New York Governor Andrew Cuomo said Tuesday he would resign in two weeks over a sexual harassment scandal that crippled his government and said he did not want to distract the state from important tasks to be done.

Cuomo’s shock announcement on a live stream from his Manhattan office came minutes after his attorney, in her own statement to reporters, again denied allegations that he sexually molested anyone during the Democrat’s three terms.

Lt. Gov. Kathy Hochul will replace Cuomo and become the first female governor of the Empire State.

Cuomo’s resignation comes a week after a scathing attorney general report found he sexually molested current and former employees, as well as a police officer assigned to his protection group, and women outside the government.

It also comes that at least five district attorneys are investigating possible crimes by Cuomo against some of the women or have requested evidence from the AG’s report.

Cuomo, 63, said he was motivated to step down to avoid months of distraction for the state, which remains grappling with the Covid pandemic, from almost certain impeachment on allegations that he sexually molested at least 11 women.

“I think the best thing I can do now, given the circumstances, is to step aside and let the government go back to the government, and that’s why I’m going to do that because I work for you and doing the right thing is right for you too do, “said Cuomo.

While Cuomo continued to deny some of the more serious claims against him, he admitted that he had offended some of his accusers with what he believed to be friendly or casual physical contact and comments that were normal for men of his generation.

“In my opinion, I haven’t crossed the line with anyone,” he said. “But I didn’t realize to what extent the line was being redrawn.”

“Thank you for letting me serve you. It was the honor of your life, ”said Cuomo.

“Godd bless you.”

Hochul, a Buffalo Democrat who turns 63 this month, said in a tweet, “I agree with Governor Cuomo’s decision to step down. It’s right and in the best interests of New Yorkers.”

“As someone who has served at all levels of government and is the next to succeed, I am ready to lead as the 57th governor of New York State,” wrote Hochul.

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Governor Andrew Cuomo speaks on August 10, 2021.

Source: New York State

Cuomo strongly denied the women’s claims, saying the investigation was tainted by bias against him and by politics.

On Tuesday, Cuomo referred emotionally to his own three daughters, saying, “I want them to know from the bottom of my heart: I have never intentionally disregarded a woman or treated a woman differently from what I wanted to treat her.”

“Your father made mistakes. And he apologized. And he learned from it. And that’s what life is about,” said Cuomo.

Cuomo is the youngest high-ranking New York Democrat politician to be hit by a sex scandal.

In 2008, Governor Eliot Spitzer resigned after revelations that paid for sex with a prostitute.

Former MP Anthony Weiner went to federal prison for more than a year in late 2017 after pleading guilty to sexing an underage girl. Eric Schneiderman resigned as attorney general in 2018 after four women accused him of physical abuse. Schneiderman had succeeded Cuomo as attorney general.

Cuomo’s resignation came five months after charges of molestation against him exploded in public.

His fall marks a staggering turnaround in his political fortune in 2020, when his handling of the Covid pandemic was widely acclaimed and he was awarded a lucrative book deal to write about his management.

The governor was also mentioned as a possible candidate for Biden or as a potential attorney general in the new administration.

Cuomo had resisted calls for resignation for months, which began after several former employees – Lindsey Boylan, Charlotte Bennett and Karen Hinton – accused him of inappropriate behavior towards them.

Other women described similar behavior on the part of Cuomo.

One of them, an aide, told supervisors that Cuomo aggressively groped her at the governor’s mansion last year after calling her on the pretext of dealing with a cell phone problem.

The unidentified woman’s account was forwarded to the Albany Police Department, which reached out to her representative.

From the dynasty to the end

Cuomo is a son of the late three-term governor Mario Cuomo.

He was previously the New York attorney general and secretary for housing and urban development in the Clinton administration.

Cuomo has three daughters with his ex-wife, Kerry Kennedy, whose own father, Robert Kennedy, served as US attorney general under his brother President John Kennedy and was assassinated in 1968 when he ran for president.

Cuomo became a national star last year.

The governor had received praise for his no-nonsense press conferences explaining the grim toll of Covid-19, his frequent admonitions to take precautions against contagion, and his empathic response to the victims of the pandemic.

Cuomo’s hilarious interviews about Covid with his own brother, CNN host Chris Cuomo, won some rave reviews, fed late-night comedians, and fueled criticism from media ethics.

The governor’s press conferences have often been compared to those of then-President Donald Trump, who has been criticized for questioning the conduct of his own medical advisors and repeatedly downplaying the threat of the virus. The governor of New York won an Emmy for his television appearances late last year.

But Cuomo’s Covid management – and his aggressive governance style as a whole – also bore the seeds of his political destruction.

Contrary to his own party

Although he easily won re-election twice, Cuomo long alienated many Democrats and progressives in the state.

Democratic state lawmakers were also angry about Cuomo’s past tacit alliance with a small clique of Democratic senators who for years effectively turned control of the state’s Senate over to the Republicans, despite the fact that the Democrats held the majority of the seats.

Throughout his political career, Cuomo has had a micromanaging, non-captive way of dealing with adversaries and would-be allies who are slow to bow to his will.

That style was fully reflected in Cuomo’s dealings with Queens Rep. Ron Kim, a Democrat, who said in April the governor loudly beat him on a phone call at home and threatened to reprimand him for criticizing Kim’s failure to disclose death dates related to Covid.

Kim and other lawmakers were upset after hearing from senior governor’s adviser Melissa DeRosa that his government had withheld data on nursing home residents’ deaths from Covid. DeRosa then claimed that the data was being kept secret to avoid being “used against us” by federal prosecutors under the command of Trump’s Attorney General William Barr.

