Stop Predatory “Vulture Funds” from Profiting Off Poverty

An estimated 3.4 billion people live in countries forced to spend more on debt payments to groups like the IMF or hedge funds than on healthcare or schools. Nearly 70 countries, almost a third of the world, are in or at risk of debt distress. While some lenders negotiate fairly, “vulture funds” exploit a loophole in New York State law. These private hedge funds often buy up a country’s debt for pennies on the dollar and then sue with massive interest, refusing to accept restructuring deals and draining resources meant for climate resilience, education, and basic survival.

For instance, after the Argentina economic collapse in 2001, hedge fund Elliott Capital bought Argentinian bonds, pursued repayment relentlessly, and eventually received returns of over two thousand percent. These bad actors threaten people’s dignity but also a country’s ability to function, exploit humanitarian crises, disrupt the global economy, and harm cooperative lenders.

As people of faith, we believe in a global economy that prioritizes human dignity over predatory profit. New York is the world’s financial capital, and more than half of sovereign debt falls under New York law, which gives the state a unique moral responsibility to end these destabilizing legal battles.

The Champerty Bill (S1477/A643A) would close the loophole that allows these lawsuits to thrive. It protects vulnerable nations and ensures that public funds are used for the common good—not extracted by litigious investors. By setting guardrails against exploitation, this bill would promote the dignity of billions of people and safeguard the global economy.

Tell your state legislators that New York must no longer be a haven for predatory debt litigation. The well-being of billions must be prioritized over exorbitant profits for bad actors.

Read the memos of support for the bills sent to the New York State Assembly by the Maryknoll Office for Global Concerns and by the New York State Catholic Conference.

Photo: New York State Capitol, courtesy of Bluegill, available in public domain via Wikimedia Commons.