senate Bill S7425

2013-2014 Legislative Session

Requires banks to disclose negative consequences of establishing alternative payment schedule on a loan

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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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May 14, 2014 referred to banks

S7425 - Bill Details

See Assembly Version of this Bill:
A1111
Current Committee:
Law Section:
Banking Law
Laws Affected:
Add ยง129-a, Bank L
Versions Introduced in Previous Legislative Sessions:
2011-2012: A3240
2009-2010: A11696

S7425 - Bill Texts

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Requires banks to disclose any negative consequences of establishing an alternative payment schedule on a loan.

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BILL NUMBER:S7425

TITLE OF BILL: An act to amend the banking law, in relation to requir-
ing banks to disclose any negative consequences an alternative loan
payment schedule may have on credit scores

SUMMARY OF PROVISIONS: Amends section 129-a of the banking law to
require the disclosure of negative consequences an alternative payment
schedule, agreed to by a bank or trust company, would have on a custom-
er's credit rating.

JUSTIFICATION: This legislation addresses the practice some banks use by
which they arrange an alternative payment schedule with a customer and
leave the customer with the impression that this arrangement will
prevent the financial institution from hurting the customer's credit
rating. When an alternative payment schedule is arranged, a bank may
still report a customer as being late on their payments even though they
have worked out a compromised alternative. Most customers are unaware of
this and don't that the alternative payment schedule is really not help-
ing them preserve their credit rating.

PRIOR LEGISLATIVE HISTORY: A.3240 of the 2012 legislative session.

FISCAL IMPLICATIONS: None to the state.

EFFECTIVE DATE: This act shall take effect in 90 days after it shall
have become a law.

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

                                  7425

                            I N  S E N A T E

                              May 14, 2014
                               ___________

Introduced  by  Sen. SANDERS -- 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  requiring  banks  to
  disclose  any negative consequences an alternative loan payment sched-
  ule may have on credit scores

  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 129-a to
read as follows:
  S  129-A. REQUIREMENT OF DISCLOSURE; ALTERNATIVE PAYMENT SCHEDULES. IN
THE EVENT THAT ANY BANK OR TRUST COMPANY  SHALL  PERMIT  A  CUSTOMER  TO
ESTABLISH AN ALTERNATIVE PAYMENT SCHEDULE FOR AN EXISTING LOAN, THE BANK
OR TRUST COMPANY SHALL PROVIDE WRITTEN DISCLOSURE OF ANY NEGATIVE CONSE-
QUENCES  SUCH  ALTERNATIVE  PAYMENT SCHEDULE MAY HAVE ON SUCH CUSTOMER'S
CREDIT SCORE OR RATING. SUCH DISCLOSURE SHALL BE PROVIDED AT THE TIME  A
LOAN  APPLICATION IS MADE, AT THE TIME A LOAN IS GRANTED AND AT THE TIME
A CUSTOMER REQUESTS THAT AN ALTERNATIVE PAYMENT SCHEDULE BE  ESTABLISHED
FOR  A  LOAN,  BUT  PRIOR  TO THE ACTUAL ESTABLISHMENT OF AN ALTERNATIVE
PAYMENT SCHEDULE.
  S 2. This act shall take effect on the ninetieth day  after  it  shall
have become a law.





 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04935-01-3

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