S T A T E O F N E W Y O R K
________________________________________________________________________
1022
2025-2026 Regular Sessions
I N A S S E M B L Y
January 8, 2025
___________
Introduced by M. of A. MAMDANI, LUCAS, LEVENBERG, SEAWRIGHT, KIM,
BURDICK, FALL, FORREST -- read once and referred to the Committee on
Banks
AN ACT to amend the executive law and the banking law, in relation to
establishing the banking bill of rights
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative intent. Across New York, financial institutions
terminate individuals' bank accounts or deny their applications with no
reason provided or recourse allowed. These banking practices dispropor-
tionately impact immigrant communities, resulting in unbanked or under-
banked New Yorkers. Such practices harm consumers' credit scores and
histories, creating barriers to housing, education and access to the
financial industry altogether; they also block millions of dollars of
donations to charitable organizations. Furthermore, these unfair and
discriminatory practices create a chilling effect on local economies
statewide. Personal finance deserves due process, and it is the intent
of the legislature to ensure fundamental banking rights for all New
Yorkers. Requiring financial institutions to disclose the reasons for
adverse actions with respect to credit and deposit accounts will prevent
discrimination ex ante, in addition to giving consumers an opportunity
to improve their credit or financial status and rectify mistakes that
may occur from misinformation or inadequate information; it will also
create a beneficial competitive effect on the financial industry.
§ 2. The executive law is amended by adding a new section 296-b to
read as follows:
§ 296-B. BANKING BILL OF RIGHTS. 1. DEFINITIONS. FOR THE PURPOSES OF
THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
A. "FINANCIAL INSTITUTION" SHALL MEAN ANY CORPORATION ORGANIZED UNDER
AND SUBJECT TO THE PROVISIONS OF THE BANKING LAW, INCLUDING ANY BANK,
TRUST COMPANY, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION,
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00252-01-5
A. 1022 2
MORTGAGE BROKER, MORTGAGE BANKER, OR OTHER INVESTMENT ENTITY, WHETHER
HEADQUARTERED WITHIN OR OUTSIDE THE STATE, WHICH PROVIDES CREDIT OR A
DEPOSIT ACCOUNT TO A CUSTOMER IN THE STATE.
B. "DEPOSIT ACCOUNT" SHALL MEAN ANY DEMAND DEPOSIT ACCOUNT, INCLUDING
BUT NOT LIMITED TO, A CHECKING ACCOUNT, TIME DEPOSIT ACCOUNT, CERTIF-
ICATE OF DEPOSIT (CD), SAVINGS ACCOUNT, PASSBOOK ACCOUNT, SHARE ACCOUNT,
MONEY MARKET ACCOUNT, OR OTHER SIMILAR ACCOUNT MAINTAINED BY A FINANCIAL
INSTITUTION.
C. "ADVERSE ACTION" SHALL MEAN A TERMINATION OR CLOSURE OF AN ACCOUNT
OR AN UNFAVORABLE CHANGE IN THE TERMS OF AN ACCOUNT THAT DOES NOT AFFECT
ALL OR SUBSTANTIALLY ALL OF A CLASS OF THE FINANCIAL INSTITUTION'S CRED-
IT OR DEPOSIT ACCOUNTS, INCLUDING BUT NOT LIMITED TO, LOSS OF PRIVI-
LEGES. THE TERM "ADVERSE ACTION" SHALL NOT INCLUDE A CHANGE IN THE TERMS
OF AN ACCOUNT EXPRESSLY AGREED TO BY AN ACCOUNT HOLDER, OR ANY ACTION OR
FORBEARANCE RELATING TO AN ACCOUNT TAKEN IN CONNECTION WITH INACTIVITY,
DEFAULT, OR DELINQUENCY OF SUCH ACCOUNT.
2. DUE PROCESS REQUIREMENTS. NOTWITHSTANDING ANY OTHER PROVISION OF
LAW OR RULE OR REGULATION TO THE CONTRARY, A FINANCIAL INSTITUTION
SHALL:
A. PROVIDE WRITTEN NOTICE OF:
(1) ALL THE SPECIFIC REASONS FOR DENIAL OF AN APPLICATION FOR CREDIT
OR A DEPOSIT ACCOUNT TO AN APPLICANT WITHIN TEN DAYS OF SUCH DENIAL; AND
(2) ANY ADVERSE ACTION OF AN EXISTING CUSTOMER'S CREDIT OR DEPOSIT
ACCOUNT AND ALL THE SPECIFIC REASONS FOR SUCH ADVERSE ACTION AT LEAST
THIRTY DAYS PRIOR TO TAKING SUCH ADVERSE ACTION; PROVIDED, HOWEVER, THAT
WHERE SUCH ADVERSE ACTION IS A REFUSAL OR FAILURE TO AUTHORIZE AN
ACCOUNT TRANSACTION AT A POINT OF SALE, OR WHEREBY FRAUD OR POTENTIALLY
UNLAWFUL ACTIVITY IS DETECTED, WRITTEN NOTICE SHALL BE PROVIDED AS SOON
AS REASONABLY POSSIBLE BUT NO LATER THAN FIVE DAYS AFTER SUCH ADVERSE
ACTION IS TAKEN.
