senate Bill S5209

2011-2012 Legislative Session

Relates to retail instalment contracts and transmitters of money

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Archive: Last Bill Status - Passed Senate


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 19, 2012 referred to banks
delivered to assembly
passed senate
Jan 18, 2012 advanced to third reading
Jan 10, 2012 2nd report cal.
Jan 09, 2012 1st report cal.2
Jan 04, 2012 referred to banks
returned to senate
died in assembly
Jun 17, 2011 referred to banks
delivered to assembly
passed senate
May 24, 2011 advanced to third reading
May 23, 2011 2nd report cal.
May 18, 2011 1st report cal.785
May 03, 2011 referred to banks

Votes

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Jan 9, 2012 - Banks committee Vote

S5209
19
0
committee
19
Aye
0
Nay
0
Aye with Reservations
0
Absent
0
Excused
0
Abstained
show Banks committee vote details

May 18, 2011 - Banks committee Vote

S5209
18
0
committee
18
Aye
0
Nay
1
Aye with Reservations
0
Absent
0
Excused
0
Abstained
show Banks committee vote details

Co-Sponsors

S5209 - Bill Details

Current Committee:
Law Section:
Banking Law
Laws Affected:
Amd ยงยง491 & 641, Bank L

S5209 - Bill Texts

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Relates to retail instalment contracts and transmitters of money; makes clear that the term "retail instalment obligation" includes an agreement no matter where entered into if it is executed by the buyer in this State and if solicited in person by a salesperson or other person acting on his or her own behalf or that of the seller; clarifies when banking institutions are exempt from coverage of the article and when New York persons are subject to the protections of this article.

view sponsor memo
BILL NUMBER:S5209

TITLE OF BILL:
An act
to amend the banking law, in relation to retail instalment contracts and
transmitters of money

PURPOSE:
To ensure that all sales finance companies and money transmitters which
do business with residents of New York State are subject to
regulation and oversight by the State Banking Department.

SUMMARY OF PROVISIONS:
Section one of the bill amends the definitions of retail instalment
obligation and retail instalment credit agreement in Section 491 of
the Banking Law to specify that such terms include agreements
wherever entered into if executed by the buyer in this state and if
solicited in person by a salesperson or other person acting on his or
her own behalf or that of the seller. The definition of sales finance
company is amended to update the exemption threshold for retail
sellers of motor vehicles and also to clarify that the definition
does not include a secondary holder of retail instalment contracts.
Section two of the bill amends Section 641 of the Banking Law which
relates to the regulation and licensing of money transmitters. These
amendments specify that a person is considered to engage in the money
transmitter business in this state if such person induces another
person to enter into a transaction by solicitation in or into this
state by any means (including mail, e-mail, telephone, radio,
television or internet).

JUSTIFICATION:
This bill seeks to protect residents of New York State by clarifying
and ensuring that sales finance companies and money transmitters
which enter into transactions with persons in this state are subject
to the legal protections of State law and the regulatory oversight
provided by the
Banking Department. This regulatory system is designed to protect
consumers and ensure they are dealing with legitimate and financially
viable companies.
Given the ease by which companies can solicit business in New York
over the internet or by mail, e-mail, phone, radio or television, it
is especially important to ensure that New Yorkers are afforded the
same protections with out-of-state companies that they receive with
regulated in-state companies. This also ensures that businesses are
operating on a level playing field.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediately.

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

                                  5209

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 3, 2011
                               ___________

Introduced  by  Sens.  FARLEY, GRIFFO -- read twice and ordered printed,
  and when printed to be committed to the Committee on Banks

AN ACT to amend the  banking  law,  in  relation  to  retail  instalment
  contracts and transmitters of money

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

  Section 1.  Subdivisions 6-a, 6-b and 7 of section 491 of the  banking
law,  subdivision  6-a  as  amended  by chapter 289 of the laws of 1962,
subdivision 6-b as added by chapter 358 of the laws of 1958 and subdivi-
sion 7 as amended by chapter 837 of the laws of  1966,  are  amended  to
read as follows:
  6-a.  "Retail  instalment  obligation" or "obligation" means an agree-
ment, entered into in this state, pursuant to which the  buyer  promises
to  pay,  in  instalments, the time sale price or prices of goods and/or
services, or any part thereof. The term does not include [(a)] a  retail
instalment  contract[,  (b)] OR a retail instalment credit agreement [or
(c) an obligation which is intended to be and is ultimately  insured  or
guaranteed  under  title three of the act of Congress entitled "Service-
men's Readjustment Act of 1944"].  THE TERM INCLUDES SUCH  AN  AGREEMENT
WHEREVER  ENTERED  INTO  IF  EXECUTED  BY THE BUYER IN THIS STATE AND IF
SOLICITED IN PERSON BY A SALESPERSON OR OTHER PERSON ACTING  ON  HIS  OR
HER OWN BEHALF OR THAT OF THE SELLER.
  6-b.  "Retail instalment credit agreement" or "credit agreement" means
an agreement entered into in this state, pursuant  to  which  the  buyer
promises  to  pay,  in  instalments, his OR HER outstanding indebtedness
from time to time to a retail seller, not evidenced by a retail  instal-
ment contract or obligation, for one or more items of goods or services,
whenever  purchased or obtained, which provides for a service charge and
under which instalment payments apply to his OR HER outstanding  indebt-
edness  from time to time.  THE TERM INCLUDES SUCH AN AGREEMENT WHEREVER
ENTERED INTO IF EXECUTED BY THE BUYER IN THIS STATE AND IF SOLICITED  IN

