Read the statement as a PDF here. 

Thanks to Senator Krueger and Assemblymember Gonzalez-Rojas, their “champerty” bill (S5623/A5290) represents progress in limiting some of the worst, predatory behavior of the "vulture" hedge funds. As the bill (S5623) passed the Senate, the Assembly should pass the companion bill (A5290) and Governor Hochul should sign this legislation into law immediately.

Most effectively and importantly, the legislation reduces New York’s punitive prejudgment interest rate to a better level and places obstacles in the way of the most predatory speculators suing debtor countries in New York courts.

While this legislation is progress and may help curtail some predatory behavior, it does not deal with the greater concern for New Yorkers and developing countries of dealing with bad faith actors and hold-out behavior.

We support this champerty bill (S5623/A5290) and emphasize the importance of additional legislative action to address the larger issues where New York law harms developing economies.  A critical portion of champerty that would have addressed the larger problem of hold-out behavior and bad faith actors was removed under pressure from creditors.

Billions of people will suffer because creditors removed the good faith provision. The removed language would have ensured that all private creditors would be required to cooperate in qualified restructurings in good faith. Without this language, we lack protections for New York courts, New York taxpayers, poor countries, and official creditors like the United States government.

Legislators in New York have compelling public interest to pass additional legislation that can rectify the power imbalance in sovereign debt restructurings and can help solve these larger problems. While we celebrate progress and this victory with the Senate passage, New York legislators must continue their work to enact further comprehensive reforms such as those included in the Sovereign Debt Stability Act (S5542A/A2970) to ensure that all private creditors governed under New York laws operate responsibly.

New York State Council of Churches

Jubilee USA Network

Oxfam

Partners In Health

Read the statement as a PDF here.