S T A T E O F N E W Y O R K
________________________________________________________________________
2460
2009-2010 Regular Sessions
I N S E N A T E
February 20, 2009
___________
Introduced by Sen. SAMPSON -- read twice and ordered printed, and when
printed to be committed to the Committee on Consumer Protection
AN ACT to amend the personal property law and the banking law, in
relation to excluding finance, service or interest charges and other
authorized fees from the amount used to determine whether the speci-
fied credit limit has been exceeded for the purpose of imposing an
overlimit charge in retail instalment credit agreements and other
installment obligations
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The closing paragraph of subdivision 5 of section 413 of
the personal property law is designated paragraph (c), and paragraph (b)
of such subdivision, as amended by chapter 1 of the laws of 1994, is
amended to read as follows:
(b) In addition to the service charge on outstanding indebtedness
permitted under subdivision three of this section, the seller or holder
may charge, receive and collect any one or more of the fees and charges
described in this paragraph, provided that any such fee or charge is
provided for in the retail instalment credit agreement. When credit
cards are issued in connection with a retail instalment credit agree-
ment, the retail instalment credit agreement may provide for an annual
fee for membership in the credit card plan. If a buyer has requested the
issuance of a credit card, the fee for the first year may be charged by
the seller or holder at any time. The seller or holder shall in each
subsequent year in which an annual fee is payable, send the buyer in or
with the statement for the monthly billing period before that in which
the fee is to be billed, a notice that the annual fee will be billed in
the next monthly statement. A buyer who is not delinquent or otherwise
in breach of any term of the agreement with the seller or holder shall
have the right during the first six months after the annual fee is
billed to notify the seller or holder in writing, at its address on the
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01825-01-9
S. 2460 2
credit agreement, to terminate the buyer's account and request a refund
of the unused portion of the annual fee previously paid. Upon receipt of
the termination notice and refund request from such buyer, the seller or
holder shall refund to the buyer the unused pro-rata share of any annual
fee previously paid as of the first billing statement date after receipt
of the termination notice. The retail [installment] INSTALMENT credit
agreement may provide for the assessment of a fee for any [installment]
INSTALMENT which is not paid on or before the date on which it is due. A
seller or holder that imposes a fee for late payments without allowing a
grace period of at least ten days must credit any cash payment made by a
buyer to an authorized representative of the seller or holder at all
stores, or to a teller at a branch where deposits are accepted, as of
the date of the receipt of the payment. The retail [installment] INSTAL-
MENT credit agreement may, in addition, provide for an overlimit charge.
The overlimit charge may be imposed whenever the specified credit limit
is exceeded BY THE TOTAL AMOUNT OF PURCHASES MADE OR CASH ADVANCES
OBTAINED, OR BOTH, AS THE CASE MAY BE, but not more than once in a
monthly billing cycle. FINANCE, SERVICE AND INTEREST CHARGES, AND ALL
OTHER FEES AND CHARGES INCLUDING BUT NOT LIMITED TO COMMISSIONS,
EXPENSES, FINES AND PENALTIES AUTHORIZED BY THIS SECTION OR BY THE TERMS
OF THE RETAIL INSTALMENT CREDIT AGREEMENT SHALL BE EXCLUDED FROM DETER-
MINATION OF WHETHER THE SPECIFIED CREDIT LIMIT IS EXCEEDED. If the over-
limit charge is imposed, the credit limit must be disclosed on the
monthly billing statement. The retail [installment] INSTALMENT credit
agreement also may provide for: (i) a returned payment charge, in the
amount set forth in section 5-328 of the general obligations law, for
any check or other method of payment that is returned unpaid, excluding
payment made by automated teller machine or other electronic media; (ii)
a charge for replacement of lost or stolen credit cards, which charge
shall be applied only where a buyer has suffered a lost or stolen credit
card after two replacements thereof; (iii) a charge for additional cred-
it cards for the buyer's account; and (iv) a charge for copies of sales
slips, monthly statements and other documents when such copies are not
required by federal or state law governing billing error disputes.
S 2. Subparagraph (vii) of paragraph e of subdivision 5 of section 108
of the banking law, as amended by chapter 1 of the laws of 1994, is
amended to read as follows:
(vii) an overlimit charge which may be imposed whenever the specified
credit limit is exceeded BY THE TOTAL AMOUNT OF PURCHASES MADE OR CASH
ADVANCES OBTAINED, OR BOTH, AS THE CASE MAY BE, but not more than once
in a monthly billing cycle. FINANCE, SERVICE AND INTEREST CHARGES, AND
ALL OTHER FEES AND CHARGES INCLUDING BUT NOT LIMITED TO COMMISSIONS,
EXPENSES, FINES AND PENALTIES AUTHORIZED BY THIS SECTION OR BY THE TERMS
OF THE RETAIL INSTALLMENT CREDIT AGREEMENT SHALL BE EXCLUDED FROM DETER-
MINATION OF WHETHER THE SPECIFIED CREDIT LIMIT IS EXCEEDED. If the over-
limit charge is imposed, the credit limit must be disclosed on the
monthly billing statement; and
S 3. This act shall take effect on the sixtieth day after it shall
have become a law and shall apply to retail instalment credit agreements
under section 413 of the personal property law and to installment obli-
gations under section 108 of the banking law, that are issued, renewed,
amended or restated on or after the effective date of this act.
