in how to compare various products” and stating, “I have secured an agreement with the legislature to make certain technical changes to this bill to better provide clarity…”. The new statute requires non-regulated commercial lenders, including asset-based lenders and factors, that propose to lend $2 million (pending approval by the legislature the threshold is likely to be at least $2 million) or less to New York-based borrowers to make certain uniform disclosures in their proposals including an “estimated” Annual Percentage Rate.

In its opposition, SFNet’s Advocacy Committee was successful in pushing the effective date of the statute to January of 2022, providing SFNet the ability to work with New York’s regulatory and enforcement body to adopt rules that allow ABL lenders and factors to meaningfully comply with the statute.

For background, please view the following links to SFNet’s Proposed Amendments to the Bill, the text of the approved Bill AB 10118_SB 5470-B, potential chapter amendments, the SFNet Opposition letter to the approved statute, and our July alert and December alert. We welcome our non-regulated members doing business in New York to contact Michele Ocejo at mocejo@sfnet.com for more information.