Bill Text: NY A06884 | 2017-2018 | General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relates to requiring automobile brokers to be licensed and bonded.

Spectrum: Moderate Partisan Bill (Democrat 9-2)

Status: (Passed) 2017-12-18 - approval memo.48 [A06884 Detail]

Download: New_York-2017-A06884-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________
            S. 5380--A                                            A. 6884--A
            Cal. No. 1056
                               2017-2018 Regular Sessions
                SENATE - ASSEMBLY
                                     March 23, 2017
                                       ___________
        IN  SENATE -- Introduced by Sen. GOLDEN -- read twice and ordered print-
          ed, and when printed to be committed  to  the  Committee  on  Consumer
          Protection  -- reported favorably from said committee and committed to
          the Committee on Finance -- reported favorably  from  said  committee,
          ordered  to  first  and  second  report,  ordered  to a third reading,
          amended and ordered reprinted, retaining its place  in  the  order  of
          third reading
        IN  ASSEMBLY  --  Introduced by M. of A. ABBATE, HARRIS, TITONE, LENTOL,
          CYMBROWITZ, CUSICK, COLTON, McDONOUGH -- read once and referred to the
          Committee on Consumer Affairs and Protection -- committee  discharged,
          bill  amended,  ordered  reprinted  as amended and recommitted to said
          committee
        AN ACT to amend the general business law and  the  vehicle  and  traffic
          law, in relation to requiring automobile brokers to be licensed
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Subdivision 1 of section 736 of the general  business  law,
     2  as  added  by  chapter  616  of  the laws of 1988, is amended to read as
     3  follows:
     4    1. "Automobile broker business" means  any  person  who,  for  a  fee,
     5  commission  or  other valuable consideration, regardless of whether such
     6  fee, commission, or consideration is paid directly by a consumer, offers
     7  to provide, provides, or represents  that  he  or  she  will  provide  a
     8  service  of  purchasing, arranging, assisting, facilitating or effecting
     9  the purchase or lease of an automobile as agent, broker, or intermediary
    10  for a consumer. "Automobile broker business" does not include any person
    11  registered as a dealer pursuant to article sixteen of  the  vehicle  and
    12  traffic  law,  or any person who sells, offers for sale or lease or acts
    13  as agent, broker or intermediary in effecting the purchase or  lease  of
    14  three  or  [less]  fewer  automobiles in any calendar year, or any motor
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10395-06-7
        S. 5380--A                          2                         A. 6884--A
     1  vehicle franchisor, manufacturer, or distributor registered under  arti-
     2  cle  sixteen of the vehicle and traffic law and subject to paragraph (y)
     3  of subdivision two of section four hundred sixty-three  of  the  vehicle
     4  and traffic law.
     5    § 2. The general business law is amended by adding a new section 736-a
     6  to read as follows:
     7    § 736-a. License required. 1. No person shall engage in business as an
     8  automobile  broker business, as defined in section seven hundred thirty-
     9  six of this article, without first having been issued a  certificate  of
    10  registration  for  an automobile broker business pursuant to paragraph c
    11  of subdivision seven of section four hundred fifteen of the vehicle  and
    12  traffic law.
    13    2.  A  certificate  of  registration for an automobile broker business
    14  shall not permit the registrant to display for sale or lease any new  or
    15  used  motor vehicles without registration as a dealer under section four
    16  hundred fifteen of the vehicle and traffic law.
    17    3. A person holding a license as an automobile broker  business  shall
    18  not  also  hold  a  certificate  of registration as a "new motor vehicle
    19  dealer" as defined in section four hundred fifteen of  the  vehicle  and
    20  traffic law.
    21    § 3. Paragraphs (e), (f) and (g) of subdivision 1 and subdivision 3 of
    22  section  738 of the general business law, as added by chapter 616 of the
    23  laws of 1988, paragraph (e) of subdivision 1 as amended by  chapter  579
    24  of the laws of 2011, are amended to read as follows:
    25    (e)  A  description  of  any  other services and an itemization of the
    26  charges for each. Such description shall include disclosure of the auto-
    27  mobile dealer from which the automobile was purchased or leased, as well
    28  as all fees, commissions or other valuable  considerations  paid  by  an
    29  automobile  dealer  to  the  automobile  broker  business for [selling,]
    30  arranging, assisting or effecting the sale or lease of an automobile  as
    31  agent,  broker,  or intermediary between the consumer and the automobile
    32  dealer. If any such fees, commissions or considerations are to  be  paid
    33  to  the  automobile  broker  business  by  such dealer, there shall be a
    34  statement in immediate proximity to such  disclosure  that  the  amounts
    35  disclosed  are  to  be paid by the dealer to the automobile broker busi-
    36  ness.
    37    (f) If a consumer elects to cancel the contract pursuant to  paragraph
    38  (b)  or  (c)  of this subdivision, he or she shall notify in writing the
    39  automobile broker business at the address specified in the contract. The
