What's happening
This bill gives the Department of Financial Services authority over motor vehicle financing, requires licensing and training for dealer finance managers.
Why it matters
Expands regulatory oversight. by treating motor vehicle financing as a "financial product or service," meaning car loans and dealer-arranged financing will now fall under the Department of Financial Services’ (DFS) consumer protection rules—potentially leading to stricter standards and more consistent enforcement.
Creates a framework for specialized regulation. by allowing the DFS to establish a dedicated Motor Vehicle Financing Bureau, which could bring more focused expertise and oversight to an area often criticized for lack of transparency and predatory practices.
Mandates professional standards for dealer finance managers. , requiring them to be licensed, pay fees, and complete up to 16 hours of training every two years—aiming to ensure that individuals arranging car loans at dealerships are better educated about compliance and consumer protection.
Empowers DFS to enforce penalties. including fines, license suspension, or revocation for violations by dealers or finance managers, raising the stakes for non-compliance and potentially deterring abusive or deceptive lending practices in car sales.
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Who cares
Department of Financial Services
The bill would give DFS jurisdiction over all financed motor vehicle sales and authority to create a motor vehicle financing bureau and regulate dealer finance operations.
Motor vehicle dealers
Dealers that sell financed vehicles or facilitate financing would have to act as or employ a DFS-licensed finance manager and could face penalties and license suspensions or revocations for violations.
Dealer finance managers
Finance managers would need DFS licenses and required instruction, with instruction capped at 16 hours and licensing and course fees capped at $200 per biennial licensing period.
Motor vehicle buyers and lenders
Every financed vehicle sale would fall under DFS jurisdiction, whether financing originates at a dealership or a lending institution.
Headline styles
Regulate Car Financing
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- 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.
Regulate Car Loan Financing
In Senate Committee · Banks · Sponsor Jesse Hamilton
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4618
2017-2018 Regular Sessions
IN ASSEMBLY
February 3, 2017
Introduced by M. of A. BLAKE -- read once and referred to the Committee on Banks
AN ACT to amend the financial services law, in relation to the jurisdiction of the department of financial services over the financing of motor vehicles; and to amend the vehicle and traffic law, in relation to the licensing of motor vehicle dealer finance managers
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subparagraph (B) of paragraph 2 of subsection (a) of section 104 of the financial services law is amended to read as follows:
(B) "Financial product or service" shall also not include the following, when offered or provided by a provider of consumer goods or services: (i) the extension of credit directly to a consumer exclusively for the purpose of enabling that consumer to purchase such consumer good or service directly from the seller, (ii) the collection of debt arising from such credit, or (iii) the sale or conveyance of such debt that is delinquent or otherwise in default. Provided, however, that the provisions of this subparagraph shall not apply to the sale of motor vehicles. Every sale of a motor vehicle that involves financing, whether originated at a motor vehicle dealer or at a lending institution, shall be deemed to be a "financial product or service" within the jurisdiction of the department.
§ 2. The opening paragraph of section 205 of the financial services law is designated subsection (a) and a new subsection (b) is added to read as follows:
(b) The superintendent may, in his or her discretion, establish a motor vehicle financing bureau, and to promulgate any and all rules and regulations necessary to regulate motor vehicle financing transactions and motor vehicle dealer financing departments.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00440-01-7
A. 4618 2
§ 3. Paragraphs 6 and 7 of subsection (c) of section 301 of the financial services law are amended and four new paragraphs 8, 9, 10 and 11 are added to read as follows:
(6) providing technical assistance to local governments and not-forprofits in the development of consumer protection measures with respect to financial products and services; [and]
(7) continuing and expanding the detection, investigation and prevention of insurance fraud[.];
(8) promulgating rules and regulations for motor vehicle dealer finance departments and finance managers;
(9) establishing educational materials and/or mandated instruction for motor vehicle dealer finance managers applying for licensing pursuant to paragraph d of subdivision three of section four hundred fifteen of the vehicle and traffic law. No such mandate instruction shall exceed sixteen hours during any biennial licensing period;
(10) imposing a licensing and course fee for motor vehicle dealer finance manager applicants pursuant to paragraph d of subdivision three of section four hundred fifteen of the vehicle and traffic law; provided that such fee shall not exceed two hundred dollars for each biennial licensing period; and
(11) establishing and imposing penalties, and license suspensions and revocations for violations by motor vehicle dealers and motor vehicle dealer finance managers.
§ 4. Subdivision 3 of section 415 of the vehicle and traffic law is amended by adding a new paragraph d to read as follows:
d. (i) Every dealer which sells motor vehicles that are financed, or which facilitates in any manner the financing of the purchase of any motor vehicle, shall act as or employ an individual to act as the finance manager for such dealer, and every such manager shall be licensed by the department of financial services.
(ii) Every licensed finance manager shall have completed such course of instruction as shall be established by the department of financial services.
§ 5. This act shall take effect on the two hundred seventieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.