Establishes a working group to create a pilot program for an alternative system to a credit score for unbanked persons, undocumented immigrants and any other individuals who would benefit from such alternative system.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2692A
SPONSOR: Forrest TITLE OF BILL:
An act to amend the financial services law, in relation to establishing
a working group to create a pilot program for an alternative system to a
credit score
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to establish a working group within the New
York State Department of Financial Services to develop a pilot program
that creates an alternative creditworthiness system. This system is
designed for individuals who lack a traditional credit score, such as
the unbanked, undocumented immigrants, and indigent populations.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1: Adds a new Section 312 to the Financial Services Law, mandat-
ing the creation of a working group by the Superintendent of the Depart-
ment of Financial Services. The working group will develop a pilot
program to assess alternative methods of determining creditworthiness
for individuals who do not possess a traditional credit score.
Section 2: Establishes that this act shall take effect immediately.
JUSTIFICATION:
Traditional credit scoring systems are inherently biased against certain
populations, particularly those who are unbanked, undocumented immi-
grants, or indigent. These individuals often lack access to financial
products and services due to their inability to meet the criteria set by
standard credit evaluations. This bill seeks to address these inequities
by developing an alternative system that more accurately reflects the
creditworthiness of individuals traditionally excluded from the finan-
cial system.
The working group established by this bill will have the expertise
necessary to consider innovative creditworthiness models, including
those being developed in Europe and other jurisdictions. By incorporat-
ing these alternative models, New York can create a more inclusive
financial environment that provides equitable access to credit for all
its residents.
This initiative is crucial for fostering economic stability among
vulnerable populations, ensuring they have the means to participate
fully in the state's economy. Moreover, by piloting this program, New
York positions itself as a leader in financial inclusivity, potentially
setting a precedent for other states to follow.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
Minimal. The working group members will not receive compensation, though
they may be reimbursed for expenses as approved by the Superintendent
and the Division of Budget.
EFFECTIVE DATE:
This act shall take effect immediately upon becoming law.
STATE OF NEW YORK
________________________________________________________________________
2692--A
2025-2026 Regular Sessions
IN ASSEMBLY
January 22, 2025
___________
Introduced by M. of A. FORREST -- read once and referred to the Commit-
tee on Banks -- recommitted to the Committee on Banks in accordance
with Assembly Rule 3, sec. 2 -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee
AN ACT to amend the financial services law, in relation to establishing
a working group to create a pilot program for an alternative system to
a credit score
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The financial services law is amended by adding a new
2 section 312 to read as follows:
3 § 312. Creditworthiness alternative pilot and working group. 1. For
4 the purposes of this section:
5 (a) "Creditworthiness" means a measure of how likely an individual
6 will default on such individual's debt obligations according to a lend-
7 er's assessment, or how worthy an individual is to receive new credit.
8 (b) "Credit score" means a number that provides a comparative estimate
9 of an individual's creditworthiness based on an analysis of such indi-
10 vidual's credit report and is used by lenders to evaluate the risk of
11 lending money or offering financial services to consumers.
12 2. The superintendent shall form a working group to create a pilot
13 program to develop an alternative credit worthiness program for individ-
14 uals who do not have a credit score; are unbanked, undocumented immi-
15 grants, indigent; or who would benefit from such a mechanism. Members of
16 the working group shall:
17 (a) be appointed by the superintendent and shall include represen-
18 tatives of the financial industry and immigration advocates;
19 (b) not receive compensation, but shall be eligible to receive
20 reimbursement for expenses subject to the approval of the superintendent
21 and the division of budget;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03974-02-6
A. 2692--A 2
1 (c) analyze models for alternatives to traditional credit scores now
2 being discussed and developed by the credit card industry in Europe,
3 among other models such members deem appropriate; and
4 (d) first convene within ninety days of the effective date of this
5 section and shall convene no less than once per month; and
6 (e) provide the superintendent, the governor, and the legislature a
7 report within one year of the effective date of this section containing
8 such working group's recommendations for the establishment of a pilot
9 program, and a feasible timeline for the implementation of such program.
10 § 2. This act shall take effect immediately.
