Albany, New York – The New York State Senate is poised this week to pass debt relief legislation, or the Champerty Fix Act. The bill must be taken up by the lower house, the New York State Assembly, this week to move the legislation for the Governor's signature.
"This legislation is critical for stopping behavior that exploits countries in crisis," noted Eric LeCompte who heads the religious development coalition, Jubilee USA Network. "One of the great aspects of this bill is that it lowers punitive interest rates when countries are in a debt crisis."
New York law governs more than 50 percent of privately held sovereign debt contracts. The “Champerty Fix Act” (S.1477, A.643-A) prevents predatory “vulture funds” from purchasing cheap debt with the purpose of litigating to collect in full.
"Lawsuits from certain hedge funds, who are not making a legitimate investment in a country, delay the resolution of debt crises," noted LeCompte. "These predatory firms not only impact social programs in developing countries, they also take advantage of taxpayers and legitimate Wall Street investors."
Religious, labor, anti-poverty, development, diaspora and environmental groups support the bill.
“The bill can help stabilize rising food and fuel prices as the legislation helps our trading partners,” said LeCompte. "It can also protect our pensions which have legitimate investments in countries and keep our taxpayer dollars from bailing out these funds."
In addition to curbing predatory behavior, the bill cuts the interest rate that debtor countries incur while lawsuits move through the courts, which incentivizes long litigation in New York courts.
The current session of the New York State legislature adjourns on June 4.
Read text of the Champerty Fix Act.
Read the Jubilee USA memo of support.
Read the Puerto Rico's Archbishop and the Head of Puerto Rico's Bible Society memo of support.
Read Evangelical Lutheran Church in America Upstate New York Synod memo of support.
Read Sisters of Mercy memo of support.
Read Maryknoll Office for Global Concerns memo of support.