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FOR IMMEDIATE RELEASE
PR- 066-05
February 15, 2005

MAYOR MICHAEL R. BLOOMBERG SIGNS LEGISLATION PROVIDING INFORMATION TO THE PUBLIC ON PAYDAY LOANS

Remarks by Mayor Bloomberg at a Public Hearing on Local Laws

“The last two bills before me help educate and protect consumers from unscrupulous payday lenders that prey on low-income New Yorkers by charging exorbitant interest and fees for short-term loans.  These lenders use advertisements that are often misleading and fail to disclose the terms of the cash advance, preventing applicants from fully comprehending the true costs of these loans.

“The first bill, Introductory Number 176-A, is sponsored by Council Members Comrie, Nelson, Sears, Baez, Brewer, Clarke, Felder, Fidler, Gennaro, Gerson, Jackson, Jennings, Katz, Koppell, Lopez, Monserrate, Perkins, Quinn, Reed, Rivera, Sanders, Seabrook, Stewart, Weprin, Yassky, Moskowitz, Addabbo, Barron, Gentile, Martinez, McMahon, Recchia, Liu,  Speaker Miller and Public Advocate Betsy Gotbaum.

“This bill would require ‘payday lenders’ to provide a disclosure notice to potential borrowers so they will have a clear understanding of a loan’s terms. Prior to any consumer entering into a payday loan, the lender or loan provider must supply the consumer with a written disclosure, in both English and Spanish, detailing the terms of the loan. The bill also requires these payday lenders to monitor the demographics of the individuals entering into payday loans and report that information to the Department of Consumer Affairs and the Council. Any person violating the provisions of this law will be subject to a minimum civil penalty of $250 and a maximum penalty of $1000 for each violation. These provisions will help to track and better educate consumers about the potential dangers of entering into payday loans.

“The second bill, Introductory Number 177-A, is sponsored by Council Members Comrie, Nelson, Sears, Baez, Brewer, Clarke, Felder, Fidler, Gennaro, Gerson, Jackson, Jennings, Katz, Koppell, Lopez, Monserrate, Perkins, Quinn, Reed, Rivera, Sanders, Seabrook, Stewart, Weprin, Yassky, Moskowitz, Addabbo, Barron, Gentile, Martinez, McMahon, Recchia, Liu, Gioia, James, Speaker Miller and Public Advocate Betsy Gotbaum.

“This bill requires lending institutions that offer payday loans or grant services and that advertise their services on city owned or operated property, to provide a clear and prominent disclosure of pertinent information on those advertisements.  This pertinent information includes interest rates and fees, information about the lender, and a contact number to which consumers can direct complaints. This bill will help ensure that consumers truly comprehend all of the costs that will be incurred by entering into payday loans.
 
“I would like to thank Gretchen Dykstra, the Commissioner of the Department of Consumer Affairs, for her efforts to ensure that consumers have the greatest protections available to them. I would also like to thank the Council for their dedication and work on these pieces
of legislation.”







MEDIA CONTACT:


Edward Skyler / Jordan Barowitz   (212) 788-2958




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