Following the vague terms of bill A10118A/S5470B, which would require New York lenders to provide certain uniform disclosures, it’s no surprise that industry leaders are reacting with frustration. Steve Denis, Executive Director of the Small Business Finance Association, remarked, “It’s actually shocking to me how tone deaf those who claim to represent our industry are when it comes to policy.
The APR disclosure bill has so far been passed through New York State’s legislature, and if signed by Governor Cuomo, would mandate that lenders disclose terms such as their APR even if the funding itself does not involve one. A similar law in California and the confusion that followed its implementation left lenders seeking advice from equally baffled lawyers. The state itself failed to provide guidance on how to calculate the terms if the loan itself did not include them.
Without major problems regarding disclosure of these terms, the bill complicates lending in a time when small businesses are trying desperately to find options to remain open. Feedback from borrowers and a lack of complaints to regulators do not indicate that this bill will solve any major existing problems. Find out more about the bill here.