S195-2011 - NY Senate Open Legislation - Requires a principal creditor to send a notice of delinquency to the debtor and co-signer of an account

Requires a principal creditor to send a notice of delinquency to the debtor and co-signer of an account.

Sponsor: MAZIARZ / Committee: RULES
Law Section: General Business Law / Law: Amd S600, add S601-a, Gen Bus L

S195-2011 Actions

Jun 21, 2012: COMMITTED TO RULES
May 2, 2012: ADVANCED TO THIRD READING
May 1, 2012: 2ND REPORT CAL.
Apr 30, 2012: 1ST REPORT CAL.612
Jan 4, 2012: REFERRED TO CONSUMER PROTECTION
Jan 5, 2011: REFERRED TO CONSUMER PROTECTION

S195-2011 Meetings

Consumer Protection: Apr 30, 2012

S195-2011 Calendars

S195-2011 Votes

VOTE: COMMITTEE VOTE: - Consumer Protection - Apr 30, 2012

Ayes (9): Zeldin, Ball, Fuschillo, Little, Marcellino, O'Mara, Hassell-Thompson, Huntley, Squadron
Ayes W/R (1): Adams

S195-2011 Memo

BILL NUMBER:S195

TITLE OF BILL:
An act
to amend the general business law, in relation to notice of delinquency
requirements

PURPOSE:
To require a principal creditor to send a notice of delinquency to the
debtor and co-signer of an account.

SUMMARY OF PROVISIONS:
Section 1 amends section GOO of the general business law by adding new
subdivision 4. Subdivision 4 (i) defines the term co-signer and their
role in relation to the debtor. Subdivision 4 (ii) states that in the
case of a consumer credit account becomes obligated under the
agreement as a co-signer with respect either to all purchases and
loans, or a specified maximum dollar amount of purchases and loans
that will be obtained from time to time pursuant to the agreement
whether or not it is contemplated that the co-signer may receive any
of the property, services or money to be obtained. This does not
include a seller, holder or lender who becomes obligated to an
assignee of such party's rights or a joint applicant for credit who
is intended to be primarily liable under the agreement.

Section 2 amends the general business law by adding new section 601-a
which obligates every principal creditor shall send a notice to the
last known address of the debtor advising them of a delinquency on
his or her account. A copy of this same notice will also be sent to
the co-signer of such account.

Section 3 establishes an effective date of January first succeeding
the date on which it shall have become a law.

JUSTIFICATION:
Current law only requires that the debtor be notified in delinquency
situations and the co-signer is forced to later reap the
repercussions. This legislation would obligate all creditors to
notify the co-signer as well of any delinquency by the debtor so that
all parties involved would be informed and the co-signer can
understand what they may liable for if the debtor continues to
default on their payments. Since a co-signer would be held
accountable for any payments that the debtor has defaulted on, it is
believed that an immediate notification of delinquency would allow
them to work out any problems with the debtor prior to the co-signer
obtaining responsibility for the debt.

LEGISLATIVE HISTORY:
S.2538 of 2009/2010; Referred to consumer protection

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law.

S195-2011 Text

 S T A T E   O F   N E W   Y O R K
 
                                           195
 2011-2012 Regular Sessions
 I N  SENATE
 (PREFILED)
 January 5, 2011
 
 Introduced  by  Sen. MAZIARZ -- read twice and ordered printed, and when
 printed to be committed to the Committee on Consumer Protection
 

AN ACT to amend the general business  law,  in  relation  to  notice  of
 delinquency requirements
 

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

 

Section 1.

Section 600 of the  general  business  law  is  amended  by
 adding a new subdivision 4 to read as follows:

 4. "CO-SIGNER" MEANS A NATURAL PERSON WHO (I) IN THE CASE OF A CONSUM
 ER  CREDIT TRANSACTION BECOMES OBLIGATED ON THE TRANSACTION AS A CO-SIG
 NER, CO-MAKER, GUARANTOR, ENDORSER OR SURETY, BUT WHO DOES  NOT  RECEIVE
 THE PROPERTY, SERVICES, OR MONEY THAT IS THE SUBJECT OF THE TRANSACTION.
 THE  TERM  DOES NOT INCLUDE A SELLER, HOLDER OR LENDER WHO BECOMES OBLI
 GATED TO AN ASSIGNEE OF SUCH PARTY'S RIGHTS; OR (II) IN THE  CASE  OF  A
 CONSUMER  CREDIT  ACCOUNT  BECOMES  OBLIGATED  UNDER  THE AGREEMENT AS A
 CO-SIGNER, CO-MAKER, GUARANTOR, ENDORSER OR SURETY WITH  RESPECT  EITHER
 TO  ALL  PURCHASES  AND  LOANS,  OR A SPECIFIED MAXIMUM DOLLAR AMOUNT OF
 PURCHASES AND LOANS THAT WILL BE OBTAINED FROM TIME TO TIME PURSUANT  TO
 THE  AGREEMENT  WHETHER OR NOT IT IS CONTEMPLATED THAT THE CO-SIGNER MAY
 RECEIVE ANY OF THE PROPERTY, SERVICES OR MONEY TO BE OBTAINED. THE  TERM
 DOES  NOT INCLUDE A SELLER, HOLDER OR LENDER WHO BECOMES OBLIGATED TO AN
 ASSIGNEE OF SUCH PARTY'S RIGHTS OR A JOINT APPLICANT FOR CREDIT  WHO  IS
 INTENDED TO BE PRIMARILY LIABLE UNDER THE AGREEMENT.
 

S 2. The general business law is amended by adding a new section 601-a
 to read as follows:

 

S 601-A. NOTICE OF DELINQUENCY. EVERY PRINCIPAL CREDITOR OR HIS OR HER
 AGENT SHALL SEND A NOTICE TO THE LAST KNOWN ADDRESS OF THE DEBTOR ADVIS
 ING  THE  DEBTOR  OF A DELINQUENCY ON HIS OR HER ACCOUNT. A COPY OF SUCH
 NOTICE SHALL ALSO BE SENT TO THE CO-SIGNER OF SUCH ACCOUNT.
 

S 3. This act shall take effect on the first of January next  succeed
 ing the date on which it shall have become a law.
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD01600-01-1

S195-2011: Requires a principal creditor to send a notice of delinquency to the debtor and co-signer of an account