NY State Senate Bill 2025-S3695

Senate Bill S3695

2025-2026 Legislative Session

Relates to prohibiting the inclusion of a confession of judgment in a contract or agreement for a financial product or service

download bill text pdf

Current Bill Status - In Senate Committee Consumer Protection Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 29, 2025	referred to consumer protection

2025-S3695 (ACTIVE) - Details

Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Add §394-bb, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S3851
2021-2022: S2632
2023-2024: S5256

2025-S3695 (ACTIVE) - Summary

Prohibits the inclusion of a confession of judgment in a contract or agreement for a financial product or service.

2025-S3695 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S3695

SPONSOR: SANDERS
 
TITLE OF BILL:

An act to amend the general business law, in relation to prohibiting the
inclusion of a confession of judgment in a contract or agreement for a
financial product or service

 
PURPOSE OR GENERAL IDEA OF BILL:

To prohibit "confessions of judgment" in any contract or agreement for a
financial product or service.

 
SUMMARY OF PROVISIONS:

Section 1 - Prohibits "confession of judgment" for any contract or
agreement for 'a financial product or service. Subdivision (2) - Defines
"financial product or service" and "financial product or service regu-
lated for the purpose of consumer or investor protection"

Section (2) - provides for an effective date of ninety days after the

bill becomes law.

 
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):

 
JUSTIFICATION:

A confession of judgment is a legal document that allows a party to
obtain a judgment without the need to bring a lawsuit.

Confessions of judgment are frequently abused by lenders to circumvent
legal court proceedings and claim, often without proof, that a debtor
has failed to meet their payment obligations. This allowed creditors to
legally seize assets of borrowers without a court proceeding, financial-
ly ruining tens of thousands of small businesses, including some of whom
did not default on their loans.

This bill will protect small businesses from predatory lenders that
often offer loans and cash advances on the pre-condition that they sign
a confession of judgment.

 
PRIOR LEGISLATIVE HISTORY:

2022: SENATE THIRD READING

2022: referred to assembly banks

2021: REFERRED TO SENATE CONSUMER PROTECTION

2021: referred to assembly banks

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

No fiscal implications.

 
EFFECTIVE DATE:
This act will take place on the ninetieth day after it becomes law.

2025-S3695 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3695
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             January 29, 2025
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Consumer Protection
 
 AN ACT to amend the general business law, in relation to prohibiting the
   inclusion of a confession of judgment in a contract or agreement for a
   financial product or service

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The general business law is amended by adding a new section
 394-bb to read as follows:
   §  394-BB.  CONFESSION  OF JUDGMENT REQUIREMENT FOR CERTAIN CONTRACTS;
 PROHIBITION. 1. NO PERSON SHALL REQUIRE A CONFESSION OF JUDGMENT IN  ANY
 CONTRACT OR AGREEMENT FOR A FINANCIAL PRODUCT OR SERVICE.
   2.  AS USED IN THIS SECTION THE FOLLOWING TERMS SHALL HAVE THE FOLLOW-
 ING MEANINGS:
   (A) "FINANCIAL PRODUCT OR SERVICE" SHALL MEAN ANY FINANCIAL PRODUCT OR
 FINANCIAL SERVICE  OFFERED  OR  PROVIDED  BY  ANY  PERSON  REGULATED  OR
 REQUIRED  TO  BE  REGULATED  BY THE SUPERINTENDENT OF FINANCIAL SERVICES
 PURSUANT TO THE BANKING LAW OR THE INSURANCE LAW OR ANY FINANCIAL  PROD-
 UCT OR SERVICE OFFERED OR SOLD TO CONSUMERS EXCEPT FINANCIAL PRODUCTS OR
 SERVICES:  (I)  REGULATED  UNDER THE EXCLUSIVE JURISDICTION OF A FEDERAL
 AGENCY OR AUTHORITY, (II) REGULATED  FOR  THE  PURPOSE  OF  CONSUMER  OR
 INVESTOR PROTECTION BY ANY OTHER STATE AGENCY, STATE DEPARTMENT OR STATE
 PUBLIC AUTHORITY, OR (III) WHERE RULES OR REGULATIONS PROMULGATED BY THE
 SUPERINTENDENT  OF  FINANCIAL  SERVICES  ON  SUCH  FINANCIAL  PRODUCT OR
 SERVICE WOULD BE PREEMPTED BY FEDERAL LAW.
   (B) "FINANCIAL PRODUCT OR SERVICE REGULATED FOR THE PURPOSE OF CONSUM-
 ER OR INVESTOR PROTECTION": (I) SHALL INCLUDE (A) ANY PRODUCT OR SERVICE
 FOR WHICH REGISTRATION OR LICENSING IS REQUIRED OR FOR WHICH THE OFFEROR
 OR PROVIDER IS REQUIRED TO BE REGISTERED OR LICENSED BY STATE  LAW,  (B)
 ANY  PRODUCT  OR SERVICE AS TO WHICH PROVISIONS FOR CONSUMER OR INVESTOR
 PROTECTION ARE SPECIFICALLY SET FORTH FOR SUCH  PRODUCT  OR  SERVICE  BY
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07918-01-5

 S. 3695                             2
 
 STATE  STATUTE  OR  REGULATION  AND (C) SECURITIES, COMMODITIES AND REAL
 PROPERTY SUBJECT TO THE PROVISIONS OF  ARTICLE  TWENTY-THREE-A  OF  THIS
 CHAPTER,  AND (II) SHALL NOT INCLUDE PRODUCTS OR SERVICES SOLELY SUBJECT
 TO  OTHER GENERAL LAWS OR REGULATIONS FOR THE PROTECTION OF CONSUMERS OR
 INVESTORS.
   § 2. This act shall take effect on the ninetieth day  after  it  shall
 have become a law.

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