NY State Senate Bill S3851

Archive: Last Bill Status - In Senate Committee Rules Committee

Introduced
In Committee
On Floor Calendar
- Passed Senate
- Passed Assembly
Delivered to Governor
Signed/Vetoed by Governor

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Actions

view actions (11)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Dec 28, 2020	committed to rules
Mar 11, 2020	advanced to third reading
Mar 10, 2020	2nd report cal.
Mar 04, 2020	1st report cal.578
Feb 10, 2020	amend by restoring to original print 3851
Jun 19, 2019	ordered to third reading cal.1684 committee discharged and committed to rules
Feb 20, 2019	referred to consumer protection
Jan 08, 2020	referred to consumer protection
Jun 20, 2019	recommitted to rules
Jun 19, 2019	amended on third reading (t) 3851a

Votes

view votes

Mar 4, 2020 - Consumer Protection committee Vote

S3851

committee

Aye

Nay

Aye with Reservations

Absent

Excused

Abstained

show Consumer Protection committee vote details

Consumer Protection Committee Vote: Mar 4, 2020

aye (6)

nay (1)

Jacobs

Jun 19, 2019 - Rules committee Vote

S3851

committee

Aye

Nay

Aye with Reservations

Absent

Excused

Abstained

Bill Amendments

Original (Active)

Co-Sponsors

S3851 (ACTIVE) - Details

See Assembly Version of this Bill:: A3636
Current Committee:: Senate Rules
Law Section:: Civil Practice Law and Rules
Laws Affected:: Add §396-aaa, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S2632, A2443
2023-2024: S5256, A7196

S3851 (ACTIVE) - Summary

Prohibits the inclusion of a confession of judgment in a contract or agreement for a financial product or service.

S3851 (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S3851

SPONSOR: SANDERS
 
TITLE OF BILL:  An act to amend the general business law, in relation
to prohibiting the inclusion of a confession of judgment in a contract
or agreement for a financial product or service

 
PURPOSE OR GENERAL IDEA OF BILL:

To prohibit "confessions of judgment" in any contract or agreement for a
financial product or service.

 
SUMMARY OF PROVISIONS:

Section 1 - Prohibits "confession of judgment" for any contract or
agreement for 'a financial product or service. Subdivision (2) - Defines
"financial product or service" and "financial product or service regu-
lated for the purpose of consumer or investor protection"

Section (2) - provides for an effective date of ninety days after the
bill becomes law.

 
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):

 
JUSTIFICATION:

A confession of judgment is a legal document that allows a party to
obtain a judgment without the need to bring a lawsuit.

Confessions of judgment are frequently abused by lenders to circumvent
legal court proceedings and claim, often without proof, that a debtor
has failed to meet their payment obligations. This allowed creditors to
legally seize assets of borrowers without a court proceeding, financial-
ly ruining tens of thousands of small businesses, including some of whom
did not default on their loans.

This bill will protect small businesses from predatory lenders that
often offer loans and cash advances on the pre-condition that they sign
a confession of judgment.

 
PRIOR LEGISLATIVE HISTORY:

No prior legislative history.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

No fiscal implications.

 
EFFECTIVE DATE: :
This act will take place on the ninetieth day after it becomes law.

S3851 (ACTIVE) - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3851
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 20, 2019
                                ___________
 
 Introduced  by  Sen. SANDERS -- 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 prohibiting the
   inclusion of a confession of judgment in a contract or agreement for a
   financial product or service

