Bill Text: NY S02649 | 2023-2024 | General Assembly | Introduced

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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 2-0)

Status: (Introduced) 2024-01-03 - REFERRED TO BANKS [S02649 Detail]

Download: New_York-2023-S02649-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          2649

                               2023-2024 Regular Sessions

                    IN SENATE

                                    January 23, 2023
                                       ___________

        Introduced  by Sens. COMRIE, BRISPORT -- read twice and ordered printed,
          and when printed to be committed to the Committee 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.
                                                                   LBD04413-01-3
        S. 2649                             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.