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History
- Substituted by A4528
- Advanced to third reading
- 2nd report cal.
- 1st report cal.428
- 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.
Extends the effectiveness of certain provisions relating to permissible fees in connection with open end loans
Signed by Governor · Sponsor Annette Robinson
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S3588
Title of bill
An act to amend chapter 223 of the laws of 1996, amend- ing the banking law relating to permissible fees in connection with open end loans, in relation to extending the effectiveness thereof
Purpose
Continues for two years, the existing statutory authority for licensed lenders to charge annual fees on open-end personal loans.
Summary of provisions
Amends the effective date of Chapter 223 of the Laws of 1996 extending for two years (June 30, 2015), the authority of licensed lenders to charge annual fees on open-end personal loans.
Justification
In 1996, legislation was enacted to authorize licensed lenders to charge annual fees on open-end loans. The law further provided that any such fee may not exceed the lesser of 1% of the loan amount or S50. This 1996 law contained a sunset date of June 30, 2000. Legislation was enacted in 2000 to extend this authority for another five years, and legislation was enacted in 2005, 2007, 2009 and 2011 extending this authority. The provisions of this law are currently sche- duled to expire on June 30, 2013.
The 1996 law recognized that annual fees are a commonly used feature in the pricing of open-end loan products, such as credit cards, home equity loans and personal loans. This type of fee reflects the fact that addi- tional costs are incurred in the administration of revolving loans, such as the preparation and mailing of monthly billing statements, the proc- essing of transactions and increased monitoring costs.
For these reasons, banking institutions have long had the ability to charge annual fees on open-end loan products. Licensed lenders have also had the ability to charge annual fees on certain open-end products, such as credit cards and home equity loans. However, prior to 1996, they did not have authority to charge annual fees on open-end personal loans. Chapter 223 of 1996 gave licensed lenders the same pricing flexibility as banking institutions with regard to fees on open-end personal loans. Therefore, this bill would extend the provisions of the 1996 law for two years.
Legislative history
New.
Fiscal implications
None.
Effective date
Immediate.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.