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The general business law is amended by adding a new section
 396-aaa to read as follows:
   §  396-AAA.  CONFESSION OF JUDGMENT REQUIREMENT FOR CERTAIN CONTRACTS;
 PROHIBITION. 1. NO PERSON SHALL REQUIRE A CONFESSION OF JUDGMENT IN  ANY
 CONTRACT OR AGREEMENT FOR A FINANCIAL PRODUCT OR SERVICE.
   2.  AS USED IN THIS SECTION THE FOLLOWING TERMS SHALL HAVE THE FOLLOW-
 ING MEANINGS:
   (A) "FINANCIAL PRODUCT OR SERVICE" SHALL MEAN ANY FINANCIAL PRODUCT OR
 FINANCIAL SERVICE  OFFERED  OR  PROVIDED  BY  ANY  PERSON  REGULATED  OR
 REQUIRED  TO  BE  REGULATED  BY THE SUPERINTENDENT OF FINANCIAL SERVICES
 PURSUANT TO THE BANKING LAW OR THE INSURANCE LAW OR ANY FINANCIAL  PROD-
 UCT OR SERVICE OFFERED OR SOLD TO CONSUMERS EXCEPT FINANCIAL PRODUCTS OR
 SERVICES:  (I)  REGULATED  UNDER THE EXCLUSIVE JURISDICTION OF A FEDERAL
 AGENCY OR AUTHORITY, (II) REGULATED  FOR  THE  PURPOSE  OF  CONSUMER  OR
 INVESTOR PROTECTION BY ANY OTHER STATE AGENCY, STATE DEPARTMENT OR STATE
 PUBLIC AUTHORITY, OR (III) WHERE RULES OR REGULATIONS PROMULGATED BY THE
 SUPERINTENDENT  OF  FINANCIAL  SERVICES  ON  SUCH  FINANCIAL  PRODUCT OR
 SERVICE WOULD BE PREEMPTED BY FEDERAL LAW.
   (B) "FINANCIAL PRODUCT OR SERVICE REGULATED FOR THE PURPOSE OF CONSUM-
 ER OR INVESTOR PROTECTION": (I) SHALL INCLUDE (A) ANY PRODUCT OR SERVICE
 FOR WHICH REGISTRATION OR LICENSING IS REQUIRED OR FOR WHICH THE OFFEROR
 OR PROVIDER IS REQUIRED TO BE REGISTERED OR LICENSED BY STATE  LAW,  (B)
 ANY  PRODUCT  OR SERVICE AS TO WHICH PROVISIONS FOR CONSUMER OR INVESTOR
 PROTECTION ARE SPECIFICALLY SET FORTH FOR SUCH  PRODUCT  OR  SERVICE  BY
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD03324-01-9

 S. 3851                             2
 
 STATE  STATUTE  OR  REGULATION  AND (C) SECURITIES, COMMODITIES AND REAL
 PROPERTY SUBJECT TO THE PROVISIONS  OF  ARTICLE  TWENTY-THREE-A  OF  THE
 GENERAL  BUSINESS  LAW,  AND (II) SHALL NOT INCLUDE PRODUCTS OR SERVICES
 SOLELY  SUBJECT  TO OTHER GENERAL LAWS OR REGULATIONS FOR THE PROTECTION
 OF CONSUMERS OR INVESTORS.
   § 2. This act shall take effect on the ninetieth day  after  it  shall
 have become a law.

Co-Sponsors

S3851A - Details

See Assembly Version of this Bill:: A3636
Current Committee:: Senate Rules
Law Section:: Civil Practice Law and Rules
Laws Affected:: Add §396-aaa, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S2632, A2443
2023-2024: S5256, A7196

S3851A - Summary

Prohibits the inclusion of a confession of judgment in a contract or agreement for a financial product or service.

S3851A - Sponsor Memo

 
BILL NUMBER: S3851A

SPONSOR: SANDERS
 
TITLE OF BILL:

An act to amend the civil practice law and rules, in relation to prohib-
iting certain judgments by confession; and prohibiting certain financial
institutions from using a marshal to execute certain judgments

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would prohibit certain judgments by confession; and prohibits
certain financial institutions from using a marshal to execute certain
judgments.

 
SUMMARY OF PROVISIONS:

 
SECTION 1: Prohibits certain "confession of judgments."  No judgment
by confession may be entered on: (1) any amount due from one or more
individuals for personal, family, household, consumer, investment, or

non-business purposes; (2) any amount under $250,000 due from any person
for any purpose; or (3) any amount due from a person that:  (i.) is
currently a nonresident of the state, (ii.) was a nonresident of the
state at the time the affidavit authorizing entry of the judgment by
confession was executed, or; (iii.) is not an individual, does not oper-
ate a place of business in the state, or did not operate a place of
business in the state at the time the affidavit authorizing entry of the
judgment by confession was executed.

 
SECTION 2: Notwithstanding any provision of law to the contrary,
financial institutions that offer any financial product or service shall
not use a marshal, as allowed for in paragraph (b) of section 1609 of
the New York civil court act, for purposes of executing any money judg-
ment relating to a confession of judgement.

 
SECTION 3: Effective date.

 
PRIOR LEGISLATIVE HISTORY:

No prior legislative history.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

No fiscal implications.

