S T A T E O F N E W Y O R K
________________________________________________________________________
7609
2021-2022 Regular Sessions
I N S E N A T E
December 17, 2021
___________
Introduced by Sen. HOYLMAN -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the banking law, in relation to prohibiting bank invest-
ments in bad faith landlords
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 13 to
read as follows:
§ 13. INVESTMENTS IN BAD FAITH LANDLORDS BY STATE CHARTERED BANKING
INSTITUTIONS. 1. NO STATE CHARTERED BANKING INSTITUTION SHALL PROVIDE
FINANCING FOR OR INVEST IN THE STOCKS, SECURITIES, OR OTHER OBLIGATIONS
OF ANY PERSON, INSTITUTION, COMPANY, OR SUBSIDIARY ENGAGED IN THE BUSI-
NESS OF LEASING RESIDENTIAL REAL ESTATE THAT HAS:
(A) BEEN CONVICTED OF ENGAGING IN ILLEGAL CONDUCT AGAINST A TENANT,
INCLUDING (I) HARASSMENT, (II) COERCION, OR (III) FRAUD;
(B) BEEN CONVICTED OF FRAUDULENT REFINANCING OF LOANS, TAX FRAUD,
EMBEZZLEMENT, OR OTHER FRAUD OR THEFT RELATED TO FINANCIAL MANAGEMENT;
OR
(C) ENTERED INTO A CONSENT DECREE WITH THE OFFICE OF THE ATTORNEY
GENERAL IN SETTLEMENT OF A LAWSUIT REGARDING UNFAIR OR DECEPTIVE PRAC-
TICES AGAINST A TENANT, THAT (I) ESTABLISHES A TENANT RESTITUTION FUND,
PURSUANT TO SUBDIVISION TWELVE OF SECTION SIXTY-THREE OF THE EXECUTIVE
LAW, WITH TOTAL CONTRIBUTIONS IN EXCESS OF ONE MILLION DOLLARS, (II)
RESULTS IN AN INDEPENDENT PROPERTY MANAGEMENT COMPANY ACQUIRING THE
PRIMARY MANAGEMENT RESPONSIBILITIES OF ANY OF THE RESPONDENT'S PROPER-
TIES, OR (III) REQUIRES A MONITOR TO ENGAGE IN THE REVIEW OF THE
RESPONDENT'S COMPLIANCE WITH THE POLICIES AND PROVISIONS OF SUCH A
DECREE.
2. FOR PURPOSES OF THIS SECTION:
(A) "STATE CHARTERED BANKING INSTITUTION" SHALL HAVE THE SAME MEANING
AS DEFINED IN SUBDIVISION ONE OF SECTION TWELVE-A OF THIS ARTICLE;
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13440-01-1
S. 7609 2
(B) "CONSENT DECREE" SHALL MEAN AN AGREEMENT BETWEEN THE PARTIES IN AN
ACTION TO RESOLVE THE ACTION, WHICH IS ENTERED, APPROVED, AND ORDERED BY
A COURT;
(C) "TENANT RESTITUTION FUND" SHALL MEAN A FUND, TRUST, OR ACCOUNT IN
WHICH MONEY IS DEPOSITED FOR THE BENEFIT OF POTENTIAL CLAIMANTS WHO
QUALIFY FOR RESTITUTIONS UNDER THE COURT ACTION THAT LED TO THE CREATION
OF THE TENANT RESTITUTION FUND AND THE OFFICE OF THE ATTORNEY GENERAL
SHALL HAVE OVERSIGHT OF THE FUND AND BE RESPONSIBLE FOR MAKING DISTRIB-
UTIONS TO CLAIMANTS;
(D) "PROPERTY MANAGEMENT COMPANY" SHALL MEAN A COMPANY THAT IS NOT
OWNED BY A PARTY TO THE CONSENT DECREE THAT IS QUALIFIED TO MANAGE THE
PROPERTIES THAT ARE SUBJECT TO A CONSENT DECREE; AND
(E) "MONITOR" SHALL MEAN AN INDIVIDUAL WHO HAS BEEN APPROVED BY THE
OFFICE OF THE ATTORNEY GENERAL TO REVIEW AND REPORT ON WHETHER THE OTHER
PARTY TO THE CONSENT DECREE AND/OR THE PROPERTY MANAGEMENT COMPANY
COMPLY WITH THE POLICIES AND PROVISIONS OF THE CONSENT DECREE.
§ 2. This act shall take effect immediately and shall apply to all
contracts entered into, renewed, modified or amended on or after such
effective date.