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STATE OF NEW YORK
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4710

2011-2012 Regular Sessions

IN ASSEMBLY

February 7, 2011
___________

Introduced by M. of A. TITONE -- read once and referred to the Committee
  on Banks

AN  ACT  to  amend  the  banking law, in relation to refund anticipation
  loans

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The  banking law is amended by adding a new section 46 to
read as follows:
  S 46. REFUND ANTICIPATION LOANS. 1. AS USED IN THIS SECTION:
  (A) "BORROWER" MEANS A PERSON WHO RECEIVES THE PROCEEDS  OF  A  REFUND
ANTICIPATION LOAN;
  (B)  "FACILITATOR" MEANS A PERSON WHO, INDIVIDUALLY, OR IN CONJUNCTION
OR COOPERATION WITH ANOTHER PERSON, MAKES A  REFUND  ANTICIPATION  LOAN,
PROCESSES,  RECEIVES OR ACCEPTS FOR DELIVERY AN APPLICATION FOR A REFUND
ANTICIPATION LOAN, ISSUES A CHECK IN PAYMENT OF REFUND ANTICIPATION LOAN
PROCEEDS, OR IN ANY OTHER MANNER ACTS TO ALLOW THE MAKING  OF  A  REFUND
ANTICIPATION  LOAN.  THE  TERM  DOES  NOT INCLUDE A BANK, TRUST COMPANY,
SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION  OR  PERSON  OR
ENTITY  ISSUED  A  LICENSE  UNDER THE PROVISIONS OF ARTICLE NINE OF THIS
CHAPTER, OPERATING UNDER THE LAWS OF THE UNITED STATES OR THIS STATE, OR
ANY PERSON WHO ACTS SOLELY AS AN INTERMEDIARY AND DOES NOT DEAL WITH THE
PUBLIC IN THE MAKING OF A REFUND ANTICIPATION LOAN;
  (C) "REFUND ANTICIPATION LOAN"  MEANS  A  LOAN  ARRANGED  TO  BE  PAID
DIRECTLY FROM THE PROCEEDS OF A BORROWER'S INCOME TAX REFUND;
  (D)  "REFUND  ANTICIPATION  LOAN FEE" MEANS ANY CHARGES, FEES OR OTHER
CONSIDERATION CHARGED OR IMPOSED FOR THE MAKING OF A REFUND ANTICIPATION
LOAN. THE TERM DOES NOT INCLUDE ANY CHARGES, FEES OR OTHER CONSIDERATION
CHARGED OR IMPOSED IN THE ORDINARY COURSE OF BUSINESS BY  A  FACILITATOR
FOR  SERVICES  THAT DO NOT RESULT IN THE MAKING OF A LOAN INCLUDING, BUT
NOT LIMITED TO, FEES FOR TAX RETURN  PREPARATION  SERVICES  OR  FOR  THE
ELECTRONIC FILING OF INCOME TAX RETURNS; AND

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05683-01-1
A. 4710                             2