 
EFFECTIVE DATE:
Immediately

S3851A - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  3851--A
     Cal. No. 1684
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 20, 2019
                                ___________
 
 Introduced  by  Sens.  SANDERS,  MAYER, PARKER -- read twice and ordered
   printed, and when printed to be committed to the Committee on Consumer
   Protection -- committee discharged and  said  bill  committed  to  the
   Committee  on Rules -- ordered to a third reading, amended and ordered
   reprinted, retaining its place in the order of third reading
 
 AN ACT to amend the civil practice law and rules, in relation to prohib-
   iting certain judgments by confession; and prohibiting certain  finan-
   cial institutions from using a marshal to execute certain judgments
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The opening paragraph of subdivision (a) of section 3218 of
 the civil practice law and rules, as amended by chapter 311 of the  laws
 of  1963,  is  amended  and  a  new  subdivision (e) is added to read as
 follows:
   Except as provided in section thirty-two hundred one OF  THIS  ARTICLE
 AND  SUBDIVISION  (E)  OF  THIS SECTION, a judgment by confession may be
 entered, without an action, either for money due or to become due, or to
 secure the plaintiff against a contingent liability  in  behalf  of  the
 defendant, or both, upon an affidavit executed by the defendant;
   (E)  PROHIBITION  ON  CERTAIN  JUDGMENTS BY CONFESSION. NO JUDGMENT BY
 CONFESSION MAY BE:
   1. ENTERED ON  ANY  AMOUNT  DUE  FROM  ONE  OR  MORE  INDIVIDUALS  FOR
 PERSONAL,  FAMILY,  HOUSEHOLD,  CONSUMER,  INVESTMENT,  OR  NON-BUSINESS
 PURPOSES;
   2. ENTERED ON ANY AMOUNT UNDER TWO HUNDRED FIFTY THOUSAND DOLLARS  DUE
 FROM ANY PERSON FOR ANY PURPOSE;
   3.  REQUIRED  AT  THE  TIME  A LOAN IS ORIGINATED OR AS A CONDITION OF
 RECEIVING A LOAN; OR
   4. ENTERED ON ANY AMOUNT DUE FROM A PERSON THAT:
   (I) IS CURRENTLY A NONRESIDENT OF THE STATE;

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

                                                            LBD03324-04-9

 S. 3851--A                          2
 
   (II) WAS A NONRESIDENT OF THE STATE AT THE TIME THE AFFIDAVIT  AUTHOR-
 IZING ENTRY OF THE JUDGMENT BY CONFESSION WAS EXECUTED; OR
   (III)  IS  NOT  AN INDIVIDUAL, DOES NOT OPERATE A PLACE OF BUSINESS IN
 THE STATE, OR DID NOT OPERATE A PLACE OF BUSINESS IN THE  STATE  AT  THE
 TIME  THE  AFFIDAVIT AUTHORIZING ENTRY OF THE JUDGMENT BY CONFESSION WAS
 EXECUTED.
   § 2. Notwithstanding any provision of law to the  contrary,  financial
 institutions that offer any financial product or service shall not use a
 marshal,  as  allowed  for  pursuant  to paragraph b of subdivision 1 of
 section 1609 of the New York city  civil  court  act,  for  purposes  of
 executing any money judgment relating to a confession of judgment.
   § 3. This act shall take effect immediately.

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The New York State Senate

senate Bill S3851

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

Your Voice

Actions

Votes

Mar 4, 2020 - Consumer Protection committee Vote

Consumer Protection Committee Vote: Mar 4, 2020

Jun 19, 2019 - Rules committee Vote

Rules Committee Vote: Jun 19, 2019

Bill Amendments

Co-Sponsors

S3851 (ACTIVE) - Details

S3851 (ACTIVE) - Summary

S3851 (ACTIVE) - Sponsor Memo

S3851 (ACTIVE) - Bill Text download pdf

Co-Sponsors

S3851A - Details

S3851A - Summary

S3851A - Sponsor Memo

S3851A - Bill Text download pdf

Comments

senate Bill S3851

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Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

Your Voice

Actions

Votes

Mar 4, 2020 - Consumer Protection committee Vote

Consumer Protection Committee Vote: Mar 4, 2020

Jun 19, 2019 - Rules committee Vote

Rules Committee Vote: Jun 19, 2019

Bill Amendments

Co-Sponsors

S3851 (ACTIVE) - Details

S3851 (ACTIVE) - Summary

S3851 (ACTIVE) - Sponsor Memo

S3851 (ACTIVE) - Bill Text download pdf

Co-Sponsors

S3851A - Details

S3851A - Summary

S3851A - Sponsor Memo

S3851A - Bill Text download pdf

Comments