senate Bill S1101

2013-2014 Legislative Session

Requires a principal creditor to send a notice of delinquency to the debtor and co-signer of an account

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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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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to consumer protection
Jan 09, 2013 referred to consumer protection

S1101 - Bill Details

Current Committee:
Law Section:
General Business Law
Laws Affected:
Amd §600, add §601-a, Gen Bus L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S195
2009-2010: S2538

S1101 - Bill Texts

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Requires a principal creditor to send a notice of delinquency to the debtor and co-signer of an account.

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BILL NUMBER:S1101

TITLE OF BILL:
An act
to amend the general business law, in relation to notice of delinquency
requirements

PURPOSE:
To require a principal creditor to send a notice of
delinquency to the debtor and co-signer of an account.

SUMMARY OF PROVISIONS:
Section 1 amends section 600 of the general
business law by adding new subdivision 4. Subdivision 4 (i) defines
the term co-signer and their role in relation to the debtor.
Subdivision 4 (ii) states that in the case of a consumer credit
account becomes obligated under the agreement as a co-signer with
respect either to all purchases and loans, or a specified maximum
dollar amount of purchases and loans that will be obtained from time
to time pursuant to the agreement whether or not it is contemplated
that the co-signer may receive any of the property, services or money
to be obtained. This does not include a seller, holder or lender who
becomes obligated to an assignee of such party's rights or a joint
applicant for credit who is intended to be primarily liable under the
agreement.

Section 2 amends the general business law by adding new section 601-a
which obligates every principal creditor shall send a notice to the
last known address of the debtor advising them of a delinquency on
his or her account. A copy of this same notice will also be sent to
the co-signer of such account.

Section 3 establishes an effective date of January first succeeding
the date on which it shall have become a law.

JUSTIFICATION:
Current law only requires that the debtor be notified
in delinquency situations and the co-signer is forced to later reap
the repercussions. This legislation would obligate all creditors to
notify the co-signer as well of any delinquency by the debtor so that
all parties involved would be informed and the co-signer can
understand what they may liable for if the debtor continues to
default on their payments. Since a co-signer would be held
accountable for any payments that the debtor has defaulted on, it is
believed that an immediate notification of delinquency would allow
them to work out any problems with the debtor prior to the co-signer
obtaining responsibility for the debt.

LEGISLATIVE HISTORY:
S.2538 of 2009/2010; Referred to Consumer
protection S.195/A.7616 of 2011/2012; Committed to Rules

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:


This act shall take effect on the first of January
next succeeding the date on which it shall have become a law.

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

                                  1101

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen. MAZIARZ -- read twice and ordered printed, and when
  printed to be committed to the Committee on Consumer Protection

AN ACT to amend the general business  law,  in  relation  to  notice  of
  delinquency requirements

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

  Section 1. Section 600 of the  general  business  law  is  amended  by
adding a new subdivision 4 to read as follows:
  4. "CO-SIGNER" MEANS A NATURAL PERSON WHO (I) IN THE CASE OF A CONSUM-
ER  CREDIT TRANSACTION BECOMES OBLIGATED ON THE TRANSACTION AS A CO-SIG-
NER, CO-MAKER, GUARANTOR, ENDORSER OR SURETY, BUT WHO DOES  NOT  RECEIVE
THE PROPERTY, SERVICES, OR MONEY THAT IS THE SUBJECT OF THE TRANSACTION.
THE  TERM  DOES NOT INCLUDE A SELLER, HOLDER OR LENDER WHO BECOMES OBLI-
GATED TO AN ASSIGNEE OF SUCH PARTY'S RIGHTS; OR (II) IN THE  CASE  OF  A
CONSUMER  CREDIT  ACCOUNT  BECOMES  OBLIGATED  UNDER  THE AGREEMENT AS A
CO-SIGNER, CO-MAKER, GUARANTOR, ENDORSER OR SURETY WITH  RESPECT  EITHER
TO  ALL  PURCHASES  AND  LOANS,  OR A SPECIFIED MAXIMUM DOLLAR AMOUNT OF
PURCHASES AND LOANS THAT WILL BE OBTAINED FROM TIME TO TIME PURSUANT  TO
THE  AGREEMENT  WHETHER OR NOT IT IS CONTEMPLATED THAT THE CO-SIGNER MAY
RECEIVE ANY OF THE PROPERTY, SERVICES OR MONEY TO BE OBTAINED. THE  TERM
DOES  NOT INCLUDE A SELLER, HOLDER OR LENDER WHO BECOMES OBLIGATED TO AN
ASSIGNEE OF SUCH PARTY'S RIGHTS OR A JOINT APPLICANT FOR CREDIT  WHO  IS
INTENDED TO BE PRIMARILY LIABLE UNDER THE AGREEMENT.
  S 2. The general business law is amended by adding a new section 601-a
to read as follows:
  S 601-A. NOTICE OF DELINQUENCY. EVERY PRINCIPAL CREDITOR OR HIS OR HER
AGENT SHALL SEND A NOTICE TO THE LAST KNOWN ADDRESS OF THE DEBTOR ADVIS-
ING  THE  DEBTOR  OF A DELINQUENCY ON HIS OR HER ACCOUNT. A COPY OF SUCH
NOTICE SHALL ALSO BE SENT TO THE CO-SIGNER OF SUCH ACCOUNT.
  S 3. This act shall take effect on the first of January next  succeed-
ing the date on which it shall have become a law.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01995-01-3

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