Press Room

Public Advocate Jumaane D. Williams spoke about the need to protect small businesses from predatory lending practices today at a remote New York City Council hearing by the Committees on Consumer Affairs and Business Licensing and Small Business. He highlighted the dire economic crisis created by the COVID-19 pandemic, which has a disproportionate impact on small business and could require them to seek expansive loans, and asked that the Council pass his resolution, Res. 1049, calling on the United States Congress and the New York State Legislature to pass legislation that prohibits the use of a confession of judgment in business loans. There is currently bipartisan federal legislation to this effect.

Confessions of judgement, the Public Advocate argued, have led to predatory practices by relinquishing the borrower's "right to due process if the debt is unpaid and there is a dispute." He further emphasized that amid the COVID-19 crisis, "Whether a local restaurant or a retail store, the reality is that small business owners are vulnerable to this predatory practice. This is especially true in our current environment, as most businesses are closed, effectively stopping a steady stream of income. Businesses already have to make tough choices because of closures not foreseen months ago. Businesses that have signed loans with high interest rates cannot afford to go under because of a missed payment." The Public Advocate's full statement is below and can be downloaded here.

Video of the hearing can be viewed online.

TESTIMONY OF PUBLIC ADVOCATE JUMAANE D. WILLIAMS

TO THE NEW YORK CITY COUNCIL COMMITTEES ON CONSUMER AFFAIRS AND BUSINESS LICENSING AND SMALL BUSINESSES

APRIL 29, 2020 Good morning,

My name is Jumaane D. Williams, Public Advocate for the City of New York. I would like to thank Chairmen Andrew Cohen and Mark Gjonaj, and the Committee members of Consumer Affairs and Business Licensing and Small Businesses for holding an oversight hearing on the impact of COVID-19 on small businesses in New York City. Today the Committees are hearing several bills that would support our restaurants and food delivery workers. I support my Council colleagues' efforts and thank them for introducing these bills.

I would also like to thank our first responders and frontline workers for helping our City battle Coronavirus as well as keeping this City running. And to the residents of New York City, I want to stress how important it is that we continue to practice social distancing and stay home as much as possible. With that said, as this crisis continues, the financial pressure on New Yorkers will increase. My resolution, Resolution 1049, aims to address a major root cause of one of the financial issues that many New Yorkers face: confession of judgment in business loans.

A confession of judgment is a written agreement, which once signed by the borrower of a monetary loan, relinquishes the borrower's right to dispute legal claims made by the lender. In other words, a person is giving up their right to due process if the debt is unpaid and there is a dispute. While confessions of judgment allow lenders to resolve and receive recompense for loan defaults in a timely manner, these agreements have also led to predatory practices. Lenders can use these agreements to accuse borrowers of defaulting on their loans and seize their assets without proof and prior notification.

Resolution 1049 calls on the U.S. Congress and the New York State legislature to pass legislation to prohibit the use of confession of judgment in business loans. Current federal law prohibits the use of confessions of judgment in consumer loans, but not in commercial loans. At the federal level, there is the Small Business Lending Fairness Act, which has been introduced but has not yet been passed. The Act is made up of two bipartisan bills, Senate bill S. 1961 and House bill H.R. 3490, which aim to extend the confession of judgment ban to commercial loans by amending the Truth in Lending Act. At the state level, the legislature passed S. 6395, which prohibits individuals from filing a confession of judgment against a party that does not reside in New York State. While this bill is a step in the right direction, it does not prohibit confessions of judgment from being filed against an in-state debtor, which leaves many New Yorkers vulnerable to predatory lending practices.

One group of New Yorkers who make up this vulnerable population are taxi medallion owners. There are 11,938 taxi medallions in New York City and obtaining a taxi medallion is not a cheap endeavor, with many taking out a business loan to afford it. Between 2002 and 2014, the price of a medallion rose from $200,000 to more than $1 million, even though City records show that taxi driver incomes barely changed. The following year the cost of the medallions began to fall. As the value of taxi medallions fell, lenders denied borrowers' appeals to refinance, and instead issued confessions of judgments, allowing the lender to seize the borrowers' assets as recompense. In fact, several banks used confession of judgment in their lending activity, where the borrowers admitted defaulting on a loan, even before borrowing any funds.

