Establishes the "vehicle lienholder accountability act"

BILL NUMBER:S3302

Title of bill

An act to amend the vehicle and traffic law, in relation to establishing the "vehicle lienholder accountability act"; to require lienholders to provide notice to the owner of the vehicle when such lienholder assigns his or her security interest

Purpose

To require a vehicle lienholder to provide the vehicle's owner with a timely lien release when such lien is assigned so that the vehicle's owner can obtain a clear title when the lien is satisfied.

Summary of specific provisions

Subdivision (a) of section 2120 of the vehicle and traffic law is amended to require vehicle lien holders to provide the vehicle's owner with a release of such lien within ten days of the lien being assigned, and subdivision (c) is added to section 2120 to impose a civil penalty not to exceed one thousand dollars for failure to comply.

Justification

Vehicle lien holders often assign their security interest without generating a lien release to the owner, and the new lienholder often fails to properly register the lien with Department of Motor Vehicles in order to avoid the fees due. As a result, many vehicle owners do not know who has a security interest in their vehicle, and are unable to obtain a clean certificate of title when they have paid off their vehicle loan. The original lienholder should be required to release his or her security interest in the vehicle once the lien has been assigned.

Prior legislative history

2010: S.7831 - Passed Transportation; Committed to Senate Codes Committee.

Fiscal implications

None.

Effective date

Shall take effect on the thirtieth day after it becomes law.