Senate Bill S9570A

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  9570--A
 
                             I N  S E N A T E
 
                              March 25, 2026
                                ___________
 
 Introduced  by  Sen. SKOUFIS -- 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 the prohibition of lend-
   ing institutions issuing unsolicited mail-loan checks

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative findings. The legislature finds that unsolicit-
 ed "live loan checks" can mislead people  into  taking  out  loans  they
 never  asked  for.  These  checks  often  look  like refunds or official
 payments, but once deposited, they create a loan with high interest  and
 fees.
   Many  New Yorkers -- especially seniors, people with disabilities, and
 families under financial stress -- are at risk of being harmed  by  this
 practice.
   The purpose of this act is to stop lenders from sending these unsolic-
 ited  checks  and  to  protect consumers from accidentally entering into
 unwanted loans.
   § 2. Subdivision 3 of section 9-t of the banking law,  as  amended  by
 chapter 184 of the laws of 2022, is amended to read as follows:
   3. (A) No lending institution shall issue a mail-loan check, except in
 response  to  [a]  AN AFFIRMATIVE request or application therefor BY THE
 PERSON TO  WHOM IT IS ISSUED.
   (B) ISSUANCE OF A MAIL-LOAN CHECK  IN  RESPONSE  TO  SUCH  REQUEST  OR
 APPLICATION,  OR  ISSUANCE  OF ANY REPLACEMENT CHECK, LEGITIMATE REFUND,
 REBATE, OR GOVERNMENT-ISSUED CHECK SHALL NOT CONSTITUTE A  VIOLATION  OF
 PARAGRAPH (A) OF THIS SUBDIVISION.
   §  3.  Section  9-t  of  the  banking law is amended by adding two new
 subdivisions 6 and 7 to read as follows:
   6. ANY DEBT, INTEREST, FEE OR OTHER OBLIGATION ARISING  FROM  A  MAIL-
 LOAN  CHECK  ISSUED  IN VIOLATION OF THIS SECTION SHALL BE NULL AND VOID
 AND UNENFORCEABLE. NO PERSON, INCLUDING ANY ASSIGNEE OR DEBT  COLLECTOR,
 SHALL  COLLECT  OR  ATTEMPT  TO  COLLECT SUCH OBLIGATION, OR REPORT SUCH
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD14226-03-6
 S. 9570--A                          2
 
 OBLIGATION TO A CREDIT REPORTING AGENCY. ANY AMOUNTS PAID BY A  CONSUMER
 IN CONNECTION WITH SUCH OBLIGATION SHALL BE REFUNDED.
   7.  NO  LENDING  INSTITUTION SHALL, DIRECTLY OR INDIRECTLY, STRUCTURE,
 LABEL OR MODIFY ANY MAIL-LOAN CHECK OR INSTRUMENT, OR  USE  ANY  DEVICE,
 SUBTERFUGE  OR  PRETENSE, FOR THE PURPOSE OF EVADING THE REQUIREMENTS OF
 THIS SECTION, INCLUDING THROUGH THE USE OF  ANY  AFFILIATE,  THIRD-PARTY
 SERVICE PROVIDER, AGENT OR ARRANGEMENT.
   § 4. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.