Governor Signs LaValle, Thiele Bill to Help Protect Small Businesses from Online Lending
State Senator Ken LaValle and State Assemblyman Fred Thiele, Chair of the Assembly’s Small Business Committee, announced that Governor Cuomo has signed legislation into law, Chapter 463 of the Laws of 2016, the two State Legislators introduced which would help develop and implement a small business online lending education and outreach campaign on the potential costs associated with obtaining loans from online marketplace lenders.
The new law will require the Department of Economic Development, in conjunction with the Department of Financial Services, to develop a small business online lending education and outreach campaign. The outreach campaign would be designed to educate businesses, in plain-language terms, of the potential costs associated with obtaining loans from online marketplace lenders including true and up-front transparent pricing and terms, the disclosure of annualized percentage rates, fees and charges, early repayment, and refinancing of a loan and any penalties that may be applied. Further, the Department of Economic Development will be required to develop and implement a plan to distribute such information to small business owners.
In the last decade, this segment of the financial marketplace has steadily expanded and is expected to continue to rapidly grow as advances in technology and data availability are changing how small businesses are accessing funds to finance their businesses.
The online lending marketplace has the potential to provide capital to small businesses that may not have access otherwise or do not have the time to go through a traditional lending process. However, with easier access, the potential exists for some online lenders to exploit small businesses by the lack of transparency and disclosure of interest rates, fees, loan terms, and repayment terms. Currently, the online marketplace lending does not have the statutory or regulatory framework to ensure that safeguards are in place to protect small business from seeking a short-term solution that becomes a long-term financial burden. Since regulation of the banking and lending industry is primarily a federal function, this new law will make small businesses aware of potential financial risks associated with this emerging lending platform.
Contact Assemblyman Fred Thiele, Jr at 2302 Main Street, PO Box 3062, Bridgehampton, NY 11932 (631) 537-2583.
Contact Senator Kenneth P. LaValle at 28 North Country Rd., Suite 203, Mount Sinai, NY 11766 (631) 473-1461
Upcoming Small Business Seminars:
Women’s Empowerment Circle
December 8, 2016 5:30pm – 8:30pm
Come join us and learn tips and tricks to use in everyday life from expert business women. Open to all. Speakers: Nicole J. Christian and Edna J. White. $10.00 per person.
Emergency Planning for Small Business
December 13, 2016, 8:30am-11am
After a natural disaster, the ultimate goal is to get your business up and running quickly. A customized disaster recovery plan will assist your business to document the steps to follow if a disaster occurs. It must be create before an interruption occurs. Plan, Prepare, and be READY. FREE Event.
Identity Theft Prevention, December 14, 2016, 8:30am-11:00am
Brian Rauer, Executive Director & General Counsel,
Better Business Bureau, will discuss: ID theft is one of the most common crimes to strike consumers. It has grown in frequency and has taken on new forms that may be more difficult to detect and correct. Have you, or someone you know been a victim of such a crime? Before falling prey to such scams, it is important to educate yourself, look for the red flags and know what to avoid. If you are victimized, know what prompt steps to take to minimize the damage.
Seminars are held at the Small Business Development Center, SBU Research and Development Park, Stony Brook, NY 11794-6016. Click here to register on the SBDC Website or call 631-632-9837 or email firstname.lastname@example.org
(And don’t forget to check the SBDC Website frequently for valuable information)