Bill Text: NY S05401 | 2023-2024 | General Assembly | Introduced

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Bill Title: Prohibits a state chartered banking institution from providing financing to a landlord who has engaged in certain bad faith acts.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced) 2024-01-03 - REFERRED TO BANKS [S05401 Detail]

Download: New_York-2023-S05401-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          5401

                               2023-2024 Regular Sessions

                    IN SENATE

                                      March 3, 2023
                                       ___________

        Introduced  by  Sens.  HOYLMAN-SIGAL,  JACKSON -- 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 prohibiting bank invest-
          ments in bad faith landlords

          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 13 to
     2  read as follows:
     3    § 13. Investments in bad faith landlords by  state  chartered  banking
     4  institutions.  1.  No  state chartered banking institution shall provide
     5  financing for or invest in the stocks, securities, or other  obligations
     6  of  any person, institution, company, or subsidiary engaged in the busi-
     7  ness of leasing residential real estate that has:
     8    (a) Been convicted of engaging in illegal conduct  against  a  tenant,
     9  including (i) harassment, (ii) coercion, or (iii) fraud;
    10    (b)  Been  convicted  of  fraudulent  refinancing of loans, tax fraud,
    11  embezzlement, or other fraud or theft related to  financial  management;
    12  or
    13    (c)  Entered  into  a  consent  decree with the office of the attorney
    14  general in settlement of a lawsuit regarding unfair or  deceptive  prac-
    15  tices  against a tenant, that (i) establishes a tenant restitution fund,
    16  pursuant to subdivision twelve of section sixty-three of  the  executive
    17  law,  with  total  contributions  in excess of one million dollars, (ii)
    18  results in an independent  property  management  company  acquiring  the
    19  primary  management  responsibilities of any of the respondent's proper-
    20  ties, or (iii) requires a  monitor  to  engage  in  the  review  of  the
    21  respondent's  compliance  with  the  policies  and  provisions of such a
    22  decree.
    23    2. For purposes of this section:
    24    (a) "State chartered banking institution" shall have the same  meaning
    25  as defined in subdivision one of section twelve-a of this article;

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07614-01-3
        S. 5401                             2

     1    (b) "Consent decree" shall mean an agreement between the parties in an
     2  action to resolve the action, which is entered, approved, and ordered by
     3  a court;
     4    (c)  "Tenant restitution fund" shall mean a fund, trust, or account in
     5  which money is deposited for the  benefit  of  potential  claimants  who
     6  qualify for restitutions under the court action that led to the creation
     7  of  the  tenant  restitution fund and the office of the attorney general
     8  shall have oversight of the fund and be responsible for making  distrib-
     9  utions to claimants;
    10    (d)  "Property  management  company"  shall mean a company that is not
    11  owned by a party to the consent decree that is qualified to  manage  the
    12  properties that are subject to a consent decree; and
    13    (e)  "Monitor"  shall  mean an individual who has been approved by the
    14  office of the attorney general to review and report on whether the other
    15  party to the consent  decree  and/or  the  property  management  company
    16  comply with the policies and provisions of the consent decree.
    17    §  2.  This  act  shall take effect immediately and shall apply to all
    18  contracts entered into, renewed, modified or amended on  or  after  such
    19  effective date.