Bill Summary: A06511 - Credit Creation Pilot Program Act of New York

• Creates a pilot program allowing licensed lenders to make unsecured installment loans of $300-$5,000 with a maximum 30% annual simple interest rate and capped origination fees of 5% or $75.

• Requires program licensees to underwrite loans based on borrower ability to repay, with total monthly debt service not exceeding 35% of gross monthly income, and mandates reporting of payment performance to consumer reporting agencies.

• Establishes consumer protections including a one-business-day rescission right, prohibition on credit insurance, prohibition on refinancing, and restrictions on waiving legal rights; caps insufficient funds fees at $25 and delinquency fees at $14 per payment.

• Permits use of referral partners for specified services (application processing, disbursement, payment collection) with compensation capped at $60 per loan on average plus $2 per payment received; referral partners prohibited from providing loan advice or negotiating terms.

• Requires program licensees to pay a $3,000 application fee and $1,000 annual fee; subjects licensees to examination by the superintendent at least every 24 months; mandates annual reporting on loan volume, borrower demographics, credit score improvements, and program compliance.

• Authorizes the superintendent to disqualify referral partners, impose administrative fines up to $1,000, and take disciplinary action against program licensees for violations; program expires five years after implementation.