N.Y. General Obligations Law § 5-521: Corporations prohibited from interposing defense of usury

§ 5-521. Corporations prohibited from interposing defense of usury. 1.

No corporation shall hereafter interpose the defense of usury in any

action. The term corporation, as used in this section, shall be

construed to include all associations, and joint-stock companies having

any of the powers and privileges of corporations not possessed by

individuals or partnerships.

2. The provisions of subdivision one of this section shall not apply

to a corporation, the principal asset of which shall be the ownership of

a one or two family dwelling, where it appears either that the said

corporation was organized and created, or that the controlling interest

therein was acquired, within a period of six months prior to the

execution, by said corporation of a bond or note evidencing

indebtedness, and a mortgage creating a lien for said indebtedness on

the said one or two family dwelling; provided, that as to any such bond,

note or mortgage executed by such a corporation and effective prior to

April sixth, nineteen hundred fifty-six, the defense of usury may be

interposed only in an action or proceeding instituted for the

collection, enforcement or foreclosure of such note, bond or mortgage.

Any provision of any contract, or any separate written instrument

executed prior to, simultaneously with or within sixty days after the

delivery of any moneys to any borrower in connection with such

indebtedness, whereby the defense of usury is waived or any such

corporation is estopped from asserting it, is hereby declared to be

contrary to public policy and absolutely void.

3. The provisions of subdivision one of this section shall not apply

to any action in which a corporation interposes a defense of criminal

usury as described in section 190.40 of the penal law.