Every two weeks the New York City Council meets for its Stated Meeting to introduce and pass legislation. As a regular feature, Searchlight covers these meetings and posts a summary of the bills passed.
Quote of the Day:
“There was a guy named `Heavy Louie’ who used to do these types of loans. [Now] it is legalized larceny by the government and it’s a heavier interest rate than even Heavy Louie charged.” â€“ Councilmember Michael Nelson on regulating so-called payday loans.
On February 2, the New York City Council passed two bills to help protect New Yorkers from so-called "pay day loans,” short-term loans with extremely high interest rates.
New York state caps interest rates at 25 percent, but out-of-state lenders can still operate in the city and often charge between 400 and 900 percent interest. Many of the individuals who take such loans have had a difficult time establishing the proper credit or have a poor credit history and are ineligible for a traditional bank loan.
“People in quick need of cash are literally getting ripped off,” said Councilmember Leroy Comrie, who drafted the bills.
The legislation (Intro 176 and Intro 177) requires that lenders:
- Provide written disclosure of the loan’s terms in English and in Spanish
- Provide demographic information on borrowers to the Department of Consumer Affairs
- And outline fees, interest rates, and other charges in advertising.
The council also passed resolutions calling on the federal government to close loopholes used by out-of-state companies and calling on the MTA to prohibit payday loan advertisements on signs and billboards.
Another bill on the council’s agenda was the “demolition by neglect” bill (Intro 403-B), which gives the Landmark Preservation Commission the power to fine property owners who allow their historic buildings to decay.
“I remember, with absolute horror and disgust, watching a New York City landmark â€“ the RKO Keith’s Theater in Flushing â€“ be destroyed by willful and deliberate neglect,” said Councilmember Tony Avella, who helped draft the bill. “And at the time, the city was powerless to do anything against the property owner.”
Some religious groups, including the Archdiocese of New York, opposed the bill, arguing that it will put an unfair financial burden on congregations that are struggling to maintain their aging buildings. Many council members expressed concerns about how the bill will affect religious groups, but said that the measure would only be applied to those who were “intentionally trying to circumvent the landmarks laws.”
The measure passed by a vote of 47 in favor, 0 against, and 1 abstention from Brooklyn Councilmember Eric Dilan.
The council also passed a measure (Res 388-A) to help preserve affordable housing in the city by extending tax exemptions for buildings in the Mitchell-Lama program for 50 years.
Created in 1955, the Mitchell-Lama housing program offered low-interest mortgages and tax breaks to developers in exchange for affordable rents. There are approximately 100,000 apartments still in the program.
Currently, property tax exemptions for Mitchell-Lama buildings end as soon as the mortgage is paid off, so owners have little incentive to keep their building in the program. As a result, many buildings are going private and renting apartments at market rates. The council's resolution, which has the power of a bill, would extend property tax incentives to encourage buildings to stay in the program.
“We have an affordable housing crisis in this city,” said Speaker Gifford Miller. “And we must begin by preserving what we have.”
All of the bills, with the exception of the landmark preservation bill, passed by a vote of 48 to 0.
The next Stated Meeting is scheduled for February 16, 2005.