Bill Text: NY A06189 | 2023-2024 | General Assembly | Introduced
Bill Title: Prohibits foreign banking corporations from issuing payday loans; defines payday loans as any transaction in which a short-term cash advance is made to a consumer in exchange for: a consumer's personal check or share draft, in the amount of an advance plus a fee, where presentment or negotiation of such check or share draft is deferred by agreement of the parties until a designated future date; or a consumer's authorization to debit the consumer's transaction account, in the amount of the advance plus a fee, where such account will be debited on or after a designated future date.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced) 2024-01-03 - referred to banks [A06189 Detail]
Download: New_York-2023-A06189-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 6189 2023-2024 Regular Sessions IN ASSEMBLY April 3, 2023 ___________ Introduced by M. of A. HYNDMAN -- read once and referred to the Commit- tee on Banks AN ACT to amend the banking law and the general obligations law, in relation to prohibiting foreign banking corporations from engaging in high-cost payday loans The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The banking law is amended by adding a new section 202-k to 2 read as follows: 3 § 202-k. Prohibition of payday loans. 1. No foreign banking corpo- 4 ration shall make any payday loan, either directly or indirectly, or 5 make any loan to any other lender for purposes of financing a payday 6 loan or refinancing or extending any payday loan. 7 2. For purposes of this section "payday loan" means any transaction in 8 which a short-term cash advance is made to a consumer in exchange for 9 (i) a consumer's personal check or share draft, in the amount of an 10 advance plus a fee, where presentment or negotiation of such check or 11 share draft is deferred by agreement of the parties until a designated 12 future date; or (ii) a consumer's authorization to debit the consumer's 13 transaction account, in the amount of the advance plus a fee, where such 14 account will be debited on or after a designated future date. 15 § 2. The general obligations law is amended by adding a new section 16 5-532 to read as follows: 17 § 5-532. Prohibition on payday loans. 1. A creditor may not make a 18 payday loan to any person if the creditor knows or has reasonable cause 19 to believe that: 20 a. the personal check or share draft the creditor receives from the 21 person, in exchange for the loan, is drawn on an insured depository 22 institution or insured credit union; or EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD04413-01-3A. 6189 2 1 b. the account the creditor receives permission from the person to 2 debit, in exchange for the loan, is a transaction account or share draft 3 account at an insured depository institution or an insured credit union. 4 2. For purposes of this section: 5 a. "Insured credit union" shall mean any credit union chartered by the 6 federal government or federally insured credit union chartered by a 7 state. 8 b. "Payday loan" shall mean any transaction in which a short-term cash 9 advance is made to a consumer in exchange for (i) a consumer's personal 10 check or share draft, in the amount of the advance plus a fee, where 11 presentment or negotiation of such check or share draft is deferred by 12 agreement of the parties until a designated future date; or (ii) a 13 consumer's authorization to debit the consumer's transaction or share 14 draft account, in the amount of the advance plus a fee, where such 15 account will be debited on or after a designated future date. 16 § 3. This act shall take effect on the ninetieth day after it shall 17 have become a law.