The ripple effect of the predatory lending practices, much of which were based on confessions of judgment, has left taxi drivers who own medallions in a lot of debt. And cruelly, a number of medallion holders have taken their lives due to the overwhelming stress from their debt. Now, the City has the opportunity to address this unfortunate outcome in a number of ways. The City should look to offering debt forgiveness for taxi drivers. Earlier this year, the Mayor and the Council appointed a panel to propose a bailout for thousands of drivers who are trapped in loans. Although much of our City's funds will be designated to addressing COVID-19 related issues, we need to look at how to make that proposed bailout a reality for taxi drivers. Not only are they among the frontline workers who are going outside every day to make sure people can get around safely, they are also among those who are financially struggling during this pandemic.

Small businesses are also at risk of confessions of judgment being used against them. Whether a local restaurant or a retail store, the reality is that small business owners are vulnerable to this predatory practice. This is especially true in our current environment, as most businesses are closed, effectively stopping a steady stream of income. Businesses already have to make tough choices because of closures not foreseen months ago. Businesses that have signed loans with high interest rates cannot afford to go under because of a missed payment. The situation for these small businesses that empower and strengthen our communities is precarious. Losing any of these small businesses would be catastrophic. But it does not have to be this way, and the legislation on the federal level is the best recourse for these small businesses.

New Yorkers in distress cannot wait any longer as long as debt collectors continue to misuse confessions of judgment. I call on the Council to pass Resolution 1049 to send a clear message to our leaders in Washington that legislation to help New Yorkers needs to pass for immediate relief. I would like to again thank the Council for holding this hearing today.

Public Advocate Jumaane D. Williams today called for a series of revenue raising measures on the state level and crucial investments on the city level as part of the COVID-19 crisis response and recovery plan. He highlighted the need to adapt to budget deficits and prevent the slashing of critical systems such as healthcare and education, as well as both youth and senior services, through revenue-raising measures on the state level and targeted investment on the city level.

In a press conference with advocates and elected officials today, the Public Advocate stated "With these cuts, the Governor is essentially saying that while he refuses to consider raising taxes on the wealthy, he's okay with cutting services are critical to New York's most vulnerable populations, especially low income communities of more color. We need adaptation, not austerity, putting in place innovative measures on a city and state level to protect vital programs in this crisis. State legislative leaders need to take action to oppose these devastating cuts." He noted that state-level cuts have contributed to deficits in New York City, causing municipal cuts as well.

This comes as the Public Advocate has issued his formal response to the city's FY2021 executive budget put forth by Mayor Bill de Blasio. In a letter sent on Friday, the Public Advocate outlined the budget priorities which he believes should be reflected in the final city budget. While the Mayor's proposal includes steep cuts to a wide range of programs in response to the deficits created by the COVID-19 pandemic, the Public Advocate's response argues that the long-term recovery from the crisis will require maintaining key investments currently in danger of being cut, including Summer Youth Employment, Education, Child Welfare, and Juvenile Justice. In a letter to the Mayor, the Public Advocate states "While I understand the need to pursue budget savings due to the unprecedented drop in projected revenue, it is vital that certain essential programs continue to receive resources necessary to address the needs of our city," saying "We cannot ask for the greatest burdens to be shouldered by those who have the greatest need." The Public Advocate also argued that in many cases, potential deficits could be offset by raising revenue on a state level, and called on his fellow city elected officials to pass a resolution supporting several revenue-raising measures. He will join a press conference Monday afternoon to discuss these measures aimed at helping to cover state and city budget deficits. In supporting the need to raise revenue from the wealthiest New Yorkers and invest in those with the greatest need, Pubic Advocate Williams said "Our current financial crisis most closely resembles the Great Depression, a time when social programs were expanded, not cut, in order to fuel recovery for the nation at large while providing everyday families with the resources that they needed... I reject the idea that we can't afford to make investments into our recovery - we can't afford not to."

