S T A T E O F N E W Y O R K
________________________________________________________________________
177
2009-2010 Regular Sessions
I N A S S E M B L Y
(PREFILED)
January 7, 2009
___________
Introduced by M. of A. PHEFFER -- Multi-Sponsored by -- M. of A. AUBRY,
CLARK, CYMBROWITZ, DIAZ, GABRYSZAK, GLICK, GOTTFRIED, JACOBS,
V. LOPEZ, MAGEE, McENENY, MILLMAN, ORTIZ, SCARBOROUGH, SEMINERIO,
TOWNS, WEINSTEIN -- read once and referred to the Committee on Consum-
er Affairs and Protection
AN ACT to amend the personal property law, in relation to prohibiting
the application of service charges and annual fees to only those cred-
it card holders or buyers who pay off their balances in full within
the grace period allowed for purchases
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative finding and declaration. The legislature finds
and declares that the public policy of this state does not countenance
the imposition of an annual fee, service charge, or other fee or charge
for credit card use which applies or will apply exclusively to only
those buyers or credit card holders who repay, or who make it a practice
each month or on a regular basis to repay, their balances in full during
the applicable grace period. Such fees and charges tend to discourage
the full and early repayment of consumer debt, thereby contributing to
mounting consumer debt and possibly to an increase in personal bankrupt-
cies. Accordingly, the purpose of this act is to codify the justified
existing public policy of this state.
S 2. Section 413 of the personal property law is amended by adding a
new subdivision 15 to read as follows:
15. (A) FOR THE PURPOSES OF THIS SUBDIVISION, THE TERM "GRACE PERIOD"
MEANS THE PERIOD OF TIME, PROVIDED FOR IN THE ORIGINAL RETAIL INSTALMENT
CREDIT AGREEMENT, DURING WHICH THE RETAIL BUYER MAY PAY THE FULL BALANCE
WHICH IS ATTRIBUTABLE TO PURCHASES OF GOODS AND SERVICES REFLECTED ON A
MONTHLY STATEMENT WITHOUT BEING ASSESSED A SERVICE CHARGE.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01860-01-9
A. 177 2
(B) NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION, IF A CREDIT
CARD IS ISSUED IN CONNECTION WITH A RETAIL INSTALMENT CREDIT AGREEMENT
AND SUCH AGREEMENT (OR AN AMENDMENT THERETO) PROVIDES FOR A GRACE PERI-
OD, AND THE BUYER PAYS THE FULL BALANCE DURING THE APPLICABLE GRACE
PERIOD, NO SERVICE CHARGE OR ANNUAL FEE OTHERWISE AUTHORIZED BY THIS
SECTION AND NO OTHER CHARGE OR FEE OF ANY KIND SHALL BE IMPOSED.
(C) THE PROVISIONS OF THIS SUBDIVISION SHALL APPLY WHERE THE SERVICE
CHARGE, ANNUAL FEE, OR OTHER CHARGE OR FEE IS, BY THE TERMS OF SUCH
AGREEMENT OR AMENDMENT OR IN PRACTICE, APPLICABLE ONLY TO BUYERS WHO
HAVE PAID, WHO DO PAY, WHO WILL PAY, OR WHO MAKE IT A PRACTICE TO PAY
THE FULL BALANCE DURING THE APPLICABLE GRACE PERIOD OR DURING A SPECI-
FIED SERIES OR NUMBER OF GRACE PERIODS.
(D) THE PROVISIONS OF THIS SUBDIVISION DO NOT APPLY TO BUYERS WHO HAVE
PAID, WHO DO PAY, WHO WILL PAY, OR WHO MAKE IT A PRACTICE TO PAY LESS
THAN THE FULL BALANCE DURING THE APPLICABLE GRACE PERIOD OR DURING A
SPECIFIED SERIES OR NUMBER OF GRACE PERIODS.
S 3. This act applies to existing retail instalment credit agreements
as well as to retail instalment credit agreements and amendments thereof
which are entered into or made on or after the effective date of this
act. If any provision of this act, or its application to any person or
circumstance, is found to be invalid by a court of competent jurisdic-
tion, and such finding of invalidity remains sustained after any and all
appeals have been exhausted or after the time for bringing any such
appeal has expired, such finding shall not invalidate the application of
such provision to a different person or circumstance and shall not
result in the invalidity of any other provision of this act, and toward
that end the provisions of this act are hereby declared severable.
S 4. This act shall take effect on the thirtieth day after it shall
have become a law.