Senate Amendments Dilute N.Y. Predator Bill
Bergquist, Erick, American Banker
The New York State Senate last week passed an anti-predatory-lending bill that the state's Assembly had passed a week earlier, but then adopted amendments that toned down some of its toughest provisions.
The last-minute amendments by the Republican-led Senate, working with Republican Gov. George E. Pataki, put the ball in the governor's court. He can either sign the bill without the amendments, veto it, or try to negotiate a compromise on the amendments between the Assembly and Senate.
The bill would put restrictions on "high-cost" loans, defined as those having an interest rate of 8 percentage points or more over the yield on comparable Treasury securities, or having points and fees that are more than 5% of the loan amount. It would also ban the financing of credit insurance on such loans and -- in a provision of interest to secondary-market loan buyers -- would hold purchasers of loans liable for damages if they are found guilty of any violations.
However, one of its amendments would weaken the bill's penalties against assignees to actual, incidental, and statutory damages, and would cap the statutory damages at $15,000 per loan. …