Senate Bill S9514A

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  9514--A
 
                             I N  S E N A T E
 
                              March 19, 2026
                                ___________
 
 Introduced  by Sen. KAVANAGH -- read twice and ordered printed, and when
   printed to be  committed  to  the  Committee  on  Banks  --  committee
   discharged, bill amended, 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.
   (B) SUCH PROHIBITED FEES OR OTHER CHARGES SHALL INCLUDE,  BUT  NOT  BE
 LIMITED TO:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD13935-04-6
 S. 9514--A                          2
 
   (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.