The full text of the Public Advocate's response letter is below and can be downloaded here. Dear Mayor de Blasio:  While I understand the need to pursue budget savings due to the unprecedented drop in projected revenue, it is vital that certain essential programs continue to receive resources necessary to address the needs of our city. Some of the proposed budget cuts would do more harm than good, taking damaging steps backward and causing greater financial stress in the long run.  It would be remiss of me to not address the substantial budget cuts to vital support for youth services, education, and low-income communities of more color, while the city continues to invest astronomically in law enforcement approach best served by other programs. The reality of our circumstance is that budget cuts will be necessary and painful. We must ensure that cuts be equitably distributed especially at a time when it is clear that specific communities were unexpectedly and disparately impacted.  I have made several recommendations, including those below, in my office's report on COVID-19 Response and Recovery. It is easier to show our values in times of surplus, than in times of hardship, but we cannot ask for the greatest burdens to be shouldered by those who have the greatest need. As I previously called for in a letter to state leaders only six weeks ago, there are a multitude of broadly supported, common- sense proposals for closing loopholes and creating modest tax increases on the ultra-wealthy - generating as much as $20 billion in new revenue. To reject these proposals in favor of withholding resources from communities that desperately need help would be a moral failure that history would not forgive. I've also introduced a resolution to the City Council that I request be adopted, calling on the state to raise needed revenue.  In the coming year, New Yorkers will need a strong and supportive government more than ever; we have all been affected by the loss of businesses and employment, the loss of loved ones, the loss of treasured social and cultural hubs, and the loss of peace of mind. In the upcoming year, our health care system is likely to be overburdened, and we need to work to a system that provides adequate health care for all New Yorkers, including mental health services. Even individuals who have not previously experienced a need for supportive services may need access to mental services following the difficulties of this pandemic, and we need a comprehensive plan to make sure New Yorkers can access the services they need. This plan must include funding for houses of worship. These organizations, especially in the communities hardest hit, are closest to communities, and can provide direct services community members need and will trust.  Additional local steps need to be taken, as well. To coordinate our response to the current crisis, and to envision the pathway to a post-pandemic New York, we must immediately create a citywide COVID-19 recovery task force. This task force, composed of faith leaders, advocacy groups, and government agencies such as DOHMH, DOE, ACS, among others, should collectively propose solutions to get New York City back on its feet, especially the communities that have been most severely impacted, in a manner that is both transparent and accountable.  Immediate funding needs the city must provide is support for funeral and burial services. In addition to helping cover the cost of burials for the families of victims of COVID-19, the city must work to establish a fund for estate planning, so individuals in New York are able to make plans for eventualities in this moment of crisis, and also as a general safety net going forward.  As negotiations accelerate, I also call on the administration to maintain current funding levels for the following programs (unless otherwise noted), so that they can assist our city in enduring this crisis:  Summer Youth Employment Program My urgent priority is to preserve funding for the Summer Youth Employment Program ("SYEP") in the coming budget. The program is an invaluable tool for our marginalized youth, communities of more color, and low-income families across our city. We know that jobs are key to keeping young people engaged in their community. Besides cutting violent crime arrests in half without reliance on law enforcement, SYEP demonstrably improves economic opportunity, provides invaluable skills and experience, and carries out essential roles that serve our entire city. Instead of being scrapped, SYEP should be adapted to meet youth needs during the current crisis. Let's use this moment as an opportunity to incentivize education. The city can use a stipend payment and allow for remote work and skills training, filling essential roles where the city needs them most. SYEP will also be key to filling the gaps that will allow our city to economically and socially recover. The SYEP's young and eager workforce deserves an opportunity to build their own foundations for a promising future while they serve and strengthen our city. I stand ready to partner with you and the administration in fashioning such a program.  Education We know New York City's schools have been shortchanged by Albany for over a decade. New York City schools are not just a place to get a Regents degree, but a vital epicenter of programs and services in a city where 1 in 10 children do not have stable housing. A crisis that will only be exacerbated in these difficult times.  While operational efficiencies are understandable, particularly now, close to $400 million in cuts to vocational programs, after school, and universal pre-k will make it harder for low-income parents to take care of their families, and make it harder for young people to get the workforce development they need to plan for future careers. I call on the administration to reject cuts- outside of operational efficiencies - principally to school maintenance staff, and select existing programming, including: 3K expansion, College Access for All and arts programming. I also call on the administration, like proposals for SYEP, to restructure School's Out New York City ("SONYC") so that remote learning is implemented.  It is also deeply disappointing to see higher education on the chopping block. The CUNY student body is made up of predominantly students who come from low-income backgrounds, who will be disproportionately impacted by the economic effects of over $166 million in cuts. My office released a report last fall which laid out my recommendations, including a need for full programmatic funding from the city and state, eliminating the TAP gap in the pursuit of moving towards making CUNY tuition-free once more and supporting CUNY faculty including adjunct professors, who should make at $7,000 per course. While these recommendations may sound strange during an economic recession, this is exactly the time to invest in our future. Public higher education in New York City saw some of its most significant growth and investment during the Great Depression, building a sound foundation for the middle class and working-class families. Time and again we see that investments in education have long term economic benefits for the entire society, and we are now in the midst of another critical opportunity to demonstrate that.

