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BILL NUMBER:S651

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.

Text

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