AFSA Seeks Veto on NY Floorplan Lending Bill
The American Financial Services Association along with several AFSA members is seeking a veto or a chapter amendment to legislation recently passed by both chambers in New York. AFSA communicated with both the Assembly and the Senate in advance and has reached out directly to New York Governor Andrew Cuomo about Senate Bill S5470B, which would cause serious harm to floorplan lenders and their dealer partners in the state.
The bill requires certain disclosures that, while well intended for other types of credit, are not appropriate when applied to floorplan lending. Floorplan lending is the process by which dealers are able to obtain vehicles without outlaying significant working capital. These loans are open-ended in nature and structured to facilitate the automobile sales process. Often floorplan loans are set out as interest-only until the vehicle is sold, at which time the principal is due.
“If signed into law, Senate Bill S5470B would be confusing or outright misleading to our dealer customers,” said Danielle Fagre Arlowe, Senior Vice President at AFSA. “To comply, floorplan lenders would be forced to create disclosures governing their disclosures—and potentially a different disclosure for each vehicle on the lot.”
AFSA’s letter to the governor explains that “in order to comply, a floorplan lender . . . would be forced to make numerous assumptions that would be inconsistent with the methodology used in our industry, leading to misinformation and confusion.”
The letter asks Gov. Cuomo to veto SB S5470B or sign on the condition of a chapter amendment exempting dealer financing agreements or commercial open-end credit plans of at least fifty thousand dollars.
AFSA is working with AFSA member lobbyists on the ground as well as various New York senate and gubernatorial representatives to advocate on behalf of AFSA’s commercial creditors who finance dealer floorplans. AFSA notes that Governor Cuomo’s office has been proactive in reaching out to understand our position on the legislation.
Please reach out to Danielle dfagre@afsamail.org with any questions about NY S5470B.
August 17th, 2020
