BILL NUMBER: S4579A
SPONSOR: HOYLMAN-SIGAL
 
TITLE OF BILL:
An act to amend the banking law, in relation to prohibiting bank invest-
ments in bad faith landlords
 
PURPOSE:
To prevent landlords convicted of fraud or violating housing laws from
receiving financing from state-chartered banks.
 
SUMMARY OF PROVISIONS:
Section one prevents state-chartered banking institution or a licensee
under the banking law from providing financing to or investing in any
person or entity engaged in leasing residential real estate if the
person or entity has engaged in certain offenses committed against
tenants in the recent past. Section one also creates exemptions if an
applicant for financing self-certifies that they will use the financing
solely to cure or prevent an immediately hazardous violation of certain
housing codes.
Section two establishes the effective date.
 
JUSTIFICATION:
When a landlord is found time and again to disregard laws that protect
tenants' health, safety, and well-being, it is reasonable to expect
financial institutions to analyze this record when considering future
financing. Certain bad actors have been convicted of illegal harassment,
coercion, or fraud against tenants, only to turn around and get financ-
ing for a new building to exploit.
Perhaps the most notorious example of this phenomenon has been Steve
Croman, the New York City landlord who in 2017 was sentenced to one year
of jail time and ordered to pay $8 million in restitution to tenants for
his crimes. A consent decree required that Croman place over 100 of his
properties under new independent management, with a monitor in place to
oversee compliance. However, after his stint in jail, Croman returned
only to go on a buying spree of new buildings. Despite his past legal
troubles, tenants report a landlord that continues old patterns of
harassment and neglect.
This bill would help address the lack of accountability by prohibiting
State chartered banks and other licensees under the Banking Law from
issuing loans to landlords that have been convicted of violating
tenants' rights. Bad actors that behave with impunity should not be
given the chance to continue victimizing New Yorkers.
 
LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect 90 days after the department of financial
services shall have promulgated regulations to effectuate the provisions
of this act.