senate Bill S651A

Prohibits banking organizations from issuing mail-loan checks without request or application therefor

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 05 / Jan / 2011
    • REFERRED TO BANKS
  • 04 / Jan / 2012
    • REFERRED TO BANKS
  • 31 / May / 2012
    • AMEND (T) AND RECOMMIT TO BANKS
  • 31 / May / 2012
    • PRINT NUMBER 651A

Summary

Prohibits banking organizations from issuing mail-loan checks without request or application therefor; provides that failure to destroy or return a mail-loan check does not constitute an acceptance thereof; provides that mail-loan checks shall have the transaction fee and interest rate included on the check.

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Bill Details

See Assembly Version of this Bill:
A2850A
Versions:
S651
S651A
Legislative Cycle:
2011-2012
Current Committee:
Senate Banks
Law Section:
Banking Law
Laws Affected:
Amd ยง9-t, Bank L
Versions Introduced in Previous Legislative Cycles:
2009-2010: S64, A2604
2007-2008: A3163A

Sponsor Memo

BILL NUMBER:S651A

TITLE OF BILL:
An act to amend the banking law, in relation to mail-loan checks

PURPOSE OR GENERAL IDEA OF BILL:
Prohibits banking organizations from issuing mail-loan checks without
request or application, in order to protect consumers from potentially
unsafe banking products.

SUMMARY OF SPECIFIC PROVISIONS:
This bill amends subdivisions 2 and 3 of section 9-t of the banking
law and adds a new subdivision 4 to section 9-t of the banking law.

JUSTIFICATION:
The practice of mailing unsolicited loan checks to consumers can prove
confusing to the consumer with respect to the obligation flowing from
his or her endorsement. Additionally, an unsolicited loan check
received by mail may be cashed by an unknown payee obligating the
payee to repay the loan. This bill would negate the problems noted
above.

PRIOR LEGISLATIVE HISTORY:
S.7493 of 2008 04/08/08 REFERRED TO BANKS

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
One hundred twentieth day after it becomes law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 651--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by Sens. SAMPSON, BRESLIN, HASSELL-THOMPSON, KRUEGER, PARKER
  -- read twice and ordered printed, and when printed to be committed to
  the Committee on Banks -- recommitted to the  Committee  on  Banks  in
  accordance  with  Senate  Rule 6, sec. 8 -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee

AN ACT to amend the banking law, in relation to mail-loan checks

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivisions 2 and 3 of section 9-t of the banking law,  as
added by chapter 309 of the laws of 2002, are amended and a new subdivi-
sion 4 is added to read as follows:
  2. Any lending institution which issues mail-loan checks shall:
  (a) include on the face of each check issued to a non-customer a writ-
ten  statement,  in legible type reading "ONE FORM OF VALID PHOTOGRAPHIC
ID NEEDED TO CASH OR DEPOSIT"; provided, however, that any entity  cash-
ing or accepting a mail-loan check for deposit may require more than one
form of identification;
  (b)  make  no  reference  on  the outside of the envelope containing a
mail-loan check that indicates that a  check  is  enclosed  within  such
envelope;
  (c) provide that all mail-loan checks shall be non-transferable; and
  (d)  include  THE  TRANSACTION FEE AND INTEREST RATE AND an expiration
date of not more than six months on the mail-loan check, AS WELL AS  ANY
ADDITIONAL INFORMATION THAT THE SUPERINTENDENT MAY REQUIRE.
  3.  NO  LENDING  INSTITUTION  SHALL ISSUE A MAIL-LOAN CHECK, EXCEPT IN
RESPONSE TO A REQUEST OR APPLICATION THEREFOR.
  4. FAILURE TO DESTROY OR RETURN A MAIL-LOAN CHECK SHALL NOT CONSTITUTE
ACCEPTANCE OF THE CHECK.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02778-03-2

S. 651--A                           2

  5. Any lending institution which mails a mail-loan check in  violation
of  the  provisions  of this section shall be liable for a civil penalty
not to exceed five hundred dollars for each such violation.
  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law.

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