B. PROVIDE A REASONABLE OPPORTUNITY FOR AN APPLICANT FOR CREDIT OR A
DEPOSIT ACCOUNT OR A CUSTOMER WITH EXISTING CREDIT OR A DEPOSIT ACCOUNT
TO CONTEST OR CORRECT ANY INFORMATION THAT THE FINANCIAL INSTITUTION MAY
HAVE RELATING TO DENIAL OF AN APPLICATION FOR CREDIT OR A DEPOSIT
ACCOUNT OR ANY PENDING ADVERSE ACTION RELATING TO A CUSTOMER'S EXISTING
CREDIT OR DEPOSIT ACCOUNT; AND
C. CONSIDER ANY INFORMATION PROVIDED BY AN APPLICANT FOR CREDIT OR A
DEPOSIT ACCOUNT OR A CUSTOMER WITH EXISTING CREDIT OR A DEPOSIT ACCOUNT
PURSUANT TO PARAGRAPH B OF THIS SUBDIVISION IN MAKING A FINAL DECISION
REGARDING DENIAL OF AN APPLICATION FOR CREDIT OR A DEPOSIT ACCOUNT OR
ANY PENDING ADVERSE ACTION RELATED TO EXISTING CREDIT OR A DEPOSIT
ACCOUNT.
3. ENFORCEMENT. A. ANY FINANCIAL INSTITUTION THAT VIOLATES SUBPARA-
GRAPH ONE OR TWO OF PARAGRAPH A OF SUBDIVISION TWO OF THIS SECTION SHALL
BE LIABLE TO SUCH APPLICANT OR CUSTOMER FOR THE FOLLOWING:
(1) TEN THOUSAND DOLLARS FOR EACH SUCH VIOLATION;
(2) ACTUAL DAMAGES RESULTING FROM SUCH VIOLATION, INCLUDING CONSEQUEN-
TIAL AND INCIDENTAL DAMAGES;
(3) REASONABLE ATTORNEYS' FEES; AND
(4) IN THE CASE OF REPEAT VIOLATIONS OR VIOLATORS, PUNITIVE DAMAGES.
B. A VIOLATION PURSUANT TO PARAGRAPH A OF THIS SUBDIVISION SHALL
CREATE A PRESUMPTION OF UNLAWFUL DISCRIMINATORY PRACTICE PURSUANT TO
SECTIONS TWO HUNDRED NINETY-SIX AND TWO HUNDRED NINETY-SIX-A OF THIS
ARTICLE IN FAVOR OF THE APPLICANT OR CUSTOMER.
C. ANY APPLICANT OR CUSTOMER SEEKING TO ENFORCE THE PROVISIONS OF THIS
SECTION, IN LIEU OF THE PROCEDURE SET FORTH IN SECTION TWO HUNDRED NINE-
A. 1022 3
TY-SEVEN OF THIS ARTICLE, MAY FILE A VERIFIED COMPLAINT WITH THE SUPER-
INTENDENT OF FINANCIAL SERVICES; PROVIDED, HOWEVER, THAT THE FILING OF
SUCH COMPLAINT WITH EITHER THE SUPERINTENDENT OF FINANCIAL SERVICES OR
THE DIVISION SHALL BAR SUBSEQUENT RECOURSE TO THE OTHER AGENCY, AS WELL
AS TO ANY LOCAL COMMISSION ON HUMAN RIGHTS, WITH RESPECT TO THE GRIEV-
ANCE COMPLAINED OF. IN THE CASE OF A VERIFIED COMPLAINT FILED WITH THE
SUPERINTENDENT OF FINANCIAL SERVICES, THE PROCEDURE SET FORTH IN PARA-
GRAPHS A AND B OF SUBDIVISION SEVEN OF SECTION TWO HUNDRED NINETY-SIX-A
OF THIS ARTICLE SHALL APPLY. IF THE SUPERINTENDENT OF FINANCIAL SERVICES
FINDS THAT A VIOLATION OF THIS SECTION HAS OCCURRED, SUCH SUPERINTENDENT
SHALL ISSUE AN ORDER DETERMINING LIABILITY PURSUANT TO PARAGRAPH A OF
THIS SUBDIVISION.
4. PREEMPTION. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO PREEMPT
ANY OTHER STATE OR FEDERAL LAW PROHIBITING THE DISCLOSURE OF CERTAIN
PROTECTED CONSUMER INFORMATION OR LIMIT THE ABILITY OF FINANCIAL INSTI-
TUTIONS TO MAKE REASONABLE BUSINESS JUDGMENTS.
5. RULES AND REGULATIONS. THE SUPERINTENDENT OF FINANCIAL SERVICES IS
AUTHORIZED TO PROMULGATE RULES AND REGULATIONS TO EFFECTUATE THE
PROVISIONS OF THIS SECTION.
§ 3. Paragraph a of subdivision 4 of section 296-a of the executive
law, as amended by chapter 632 of the laws of 1976, is amended to read
as follows:
a. [If so requested by] A CREDITOR SHALL FURNISH an applicant for
credit[, a creditor shall furnish such applicant] with a statement of
the specific reasons for rejection of the applicant's application for
credit PURSUANT TO SECTION TWO HUNDRED NINETY-SIX-B OF THIS ARTICLE.
§ 4. Section 9-d of the banking law, as added by chapter 173 of the
laws of 1974 and as further amended by section 104 of part A of chapter
62 of the laws of 2011, is amended to read as follows:
§ 9-d. Enforcement of [section] SECTIONS two hundred ninety-six-a AND
TWO HUNDRED NINETY-SIX-B of the executive law. In addition to the powers
conferred upon the superintendent of financial services by this chapter,
he OR SHE shall enforce [section] SECTIONS two hundred ninety-six-a AND
TWO HUNDRED NINETY-SIX-B of the executive law by taking such action as
is therein authorized.
§ 5. This act shall take effect immediately.