Authorizes the commissioner of motor vehicles to issue a certificate of title free of liens upon submission of proof by dealer of payment of debt on a vehicle

2 Co-sponsors

• David Carlucci
• William J. Larkin Jr.

BILL NUMBER:S5132D

Title of bill

An act to amend the vehicle and traffic law, in relation to satisfaction of a security interest in a motor vehicle by a dealer

Purpose

To include within the law regarding the release of a security interest the ability for a dealer to submit evidence that the lien has been satisfied in order to be issued a useable title.

Summary of provisions

This bill would amend section 2121 of the vehicle and traffic law to add a new paragraph b to allow a dealer to submit evidence that a security interest in a motor vehicle has been satisfied in order to be issued a useable title by the commissioner.

Justification

The Department of Motor Vehicles recently established a program allowing for the electronic filing and releasing of liens. This program has helped with the timely release of liens, however not all of the banks and other financial institutions that provide loans for motor vehicles are participants in the program. consequently, many dealers still have problems receiving the timely release of liens. The law currently provides that such releases are to released "immediately upon payment" however practically this has been difficult to meet, and also problematic to enforce.

Since DMV has the technology available to them, titles should be able to be processed in a more efficient and modem manner. This bill stipulates that a duplicate certificate or a certificate without the lien must be made available within 10 business days. By using the appropriate electronic technology instead of cumbersome paper, 10 business days is not an unreasonable expectations for New York State dealers, many of whom are witnessing surrounding states using far more modem and efficient methods of processing. By utilizing technology, New York state will be able to better attract businesses and be more competitive with surrounding states.

Dealers are then placed in the difficult position of being in possession of a car that they cannot show for sale, nor can they sell to any other dealer or wholesaler or auctioneer until such a release is ultimately sent, even though they have proof that the lien has been fully satisfied. Real estate transactions are routinely completed with less formalized or absolute proof of the satisfaction of a lien than is currently required for automobile transactions. The Vehicle and Traffic Law (§2110) already allows the Department to proceed with the registration of a vehicle provided that sufficient evidence to demonstrate that the applicant is the owner of the vehicle and that there are no undisclosed security interests in such vehicle is provided. The law allows for the issuance of title based upon sufficient evidence that a lien has been fulfilled, and does not limit the proof to only a release of lien document. This amendment

would give the Commissioner of DMV the authority to issue appropriate title where a dealer has submitted sufficient evidence.

Legislative history

2007-2008: A.9261 2009-2010: A.2622

Fiscal implications

None.

Effective date

This act shall take effect 180 after enactment.