S T A T E O F N E W Y O R K
________________________________________________________________________
9588--B
I N A S S E M B L Y
January 21, 2026
___________
Introduced by M. of A. TORRES, LEVENBERG, HEVESI, HYNDMAN -- read once
and referred to the Committee on Banks -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee -- again reported from said committee with amendments, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the banking law, in relation to prohibiting certain
financial institutions from charging fees based on the frequency of
mortgage payments or changing such payment schedule
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 9-aa to
read as follows:
§ 9-AA. FEES FOR CERTAIN MORTGAGE PAYMENTS PROHIBITED. 1. FOR THE
PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
MEANINGS:
(A) "MORTGAGE PAYMENT SERVICER" SHALL MEAN A MORTGAGE LOAN SERVICER AS
DEFINED IN SECTION FIVE HUNDRED NINETY OF THIS CHAPTER, ANY BANKING
ORGANIZATION, A LICENSED MORTGAGE BANKER PURSUANT TO ARTICLE TWELVE-D OF
THIS CHAPTER, AN INTERSTATE BRANCH ESTABLISHED PURSUANT TO ARTICLE
FIVE-C OF THIS CHAPTER, OR OTHER PERSON OR ENTITY, TO THE EXTENT SUCH
PERSON OR ENTITY, DIRECTLY OR INDIRECTLY, SERVICES, ADMINISTERS, OR
PROCESSES PAYMENTS ON A MORTGAGE LOAN. SUCH TERM SHALL NOT INCLUDE ANY
NATIONAL BANK, FEDERAL SAVINGS BANK, FEDERAL SAVINGS AND LOAN ASSO-
CIATION, FEDERAL CREDIT UNION, OR ANY ENTITY CHARTERED OR LICENSED BY
THE UNITED STATES;
(B) "MONTHLY" SHALL MEAN ONCE PER CALENDAR MONTH;
(C) "SEMI-MONTHLY" SHALL MEAN TWICE PER CALENDAR MONTH; AND
(D) "BIWEEKLY" SHALL MEAN ONCE EVERY FOURTEEN DAYS.
2. (A) NOTWITHSTANDING ANY OTHER PROVISION OF LAW OR RULE OR REGU-
LATION TO THE CONTRARY, NO MORTGAGE PAYMENT SERVICER SHALL, DIRECTLY OR
INDIRECTLY, CHARGE A FEE OR OTHER CHARGE TO A MORTGAGOR FOR MAKING
PAYMENTS ON A MORTGAGE LOAN ON A MONTHLY, SEMI-MONTHLY, OR BIWEEKLY
SCHEDULE.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13935-05-6
A. 9588--B 2
(B) SUCH PROHIBITED FEES OR OTHER CHARGES SHALL INCLUDE, BUT NOT BE
LIMITED TO:
(I) ADDITIONAL COSTS, PAYMENTS, FEES, PENALTIES, OR PREMIUMS FOR
CHANGING BETWEEN MONTHLY, SEMI-MONTHLY, AND BIWEEKLY MORTGAGE PAYMENT
PLANS; AND
(II) PAYMENT OF AN ADDITIONAL PRINCIPAL OR INTEREST PAYMENT ON A MORT-
GAGE, OR ANY PART THEREOF, AS A CONDITION FOR CHANGING A MORTGAGE
PAYMENT SCHEDULE, EXCEPT TO THE EXTENT NECESSARY TO ALIGN THE MORTGAGE
WITH THE NEW PAYMENT SCHEDULE.
3. (A) NO MORTGAGE PAYMENT SERVICER SHALL PROHIBIT A MORTGAGOR FROM
ELECTING TO PAY A MORTGAGE ON A MONTHLY, SEMI-MONTHLY, OR BIWEEKLY SCHE-
DULE. A MORTGAGE PAYMENT SERVICER SHALL PERMIT A MORTGAGOR TO CHANGE THE
FREQUENCY OF SUCH MORTGAGOR'S MORTGAGE PAYMENTS AMONG SUCH PAYMENT SCHE-
DULES.
