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Sponsors
1 Co-sponsor
History
- Print number 2843a
- Amend and recommit to codes
- Reported and committed to codes
- Referred to banks
- Referred to banks
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Imposes restrictions on relationships with home improvement contractors
In Assembly Committee · Banks · Sponsor Sam Hoyt
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S2843A
Title of bill
An act to amend the banking law and the general business law, in relation to home improvement contractors
Purpose
To help address and prevent abusive practices that have resulted from relationships between some home improvement contractors and some mortgage lenders or mortgage brokers.
Summary of provisions
A new Section 595-c is added to the Banking Law. Subdivision one of this new section provides that a mortgage banker, exempt organization (i.e. a banking institution or insurance company) or mortgage broker shall not pay a referral fee or other compensation to a home improvement contractor in connection with a mortgage loan unless the following conditions are met:
a) the contractor is an agent or employee of the lender or broker; b) the lender or broker has given prior notice to the Banking Department of such relationship; c) the consumer is provided conspicuous notice in writing about the relationship between the contractor and lender or broker; and d) such relationship is subject to any additional requirements or conditions as provided in regulations of the Banking Board.
Subdivision two of this new section authorizes the Superintendent of Banks to impose special conditions and restrictions on a mortgage banker, mortgage broker or exempt organization if there has been a pattern of bona fide complaints of abusive practices involving a relationship between such entity and a home improvement contractor with whom it has a formal or informal business arrangement.
Subdivision three of this new section defines "home improvement" and "home improvement contractor.
The bill also amends Section 771 of the General Business Law in regard to the written agreement which a home improvement contractor must provide to the homeowner with a provision requiring that the written agreement must include a conspicuous statement that "If you obtain or use any type of mortgage loan to finance this project, you could lose your home and any money you have put into it if you do not meet your obligations under the loan."
Justification
This legislation addresses the problem of abusive lending practices where some lenders and mortgage brokers use deceptive or fraudulent means to target vulnerable homeowners for excessive high cost loans. The elderly are a
frequent target, since they may own their homes or have a high level of equity that can be exploited.
Abusive or questionable practices have resulted from relationships between some home improvement contractors and some mortgage lenders or mortgage brokers. Some homeowners have been subjected to high pressure sales tactics for home repairs and financing for these improvements. These contractors or salespeople may pressure, intimidate, and mislead homeowners into taking out a high-priced home equity loan, or refinancing an existing mortgage as a high cost loan, to pay for these repairs. In the most egregious cases homeowners may not realize that in agreeing to the home improvement contract they are signing documents that commit them to a mortgage loan or refinancing.
This bill seeks to improve accountability and ensure that mortgage bankers and mortgage brokers are responsible for the activities of any home improvement contractors with whom they have relationships.
Legislative history
2007-08: S.2613-A/52-A 2005-06: S.7148/A.2152, Passed Assembly Both Years 2003-04: A.4980 2001-02: A.5969 1999-00: A.4046 1997-98: S.256/A.124 1995-96: A.3150 1993-94: S.4007
Fiscal implications
None.
Effective date
Section one will take effect 120 days after it shall have become a law. Section two will take effect 180 days after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.