S1627-2011 Actions

• Jan 4, 2012: REFERRED TO BANKS
• Jan 10, 2011: REFERRED TO BANKS

S1627-2011 Memo

BILL NUMBER:S1627

TITLE OF BILL:
An act
to amend the banking law, in relation to the maximum rate of
interest on credit cards

PURPOSE OR GENERAL IDEA OF BILL:
To set a cap on current credit card interest rates in the State of New
York more in line with interest rates for other credit rates in other
areas.

SUMMARY OF SPECIFIC PROVISIONS:
Creates a new Section 14-g to the Banking law and defines:

1. The term "credit card".
2. Establishes a maximum rate of interest of fifteen percent (18%) and
provides for raising the rate according to a time and prime rate
formula.
3. Makes maximum interest rate for credit cards applicable to all
persons and corporations in New York.

EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:
This bill amends, by implication Section 14(A) of the Banking law, by
imposing a cap specifically on interest rates of credit cards.

JUSTIFICATION:
In today's economy, with present interest rates for home mortgages at
eight percent (8%), consumers should not have to tolerate being
charged rates in excess of twice the prime rate to use a credit card.
In addition, the industry has shown no inclination to regulate itself
responsibly in terms of lowering its rates and, therefore, the State
must protect the interest of consumers.

PRIOR LEGISLATIVE HISTORY:
S.1906A of 2007
01/29/07 Referred to Banks
S.96 of 2009
01/07/09 Referred to Banks
01/06/10 Referred to Banks

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENT:
None.

EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law.

S1627-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                         1627
 2011-2012 Regular Sessions
 I N  SENATE
 January 10, 2011
 
 Introduced  by  Sen. SAMPSON -- 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  the  maximum  rate  of
 interest on credit cards
 

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 14-g  to
 read as follows:

 

S  14-G.    POWER  OF  THE  BANKING BOARD TO PRESCRIBE MAXIMUM RATE OF
 INTEREST ON CREDIT CARDS.  1.  AS USED IN THIS SECTION, THE TERM "CREDIT
 CARD" SHALL MEAN ANY CREDIT PLATE, CHARGE PLATE OR OTHER  IDENTIFICATION
 CARD  OR DEVICE WHICH IS ISSUED TO ANY LEGAL ENTITY AS THE HOLDER THERE
 OF, AND MAY BE USED BY SUCH HOLDER TO OBTAIN A CASH ADVANCE OR A LOAN OR
 CREDIT, OR TO PURCHASE OR RENT PROPERTY OR SERVICES ON THE CREDIT OF THE
 ISSUER OR OF THE HOLDER.
 2.  NOTWITHSTANDING THE PROVISIONS OF ANY OTHER  LAW,  RULE  OR  REGU
 LATION  TO THE CONTRARY, THE BANKING BOARD SHALL SET THE MAXIMUM RATE OF
 INTEREST FOR CREDIT CARDS, NOT  TO  EXCEED  EIGHTEEN  PERCENT  ANNUALLY.
 SUCH  RATE  MAY  ONLY  EXCEED EIGHTEEN PERCENT IF THE PRIME RATE EXCEEDS
 EIGHTEEN PERCENT FOR SIXTY CONSECUTIVE DAYS, BUT IN NO EVENT SHALL  SUCH
 NEW RATE ESTABLISHED BY THE BANKING BOARD BE MORE THAN ONE AND ONE-QUAR
 TER PERCENT ABOVE THE PRIME RATE IN EFFECT AT THE TIME SUCH RATE IS SET.
 3.    NO  PERSON,  FIRM  OR CORPORATION SHALL, DIRECTLY OR INDIRECTLY,
 CHARGE, TAKE OR RECEIVE ANY MONEY, GOODS OR SERVICES AS INTEREST ON  THE
 EXTENSION  OF CREDIT AT A RATE EXCEEDING THE RATE PRESCRIBED PURSUANT TO
 SUBDIVISION TWO OF THIS SECTION.
 

S 2. This act shall take effect on the thirtieth day  after  it  shall
 have become a law.
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD05870-01-1

*By contributing or voting you agree to the Terms of Participation and Privacy Policy and verify you are over 13.

Discuss!