Prohibits a state chartered banking institution from providing financing to a landlord who has engaged in certain bad faith acts.
This bill would add a new section to the Banking Law prohibiting state-chartered banking institutions, and other entities licensed under that law, from knowingly financing or investing in the stocks, securities, or other obligations of certain real-estate-owning entities that have engaged in specified “bad faith” landlord conduct. The covered conduct includes recent rent abatements tied to code violations, repeated housing and consumer-law violations, hazardous building conditions, placement in New York City’s alternative enforcement program, harassment, retaliation, and other listed violations under state and city housing and civil rights laws.
The bill creates a limited exception for financing used solely to cure or prevent an immediately hazardous violation of fire, building, or housing codes. To use that exception, an applicant must self-certify eligibility and provide records, reports, plans, and cost statements supporting the need for the financing. False certifications or false supporting documents would trigger civil penalties of $10,000 to $50,000. The Superintendent of Financial Services would be required to adopt implementing regulations and a sample certification form, and the law would apply to contracts entered into, renewed, modified, or amended after the effective date.
If enacted, the bill would expand state banking regulation by restricting what state-chartered banks and other licensed financial entities may fund or invest in when the borrower or target entity is a landlord or property-owning business with a recent history of housing-code, harassment, retaliation, deceptive-practice, or discrimination-related violations. It would effectively use financial access as an enforcement tool against landlords with documented patterns of poor housing conditions or unlawful conduct, while preserving financing for urgent repairs that address immediate hazards. The bill would also add new compliance, certification, and recordkeeping obligations for lenders and borrowers, and would require the Department of Financial Services to issue regulations to implement the new restrictions.
Based on the bill text and available context, the measure appears to be framed as a tenant-protection and accountability bill aimed at curbing financing for landlords with repeated violations or abusive practices. There are no committee transcripts or recorded votes provided, so no formal legislative debate or vote sentiment can be assessed from the available record. The overall tone of the proposal is regulatory and enforcement-oriented, with an emphasis on preventing banks from supporting landlords who have engaged in harmful conduct.
The main point of potential contention is the breadth of the financing ban and the criteria used to label a landlord or property-owning entity as ineligible, including reliance on recent violations, harassment findings, and city-specific enforcement programs. Banks and lenders may view the measure as creating compliance burdens and credit restrictions, while tenant advocates are likely to support it as a way to pressure bad actors to improve conditions. Another likely point of debate is the exception for emergency repair financing, which attempts to balance enforcement against the need to fund immediate safety-related work, but requires documentation that could be disputed in practice.