May 3, 2018
On May 2, 2018, a New York state senator introduced a bill that would require companies offering internet lending services to obtain a limited state charter to operate in New York.
New York Senate Bill 8340, which was referred to the Senate Committee on Banks, would require companies to obtain approval from the N.Y. Department of Financial Services to "engage in the business of making loans over an internet or electronic platform, and to provide a customer with the funds of an approved loan, whereby the application of the customer seeking the loan is taken, and the loan is approved or denied, by the internet lending services corporation, over the internet, or by other electronic means approved by [the Department of Financial Services]."
The proposed internet lending charter would apply to companies making consumer loans of $25,000 or less and commercial loans of $50,000 or less. If enacted, a company that obtains an internet lending charter would be subject to examination and supervision by the Department of Financial Services and would be required to maintain a minimum capital requirement of at least $250,000, an amount that is five times higher than similar brick-and-mortar licensed lenders operating in New York.
We will continue to monitor any legislative developments on this bill.