BILL NUMBER:S7944

TITLE OF BILL:  An act to amend the general business law, in relation
to the prohibition of the installation of starter interrupt devices on
certain new and used motor vehicles

PURPOSE OR GENERAL IDEA OF BILL:

To prohibit the use of starter interrupt devices by lenders as a
condition of qualifying for an auto loan.

SUMMARY OF SPECIFIC PROVISIONS:

Section one amends the general business law by adding section 396-qqq
which prohibits the use of starter interrupt devices by dealers or
lenders on new or used motor vehicles and establishes a fine of up to
$5,000 for knowing violation.

Section two sets the effective date.

JUSTIFICATION:

A recent explosion in the Subprime auto lending market. has some of
the same banks and financial institutions responsible for the
catastrophic collapse of the mortgage industry in 2008, and
consequently the U.S. and global economies, cashing in big once again.
              

And while these high-risk, high-interest loans are on automobiles and
not homes, unfortunately, the victims are often low-income consumers
still trying to recover from the recent economic recession.

In its recently published investigation into lenders' unscrupulous
practices within the booming subprime auto lending market, The New
York Times found that "roughly 25 percent of all new auto loans made
last year were subprime (interest rates on some of the loans exceeded
29 percent)and the volume of subprime auto loans reached more than
$145 billion in the first three months of this year."

A growing number of these predatory lenders are now equipping cars
with a starter interrupt device as a condition of the loan. This new
technology allows lenders to remotely disable the ignition in order to
prevent a car from starting within minutes of a payment being late.
This reckless practice can threaten public safety and result in
serious consequences. Instances of parents being unable to rush
seriously ill children to the hospital due to lenders activating the
devices are becoming increasingly more common.

Additionally, many of these devices have GPS technology which allow
the lenders to track the cars' location and movements with very few
regulations to protect individual privacy and public safety. This
legislation specifically bans the practice of installing a "starter
interrupt" device as a condition for new or used car purchases, to
remedy this gap in the law and further protect consumers.

PRIOR LEGISLATIVE HISTORY:

This is a new bill.


FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act shall take effect on the first of November next succeeding
the date on which it shall have become a law.