(B) A MORTGAGE PAYMENT SERVICER MAY REQUIRE REASONABLE ADJUSTMENTS
THAT ARE NECESSARY TO IMPLEMENT A CHANGE IN PAYMENT SCHEDULE, INCLUDING
ADJUSTMENTS TO ALIGN PAYMENT DUE DATES OR ESCROW OBLIGATIONS; PROVIDED
THAT SUCH ADJUSTMENTS ARE NOT USED TO EVADE OR UNREASONABLY RESTRICT THE
REQUIREMENTS OF THIS SECTION.
4. (A) NOTWITHSTANDING ANY OTHER PROVISION OF LAW OR RULE OR REGU-
LATION TO THE CONTRARY, EACH MORTGAGE PAYMENT SERVICER SHALL, UPON
REQUEST OF A MORTGAGOR, PROVIDE SUCH MORTGAGOR WITH AN AMORTIZATION
SCHEDULE AND AN ESTIMATE OF POTENTIAL INTEREST SAVINGS IF SUCH MORTGAGOR
WERE TO CHOOSE A MONTHLY, SEMI-MONTHLY, OR BIWEEKLY MORTGAGE PAYMENT
SCHEDULE AND INFORMATION ON HOW TO CHANGE TO A DIFFERENT PAYMENT SCHED-
ULE.
(B) (I) THE SUPERINTENDENT SHALL PRESCRIBE BY REGULATION A STANDARD-
IZED WRITTEN NOTICE TO BE PROVIDED TO MORTGAGORS INFORMING THEM OF THEIR
RIGHTS UNDER THIS SECTION, INCLUDING, BUT NOT LIMITED TO, THE RIGHT TO
ELECT AND CHANGE THE FREQUENCY OF MORTGAGE PAYMENTS AMONG MONTHLY, SEMI-
MONTHLY, AND BIWEEKLY PAYMENT SCHEDULES, AND THE PROHIBITION ON FEES OR
OTHER CHARGES FOR SUCH ELECTION OR CHANGE.
(II) EACH MORTGAGE PAYMENT SERVICER SHALL PROVIDE SUCH NOTICE TO A
MORTGAGOR AT THE TIME A MORTGAGE IS ORIGINATED OR FIRST SERVICED BY SUCH
MORTGAGE PAYMENT SERVICER AND UPON REQUEST OF A MORTGAGOR.
(III) THE SUPERINTENDENT MAY PRESCRIBE THE FORM, MANNER, AND TIMING OF
SUCH NOTICE, INCLUDING WHETHER SUCH NOTICE MAY BE PROVIDED ELECTRON-
ICALLY.
5. IF ANY PROVISION OF THIS SECTION OR ITS APPLICATION TO ANY PERSON
OR CIRCUMSTANCE IS HELD INVALID, THE INVALIDITY DOES NOT AFFECT OTHER
PROVISIONS OR APPLICATION OF THIS SECTION WHICH CAN BE GIVEN EFFECT
WITHOUT THE INVALID PROVISION OR APPLICATION, AND TO THIS END THE
PROVISIONS OF THIS SECTION ARE SEVERABLE.
6. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO REQUIRE ANY PERSON OR
ENTITY TO ACT IN A MANNER INCONSISTENT WITH FEDERAL LAW OR REGULATION,
AND TO THE EXTENT OF ANY CONFLICT, FEDERAL LAW SHALL CONTROL.
7. A VIOLATION OF THIS SECTION SHALL CONSTITUTE A VIOLATION OF THIS
CHAPTER AND SHALL BE SUBJECT TO ALL PENALTIES AND REMEDIES AVAILABLE TO
THE SUPERINTENDENT PURSUANT TO THIS CHAPTER AND ANY OTHER APPLICABLE
LAW.
§ 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law and shall apply to mortgage loans serviced on
or after such effective date.