LAWSUIT REFORM ALLIANCE CALLS ON LEGISLATURE TO PASS BILL TO REGULATE LAWSUIT LENDING
Lawmakers Must Close The “Predatory Lending Loophole” In The Final Days of Session
ALBANY – As the legislative session winds to a close, Lawsuit Reform Alliance of New York executive director Tom Stebbins today called on the state legislature to pass a bill that would subject companies that offer settlement-advance loans to plaintiffs in personal injury lawsuits to the same consumer protection laws as all other providers of consumer loans.
Following a public hearing convened in May by Senate Consumer Protection Chair Chris Jacobs (R-Buffalo) and Senator Rob Ortt (R-Lockport) Stebbins reiterated LRANY’s support for S3911B, a bill introduced by Senator Ortt and Assemblyman Magnarelli that would cap interest on lawsuit loans at New York’s existing threshold for criminal usury.
Since the hearing, which was called after the New York Times and the New York Post reported on predatory practices within the industry, the Senate has seen the introduction of a bill supported by the New York State Trial Lawyers Association and a bill supported by a trade group representing the lenders.
“The hearing provided an opportunity for a number of voices to be heard on how to best protect consumers from the excesses of the lawsuit lending industry. As the New York Post and the New York Times have both reported recently and in the past, there are countless stories of abuse and profiteering in this currently unregulated sector.
“It is time to put politics aside, ignore the indsutry’s attempt to muddy the waters, and pass common sense legislation that will protect consumers from predatory lending practices. Lawmakers must close the loophole that allows these companies to take advantage of some of the most vulnerable, desperate New Yorkers.
“Senator Ortt’s and Assemblyman Magnarelli’s bill is the way to do that,” Stebbins said.
Similar legislation passed the Senate unanimously in 2016, but the lenders and their representative trade groups have since dramatically increased their spending on lobbying against any regulation in New York.