New York Commercial Finance Disclosure Bill (S05470) Sent to Gov. Cuomo’s Desk

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The New York legislature delivered a bill to Governor Cuomo for his signature on December 11, 2020 that would require Private Lenders who make certain “Commercial Financing Transactions” to provide a wide range of loan disclosures to commercial borrowers.

These loan disclosures are substantially similar to many consumer disclosures provided by lenders for consumer loans that are covered by the Truth-in-Lending Act (TILA) and its implementing Regulation Z.

Currently, New York commercial lenders generally do not need to provide special loan disclosures to borrowers that are “consumer” in nature.

Below you’ll find high-level summaries of what New York lenders need to understand about this proposed bill and its potential impact:

Summary of New York S05470 – What You Need to Know

A detailed outline provided by AAPL and its General Counsel, Geraci LLP, can be found here.


The bill would apply to certain “Commercial Financing Transactions” of $500,000 or less that are unsecured or secured by personal property.  The bill would NOT apply to transactions secured by real property.  Examples include:

  • Commercial Loans not secured by real property
  • Factoring Transactions
  • Sales Based Financing


The Bill has not yet been signed by Governor Cuomo. It would take effect 180 days after the Governor signs it into law.


The bill requires commercial lenders to provide a wide array of loan disclosures to their commercial borrowers, including annual percentage rates, finance charges, fees, payment amounts, prepayment penalties and collateral requirements.

Other Issues Covered

The bill also creates fines and penalties for creditors that do not comply with the disclosure requirements.  Fines range from $2,000 to $10,000 per violation.

Our Take

As has become customary, state legislatures continue to copy other states laws. California passed Senate Bill 1235 in 2018, which required consumer loan disclosures to be provided to commercial borrowers in certain commercial transactions. New York’s bill is almost identical in its language and approach.

Similar to California’s law, AAPL’s membership base is likely unaffected by this legislation as the vast majority of its membership provides loans secured by real estate.

However, AAPL and its General Counsel, Geraci LLP, continue to oppose any legislation which attempts to bring consumer protections into business transactions. Business parties should be free to contract with one another without unnecessary government interference, and this type of legislation continues to muddy the waters between consumer and commercial transactions.

If you have any questions about New York SO5470, please reach out to Geraci LLP here.

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