The Business Council supports the provisions in S.1505 / A.2005 Article VII PPGG, Part D which would calculate the annual rate of interest to be paid on a judgment or accrued claim, at the weekly average one-year constant maturity treasury yield as published by the Board of Governors of the Federal Reserve System for the calendar week preceding the date of entry of the judgment awarding damages.
Replacement of the current, excessively high, 9% interest rate on judgments in civil lawsuits and replacing it with the prevailing market rate of interest is both logical and fair. Such a change would be good for New York consumers who have had to pay this excessive rate on judgments for years. It would also greatly benefit municipalities throughout the state and concurrently help control insurance rates for all purchasers.
The 9% interest rate dates back to the early 1980's when interest rates in the United State were in the double-digits, today it is under 3%. This creates an unnecessary and unwarranted windfall on judgement interest.
This provision is logical in that it pairs the interest on judgments with actual current economic conditions and rate in place at the time of the judgment’s entry and ensures that neither plaintiff nor defendant are put at an advantage or disadvantage.
It is for these reasons that The Business Council supports the provisions in S.1505 / A.2005 Article VII PPGG, Part D and urges its passage by the Senate and the Assembly.