What's happening
This bill ensures loan assignees are liable for buyers' claims and allows courts to award reasonable costs and attorney's fees.
Why it matters
Holds loan assignees accountable. By making loan assignees (such as banks or other financial institutions that purchase retail installment contracts) liable for any claims or defenses a buyer could have asserted against the original seller, the bill ensures buyers aren’t left without recourse if their contract changes hands.
Protects consumer rights despite contract transfer. Even if a buyer’s loan is sold or assigned to another company, the buyer keeps the right to raise issues—such as fraud, misrepresentation, or breach of contract—against whoever currently owns the loan, making it harder for bad actors to evade responsibility.
Expands potential financial recovery for consumers. The new provision allows courts to award buyers not just damages up to the amount owed on the contract, but also “reasonable costs and attorney’s fees,” potentially making it more feasible for consumers to pursue valid claims and deterring unfair practices.
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Who cares
Headline styles
Limit Loan Holder Liability
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Enacting clause stricken
- Referred to consumer affairs and protection
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5311
2017-2018 Regular Sessions
IN ASSEMBLY
February 7, 2017
Introduced by M. of A. DINOWITZ -- read once and referred to the Committee on Consumer Affairs and Protection
AN ACT to amend the personal property law, in relation to loan assignees
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 9 of section 302 of the personal property law, as amended by chapter 643 of the laws of 1978, is amended to read as follows:
9. (a) No retail instalment contract shall contain any provision by which the buyer agrees not to assert against an assignee a claim or defense arising out of the sale or require or entail the execution of any note or series of notes, which when separately negotiated will cut off as to third parties any right of action or defense which the buyer may have against the seller. The assignee of a retail installment contract or obligation shall be subject to all claims and defenses of the buyer against the seller arising from the sale notwithstanding any agreement to the contrary, but the assignee's liability under this subdivision shall not exceed the amount owing to the assignee at the time the claim or defense is asserted against the assignee.
(b) Limitations on assignee liability referred to in paragraph (a) of this subdivision shall be exclusive of any reasonable costs and attorney's fees the court may award.
§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03767-01-7
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.