senate Bill S651A

2011-2012 Legislative Session

Prohibits banking organizations from issuing mail-loan checks without request or application therefor

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Archive: Last Bill Status - In Committee


  • 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
May 31, 2012 print number 651a
amend (t) and recommit to banks
Jan 04, 2012 referred to banks
Jan 05, 2011 referred to banks

Bill Amendments

Original
A (Active)
Original
A (Active)

Co-Sponsors

S651 - Bill Details

See Assembly Version of this Bill:
A2850A
Current Committee:
Law Section:
Banking Law
Laws Affected:
Amd §9-t, Bank L
Versions Introduced in 2009-2010 Legislative Session:
S64, A2604

S651 - Bill Texts

view summary

Prohibits banking organizations from issuing mail-loan checks without request or application therefor; provides that failure to destroy or return a mail-loan check does not constitute an acceptance thereof; provides that mail-loan checks shall have the transaction fee and interest rate included on the check.

view sponsor memo
BILL NUMBER:S651

TITLE OF BILL:
An act
to amend the banking
law, in relation to prohibiting banks from issuing checks whose
endorsement constitutes acceptance of an unsolicited loan

PURPOSE OR GENERAL IDEA OF BILL:
Prohibits banking organizations from issuing checks for unsolicited
loans.

SUMMARY OF SPECIFIC PROVISIONS:
This bill amends the banking law by adding section 9-v, which
prohibits banking organizations from issuing checks whose endorsement
constitutes acceptance of an unsolicited loan.

JUSTIFICATION:
The practice of mailing unsolicited loan checks to consumers can prove
confusing to the consumer with respect to the obligation flowing from
his or her endorsement. Additionally, an unsolicited loan check
received by mail may be cashed by an unknown payee obligating the
payee to repay the loan. This bill would negate the problems noted
above.

PRIOR LEGISLATIVE HISTORY:
S.7493 of 2008
04/08/08 Referred to Banks
S.64 of 2009
01/07/09 Referred to Banks
01/06/10 Referred to Banks

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
One hundred twentieth day after it becomes law.

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

                                   651

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  Sen. SAMPSON -- 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 prohibiting  banks  from
  issuing checks whose endorsement constitutes acceptance of an unsolic-
  ited loan

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

  Section 1. The banking law is amended by adding a new section  9-v  to
read as follows:
  S  9-V.  BANKING  ORGANIZATIONS  PROHIBITED  FROM ISSUING CHECKS WHOSE
ENDORSEMENT CONSTITUTES ACCEPTANCE OF AN UNSOLICITED LOAN.   NO  BANKING
ORGANIZATION  SHALL ISSUE A CHECK OR DRAFT TO ANY PERSON, FIRM, PARTNER-
SHIP, CORPORATION OR OTHER LEGAL ENTITY IF THE ENDORSEMENT OR DEPOSIT OF
SUCH CHECK OR DRAFT BY THE PAYEE WOULD CONSTITUTE THE  ACCEPTANCE  OF  A
LOAN  FROM  SUCH BANKING ORGANIZATION TO SUCH PAYEE WITHOUT SUCH PAYEE'S
HAVING SOLICITED SUCH LOAN.
  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law; provided, however, that effective immediate-
ly, the addition, amendment, and/or repeal of any rule or regulation  by
the superintendent of banks necessary for the implementation of this act
on  its  effective  date  are  authorized  and  directed  to be made and
completed on or before such effective date.



 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02778-01-1

Co-Sponsors

S651A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A2850A
Current Committee:
Law Section:
Banking Law
Laws Affected:
Amd §9-t, Bank L
Versions Introduced in 2009-2010 Legislative Session:
S64, A2604

S651A (ACTIVE) - Bill Texts

view summary

Prohibits banking organizations from issuing mail-loan checks without request or application therefor; provides that failure to destroy or return a mail-loan check does not constitute an acceptance thereof; provides that mail-loan checks shall have the transaction fee and interest rate included on the check.

view sponsor memo
BILL NUMBER:S651A

TITLE OF BILL:
An act to amend the banking law, in relation to mail-loan checks

PURPOSE OR GENERAL IDEA OF BILL:
Prohibits banking organizations from issuing mail-loan checks without
request or application, in order to protect consumers from potentially
unsafe banking products.

SUMMARY OF SPECIFIC PROVISIONS:
This bill amends subdivisions 2 and 3 of section 9-t of the banking
law and adds a new subdivision 4 to section 9-t of the banking law.

JUSTIFICATION:
The practice of mailing unsolicited loan checks to consumers can prove
confusing to the consumer with respect to the obligation flowing from
his or her endorsement. Additionally, an unsolicited loan check
received by mail may be cashed by an unknown payee obligating the
payee to repay the loan. This bill would negate the problems noted
above.

PRIOR LEGISLATIVE HISTORY:
S.7493 of 2008 04/08/08 REFERRED TO BANKS

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
One hundred twentieth day after it becomes law.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 651--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by Sens. SAMPSON, BRESLIN, HASSELL-THOMPSON, KRUEGER, PARKER
  -- read twice and ordered printed, and when printed to be committed to
  the Committee on Banks -- recommitted to the  Committee  on  Banks  in
  accordance  with  Senate  Rule 6, sec. 8 -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee

AN ACT to amend the banking law, in relation to mail-loan checks

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

  Section 1. Subdivisions 2 and 3 of section 9-t of the banking law,  as
added by chapter 309 of the laws of 2002, are amended and a new subdivi-
sion 4 is added to read as follows:
  2. Any lending institution which issues mail-loan checks shall:
  (a) include on the face of each check issued to a non-customer a writ-
ten  statement,  in legible type reading "ONE FORM OF VALID PHOTOGRAPHIC
ID NEEDED TO CASH OR DEPOSIT"; provided, however, that any entity  cash-
ing or accepting a mail-loan check for deposit may require more than one
form of identification;
  (b)  make  no  reference  on  the outside of the envelope containing a
mail-loan check that indicates that a  check  is  enclosed  within  such
envelope;
  (c) provide that all mail-loan checks shall be non-transferable; and
  (d)  include  THE  TRANSACTION FEE AND INTEREST RATE AND an expiration
date of not more than six months on the mail-loan check, AS WELL AS  ANY
ADDITIONAL INFORMATION THAT THE SUPERINTENDENT MAY REQUIRE.
  3.  NO  LENDING  INSTITUTION  SHALL ISSUE A MAIL-LOAN CHECK, EXCEPT IN
RESPONSE TO A REQUEST OR APPLICATION THEREFOR.
  4. FAILURE TO DESTROY OR RETURN A MAIL-LOAN CHECK SHALL NOT CONSTITUTE
ACCEPTANCE OF THE CHECK.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02778-03-2

S. 651--A                           2

  5. Any lending institution which mails a mail-loan check in  violation
of  the  provisions  of this section shall be liable for a civil penalty
not to exceed five hundred dollars for each such violation.
  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law.

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