S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7294
 
                             I N  S E N A T E
 
                              January 5, 2018
                                ___________
 
 Introduced  by Sen. HAMILTON -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend a chapter of the laws of 2017, relating to  establishing
   the  task  force on online lending institutions, and providing for its
   powers and duties, as proposed in legislative bills numbers S.  6593-A
   and  A.  8260-A,  in relation to directing the department of financial
   services to study, evaluate and make recommendations concerning online
   lending institutions and the effectiveness thereof
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  2  of a chapter of the laws of 2017, relating to
 establishing the task force on online lending institutions, and  provid-
 ing  for its powers and duties, as proposed in legislative bills numbers
 S. 6593-A and A. 8260-A, is amended to read as follows:
   § 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;
   (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.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD13051-08-7
              

 S. 7294                             2

   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;
   (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

 S. 7294                             3

 provide any information or data  relating  to  a  specific  borrower  or
 borrowers, or lender or lenders.]
   1.  THE  DEPARTMENT  OF  FINANCIAL  SERVICES  IS HEREBY AUTHORIZED AND
 DIRECTED TO STUDY  AND  ISSUE  A  PUBLIC  REPORT  WITH  RECOMMENDATIONS,
 CONCERNING  THE  PRACTICES,  ECONOMIC  IMPACT,  AND OPERATIONS OF ONLINE
 LENDING IN NEW YORK STATE. THIS REPORT SHALL BE PREPARED IN CONSULTATION
 WITH STAKEHOLDERS, INCLUDING ONLINE LENDERS, CONSUMERS AND  SMALL  BUSI-
 NESSES.
   2. ON OR BEFORE JULY 1, 2018, THE SUPERINTENDENT OF FINANCIAL SERVICES
 SHALL SUBMIT TO THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE SENATE, THE
 SPEAKER  OF  THE ASSEMBLY, THE CHAIR OF THE SENATE STANDING COMMITTEE ON
 BANKS, AND THE CHAIR OF THE ASSEMBLY  STANDING  COMMITTEE  ON  BANKS,  A
 WRITTEN REPORT DETAILING THE FINDINGS AND RECOMMENDATIONS ON THE DEPART-
 MENT'S  STUDY  PERFORMED  IN  ACCORDANCE  WITH  SUBDIVISION  ONE OF THIS
 SECTION.  SUCH REPORT SHALL NOT INCLUDE PERSONAL IDENTIFYING INFORMATION
 OF ANY BORROWER. THE SUPERINTENDENT  SHALL  USE  REASONABLE  EFFORTS  TO
 IDENTIFY  THE  ONLINE  LENDERS CURRENTLY OPERATING IN NEW YORK STATE AND
 SHALL INCLUDE THE FOLLOWING INFORMATION IN THE REPORT:
   (I) AN ANALYSIS OF THE ONLINE LENDERS PRESENTLY OPERATING IN THE STATE
 INCLUDING THE COMMON MEANS AND METHODS OF THEIR  OPERATIONS,  AND  BUSI-
 NESS;  LENDING  PRACTICES OF THE ONLINE LENDING INDUSTRY, AND PREVALENCE
 OF SUCH PRACTICES, INCLUDING DISCLOSURE PRACTICES AND INTEREST RATES AND
 COSTS CHARGED BY ONLINE LENDERS TO INDIVIDUALS  AND  BUSINESSES  IN  THE
 STATE;  THE  PRIMARY  DIFFERENCES  BETWEEN  ONLINE  LENDING PRODUCTS AND
 SERVICES AND THOSE MADE BY TRADITIONAL LENDING INSTITUTIONS DOING  BUSI-
 NESS  IN  THE STATE; THE RISKS AND BENEFITS OF THE PRODUCTS OFFERED; AND
 THE OTHER FORMS OF CREDIT THAT WOULD BE AVAILABLE TO SUCH  BORROWERS  IN
 THE ABSENCE OF ONLINE LENDING OPPORTUNITIES;
   (II) THE TYPES AND AVAILABILITY OF CREDIT PRODUCTS FOR INDIVIDUALS AND
 BUSINESSES;
   (III)  AN ANALYSIS OF DATA, IF AVAILABLE AND ACCESSIBLE, REGARDING THE
 TYPE AND NUMBER OF COMPLAINTS, ACTIONS  AND  INVESTIGATIONS  RELATED  TO
 ONLINE LENDERS; AND
   (IV)  A  SURVEY OF THE EXISTING STATE AND FEDERAL LAWS AND REGULATIONS
 THAT APPLY TO THE ONLINE LENDING INDUSTRY, AND THE IMPACT OF  SUCH  LAWS
 AND  REGULATIONS  ON CONSUMERS, AND THE ACCESS TO CREDIT ON ONLINE LEND-
 ERS, INCLUDING BUT NOT LIMITED TO THE  AVAILABILITY  AND  COST  OF  SUCH
 CREDIT OPPORTUNITIES TO START UP OR EMERGING BUSINESSES.
   §  2.  Section  3 of a chapter of the laws of 2017, relating to estab-
 lishing the task force on online lending institutions, and providing for
 its powers and duties, as  proposed  in  legislative  bills  numbers  S.
 6593-A and A. 8260-A, is amended to read as follows:
   §  3.  This act shall take effect immediately, and shall expire and be
 deemed repealed [April 15,] JULY 1, 2018.
   § 3. This act shall take effect immediately;  provided,  however  that
 section  one  of  this act shall take effect on the same date and in the
 same manner as a chapter of the laws of 2017, relating  to  establishing
 the  task  force  on  online lending institutions, and providing for its
 powers and duties, as proposed in legislative bills  numbers  S.  6593-A
 and A. 8260-A, takes effect.