What's happening
This bill requires vehicle lienholders to notify owners in writing when assigning their security interest and imposes penalties for violations.
Why it matters
Empowers vehicle owners by ensuring they are promptly informed in writing when their vehicle loan or lien is sold or transferred. , helping them track who has legal rights over their vehicle and reducing confusion about whom to contact for payoff or disputes.
Establishes a clear legal obligation for lienholders to notify owners and provide a release of their security interest within ten days of assignment. , making the transfer process more transparent and preventing potential administrative errors that could delay title transfers or loan payoff.
Introduces a financial penalty (up to $1,000) for lienholders who fail to comply with the notice and release requirements. , giving the law real consequences and incentivizing financial institutions and lenders to follow proper procedures that protect consumer rights.
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Who cares
Headline styles
Notify Owners on Lien Transfer
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to transportation
- Referred to transportation
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.
Notify Owners of Lien Transfers
In Assembly Committee · Transportation · Sponsor Michael DenDekker
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1486
2017-2018 Regular Sessions
IN SENATE
January 9, 2017
Introduced by Sen. AVELLA -- read twice and ordered printed, and when printed to be committed to the Committee on Transportation
AN ACT to amend the vehicle and traffic law, in relation to establishing the "vehicle lienholder accountability act"; to require lienholders to provide notice to the owner of the vehicle when such lienholder assigns his or her security interest
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. This act shall be known and may be cited as the "vehicle lienholder accountability act".
§ 2. Section 2120 of the vehicle and traffic law, as added by chapter 1134 of the laws of 1971, is amended to read as follows:
§ 2120. Assignment by lienholder. (a) A lienholder may assign, absolutely or otherwise, his or her security interest in the vehicle to a person other than the owner without affecting the interest of the owner or the validity of the security interest, [but any] provided that such lienholder notifies the owner of the vehicle of such assignment, in writing, and executes a release of his or her security interest within ten days of such assignment. Any person without notice of the assignment is protected in dealing with the lienholder as the holder of the security interest and the lienholder remains liable for any obligations as lienholder until the assignee is named as lienholder on the certificate.
(b) The assignee may, but need not to perfect the assignment, have the certificate of title endorsed or issued with the assignee named as lienholder, upon delivering to the commissioner an assignment by the lienholder named in the certificate in the form the commissioner prescribes. Upon the request of the assignee the commissioner shall request the owner to deliver to the commissioner the certificate of title.
(c) A lienholder who violates the provisions of this section shall pay a civil penalty not to exceed one thousand dollars.
§ 3. This act shall take effect on the thirtieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01194-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the vehicle and traffic law, in relation to establishing the "vehicle lienholder accountability act"; to require lienholders to provide notice to the owner of the vehicle when such lienholder assigns his or her security interest
Purpose or general idea of bill
To require a vehicle lienholder to provide the vehicle's owner with a timely lien release, in writing, when such lien is assigned so that the vehicle's owner can obtain a clear title when the lien is satisfied.
Summary of provisions
Subdivision (a) of section 2120 of the vehicle and traffic law is amended to require vehicle lienholders to provide the vehicle's owner with a release of such lien in writing within ten days of the lien being assigned, and subdivision (c) is added to section 2120 to impose a civil penalty not to exceed one thousand dollars for failure to comply.
Justification
Vehicle lienholders often assign their security interest without generating a lien release to the owner, and the new lienholder often fails to properly register the lien with Department of Motor Vehicles in order to avoid the fees due. As a result, many vehicle owners do not know who has a security interest in their vehicle, and are unable to obtain a clean certificate of title when they have paid off their vehicle loan. The original lienholder should be required to release his or her security interest in the vehicle once the lien has been assigned.
Prior legislative history
2015-2016: S6538-A/A4218 Referred to Transportation (DenDekker); 2013-14: A3649 Referred to Transportation; 2011-12: A2094 Passed Assembly S3302 Referred to Transportation.
Fiscal implications for state and local governments
None.
Effective date
The thirtieth day after it shall become law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.