Extends the effectiveness of certain provisions relating to permissible fees in connection with open end loans.

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S3588-2013 Actions

• Apr 30, 2013: SUBSTITUTED BY A4528
• Apr 29, 2013: ADVANCED TO THIRD READING
• Apr 24, 2013: 2ND REPORT CAL.
• Apr 23, 2013: 1ST REPORT CAL.428
• Feb 7, 2013: REFERRED TO BANKS

S3588-2013 Meetings

Banks: Apr 24, 2013

S3588-2013 Calendars

Active List: Apr 30, 2013 , Floor Calendar: Apr 24, 2013 , Floor Calendar: Apr 29, 2013 , Floor Calendar: Apr 30, 2013

S3588-2013 Votes

S3588-2013 Memo

BILL NUMBER:S3588

TITLE OF BILL:  An act to amend chapter 223 of the laws of 1996, amend-
ing the banking law relating to permissible fees in connection with open
end loans, in relation to extending the effectiveness thereof

PURPOSE:  Continues for two years, the existing statutory authority for
licensed lenders to charge annual fees on open-end personal loans.

SUMMARY OF PROVISIONS:  Amends the effective date of Chapter 223 of the
Laws of 1996 extending for two years (June 30, 2015), the authority of
licensed lenders to charge annual fees on open-end personal loans.

JUSTIFICATION:  In 1996, legislation was enacted to authorize licensed
lenders to charge annual fees on open-end loans. The law further
provided that any such fee may not exceed the lesser of 1% of the loan
amount or S50. This 1996 law contained a sunset date of June 30, 2000.
Legislation was enacted in 2000 to extend this authority for another
five years, and legislation was enacted in 2005, 2007, 2009 and 2011
extending this authority. The provisions of this law are currently sche-
duled to expire on June 30, 2013.

The 1996 law recognized that annual fees are a commonly used feature in
the pricing of open-end loan products, such as credit cards, home equity
loans and personal loans. This type of fee reflects the fact that addi-
tional costs are incurred in the administration of revolving loans, such
as the preparation and mailing of monthly billing statements, the proc-
essing of transactions and increased monitoring costs.

For these reasons, banking institutions have long had the ability to
charge annual fees on open-end loan products. Licensed lenders have also
had the ability to charge annual fees on certain open-end products, such
as credit cards and home equity loans. However, prior to 1996, they did
not have authority to charge annual fees on open-end personal loans.
Chapter 223 of 1996 gave licensed lenders the same pricing flexibility
as banking institutions with regard to fees on open-end personal loans.
Therefore, this bill would extend the provisions of the 1996 law for two
years.

LEGISLATIVE HISTORY: New.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediate.

S3588-2013 Text

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

                                    3588

                         2013-2014 Regular Sessions

                              I N  SENATE

                              February 7, 2013
                                 ___________

  Introduced  by  Sen.  GRIFFO -- read twice and ordered printed, and when
    printed to be committed to the Committee on Banks

  AN ACT to amend chapter 223 of the laws of 1996,  amending  the  banking
    law relating to permissible fees in connection with open end loans, in
    relation to extending the effectiveness thereof

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


    Section 1. Section 3 of chapter 223 of the laws of 1996, amending  the
  banking  law  relating  to  permissible fees in connection with open end
  loans, as amended by chapter 114 of the laws of 2011, is amended to read
  as follows:

    S 3. This act shall take effect immediately, and remain in full  force
  and  effect until June 30, [2013] 2015, when, upon such date, the amend-
  ments made by this act shall expire and  be  deemed  repealed,  and  the
  provisions  of law amended by this act shall revert to their text and be
  read as they were immediately prior to the effective date of this act.
    S 2. This act shall take effect immediately.





   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD08372-01-3