Relates to retail instalment contracts and transmitters of money

1 Co-sponsor

• Joseph A. Griffo

BILL NUMBER:S5209

Title of bill

An act to amend the banking law, in relation to retail instalment contracts and transmitters of money

Purpose

To ensure that all sales finance companies and money transmitters which do business with residents of New York State are subject to regulation and oversight by the State Banking Department.

Summary of provisions

Section one of the bill amends the definitions of retail instalment obligation and retail instalment credit agreement in Section 491 of the Banking Law to specify that such terms include agreements wherever entered into if executed by the buyer in this state and if solicited in person by a salesperson or other person acting on his or her own behalf or that of the seller. The definition of sales finance company is amended to update the exemption threshold for retail sellers of motor vehicles and also to clarify that the definition does not include a secondary holder of retail instalment contracts. Section two of the bill amends Section 641 of the Banking Law which relates to the regulation and licensing of money transmitters. These amendments specify that a person is considered to engage in the money transmitter business in this state if such person induces another person to enter into a transaction by solicitation in or into this state by any means (including mail, e-mail, telephone, radio, television or internet).

Justification

This bill seeks to protect residents of New York State by clarifying and ensuring that sales finance companies and money transmitters which enter into transactions with persons in this state are subject to the legal protections of State law and the regulatory oversight provided by the Banking Department. This regulatory system is designed to protect consumers and ensure they are dealing with legitimate and financially viable companies. Given the ease by which companies can solicit business in New York over the internet or by mail, e-mail, phone, radio or television, it is especially important to ensure that New Yorkers are afforded the same protections with out-of-state companies that they receive with regulated in-state companies. This also ensures that businesses are operating on a level playing field.

Fiscal implications

None.

Effective date

Immediately.