Provides that no agreement for preauthorized electronic fund transfers entered into on or after January first, two thousand thirteen permit or require the transfer of any amount as a penalty or final payment after a stop payment notice has been given.
Ayes (56): Adams, Addabbo, Alesi, Avella, Ball, Bonacic, Breslin, Carlucci, DeFrancisco, Dilan, Duane, Espaillat, Farley, Flanagan, Fuschillo, Gianaris, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Huntley, Johnson, Kennedy, Klein, Krueger, Lanza, Larkin, LaValle, Libous, Little, Marcellino, Martins, Maziarz, Montgomery, Nozzolio, O'Mara, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Saland, Sampson, Savino, Serrano, Seward, Skelos, Smith, Stavisky, Stewart-Cousin, Valesky, Young, Zeldin
Excused (6): Diaz, Gallivan, Kruger, McDonald, Oppenheimer, Squadron
TITLE OF BILL: An act to amend the banking law, in relation to preauthorized electronic fund transfers
PURPOSE: To protect consumers from having their bank accounts debited after they have canceled such authorization.
SUMMARY OF PROVISIONS: Amends section 9-s of the banking law by adding subdivision 2 and 3, which prohibits the transfer of funds from a consumer account after the consumer has canceled authorization to debit their account, for any account entered into after January 1, 2011.
JUSTIFICATION: Increasingly consumers are signing up to have bills paid by having their financial accounts debited. However, a problem has arisen that after this direct debiting has been canceled consumers are seeing a final payment deducted from their account. Consumers are unaware of this transaction and sometimes do not have enough funds to cover the debit. Sometimes the debit is for a termination fee that the consumer is unaware of and would like to challenge. This legislation does not prevent companies from collecting payment, it just states, that when an authorization for direct debiting is canceled, that it is final and future payment will have to be transferred in more conventional ways.
LEGISLATIVE HISTORY: S.2378 of 2005/2006; Referred to Banks S.104 of 2007/2008; Referred to Banks S.1055C/A.10401 of 2009/2010; Referred to Banks
FISCAL IMPLICATIONS: None to the State.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 219 2011-2012 Regular Sessions IN SENATE (PREFILED) January 5, 2011 ___________Introduced by Sens. MAZIARZ, BONACIC, FLANAGAN, FUSCHILLO, JOHNSON, RANZENHOFER, SEWARD -- read twice and ordered printed, and when print- ed to be committed to the Committee on Banks AN ACT to amend the banking law, in relation to preauthorized electronic fund transfers THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 9-s of the banking law, as added by chapter 550 of the laws of 1998, is amended to read as follows: S 9-s. Preauthorized electronic fund transfers. 1. Every banking institution which provides preauthorized electronic fund transfers from consumer accounts shall, in accordance with regulations adopted by the banking board, provide consumers with the right to stop payment by giving written or oral notice within a specified period of time prior to such transfer.
[Any banking institution which complies with the stop payment provisions of the federal Electronic Funds Transfer Act, as such act may be amended from time to time, and any regulations adopted pursu- ant thereto, shall be deemed to be in compliance with the provisions of this section.]For purposes of this section, "banking institution" shall mean any state or federally chartered bank, trust company, savings bank, savings and loan association or credit union, and "consumer account" shall mean an account used primarily for personal, family or household purposes. 2. NO AGREEMENT FOR PREAUTHORIZED ELECTRONIC FUND TRANSFERS ENTERED INTO ON OR AFTER JANUARY FIRST, TWO THOUSAND TWELVE SHALL PERMIT OR REQUIRE THE TRANSFER FROM A CONSUMER ACCOUNT OF ANY FUNDS AS A PENALTY OR A FINAL PAYMENT AFTER THE CONSUMER HAS GIVEN WRITTEN OR ORAL NOTICE TO STOP PAYMENT TO HIS OR HER FINANCIAL INSTITUTION. 3. ANY BANKING INSTITUTION WHICH COMPLIES WITH THE STOP PAYMENT PROVISIONS OF THE FEDERAL ELECTRONIC FUNDS TRANSFER ACT, AS SUCH ACT MAYEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01582-01-1 S. 219 2
BE AMENDED FROM TIME TO TIME, AND ANY REGULATIONS ADOPTED PURSUANT THER- ETO, SHALL BE DEEMED TO BE IN COMPLIANCE WITH THE PROVISIONS OF THIS SECTION. S 2. This act shall take effect immediately.