Short term lending may come to New York

Check-cashing businesses may be allowed to offer short term loans that carry interest as high as 400 percent if legislation that was introduced earlier this year in the New York Senate and Assembly is passed. Despite being legalized in many other states, short term lending is currently against the law in New York. The new legislation would require the loans to be between $300 and $2,000, and issued for terms of no less than 90 days and no more than six months, the Buffalo News reports. The maximum rate that could be charged would be set by state regulators. "We're trying to do something that fills people's needs and does it in a responsible and regulated way, and nobody else is," Edward P. D'Alessio, deputy general counsel for the Financial Service Centers of New York trade group, told the news source. The bill is being sponsored by Republican Senator Hugh T. Farley of Schenectady, the former chairman of the Senate Banks Committee. Opponents argue that short term loans will have a negative impact on people already making credit decisions under financial strain.