What's happening
This bill prohibits lenders from blocking access to credit line mortgage funds or revoking terms if borrowers are current on payments.
Why it matters
Strengthens borrower protections. by ensuring that as long as borrowers are making timely payments, lenders cannot arbitrarily cut off access to home equity lines of credit or change the loan terms, providing greater financial security and predictability for homeowners.
Limits lender discretion. to freeze or alter credit line mortgages, reducing the risk that borrowers will unexpectedly lose access to funds they may be relying on for home repairs, emergencies, or other personal needs.
Promotes consumer confidence. in using credit line mortgages by guaranteeing continued access under agreed-upon terms, which may encourage more responsible borrowing and financial planning.
Addresses potential abuse. by financial institutions, closing a loophole that allowed lenders to revoke credit even when the borrower was not at fault, thereby aiming to create a fairer lending environment.
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Who cares
Borrowers with credit line mortgages
The bill would prohibit lenders from blocking access to credit line funds or revoking mortgage terms while borrowers are current on repayment.
Savings and loan associations
The bill would expressly bar them from freezing credit line funds or revoking credit line mortgage terms for borrowers who are current on repayment.
Other authorized mortgage lenders
The bill would add the same restriction to the real property law, limiting their ability to cut off credit line access for borrowers who are current on repayment.
Headline styles
Stop Lenders Freezing Credit
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to banks
- Referred to banks
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5347
2017-2018 Regular Sessions
IN ASSEMBLY
February 8, 2017
Introduced by M. of A. WEPRIN -- Multi-Sponsored by -- M. of A. ABINAN- TI, COOK, DenDEKKER, GALEF, JAFFEE, McDONOUGH, PERRY, RIVERA, ZEBROW- SKI -- read once and referred to the Committee on Banks
AN ACT to amend the banking law and the real property law, in relation to credit line mortgages
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 380-g of the banking law, as added by chapter 625 of the laws of 1976, is amended to read as follows:
§ 380-g. Power to engage in line of credit financing of residential real estate. 1. A savings and loan association is authorized to invest an amount, not exceeding the lesser of (a) ten per centum of the sum of its surplus, undivided profits, and reserves or (b) one per centum of its assets, in loans or in interests therein the principal purpose of which is to provide financing with respect to what is or is expected to become primarily residential real estate within this state, where (i) the association relies substantially for repayment on the borrower's general credit standing, with or without other security, or (ii) the association relies on other assurances for repayment, including but not limited to a guaranty or similar obligation of a third party, and, in either case described in clause (i) or (ii), regardless of whether or not the association takes security.
2. A savings and loan association shall not have the authority to block access to credit line funds by a borrower or to otherwise revoke the terms of a credit line mortgage when a borrower is current on repayment of such indebtedness.
§ 2. Section 281 of the real property law is amended by adding a new subdivision 2-a to read as follows:
2-a. An authorized lender shall not have the authority to block access to credit line funds by a borrower or to otherwise revoke the terms of a credit line mortgage when a borrower is current on repayment of such indebtedness.
§ 3. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09553-01-7
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.