senate Bill S3588

Signed By Governor
2013-2014 Legislative Session

Extends the effectiveness of certain provisions relating to permissible fees in connection with open end loans

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Archive: Last Bill Status Via A4528 - Signed by Governor


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
May 22, 2013 signed chap.32
May 10, 2013 delivered to governor
Apr 30, 2013 returned to assembly
passed senate
3rd reading cal.428
substituted for s3588
Apr 30, 2013 substituted by a4528
Apr 29, 2013 advanced to third reading
Apr 24, 2013 2nd report cal.
Apr 23, 2013 1st report cal.428
Feb 07, 2013 referred to banks

Votes

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S3588 - Bill Details

See Assembly Version of this Bill:
A4528
Law Section:
Banks
Laws Affected:
Amd ยง3, Chap 223 of 1996

S3588 - Bill Texts

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Extends the effectiveness of certain provisions relating to permissible fees in connection with open end loans.

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BILL NUMBER:S3588

TITLE OF BILL: An act to amend chapter 223 of the laws of 1996, amend-
ing the banking law relating to permissible fees in connection with open
end loans, in relation to extending the effectiveness thereof

PURPOSE: Continues for two years, the existing statutory authority for
licensed lenders to charge annual fees on open-end personal loans.

SUMMARY OF PROVISIONS: Amends the effective date of Chapter 223 of the
Laws of 1996 extending for two years (June 30, 2015), the authority of
licensed lenders to charge annual fees on open-end personal loans.

JUSTIFICATION: In 1996, legislation was enacted to authorize licensed
lenders to charge annual fees on open-end loans. The law further
provided that any such fee may not exceed the lesser of 1% of the loan
amount or S50. This 1996 law contained a sunset date of June 30, 2000.
Legislation was enacted in 2000 to extend this authority for another
five years, and legislation was enacted in 2005, 2007, 2009 and 2011
extending this authority. The provisions of this law are currently sche-
duled to expire on June 30, 2013.

The 1996 law recognized that annual fees are a commonly used feature in
the pricing of open-end loan products, such as credit cards, home equity
loans and personal loans. This type of fee reflects the fact that addi-
tional costs are incurred in the administration of revolving loans, such
as the preparation and mailing of monthly billing statements, the proc-
essing of transactions and increased monitoring costs.

For these reasons, banking institutions have long had the ability to
charge annual fees on open-end loan products. Licensed lenders have also
had the ability to charge annual fees on certain open-end products, such
as credit cards and home equity loans. However, prior to 1996, they did
not have authority to charge annual fees on open-end personal loans.
Chapter 223 of 1996 gave licensed lenders the same pricing flexibility
as banking institutions with regard to fees on open-end personal loans.
Therefore, this bill would extend the provisions of the 1996 law for two
years.

LEGISLATIVE HISTORY: New.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediate.

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

                                  3588

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 7, 2013
                               ___________

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

AN ACT to amend chapter 223 of the laws of 1996,  amending  the  banking
  law relating to permissible fees in connection with open end loans, in
  relation to extending the effectiveness thereof

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

  Section 1. Section 3 of chapter 223 of the laws of 1996, amending  the
banking  law  relating  to  permissible fees in connection with open end
loans, as amended by chapter 114 of the laws of 2011, is amended to read
as follows:
  S 3. This act shall take effect immediately, and remain in full  force
and  effect until June 30, [2013] 2015, when, upon such date, the amend-
ments made by this act shall expire and  be  deemed  repealed,  and  the
provisions  of law amended by this act shall revert to their text and be
read as they were immediately prior to the effective date of this act.
  S 2. This act shall take effect immediately.





 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08372-01-3

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