New York Assembly Bill A11302

New York 2025-2026 Regular Session

• Introduced: 5/11/26
• Refer: 5/11/26

Caption

Extends the interest rate caps and criminal usury framework to covered services

Summary

This bill expands New York’s interest-rate and criminal usury laws to reach a new category defined as “covered service.” The bill defines covered service broadly to include short-term financing arrangements that involve interest, fees, tips, renewal charges, ancillary charges, or other payments connected to the transaction, including retail installment contracts, merchant cash advances, invoice financing, revenue-based financing, and any transaction that functions in substance as an advance of funds for a future payment or obligation, regardless of how it is labeled. The bill amends the General Obligations Law and Banking Law so that the state’s civil usury caps apply not only to traditional loans and forbearances, but also to these covered services. It also updates the Penal Law’s criminal usury provisions so that charging interest above the statutory threshold on a covered service can trigger criminal liability in the same way as an unlawful loan. The measure takes effect immediately and would therefore broaden enforcement tools against high-cost financing products that may be structured to avoid existing usury limits.

Impact

If enacted, the bill would materially expand the scope of New York’s usury laws by treating certain nontraditional financing products as the functional equivalent of loans for purposes of interest-rate limits and criminal penalties. This would affect lenders, finance companies, merchant cash advance providers, invoice financiers, and other businesses offering short-term commercial financing, as well as borrowers who use those products. It would also give regulators and prosecutors a clearer statutory basis to challenge transactions that are economically loans but are labeled as sales, advances, or other financing arrangements.

Sentiment

The available record shows the bill was introduced and referred to the Judiciary Committee, with no recorded votes or committee transcript excerpts provided. Based on the bill’s caption and structure, the measure appears aimed at consumer and small-business protection by closing perceived loopholes in New York’s usury laws. There is no direct evidence in the provided materials of organized support or opposition, but the bill’s broad reach suggests it would likely be viewed favorably by advocates of tighter lending regulation and more cautiously by alternative-finance providers.

Contention

The main point of contention is the bill’s broad definition of “covered service,” which captures a wide range of financing arrangements beyond traditional loans, including merchant cash advances and revenue-based financing. Supporters would likely argue that this is necessary to prevent evasion of usury caps through relabeling, while opponents may contend that the definition is overinclusive and could sweep in legitimate commercial financing or create uncertainty for business funding markets. Another likely issue is the inclusion of fees, tips, renewal charges, and ancillary charges in the interest calculation, which could make compliance more difficult and expose more transactions to civil and criminal usury enforcement.