New York would apply state interest limits to covered consumer loans

Covered lenders and other covered businesses would have to follow applicable New York limits on interest and related charges. The rule covers credit made in New York to state residents mainly for personal, family, or household use, when a material step in the transaction occurs in the state. Credit secured by a first lien on a home or other real estate is excluded. The rule would cover transactions where a covered state-chartered institution or other covered business asserts, relies on, or could rely on the specified federal rate authority. National banks and other federally chartered institutions are excluded unless federal law allows state law to apply. An earlier loan commitment would remain under federal rate authority if federal law requires it. The rule would apply to covered transactions made on or after the article takes effect, 180 days after the act becomes law.

The state financial services superintendent and attorney general could enforce the article and seek remedies for violations. The enforcement powers concern violations of the article by covered lenders and other covered businesses. The superintendent would have to give notice and an opportunity to be heard before imposing a civil penalty. A court could award a penalty in an attorney general action: up to $2,500 for each violation, or $10,000 for each knowing or willful violation.