New York State Extends the Effective Date of its new Financial Disclosure Legislation to January 22, 2022

New York State has extended the effective date of its new financial disclosure legislation to January 22, 2022 and increased the transaction cap to include lenders making annual advances to borrowers of $2,500,000 or less.

As has been previously reported in detail in two prior TSL articles: (Governor Cuomo Approves New York State Disclosure Law…Compliance Requirements to be Established in Rulemaking and SFNet Advocacy Alert: Governor’s Office Pushing for Amendment to Increase Transaction Threshold) New York State has enacted financial disclosure legislation affecting lenders (including ABL, Factors and Fintech) who make advances to New York State borrowers of $2,500,000 or less. The most challenging of these disclosures is a requirement that any potential borrower be provided an APR-based metric detailing the “cost” of the lender’s advances prior to the closing of the transaction.

The basis for the extension of the effective date of the transaction is to provide the time necessary for the New York State Department of Financial Services to adopt rules and regulations for the implementation of the statute. A copy of the most recent legislation can be found here and a copy of the recent chapter amendments can be found here.

SFNet, in conjunction with various of its members and with the assistance of a lobbying firm (Statewide Public Affairs), has previously met with Governor Cuomo’s senior staff, the bill sponsors, legislative leadership and representatives of the New York State Department of Financial Services (DFS) in an effort to modify this legislation to provide greater protection for our members.  In the end, the Governor and Legislature were content to leave articulating the details of how the broad range of lending products must be disclosed to a regulatory rulemaking through DFS. SFNet has already begun the steps to engage DFS on this regulatory process. We will keep our members closely apprised of how they can engage in our efforts to shape a reasonable outcome with DFS by which our members can comply.

If you are interested in joining the subcommittee working on this issue, please contact Michele Ocejo at mocejo@sfnet.com.