Assemblyman Ken Zebrowski, with a Coalition of Assembly Democrats, Denounces the House’s Effort to Block State Ability to Restrict Predatory Loans

Assemblyman Ken Zebrowski, Chair of Assembly Committee on Banks, wrote a letter to Senators Schumer and Gillibrand asking that they oppose the “Protecting Consumers’ Access to Credit Act of 2017” (HR3244/S1642). The letter, signed by fourteen Assemblymembers, assailed the House’s recent passage of the bill that intends to strip states of the ability to enforce their usury laws on third party non-bank assignees of debt or loans. The bill would overturn a Second Circuit Court decision in Madden v. Midland Funding LLC, which ruled that non-bank assignees of loans or debts were subject to the usury laws of the consumer’s home state.

The “Protecting Consumers’ Access to Credit Act of 2017” would allow non-bank entities to utilize a funding bank in a state with a high usury cap or no cap at all in an effort to export high interest rate loans into states with more restrictive usury laws such as New York. The bill passed the House on February 14th and is currently in the Committee on Banking, Housing, and Urban Affairs.

“This is an attempt by Washington to usurp the right of states to enforce their usury laws on third party assignees of loans. New York has a proud history of protecting consumers against predatory lending. This bill threatens to open the floodgates of high interest loans into strong usury law states. In the end, it will hurt consumers and line the pockets of out of state banks,” said Assemblyman Zebrowski.