Bill Text: NY A05266 | 2011-2012 | General Assembly | Introduced

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Bill Title: Regulates the provision of refund anticipation loans by person and entities other than banking institutions; requires that at the time a borrower applies for a refund anticipation loan, a facilitator shall disclose to such borrower certain information relating to fees and interest rates; defines terms.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2012-01-04 - referred to banks [A05266 Detail]

Download: New_York-2011-A05266-Introduced.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         5266
                              2011-2012 Regular Sessions
                                 I N  A S S E M B L Y
                                   February 15, 2011
                                      ___________
       Introduced by M. of A. TITONE -- read once and referred to the Committee
         on Banks
       AN  ACT  to  amend  the  banking law, in relation to refund anticipation
         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 46 to
    2  read as follows:
    3    S 46. REFUND ANTICIPATION LOANS. 1. AS USED IN THIS SECTION:
    4    (A) "BORROWER" MEANS A PERSON WHO RECEIVES THE PROCEEDS  OF  A  REFUND
    5  ANTICIPATION LOAN;
    6    (B)  "FACILITATOR" MEANS A PERSON WHO, INDIVIDUALLY, OR IN CONJUNCTION
    7  OR COOPERATION WITH ANOTHER PERSON, MAKES A  REFUND  ANTICIPATION  LOAN,
    8  PROCESSES,  RECEIVES OR ACCEPTS FOR DELIVERY AN APPLICATION FOR A REFUND
    9  ANTICIPATION LOAN, ISSUES A CHECK IN PAYMENT OF REFUND ANTICIPATION LOAN
   10  PROCEEDS, OR IN ANY OTHER MANNER ACTS TO ALLOW THE MAKING  OF  A  REFUND
   11  ANTICIPATION  LOAN.  THE  TERM  DOES  NOT INCLUDE A BANK, TRUST COMPANY,
   12  SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION  OR  PERSON  OR
   13  ENTITY  ISSUED  A  LICENSE  UNDER THE PROVISIONS OF ARTICLE NINE OF THIS
   14  CHAPTER, OPERATING UNDER THE LAWS OF THE UNITED STATES OR THIS STATE, OR
   15  ANY PERSON WHO ACTS SOLELY AS AN INTERMEDIARY AND DOES NOT DEAL WITH THE
   16  PUBLIC IN THE MAKING OF A REFUND ANTICIPATION LOAN;
   17    (C) "REFUND ANTICIPATION LOAN"  MEANS  A  LOAN  ARRANGED  TO  BE  PAID
   18  DIRECTLY FROM THE PROCEEDS OF A BORROWER'S INCOME TAX REFUND;
   19    (D)  "REFUND  ANTICIPATION  LOAN FEE" MEANS ANY CHARGES, FEES OR OTHER
   20  CONSIDERATION CHARGED OR IMPOSED FOR THE MAKING OF A REFUND ANTICIPATION
   21  LOAN. THE TERM DOES NOT INCLUDE ANY CHARGES, FEES OR OTHER CONSIDERATION
   22  CHARGED OR IMPOSED IN THE ORDINARY COURSE OF BUSINESS BY  A  FACILITATOR
   23  FOR  SERVICES  THAT DO NOT RESULT IN THE MAKING OF A LOAN INCLUDING, BUT
   24  NOT LIMITED TO, FEES FOR TAX RETURN  PREPARATION  SERVICES  OR  FOR  THE
   25  ELECTRONIC FILING OF INCOME TAX RETURNS; AND
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD03239-01-1
       A. 5266                             2
    1    (E)  "ANNUAL  PERCENTAGE RATE" SHALL HAVE THE SAME MEANING AS PROVIDED
    2  IN PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION SIX-L OF THIS CHAPTER.
    3    2.  AT  THE  TIME A BORROWER APPLIES FOR A REFUND ANTICIPATION LOAN, A
    4  FACILITATOR SHALL DISCLOSE TO SUCH BORROWER ON A DOCUMENT THAT IS  SEPA-
    5  RATE FROM THE LOAN APPLICATION:
    6    (A)  THE  ESTIMATED  FEE  FOR  PREPARING  AND ELECTRONICALLY FILING AN
    7  INCOME TAX RETURN;
    8    (B) THE REFUND ANTICIPATION LOAN FEE SCHEDULE;
    9    (C) THE ANNUAL PERCENTAGE RATE FOR THE LOAN;