Even when Cuomo adamantly denied Kim’s report of the phone call, he accused Kim of “unethical” behavior in assisting nail salon owners while lawmakers debated adopting industry reforms six years ago.

New York Mayor Bill de Blasio, who himself has been a whipping boy for the governor for a long time, called the phone call “classic Andrew Cuomo”.

“A lot of people in New York state received these calls,” de Blasio said during an MSNBC interview.

“The bullying is nothing new. I think Ron Kim and it’s very, very sad, no officer, no person telling the truth should be treated that way. The threats, the belittling, the request that someone be correct change moment … I’ve heard this many, many times and I know a lot of other people in this state have heard that. “

The controversy over the phone call erupted just before former Cuomo adviser Boylan revived her previous claims that he sexually molested her.

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An Afterpay logo is displayed on a smartphone.

Igor Golovniov | SOPA pictures | LightRakete | Getty Images

“Buy now, pay later” options are becoming increasingly popular, but analysts warn of the risk of default in the face of a lack of credit checks and “opaque” debt reporting.

Not being able to review consumer credit history could result in lenders underestimating borrowers’ debts when evaluating new loan applications, they said. There is also a risk that consumers will use more credit card debt to meet their “buy now, pay later” (BNPL) obligations, analysts warned.

BNPL providers typically work with retailers – both online and in stores – to enable consumers to pay in installments, with perks such as no late fees and often high credit limits.

Such payment options are becoming increasingly popular with younger consumers, especially when shopping online, and in recent years more and more companies have started offering the service.

Default risks

In a recent report, Fitch Ratings said reporting on the sector’s debt trends was “opaque”. Many of these providers do not report the use of such services to credit agencies, according to the rating provider.

“As a result, BNPL debts are often not visible in the credit file and borrowers could try to obtain BNPL credits from multiple providers,” Fitch analysts write. “Lenders (including non-BNPL) may underestimate a borrower’s level of debt when taking on new debt.”

These companies don’t do credit checks on these people … during a downturn, they may be the first to buy now and not pay later.

Stephen Biggar

Director of Financial Institutions Research, Argus Research

Stephen Biggar, Director of Financial Institutions Research at Argus Research, warned that defaults were “one of the main risks”.

“These companies don’t do credit checks on these people,” he told CNBC’s Squawk Box Asia last week. “During a downturn, they may be the first to buy now and not pay later.”

This is how “buy now, pay later” works

Traditionally, installment payments have been offered in shops for decades. However, in the past, this was typically the case for large-volume items such as furniture, electronics, and home appliances, which cost thousands of dollars.

The latest buy now, pay later plans span a segment between credit cards and installment payments. Focused on younger and more tech-savvy users, they are offered for online purchases that can range from $ 10 to $ 20 or up to thousands of dollars.

One of the most popular providers is the US-based pay-over-time company Affirm. The maximum amount that can be taken out with Affirm for a single payment plan is $ 17,500.

Many of these financial technology apps offer sweets that credit cards and traditional installment payments don’t – sometimes they include no late fees, low or no interest rates, high credit limits, and no required credit checks. The conditions vary depending on the provider.

On the flip side, the cost of borrowing can skyrocket if consumers don’t read the terms carefully.

There are some potential pitfalls in the fine print: additional fees like additional fees for rescheduling payments, and some providers charge high late fees.

BNPL users cannot afford the regular repayments and may turn to credit cards or other forms of high-yield debt to help repay BNPL debt.

Analysts also warn of the propensity for impulse purchases given the simplicity of the application process and the lower cost of credit compared to credit cards.

The use of such payment options skyrocketed during the pandemic as online shopping increased, Fitch said.

In the US, these short-term rate-related loans increased 215% year over year in the first two months of this year, according to Adobe Analytics. The data showed that consumers using such services place orders that are 18% larger compared to the same period in 2020.

The volume of e-commerce payments made through BNPL in the US rose to $ 19 billion last year – more than double the $ 9.5 billion spent in 2019, Fitch said, citing estimates from the Payment company Worldpay.

The providers that have appeared in this segment include Affirm, Quadpay and Klarna.

More established financial firms have also jumped on the bandwagon: PayPal, Mastercard, American Express, Citi, and JP Morgan Chase all offer similar credit products, while Apple reportedly plans to offer such a service as well.

Credit card debt could skyrocket

Fitch warned that such debts could “buy now, pay later” and even spill over to credit card debt.

“BNPL users cannot afford the regular repayments and can turn to credit cards or other forms of high-yield debt to repay BNPL debt,” it said.

US household debt rose by the highest dollar in 14 years in the second quarter, according to the Federal Reserve. While this was mainly due to a surge in the housing market, credit card balances also grew $ 17 billion from the first quarter to a total of $ 787 billion.

According to Fitch, findings from the Australian Securities and Investment Commission in November showed that 15% of Australian consumers using such pay-later programs had to take out an additional loan the previous year in order to pay off their BNPL plan on time.

In the UK, Fitch quoted a major UK bank as reporting that of their 660,000+ customers who paid their BNPL providers, 10% exceeded their overdrafts in the same month.

Argus Research’s Biggar told CNBC that Square’s transaction losses “rose significantly” in the past quarter.

According to Square’s 2019 annual report, transaction and credit losses for the year ended December 31, 2019 increased 44% year over year.

Speaking of the risks of consumers missing out on payments, he said, “This is definitely a problem as we look to the next possible downturn … these loans have to be covered by something.”

In comparison, credit cards have “security features” built in, including cutting off access to the card, he pointed out.

– CNBC’s Jeff Cox contributed to this report.