Prohibits banking organizations from issuing mail-loan checks without request or application therefor; provides that failure to destroy or return a mail-loan check does not constitute an acceptance thereof; provides that mail-loan checks shall have the transaction fee and interest rate included on the check.
TITLE OF BILL: An act to amend the banking law, in relation to prohibiting banks from issuing checks whose endorsement constitutes acceptance of an unsolicited loan
PURPOSE OR GENERAL IDEA OF BILL: Prohibits banking organizations from issuing checks for unsolicited loans.
SUMMARY OF SPECIFIC PROVISIONS: This bill amends the banking law by adding section 9-v, which prohibits banking organizations from issuing checks whose endorsement constitutes acceptance of an unsolicited loan.
JUSTIFICATION: The practice of mailing unsolicited loan checks to consumers can prove confusing to the consumer with respect to the obligation flowing from his or her endorsement. Additionally, an unsolicited loan check received by mail may be cashed by an unknown payee obligating the payee to repay the loan. This bill would negate the problems noted above.
PRIOR LEGISLATIVE HISTORY: S.7493 of 2008 04/08/08 Referred to Banks S.64 of 2009 01/07/09 Referred to Banks 01/06/10 Referred to Banks
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: One hundred twentieth day after it becomes law.
STATE OF NEW YORK ________________________________________________________________________ 651 2011-2012 Regular Sessions IN SENATE (PREFILED) January 5, 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 prohibiting banks from issuing checks whose endorsement constitutes acceptance of an unsolic- ited loan 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 9-v to read as follows: S 9-V. BANKING ORGANIZATIONS PROHIBITED FROM ISSUING CHECKS WHOSE ENDORSEMENT CONSTITUTES ACCEPTANCE OF AN UNSOLICITED LOAN. NO BANKING ORGANIZATION SHALL ISSUE A CHECK OR DRAFT TO ANY PERSON, FIRM, PARTNER- SHIP, CORPORATION OR OTHER LEGAL ENTITY IF THE ENDORSEMENT OR DEPOSIT OF SUCH CHECK OR DRAFT BY THE PAYEE WOULD CONSTITUTE THE ACCEPTANCE OF A LOAN FROM SUCH BANKING ORGANIZATION TO SUCH PAYEE WITHOUT SUCH PAYEE'S HAVING SOLICITED SUCH LOAN. S 2. This act shall take effect on the one hundred twentieth day after it shall have become a law; provided, however, that effective immediate- ly, the addition, amendment, and/or repeal of any rule or regulation by the superintendent of banks necessary for the implementation of this act on its effective date are authorized and directed to be made and completed on or before such effective date.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02778-01-1