S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   588

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by M. of A. WEPRIN -- Multi-Sponsored by -- M. of A. ABINAN-
  TI, COOK, DenDEKKER, DUPREY, GABRYSZAK, GALEF, GIBSON, JAFFEE, MAISEL,
  McDONOUGH, RIVERA, ROBERTS, ROBINSON, SCARBOROUGH, ZEBROWSKI  --  read
  once and referred to the Committee on Banks

AN  ACT  to amend the banking law and the real property law, in relation
  to credit line mortgages

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

  Section  1.  Section 380-g of the banking law, as added by chapter 625
of the laws of 1976, is amended to read as follows:
  S 380-g. Power to engage in line of credit  financing  of  residential
real  estate.  1. A savings and loan association is authorized to invest
an amount, not exceeding the lesser of (a) ten per centum of the sum  of
its  surplus,  undivided  profits, and reserves or (b) one per centum of
its assets, in loans or in interests therein the  principal  purpose  of
which  is to provide financing with respect to what is or is expected to
become primarily residential real estate within this  state,  where  (i)
the  association  relies  substantially  for repayment on the borrower's
general credit standing, with or without other  security,  or  (ii)  the
association  relies on other assurances for repayment, including but not
limited to a guaranty or similar obligation of a third  party,  and,  in
either  case  described  in clause (i) or (ii), regardless of whether or
not the association takes security.
  2. A SAVINGS AND LOAN ASSOCIATION SHALL  NOT  HAVE  THE  AUTHORITY  TO
BLOCK  ACCESS  TO CREDIT LINE FUNDS BY A BORROWER OR TO OTHERWISE REVOKE
THE TERMS OF A CREDIT LINE MORTGAGE WHEN A BORROWER IS CURRENT ON REPAY-
MENT OF SUCH INDEBTEDNESS.
  S 2. Section 281 of the real property law is amended by adding  a  new
subdivision 2-a to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03861-01-3
              

A. 588                              2

  2-A. AN AUTHORIZED LENDER SHALL NOT HAVE THE AUTHORITY TO BLOCK ACCESS
TO CREDIT LINE FUNDS BY A BORROWER OR TO OTHERWISE REVOKE THE TERMS OF A
CREDIT  LINE  MORTGAGE  WHEN  A BORROWER IS CURRENT ON REPAYMENT OF SUCH
INDEBTEDNESS.
  S 3. This act shall take effect immediately.