S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  8260--A
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               June 2, 2017
                                ___________
 
 Introduced  by  M.  of  A.  ZEBROWSKI  --  read once and referred to the
   Committee on Banks -- reported and referred to the Committee  on  Ways
   and  Means -- committee discharged, bill amended, ordered reprinted as
   amended and recommitted to said committee
 
 AN ACT to establish the task force on online lending  institutions,  and
   providing  for  its powers and duties; and providing for the repeal of
   such provisions upon expiration thereof
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Legislative findings and intent. The legislature finds and
 declares that nationwide financial and  technological  firms  have  used
 electronic  platforms  to  develop  a completely new sector of business,
 known as online lending. The New York state economy, which is driven  by
 a  virtual  presence  on  the  internet, just like other businesses, has
 needs for capital to grow and prosper.  The  legislature  further  finds
 that  in  recent  years, financial services have begun to use electronic
 platforms to reduce costs and expand availability and  have  specialized
 in  providing small personal and commercial loans to residents and busi-
 nesses in this state.
   The legislature further finds that although online loans  can  provide
 another  avenue for individuals and entrepreneurs to acquire capital and
 grow their small business, there is potential  for  unscrupulous  online
 lenders  to  exploit  consumers  through  predatory practices. While the
 state has an interest in fostering its economy and  its  businesses,  it
 likewise  has an interest in protecting its consumers and the well-being
 of its residents.
   § 2. Task force on online lending institutions.  1.  There  is  hereby
 established  a  task  force  on online lending institutions (hereinafter
 referred to in this section as the "task force") which shall consist  of
 seven members as follows:
   (a) three members appointed by the governor;

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

                                                            LBD13051-03-7

 A. 8260--A                          2
 
   (b)  two  members  appointed by the temporary president of the senate;
 and
   (c) two members appointed by the speaker of the assembly.
   2.  The appointed members should include individuals representative of
 the online lending community, the small business community,  the  finan-
 cial  services industry, and the consumer protection community. Appoint-
 ments shall take into consideration the expertise of the other  appoint-
 ees, so that the task force reflects a diversity of experience.
   3.  The  members  of  the task force shall receive no compensation for
 their services, but shall be allowed their actual and necessary expenses
 incurred in the performance of their duties pursuant to this section.
   4. Any vacancies in the membership of the task force shall  be  filled
 in the manner provided for in the initial appointment.
   5.  The task force may consult with any organization, other government
 entity or agency, or person, in the development of its  report  required
 by subdivision six of this section.
   6.  On  or  before  April 15, 2018, the task force shall submit to the
 governor, the temporary president of the senate and the speaker  of  the
 assembly a report containing the following:
   (a)  an  analysis  of  data  received  by  the department of financial
 services on the prevalence of these institutions in the  state,  specif-
 ically, how many online lenders are lending to consumers and small busi-
 nesses in this state;
   (b)  an analysis of data received by the attorney general and division
 of consumer affairs regarding the  number  of  complaints,  actions  and
 investigations related to online lending institutions;
   (c)  an examination of the online lending industry and the key partic-
 ipants therein, and an investigation and understanding  of  the  differ-
 ences  in  small  business  and consumer borrowers, lenders and markets,
 such as the history, business models and  practices  of  online  lending
 institutions  including  identification  of  interest  rates  charged by
 online lenders;
   (d) an examination of how  consumers  are  utilizing  online  consumer
 credit  to  manage  existing debt, potentially reduce borrowing costs or
 access needed funds;
   (e) an examination of the existing small business credit gap and small
 business' use of credit and credit needs;
   (f) identification of alternatives for consumers and small  businesses
 who are unable to access traditional financing and whether new technolo-
 gies can enhance access to credit;
   (g)  an examination of whether existing federal and state laws already
 provide appropriate police powers and regulation of small  business  and
 consumer lending by online lending institutions;
   (h) an evaluation of the impact of any contemplated or proposed law or
 regulation  on  the  small business credit gap, including a quantitative
 analysis of the amount of increased or  decreased  credit  available  to
 small  businesses  as  a result of such law or regulation, including the
 extent to which access to credit would be  affected  under  the  state's
 current usury laws;
   (i)  an  analysis of the potential interaction of federal law with any
 contemplated or proposed state regulation;
   (j) an exploration of options for multistate collaboration to  harmon-
 ize the laws and regulations of various states related to small business
 and consumer lending across state borders;

 A. 8260--A                          3
 
   (k)  an  assessment  of best practices for small business and consumer
 loan disclosures, including current online lending industry  efforts  to
 advanced standardized and clear information for borrowers;
   (l)  an  assessment of whether consumer loans and small business loans
 are treated differently by online lending institutions and if any  level
 of oversight should take such differences into consideration;
   (m)  an  identification  of what consumer protections exist to protect
 consumers in this state  from  predatory  practices  of  online  lending
 institutions; and
   (n) a determination of what new measures, if any, are needed to ensure
 consumers  are  protected  from  deceptive  or predatory lending without
 unduly restricting access to credit.
   All information and data required to  be  reported  pursuant  to  this
 subdivision  shall be provided in the aggregate statewide, and shall not
 provide any information or data  relating  to  a  specific  borrower  or
 borrowers, or lender or lenders.
   §  3.  This act shall take effect immediately, and shall expire and be
 deemed repealed April 15, 2018.