Bill Text: NY S04458 | 2015-2016 | 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 (i) 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 (ii) 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 - Dead) 2016-01-06 - REFERRED TO BANKS [S04458 Detail]

Download: New_York-2015-S04458-Introduced.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         4458
                              2015-2016 Regular Sessions
                                   I N  S E N A T E
                                    March 20, 2015
                                      ___________
       Introduced  by  Sen.  COMRIE -- 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    S  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    S  2.  The  general obligations law is amended by adding a new section
   16  5-532 to read as follows:
   17    S 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.
                                                                  LBD05290-01-5
       S. 4458                             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    S 3. This act shall take effect on the ninetieth day  after  it  shall
   17  have become a law.