   10    (D) THE ESTIMATED TOTAL COST TO THE BORROWER FOR  UTILIZING  A  REFUND
   11  ANTICIPATION LOAN;
   12    (E)  THE ESTIMATED NUMBER OF DAYS WITHIN WHICH THE LOAN PROCEEDS SHALL
   13  BE PAID TO THE BORROWER IF THE LOAN IS APPROVED;
   14    (F) THE BORROWER IS RESPONSIBLE FOR REPAYMENT OF THE LOAN AND  RELATED
   15  FEES IN THE EVENT THE INCOME TAX REFUND IS NOT PAID OR NOT PAID IN FULL;
   16  AND
   17    (G)  THE AVAILABILITY OF ELECTRONIC FILING OF THE INCOME TAX RETURN OF
   18  THE BORROWER AND THE AVERAGE TIME  ANNOUNCED  BY  THE  INTERNAL  REVENUE
   19  SERVICE  WITHIN WHICH THE BORROWER CAN EXPECT TO RECEIVE A REFUND IF THE
   20  BORROWER'S RETURN IS ELECTRONICALLY FILED  AND  THE  BORROWER  DOES  NOT
   21  OBTAIN A REFUND ANTICIPATION LOAN.
   22    3.  NO  REFUND  ANTICIPATION  LOAN SHALL BE MADE AT ANY LOCATION OTHER
   23  THAN A LOCATION IN WHICH THE PRINCIPAL BUSINESS IS TAX PREPARATION.  ALL
   24  DISCLOSURE  DOCUMENTS  REQUIRED BY SUBDIVISION TWO OF THIS SECTION SHALL
   25  BE AVAILABLE IN ENGLISH, SPANISH AND IN ANY  OTHER  LANGUAGE  SPOKEN  BY
   26  MORE  THAN  FIVE  PERCENT  OF  THE  POPULATION  IN  THE  VICINITY OF THE
   27  FACILITATOR'S LOCATION.
   28    4. NOTWITHSTANDING ANY OTHER PROVISION OF THIS CHAPTER OR THE  GENERAL
   29  OBLIGATIONS  LAW, THE INTEREST RATE FOR A REFUND ANTICIPATION LOAN SHALL
   30  NOT EXCEED (A) SIXTY PERCENT PER ANNUM FOR THE INITIAL  TWENTY-ONE  DAYS
   31  OF SUCH LOAN, AND (B) TWENTY PERCENT PER ANNUM FOR THE PERIOD COMMENCING
   32  ON THE TWENTY-SECOND DAY OF SUCH LOAN AND ENDING ON THE DATE OF PAYMENT.
   33    5.  IN  OFFERING  TO  FACILITATE OR FACILITATING A REFUND ANTICIPATION
   34  LOAN, NO FACILITATOR SHALL ENGAGE IN ANY OF THE FOLLOWING ACTIVITIES:
   35    (A) REQUIRING A CLIENT TO ENTER INTO A LOAN ARRANGEMENT  IN  ORDER  TO
   36  COMPLETE A TAX RETURN;
   37    (B)  MISREPRESENTING A MATERIAL FACTOR OR CONDITION OF A REFUND ANTIC-
   38  IPATION LOAN;
   39    (C) FAILING TO PROCESS THE APPLICATION FOR A REFUND ANTICIPATION  LOAN
   40  PROMPTLY AFTER THE CLIENT APPLIES FOR THE LOAN; OR
   41    (D)  ENGAGING IN ANY TRANSACTION, PRACTICE, OR COURSE OF BUSINESS THAT
   42  OPERATES A FRAUD UPON ANY PERSON IN  CONNECTION  WITH  A  REFUND  ANTIC-
   43  IPATION LOAN.
   44    6. ANY FACILITATOR WHO VIOLATES ANY PROVISION OF THIS SECTION SHALL BE
   45  SUBJECT  TO  A  CIVIL  PENALTY OF NOT MORE THAN FIVE HUNDRED DOLLARS FOR
   46  EACH SUCH VIOLATION. SUCH PENALTY SHALL BE ASSESSED BY  THE  SUPERINTEN-
   47  DENT AS PROVIDED IN SECTION FORTY-FOUR OF THIS ARTICLE. IN ADDITION, ANY
   48  FACILITATOR  WHO  VIOLATES ANY PROVISION OF THIS SECTION SHALL BE LIABLE
   49  TO ANY AGGRIEVED BORROWER IN AN AMOUNT EQUAL TO THREE TIMES  THE  AMOUNT
   50  OF THE REFUND ANTICIPATION LOAN FEE, PLUS REASONABLE ATTORNEY'S FEES, IN
   51  A  CIVIL  ACTION  BROUGHT  BY  THE AGGRIEVED BORROWER OR BY THE ATTORNEY
   52  GENERAL ON BEHALF OF THE AGGRIEVED BORROWER.
   53    7. THE SUPERINTENDENT MAY  PRESCRIBE  REGULATIONS  TO  CARRY  OUT  THE
   54  PROVISIONS AND PURPOSES OF THIS SECTION.
   55    S  2.  Nothing  in  this act shall be construed to impair or limit the
   56  validity of any additional local laws or regulations,  not  inconsistent
       A. 5266                             3
    1  with  the  provisions  of  this  act, applicable to the making of refund
    2  anticipation loans.
    3    S  3.  If any clause, sentence, paragraph, section or part of this act
    4  be adjudged by any court of competent jurisdiction to be  invalid,  such
    5  judgment  shall  not  affect, impair or invalidate the remainder thereof
    6  but shall be applied in its operation to  the  clause,  sentence,  para-
    7  graph,  section  or part thereof directly involved in the controversy in
    8  which such judgment shall have been rendered.
    9    S 4. This act shall take effect on the first of November next succeed-
   10  ing the date on which it shall have become  a  law;  provided,  however,
   11  that effective immediately, the addition, amendment and/or repeal of any
   12  rule  or  regulation necessary for the implementation of this act on its
   13  effective date are authorized and directed to be made and  completed  on
   14  or before such effective date.