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.