    40  automobile broker business shall make a  full  refund  to  the  consumer
    41  within  ten business days following receipt of the request for a refund.
    42  The contract shall contain a statement,  setting  forth  the  consumer's
    43  right to cancel the contract under paragraphs (b) and (c) of this subdi-
    44  vision and the refund obligations of the automobile broker business.
    45    (g)  The  statements required by paragraphs (a), (b), (c), (e) and (f)
    46  of this subdivision shall be printed in at least ten point bold type.
    47    3. An automobile broker business shall deliver to the consumer or mail
    48  to him or her at the address shown on the  contract,  an  executed  copy
    49  thereof.
    50    §  4.  Subdivision  1 of section 740-a of the general business law, as
    51  added by chapter 579 of the laws of 2011, is amended to read as follows:
    52    1. Automobile broker businesses shall obtain and continue in effect  a
    53  surety  bond in an amount of [seventy-five] one hundred thousand dollars
    54  executed by a surety company authorized  to  transact  business  in  the
    55  state  by  the [insurance] department of financial services of the state
    56  or its successor. The bonds shall be approved as to form by  the  secre-
        S. 5380--A                          3                         A. 6884--A
     1  tary  of  state  and shall be conditioned on the automobile broker busi-
     2  ness' payment of all valid bank drafts, including checks, drawn for  the
     3  purchase  of  motor  vehicles  and  safekeeping of all customer deposits
     4  related  to  the  sale of a motor vehicle between the time of receipt of
     5  such customer deposit and the transfer of good title to the  vehicle  to
     6  the customer.
     7    §  5.  Section  741-a of the general business law, as added by chapter
     8  579 of the laws of 2011, is amended to read as follows:
     9    § 741-a. Advertising. Automobile broker businesses shall  clearly  and
    10  conspicuously  disclose the following in all advertisements in any medi-
    11  um, and in any print advertisement such disclosures shall not appear  in
    12  any  footnotes  and shall be situated in the top half of any such adver-
    13  tisement in an easily readable typeface:
    14    (a) That the automobile broker business is not a [licensed] registered
    15  new motor vehicle dealer but is a registered automobile broker  business
    16  as  defined  in  section four hundred fifteen of the vehicle and traffic
    17  law;
    18    (b) The registration number issued to the automobile  broker  business
    19  pursuant to section four hundred fifteen of the vehicle and traffic law;
    20    (c)  Whether any fees may be imposed by the automobile broker business
    21  for services rendered. Details of such compensation shall be provided by
    22  the automobile broker business upon request by the consumer; and
    23    [(c)] (d) That no warranty repair services will  be  provided  by  the
    24  automobile broker business.
    25    §  6.  Subdivision  1 of section 415 of the vehicle and traffic law is
    26  amended by adding a new paragraph m to read as follows:
    27    m. "Automobile broker business" shall have the meaning  set  forth  in
    28  subdivision one of section seven hundred thirty-six of the general busi-
    29  ness law.
    30    § 7. Section 415 of the vehicle and traffic law is amended by adding a
    31  new subdivision 3-a to read as follows:
    32    3-a.  Automobile  broker business registration. No person shall engage
    33  in the automobile broker business or represent or advertise that  he  or
    34  she is engaged or intends to engage in the automobile broker business in
    35  this  state, unless there shall have been issued to him or her a certif-
    36  icate of registration as an automobile broker business  by  the  commis-
    37  sioner  under  this  section pursuant to an application for registration
    38  submitted pursuant to subdivision five of this section.
    39    § 8. Subdivision 5 of section 415 of the vehicle and  traffic  law  is
    40  amended by adding a new paragraph b-3 to read as follows:
    41    b-3.   In the case of an application for registration as an automobile
    42  broker business, the name and address of the surety company  which  will
    43  issue  the  bond  required  by  subdivision one of section seven hundred
    44  forty-a of the general business law. If the bond is to be issued  by  an
    45  authorized  agent  of the surety company licensed by the state, then the
    46  name and address of that agent may be provided in lieu of  the  informa-
    47  tion concerning the surety company.
    48    §  9.  Paragraph  d of subdivision 9 of section 415 of the vehicle and
    49  traffic law, as amended by chapter 254 of the laws of 2010,  is  amended
    50  to read as follows:
    51    d.  Has  failed to comply with any of the rules and regulations of the
    52  commissioner for the enforcement of this article or with  any  provision
    53  of  this  chapter  or  article thirty-five-B of the general business law
    54  applicable thereto; or
    55    § 10. This act shall take effect on  the  one  hundred  eightieth  day
    56  after  it  shall  have become a law; provided, however, that the commis-
        S. 5380--A                          4                         A. 6884--A
     1  sioner of the department of motor vehicles shall take actions  necessary
     2  to  provide  for  the  issuance of registration certificates pursuant to
     3  section 415 of the vehicle and traffic law, as amended by sections  six,
     4  seven, eight and nine of this act, prior to such date.