Velázquez Backs NY Legislation to Stop Vulture Funds from Preying on Puerto Rico and Other Struggling Economies  

WASHINGTON —Congresswoman Nydia M. Velázquez (D-NY) today voiced her support for New York State legislation that would close a loophole exploited by predatory hedge funds to profit from nations and territories in financial distress. The bill, sponsored by Assemblymember Jessica González-Rojas and State Senator Liz Krueger, would restore the legal doctrine of champerty, making it illegal to buy debt for the sole purpose of suing to collect on it. She released the following statement: 
 
“For Puerto Ricans, this issue is not theoretical. New York's legal system has been used by hedge funds seeking outsized profits from Puerto Rico's debt crisis for years.
 
“To this day, the island has not finalized its bankruptcy; the Puerto Rico Electric Power Authority's restructuring remains stalled after 12 years of costly litigation. In total, Puerto Ricans have paid a staggering $2 billion for Title III proceedings under PROMESA.
 
“New York must act now to prevent Puerto Rican families from continuing to endure painful austerity, economic instability, and unreliable electric service just so vulture funds can maximize profits. As home to one of the largest Puerto Rican populations in the nation, New York has a unique responsibility to ensure its laws are not being used to profit from the suffering of Puerto Rican communities.
 
“Passing the Champerty Fix Bill would send a clear message that New York stands with working families and diaspora communities, not predatory actors exploiting financial distress for private gain.”