Child Welfare For young people in need of services from this city, a city where 1 in 10 children are homeless, this budget will have a long-standing impact. And, like any other circumstance, those least able to protect themselves will suffer the most. Cutting over $300 million from the budget of foster care, and child welfare services will not alleviate the need for these programs, or the damage to communities when children are not protected from harm. In a time when so many of New York's families will be experiencing hardship, we have a responsibility to the most vulnerable young people to expand programs aimed at keeping families together, and other prevention services. Juvenile Justice For too long, we have seen families and communities decimated by locking up people who pose no threat to society and belong at home. Let us use this moment as a turning point. Further, District Attorneys should use prosecutorial discretion to decline to charge young people arrested for non-violent crimes. And yet, this budget decimates programs directly created to help young people involved in the justice system. Cutting over $20 million from programs aimed at voluntary non-secure detention, and alternatives to detention leave young people at risk and is a shortsighted, short term budgetary fix, with long term economic and social costs well beyond just the young people involved in these programs. Our current financial crisis most closely resembles the Great Depression, a time when social programs were expanded, not cut, in order to fuel recovery for the nation at large while providing everyday families with the resources that they needed. The 2008 global financial crisis also provided key lessons that we can't afford to ignore - austerity doesn't work. The governments that slashed critical services en masse lagged years behind governments that invested in recovery and growth. I reject the idea that we can't afford to make investments into our recovery - we can't afford not to.  Once this crisis subsides, I welcome further discussions on how budget allocations should be adjusted and refined to best address a post-pandemic reality.  Please contact First Deputy Public Advocate for Policy, Nick E. Smith, at nsmith@advocate.nyc.gov for questions or further discussion. Thank you for your time and consideration. Sincerely, Jumaane D. Williams Public Advocate for the City of New York

Public Advocate Jumaane D. Williams released the following statement after Mayor Bill de Blasio announced the creation of a task force focused on the racial disparities in COVID-19 impact as part of the response and recovery to this pandemic. The Public Advocate first called for the creation of the task force after the city released data showing the extent of the disparity in communities of more color.

"I thank the Mayor for answering the call to confront the racial disparities exacerbated by COVID-19 with a task force of experts to rapidly implement an action plan in real time for both the immediate recovery and long-term response to this crisis in communities of more color. Who comprises this task force, how quickly they are empowered to act, and the force of that action are paramount. Throughout this crisis, our government has moved too slowly on all levels, and now we need to be quick and decisive.  "The primary function of this task force cannot be to engage in a long, protracted process of deliberation and study, dwelling on how we got here. We know this disparity was created by a long history of systemic inequities and injustices. Additional delays waste time that the people being devastated by this crisis-- those who are deemed essential but treated as expendable-- just don't have. Ultimately, we need results, not a report, and the work of this task force must have a voice in and be supported by the city's budget.  "I am glad, too, that the Mayor is asking for a preliminary roadmap to recovery - I ask him to review my own Preliminary Response and Recovery Plan, and look forward to working with the administration to create the changes this city needs in the midst and the wake of this crisis."

Public Advocate Jumaane D. Williams called on the state government to amend restrictions which make it difficult for grieving families to claim their deceased loved ones who have died in the COVID-19 pandemic. This follows concerns that the limited capacity of hospitals and morgues, and the inability to meet the rapid influx of COVID-19 fatalities, has made it increasingly difficult for families to hold individual burials.

