Velázquez Seeks To End Predatory Small Business Loans
U.S. Rep. Nydia M. Velázquez (D-Maspeth, Ridgewood, Woodhaven, Brooklyn, Lower Manhattan) NY) and Dr. Roger Marshall (R-KS) yesterday announced they introduced legislation aimed at ending a predatory commercial lending practice that, according to media reports, has ballooned in recent years.
Dubbed the “Small Business Lending Fairness Act,” the proposed measure legislation would put an end to the practice of small business borrowers signing an obscure legal document known as a “confession of judgement,” which essentially requires the borrower to waive their legal rights. Confessions of judgement have been linked to unfair lending terms, onerous interest rates and unjust seizure of assets.
“This legal loophole has fueled an entire cottage industry of con artists and scammers who profit by exploiting hardworking entrepreneurs and ruining the lives of cash-strapped small business owners,” said Velázquez who is the incoming Chairwoman of the House Small Business Committee. “I call on my colleagues to join me in swiftly enacting this bipartisan measure, which will put an end to these abusive practices.”
Since 1985, confessions of judgement have been prohibited under the “Truth in Lending Act” for consumer loans, but the protections do not extend to certain types of commercial loans. By billing business loans as “merchant cash advances”, unscrupulous lenders began using confessions of judgement during the financial crisis to lure small firms into taking on unsustainable and costly debt, sometimes with interest rates of as much as 350 percent. In some cases, lenders have been allowed to freeze and drain borrowers’ bank accounts, even when the small business borrowers have met their loan obligations.
“By ending ‘confessions of judgement’ in commercial lending, we can stop abusive practices that are crippling honest small business owners,” Velázquez added. “I found it appalling that New York State law has made our state a magnet for dishonest lenders, which is why I’m working to see this loophole closed federally.”
Both Reps. Velázquez and Marshall sit on the House Small Business Committee and Velázquez is the third most senior Democrat on the House Financial Services Committee. Their bill mirrors legislation previously introduced in the Senate by U.S. Senators Sherrod Brown (D-OH) and Marco Rubio (R-FL).
Dromm’s Finance Committee Sees New City Revenue
City Council Member Daniel Dromm (D-East Elmhurst, Elmhurst and Jackson Heights) chair of the Finance Committee, will hold a committee meeting, which among other things will appropriate $507 million in new revenue to various city agencies. About half of the revenue, $244 million is coming from additional personal income taxes due to an uptick in the local economy. Additionally, the committee will review a resolution at the mayor’s request to provide funding of certain organizations in the Expense Budget
The meeting is slated for 10 a.m., today, Dec. 20 at City Hall in Lower Manhattan. The meeting is open to the public.
Van Bramer Lauds New Sunnyside Bike Lanes
City Council Member Jimmy Van Bramer (D-Astoria, Long Island City, Sunnyside, Woodside) yesterday lauded Mayor Bill de Blasio’s announcement that the city’s Department of Transportation had this year constructed over 20 miles of new on-street protected bike lanes along some of New York City’s major streets, including four miles in Sunnyside.
“Bike lanes save lives. They make roads safer for pedestrians, cyclists, and drivers,” said Van Bramer. “Building more protected bike lanes makes a safer City for all and is a vital component of Vision Zero. The accomplishment of more bike lanes, including those along 43rd Ave and Skillman in my district, is good, but we must continue to expand the network to make a safer City for all.”
Specifically, the Queens bile lanes include a 1.8 mile stretch along 3rd Ave/233 Street (Alley Pond Park to Horace Harding Expw); a 2.6 mile stretch along 43rd Ave/ Skillman Ave (Queens Blvd Br. to Roosevelt Ave); and a 0.2 mile stretch along Jewel Avenue.
Kim Supports Activists Against Amazon Deal
Assemblyman Ron Kim (D-Whitestone, Flushing, College Point, Murray Hill ) yesterday threw his support behind activists and community groups who attended the New York State Public Authorities Control Board to voice their protest against the Amazon deal, which will bring the giant online retailer’s second headquarters to Longs Island City.
The city and state are giving the company up to $3 billion in subsidies to bring 25,000 good paying jobs to the city.
“Today, activists lead by the Alliance for a Greater New York and New York Communities for Change are putting the state’s Public Authority Control Board on notice that Amazon is not welcome in New York. I fully support their efforts to halt this deal,” said Kim.
“I am calling on the members of the PACB to listen to community input and reject any subsidies for Amazon. New York should refuse to participate in this race to the bottom. Instead, let’s take those corporate giveaways and reinvest that money into the people of this great state. This action will have a direct and positive impact on working families and simultaneously spur economic growth.”