Bill Text: NY S05209 | 2011-2012 | General Assembly | Introduced

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Bill Title: Relates to retail instalment contracts and transmitters of money; makes clear that the term "retail instalment obligation" includes an agreement no matter where entered into if it is executed by the buyer in this State and if solicited in person by a salesperson or other person acting on his or her own behalf or that of the seller; clarifies when banking institutions are exempt from coverage of the article and when New York persons are subject to the protections of this article.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Engrossed - Dead) 2012-01-19 - referred to banks [S05209 Detail]

Download: New_York-2011-S05209-Introduced.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         5209
                              2011-2012 Regular Sessions
                                   I N  S E N A T E
                                      May 3, 2011
                                      ___________
       Introduced  by  Sens.  FARLEY, GRIFFO -- read twice and ordered printed,
         and when printed to be committed to the Committee on Banks
       AN ACT to amend the  banking  law,  in  relation  to  retail  instalment
         contracts and transmitters of money
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1.  Subdivisions 6-a, 6-b and 7 of section 491 of the  banking
    2  law,  subdivision  6-a  as  amended  by chapter 289 of the laws of 1962,
    3  subdivision 6-b as added by chapter 358 of the laws of 1958 and subdivi-
    4  sion 7 as amended by chapter 837 of the laws of  1966,  are  amended  to
    5  read as follows:
    6    6-a.  "Retail  instalment  obligation" or "obligation" means an agree-
    7  ment, entered into in this state, pursuant to which the  buyer  promises
    8  to  pay,  in  instalments, the time sale price or prices of goods and/or
    9  services, or any part thereof. The term does not include [(a)] a  retail
   10  instalment  contract[,  (b)] OR a retail instalment credit agreement [or
   11  (c) an obligation which is intended to be and is ultimately  insured  or
   12  guaranteed  under  title three of the act of Congress entitled "Service-
   13  men's Readjustment Act of 1944"].  THE TERM INCLUDES SUCH  AN  AGREEMENT
   14  WHEREVER  ENTERED  INTO  IF  EXECUTED  BY THE BUYER IN THIS STATE AND IF
   15  SOLICITED IN PERSON BY A SALESPERSON OR OTHER PERSON ACTING  ON  HIS  OR
   16  HER OWN BEHALF OR THAT OF THE SELLER.
   17    6-b.  "Retail instalment credit agreement" or "credit agreement" means
   18  an agreement entered into in this state, pursuant  to  which  the  buyer
   19  promises  to  pay,  in  instalments, his OR HER outstanding indebtedness
   20  from time to time to a retail seller, not evidenced by a retail  instal-
   21  ment contract or obligation, for one or more items of goods or services,
   22  whenever  purchased or obtained, which provides for a service charge and
   23  under which instalment payments apply to his OR HER outstanding  indebt-
   24  edness  from time to time.  THE TERM INCLUDES SUCH AN AGREEMENT WHEREVER
   25  ENTERED INTO IF EXECUTED BY THE BUYER IN THIS STATE AND IF SOLICITED  IN
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD11182-01-1
       S. 5209                             2
    1  PERSON  BY A SALESPERSON OR OTHER PERSON ACTING ON HIS OR HER OWN BEHALF
    2  OR THAT OF THE SELLER.
    3    7.  "Sales  finance  company"  means  a person engaged, in whole or in
    4  part, directly or indirectly, in the business of purchasing or otherwise
    5  acquiring retail instalment contracts, obligations or credit  agreements
    6  made  by  and  between  other parties, or any interest therein. The term
    7  includes a retail seller of motor vehicles engaged, in whole or in part,
    8  in the business of holding retail  instalment  contracts  acquired  from
    9  retail buyers, [which have] IF THE NUMBER OF RETAIL INSTALMENT CONTRACTS
   10  ACQUIRED  IN  ANY ONE YEAR EXCEEDS FIVE SUCH CONTRACTS, OR IF THE aggre-
   11  gate unpaid time balances [of twenty-five] ON SUCH CONTRACTS EXCEED  ONE
   12  HUNDRED thousand dollars or more at any one time, exclusive of contracts
   13  repurchased  from  a sales finance company or financing agency, under an
   14  agreement to repurchase in case of default entered into as  an  incident
   15  to  the  bona  fide sale thereof to a sales finance company or financing
   16  agency. The term does not include the pledgee of an aggregate number  of
   17  contracts  to  secure a bona fide loan thereon, OR A SECONDARY HOLDER OF
   18  SUCH CONTRACTS.  The term includes a person  engaged,  in  whole  or  in
   19  part,  directly  or  indirectly, in the business of entering into retail
   20  instalment credit agreements with retail buyers pursuant to  subdivision
   21  eleven  of  section  four hundred thirteen of the personal property law.
   22  FOR PURPOSES OF THIS ARTICLE, THE TERM "SECONDARY HOLDER" MEANS A PERSON
   23  THAT (I) PURCHASES OR OTHERWISE ACQUIRES A SALES FINANCE CONTRACT, OR AN
   24  INTEREST THEREIN, THAT WAS ORIGINATED BY A  PERSON  LICENSED  OR  EXEMPT
   25  FROM  LICENSING  UNDER  THIS  ARTICLE  AND  THAT IS SERVICED BY A PERSON
   26  LICENSED OR EXEMPT FROM LICENSING UNDER THIS ARTICLE, AND  (II)  HAS  NO
   27  CONTACT WITH THE OBLIGOR UNDER SUCH CONTRACT.
   28    S  2.  Subdivision  1 of section 641 of the banking law, as amended by
   29  chapter 677 of the laws of 2004, is amended to read as follows:
   30    1. No person shall engage IN THIS STATE in the business of selling  or
   31  issuing  checks, or engage in the business of receiving money for trans-
   32  mission or transmitting the same, without a  license  therefor  obtained
   33  from  the  superintendent  as  provided  in  this article, nor shall any
   34  person engage in such business as an agent, except  as  an  agent  of  a
   35  licensee or as agent of a payee; provided, however, that nothing in this
   36  article  shall  apply  to a bank, trust company, private banker, foreign
   37  banking corporation licensed pursuant to article two of this chapter  or
   38  foreign  banking  company authorized to operate pursuant to the Interna-
   39  tional Banking Act of 1978 (12 USC 3101 et seq.),  as  amended,  savings
   40  bank,  savings  and  loan association, an investment company, a national
   41  banking association, federal reserve bank, corporation  organized  under
   42  the  provisions  of section twenty-five-a of an act of congress entitled
   43  the "Federal Reserve Act", federal savings  bank,  federal  savings  and
   44  loan  association or state or federal credit union OR OUT-OF-STATE STATE
   45  BANK.  A PERSON ENGAGES IN THIS STATE IN  THE  BUSINESS  OF  SELLING  OR
   46  ISSUING  CHECKS  OR RECEIVING MONEY FOR TRANSMISSION OR TRANSMITTING THE
   47  SAME IF SUCH PERSON INDUCES ANOTHER PERSON WHO  IS  A  RESIDENT  OF,  OR
   48  LOCATED IN, THIS STATE TO ENTER INTO A TRANSACTION BY SOLICITATION IN OR
   49  INTO  THIS STATE BY ANY MEANS, INCLUDING BUT NOT LIMITED TO, MAIL, ELEC-
   50  TRONIC MAIL, TELEPHONE, RADIO, TELEVISION, THE  INTERNET  OR  ANY  OTHER
   51  ELECTRONIC MEANS.
   52    S 3. This act shall take effect immediately.