In a letter to New York State Health Commissioner Howard Zucker on Thursday, the Public Advocate requested that Section 4144 of New York State Law, requiring that all bodies be removed by a licensed funeral director, be temporarily exempted or amended to allow any paid employee of a funeral home to perform body removal. This, he argued, would vastly increase funeral homes' capacity to empty our city's overcrowded hospitals and morgues.

Public Advocate Williams stated that "Considering the unique nature of this crisis, this regulation appears to do more harm than good by preventing our hospitals and morgues from releasing custody of the deceased in a timely manner," and that "With this change in place, more families would be granted the dignity of giving their loved ones an individual burial, and strain upon our hospitals and morgues would be reduced."

The full text of the Public Advocate's letter is below and can be downloaded here. Dear Commissioner Zucker:

New York City is in the midst of a public health crisis unseen in a century, placing stresses on our systems in ways we never considered. Specifically, I write in regard to the rapid influx of COVID-19 fatalities threatening to overwhelm the limited capacity of our hospitals and morgues. A contributing factor to this issue is that only licensed funeral directors are allowed to transport the deceased.

Considering the unique nature of this crisis, this regulation appears to do more harm than good by preventing our hospitals and morgues from releasing custody of the deceased in a timely manner. As you may be aware, an inability to perform this timely processing has led to troubling mass burials of "unclaimed" bodies on Hart Island.

I believe an appropriate solution to this problem would be to loosen current requirements for removal of remains that are currently dictated by Section 4144 of New York State Law. This law, which requires that all bodies be removed by a licensed funeral director, should be temporarily exempted or amended to allow any paid employee of a funeral home to perform body removal - vastly increasing funeral homes' capacity to empty our city's overcrowded hospitals and morgues. With this change in place, more families would be granted the dignity of giving their loved ones an individual burial, and strain upon our hospitals and morgues would be reduced.

I hope to see expeditious action taken to alleviate this growing problem across our state. For any questions or further discussion, please contact First Deputy Public Advocate for Policy Nick E. Smith, at nsmith@advocate.nyc.gov. Thank you for your time and consideration. Sincerely,

Jumaane D. Williams Public Advocate for the City of New York

Public Advocate Jumaane D. Williams released the following statement as the holy month of Ramadan begins this evening in the Muslim community.

"I want to wish all of my Muslim brothers and sisters  'Ramadan Mubarak.' This holy month of fasting, charity and prayer is a time for reflection, a time to focus on self-reformation and how best to serve our community. Regardless of one's own personal creed, these are lessons we can all apply to our lives. Even this year, while we are unable to celebrate with traditional large iftars or gather together in prayer with our diverse communities, I know that we can see that same spirit of unity, fellowship, and common purpose with our families, in our homes. Physical distance can be overcome with spiritual closeness.

"In this time of financial hardship for so many, we should remember the practice of zakat, as those of us who are able should do what we can to support our neighbors who are struggling. 

"This month reminds us to pursue peace and justice for every human being. To work to make sure that the practice of America lives up to its promise. I look forward to continuing that work throughout this month and beyond. 

"May this month of Ramadan be a meaningful, spiritual experience."

Public Advocate Jumaane D. Williams released the following statement after touring two newly opened city-run COVID-19 testing sites and holding a press conference outside a site in one of the hardest-hit regions of the city. Video of that press conference is available here.

"The Mayor's actions to open new testing sites in hard hit areas and the Governor's efforts to expand both testing and treatment within NYCHA are welcome, positive steps, but must be expanded and expedited to meet the overwhelming need. The initial response to this crisis created a vicious and deeply damaging cycle - by failing to implement wide-scale testing in these areas, the full scope of the crisis went unaccounted for and unaddressed, which only further exacerbated the crisis. In places like Throggs Neck and Gun Hill, Borough Park and Mariner's Harbor, COVID-19 continues to take a  disparate toll without adequate testing to meet it. "In order to address the delay and the disparity, to get help to communities most in need, the federal government needs to provide funding directly to New York City. We can't wait for funds to move through the state, we can't wait for Donald Trump to put his name on a check, we need resources immediately- we can't buy back the lost time, but we can work to save lives through enhanced testing and treatment now."