  (E)  "ANNUAL  PERCENTAGE RATE" SHALL HAVE THE SAME MEANING AS PROVIDED
IN PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION SIX-L OF THIS CHAPTER.
  2.  AT  THE  TIME A BORROWER APPLIES FOR A REFUND ANTICIPATION LOAN, A
FACILITATOR SHALL DISCLOSE TO SUCH BORROWER ON A DOCUMENT THAT IS  SEPA-
RATE FROM THE LOAN APPLICATION:
  (A)  THE  ESTIMATED  FEE  FOR  PREPARING  AND ELECTRONICALLY FILING AN
INCOME TAX RETURN;
  (B) THE REFUND ANTICIPATION LOAN FEE SCHEDULE;
  (C) THE ANNUAL PERCENTAGE RATE FOR THE LOAN;
  (D) THE ESTIMATED TOTAL COST TO THE BORROWER FOR  UTILIZING  A  REFUND
ANTICIPATION LOAN;
  (E)  THE ESTIMATED NUMBER OF DAYS WITHIN WHICH THE LOAN PROCEEDS SHALL
BE PAID TO THE BORROWER IF THE LOAN IS APPROVED;
  (F) THE BORROWER IS RESPONSIBLE FOR REPAYMENT OF THE LOAN AND  RELATED
FEES IN THE EVENT THE INCOME TAX REFUND IS NOT PAID OR NOT PAID IN FULL;
AND
  (G)  THE AVAILABILITY OF ELECTRONIC FILING OF THE INCOME TAX RETURN OF
THE BORROWER AND THE AVERAGE TIME  ANNOUNCED  BY  THE  INTERNAL  REVENUE
SERVICE  WITHIN WHICH THE BORROWER CAN EXPECT TO RECEIVE A REFUND IF THE
BORROWER'S RETURN IS ELECTRONICALLY FILED  AND  THE  BORROWER  DOES  NOT
OBTAIN A REFUND ANTICIPATION LOAN.
  3.  NO  REFUND  ANTICIPATION  LOAN SHALL BE MADE AT ANY LOCATION OTHER
THAN A LOCATION IN WHICH THE PRINCIPAL BUSINESS IS TAX PREPARATION.  ALL
DISCLOSURE  DOCUMENTS  REQUIRED BY SUBDIVISION TWO OF THIS SECTION SHALL
BE AVAILABLE IN ENGLISH, SPANISH AND IN ANY  OTHER  LANGUAGE  SPOKEN  BY
MORE  THAN  FIVE  PERCENT  OF  THE  POPULATION  IN  THE  VICINITY OF THE
FACILITATOR'S LOCATION.
  4. NOTWITHSTANDING ANY OTHER PROVISION  OF  THE  BANKING  LAW  OR  THE
GENERAL  OBLIGATIONS  LAW,  THE  INTEREST RATE FOR A REFUND ANTICIPATION
LOAN SHALL NOT EXCEED (A) SIXTY PERCENT PER ANNUM FOR THE INITIAL  TWEN-
TY-ONE DAYS OF SUCH LOAN, AND (B) TWENTY PERCENT PER ANNUM FOR THE PERI-
OD  COMMENCING  ON  THE TWENTY-SECOND DAY OF SUCH LOAN AND ENDING ON THE
DATE OF PAYMENT.
  5. ANY FACILITATOR WHO VIOLATES ANY PROVISION OF THIS SECTION SHALL BE
SUBJECT TO A CIVIL PENALTY OF NOT MORE THAN  FIVE  HUNDRED  DOLLARS  FOR
EACH  SUCH  VIOLATION. SUCH PENALTY SHALL BE ASSESSED BY THE SUPERINTEN-
DENT AS PROVIDED IN SECTION FORTY-FOUR OF THIS ARTICLE. IN ADDITION, ANY
FACILITATOR WHO VIOLATES ANY PROVISION OF THIS SECTION SHALL  BE  LIABLE
TO  ANY  AGGRIEVED BORROWER IN AN AMOUNT EQUAL TO THREE TIMES THE AMOUNT
OF THE REFUND ANTICIPATION LOAN FEE, PLUS REASONABLE ATTORNEY'S FEES, IN
A CIVIL ACTION BROUGHT BY THE AGGRIEVED  BORROWER  OR  BY  THE  ATTORNEY
GENERAL ON BEHALF OF THE AGGRIEVED BORROWER.
  6.  THE  SUPERINTENDENT  MAY  PRESCRIBE  REGULATIONS  TO CARRY OUT THE
PROVISIONS AND PURPOSES OF THIS SECTION.
  S 2. Nothing in this act shall be construed to  impair  or  limit  the
validity  of  any additional local laws or regulations, not inconsistent
with the provisions of this act, applicable  to  the  making  of  refund
anticipation loans.
  S  3.  If any clause, sentence, paragraph, section or part of this act
be adjudged by any court of competent jurisdiction to be  invalid,  such
judgment shall not affect, impair or invalidate the remainder hereof but
shall  be  applied  in its operation to the clause, sentence, paragraph,
section or part hereof directly involved in  the  controversy  in  which
such judgment shall have been rendered.
  S  4. This act shall take effect on the first of October next succeed-
ing the date on which it shall have become  a  law;  provided,  however,
A. 4710                             3

that effective immediately, the addition, amendment and/or repeal of any
rule  or  regulation necessary for the implementation of this act on its
effective date are authorized and directed to be made and  completed  on
or before such effective date.