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11182-01-1

S. 5209                             2

PERSON  BY A SALESPERSON OR OTHER PERSON ACTING ON HIS OR HER OWN BEHALF
OR THAT OF THE SELLER.
  7.  "Sales  finance  company"  means  a person engaged, in whole or in
part, directly or indirectly, in the business of purchasing or otherwise
acquiring retail instalment contracts, obligations or credit  agreements
made  by  and  between  other parties, or any interest therein. The term
includes a retail seller of motor vehicles engaged, in whole or in part,
in the business of holding retail  instalment  contracts  acquired  from
retail buyers, [which have] IF THE NUMBER OF RETAIL INSTALMENT CONTRACTS
ACQUIRED  IN  ANY ONE YEAR EXCEEDS FIVE SUCH CONTRACTS, OR IF THE aggre-
gate unpaid time balances [of twenty-five] ON SUCH CONTRACTS EXCEED  ONE
HUNDRED thousand dollars or more at any one time, exclusive of contracts
repurchased  from  a sales finance company or financing agency, under an
agreement to repurchase in case of default entered into as  an  incident
to  the  bona  fide sale thereof to a sales finance company or financing
agency. The term does not include the pledgee of an aggregate number  of
contracts  to  secure a bona fide loan thereon, OR A SECONDARY HOLDER OF
SUCH CONTRACTS.  The term includes a person  engaged,  in  whole  or  in
part,  directly  or  indirectly, in the business of entering into retail
instalment credit agreements with retail buyers pursuant to  subdivision
eleven  of  section  four hundred thirteen of the personal property law.
FOR PURPOSES OF THIS ARTICLE, THE TERM "SECONDARY HOLDER" MEANS A PERSON
THAT (I) PURCHASES OR OTHERWISE ACQUIRES A SALES FINANCE CONTRACT, OR AN
INTEREST THEREIN, THAT WAS ORIGINATED BY A  PERSON  LICENSED  OR  EXEMPT
FROM  LICENSING  UNDER  THIS  ARTICLE  AND  THAT IS SERVICED BY A PERSON
LICENSED OR EXEMPT FROM LICENSING UNDER THIS ARTICLE, AND  (II)  HAS  NO
CONTACT WITH THE OBLIGOR UNDER SUCH CONTRACT.
  S  2.  Subdivision  1 of section 641 of the banking law, as amended by
chapter 677 of the laws of 2004, is amended to read as follows:
  1. No person shall engage IN THIS STATE in the business of selling  or
issuing  checks, or engage in the business of receiving money for trans-
mission or transmitting the same, without a  license  therefor  obtained
from  the  superintendent  as  provided  in  this article, nor shall any
person engage in such business as an agent, except  as  an  agent  of  a
licensee or as agent of a payee; provided, however, that nothing in this
article  shall  apply  to a bank, trust company, private banker, foreign
banking corporation licensed pursuant to article two of this chapter  or
foreign  banking  company authorized to operate pursuant to the Interna-
tional Banking Act of 1978 (12 USC 3101 et seq.),  as  amended,  savings
bank,  savings  and  loan association, an investment company, a national
banking association, federal reserve bank, corporation  organized  under
the  provisions  of section twenty-five-a of an act of congress entitled
the "Federal Reserve Act", federal savings  bank,  federal  savings  and
loan  association or state or federal credit union OR OUT-OF-STATE STATE
BANK.  A PERSON ENGAGES IN THIS STATE IN  THE  BUSINESS  OF  SELLING  OR
ISSUING  CHECKS  OR RECEIVING MONEY FOR TRANSMISSION OR TRANSMITTING THE
SAME IF SUCH PERSON INDUCES ANOTHER PERSON WHO  IS  A  RESIDENT  OF,  OR
LOCATED IN, THIS STATE TO ENTER INTO A TRANSACTION BY SOLICITATION IN OR
INTO  THIS STATE BY ANY MEANS, INCLUDING BUT NOT LIMITED TO, MAIL, ELEC-
TRONIC MAIL, TELEPHONE, RADIO, TELEVISION, THE  INTERNET  OR  ANY  OTHER
ELECTRONIC MEANS.
  S 3. This act shall take effect immediately.

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