senate Bill S2432A

Prohibits fee charges for payment of an account regardless of the method of payment

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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

  • 17 / Jan / 2013
    • REFERRED TO CONSUMER PROTECTION
  • 29 / Apr / 2013
    • 1ST REPORT CAL.445
  • 30 / Apr / 2013
    • 2ND REPORT CAL.
  • 01 / May / 2013
    • ADVANCED TO THIRD READING
  • 12 / Jun / 2013
    • AMENDED ON THIRD READING 2432A
  • 21 / Jun / 2013
    • COMMITTED TO RULES
  • 08 / Jan / 2014
    • REFERRED TO CONSUMER PROTECTION
  • 03 / Feb / 2014
    • 1ST REPORT CAL.84
  • 04 / Feb / 2014
    • 2ND REPORT CAL.
  • 10 / Feb / 2014
    • ADVANCED TO THIRD READING
  • 20 / Jun / 2014
    • COMMITTED TO RULES

Summary

Prohibits fee charges for payment of an account regardless of the method of payment.

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Bill Details

See Assembly Version of this Bill:
A370B
Versions:
S2432
S2432A
Legislative Cycle:
2013-2014
Current Committee:
Senate Rules
Law Section:
General Business Law
Laws Affected:
Amd ยง399-zzz, Gen Bus L
Versions Introduced in 2011-2012 Legislative Cycle:
S6728A, A9352A

Votes

9
0
9
Aye
0
Nay
1
aye with reservations
0
absent
0
excused
0
abstained
show Consumer Protection committee vote details

Sponsor Memo

BILL NUMBER:S2432A

TITLE OF BILL: An act to amend the general business law, in relation
to prohibiting fee charges for payment of an account regardless of the
method of payment

PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to
protect consumers from unfair payment fees.

SUMMARY OF SPECIFIC PROVISIONS: This bill would prohibit any person
or business entity from charging a consumer an additional rate or fee
or a differential in the rate or fee associated with payment on an
account, whether such payment is made by mail, electronic transfer,
telephone authorization, or other means, unless such payment involves
an expedited service by a service representative of the person,
partnership, corporation, association or other business entity. This
bill was amended to make technical changes.

JUSTIFICATION: In recent months, there have been instances of major
companies announcing plans to impose an additional fee on the accounts
of customers that choose certain payment methods, such as one-time
payments made online or over the telephone. Such payment fees unfairly
penalize certain consumers and may disproportionately impact low- and
moderate-income consumers. In today's world of highly-automated
payment systems, the cost of processing payments is often nominal and
considered a standard cost of doing business that is included in the
total rate or amount charged for services. The recent emergence of
proposals that would set payment fees at levels that appears to be
significantly higher than the actual cost or processing payments has
generated thousands or consumer complaints.

During these tough economic times, many consumers are struggling to
Pay their bills and must budget very carefully. These consumers should
not be forced to bear the burden of an additional payment charge,
unless expedited service is provided. Under this legislation,
businesses interested in encouraging the use of certain payment
methods may elect to implement incentive-based programs that do not
penalize consumers. Several major companies have successfully
convinced customers to use electronic billing by providing an
incentive to switch from paper billing.

This legislation would expand upon the provisions of section 399-zzz
of the General Business Law, which prohibits businesses from charging
customers an additional rate or fee when the consumer chooses to pay
by United States mail or received a paper billing statement. The
bill's provisions are also consistent with the federal Credit C.R.R.D.
Act Of 2009, which similarly restricts the ability of card issuers to
impose payment fees on cardholder accounts.

PRIOR LEGISLATIVE HISTORY: 2012: S. 6728 - Referred to Consumer
Affairs

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None to the
State.

EFFECTIVE DATE: This act shall take effect on January 1st next
succeeding.


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

                                 2432--A
    Cal. No. 445

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 17, 2013
                               ___________

Introduced  by  Sens.  KLEIN, MAZIARZ -- read twice and ordered printed,
  and when  printed  to  be  committed  to  the  Committee  on  Consumer
  Protection -- reported favorably from said committee, ordered to first
  and  second  report,  ordered  to a third reading, amended and ordered
  reprinted, retaining its place in the order of third reading

AN ACT to amend the general business law, in relation to prohibiting fee
  charges for payment of an account regardless of the method of payment

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

  Section  1.  Subdivision  1 of section 399-zzz of the general business
law, as added by chapter 556 of the laws of 2010, is amended to read  as
follows:
  1.  (A) Subject to federal law and regulation, no person, partnership,
corporation, association or other business entity shall charge a consum-
er an additional rate or fee or a differential in the rate or fee  asso-
ciated with payment on an account:
  (I)  when  the  consumer  chooses  to  [pay  by United States mail or]
receive a paper billing statement; OR
  (II) WHETHER SUCH PAYMENT IS MADE BY MAIL, ELECTRONIC TRANSFER, A LIVE
CUSTOMER SERVICE REPRESENTATIVE, TELEPHONE AUTHORIZATION BY MEANS  OF  A
VOICE RESPONSE UNIT OR INTERACTIVE VOICE RESPONSE SYSTEM, OTHER MEANS OR
A  COMBINATION THEREOF, UNLESS SUCH PAYMENT IS EXPEDITED BY SUCH PERSON,
PARTNERSHIP, CORPORATION, ASSOCIATION OR OTHER BUSINESS ENTITY TO CREDIT
SUCH PAYMENT THE SAME DAY OR, IF  THE  PAYMENT  IS  RECEIVED  AFTER  ANY
ESTABLISHED  CUT-OFF  TIME,  THE  NEXT BUSINESS DAY. FOR THE PURPOSES OF
THIS SUBPARAGRAPH, "EXPEDITED" MEANS A RUSH PAYMENT METHOD  OUTSIDE  THE
NORMAL AND USUAL COURSE OF BUSINESS.
  (B)  This  subdivision  shall  not  be construed to prohibit a person,
partnership, corporation, association  or  other  business  entity  from
offering  consumers  a  credit  or  other  incentive to elect a specific
payment or billing option.
  S 2. This act shall take effect on the first of January next  succeed-
ing the date on which it shall have become a law.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03106-05-3

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