Senate Bill S6348

                                BILL NUMBER:S6348

TITLE OF BILL:
An act
to amend
the state finance law, in relation to the procurement of banking
services

PURPOSE:
To provide an incentive to financial institutions to comply
with the cap on the rates of interest authorized in section 5-501 of
the General Obligations Law and established by subdivision one of
section fourteen-a of the Banking Law.

SUMMARY OF PROVISIONS:

Section 1 of the bill would add a new section 163-c to the State
Finance Law which relates to the
procurement of banking services. The new Section 163-c would
provide that state
agencies, as part of the process of evaluating proposals for
procuring banking services, take into account whether a financial
institution complies with the cap on the rate of interest for credit
cards and loans authorized in section 5-501 of the General
Obligations Law and established by subdivision one of section
fourteen-a of the Banking Law. The scoring would be accomplished in
              

accord with regulations adopted by the Superintendent of Financial
Services in consultation with the State Comptroller.

Section 2 of the bill sets forth the effective date.

JUSTIFICATION:
People throughout the State have fallen victim to financial
institutions applying usurious credit card and loan interest rates.
The current cap on interest rates authorized in section 5-501 of the
General Obligations Law and established by subdivision one of section
fourteen-a of the Banking Law is applicable only to State-chartered
banks. By including compliance with this provision in procurement for
State agency banking services, the proposed legislation would create
an incentive for banks chartered outside the State to comply with
these provisions when offering credit or making loans to residents of
the State.

LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPACT ON THE STATE:
This bill would have no significant fiscal impact.

EFFECTIVE DATE:

This act shall take effect on the one hundred
twentieth day after it shall have become a law provided, however,
that effective immediately the addition, amendment and/or repeal of
any rule or regulation necessary for implementation of this act on
its effective date are authorized and directed to be made and
completed by the department of financial services on or before such
effective date.