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 mail-loan checks
PURPOSE OR GENERAL IDEA OF BILL: Prohibits banking organizations from issuing mail-loan checks without request or application, in order to protect consumers from potentially unsafe banking products.
SUMMARY OF SPECIFIC PROVISIONS: This bill amends subdivisions 2 and 3 of section 9-t of the banking law and adds a new subdivision 4 to section 9-t of the banking law.
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 S651A of 2011 01/05/11 REFERRED TO BANKS 01/04/12 REFERRED TO BANKS 05/31/12 AMEND(T) AND RECOMMIT TO BANKS 05/31/12 PRINT NUMBER 651A
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: One hundred twentieth day after it becomes law.
STATE OF NEW YORK ________________________________________________________________________ 703 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________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 mail-loan checks THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivisions 2 and 3 of section 9-t of the banking law, as added by chapter 309 of the laws of 2002, are amended and a new subdivi- sion 4 is added to read as follows: 2. Any lending institution which issues mail-loan checks shall: (a) include on the face of each check issued to a non-customer a writ- ten statement, in legible type reading "ONE FORM OF VALID PHOTOGRAPHIC ID NEEDED TO CASH OR DEPOSIT"; provided, however, that any entity cash- ing or accepting a mail-loan check for deposit may require more than one form of identification; (b) make no reference on the outside of the envelope containing a mail-loan check that indicates that a check is enclosed within such envelope; (c) provide that all mail-loan checks shall be non-transferable; and (d) include THE TRANSACTION FEE AND INTEREST RATE AND an expiration date of not more than six months on the mail-loan check, AS WELL AS ANY ADDITIONAL INFORMATION THAT THE SUPERINTENDENT MAY REQUIRE. 3. NO LENDING INSTITUTION SHALL ISSUE A MAIL-LOAN CHECK, EXCEPT IN RESPONSE TO A REQUEST OR APPLICATION THEREFOR. 4. FAILURE TO DESTROY OR RETURN A MAIL-LOAN CHECK SHALL NOT CONSTITUTE ACCEPTANCE OF THE CHECK. 5. Any lending institution which mails a mail-loan check in violation of the provisions of this section shall be liable for a civil penalty not to exceed five hundred dollars for each such violation. S 2. This act shall take effect on the one hundred twentieth day after it shall have become a law.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00560-01-3