Requires a principal creditor to send a notice of delinquency to the debtor and co-signer of an account.
Ayes (9): Zeldin, Ball, Fuschillo, Little, Marcellino, O'Mara, Hassell-Thompson, Huntley, Squadron
Ayes W/R (1): Adams
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.
STATE OF NEW YORK ________________________________________________________________________ 195 2011-2012 Regular Sessions IN 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