What's happening
This bill expands definitions and licensing requirements for retail installment contracts and money transmitters to include certain out-of-state and electronically solicited transactions.
Why it matters
Expanding coverage to electronically solicited transactions means more businesses—including online and out-of-state companies—must comply with New York's licensing and consumer protection laws. This could increase oversight and potentially reduce predatory practices in retail installment contracts and money transmission targeting New Yorkers.
Consumers in New York gain stronger protections, even if they sign agreements out-of-state or through electronic means. If a salesperson or company solicits business from someone in New York, these transactions are now subject to New York law, closing loopholes that previously allowed some companies to avoid regulation.
The definition changes significantly increase the reach of New York’s regulatory authority over financial products and services. Companies that previously did not need a license because transactions were technically “out of state” or initiated online will now need to adhere to the same standards as in-state businesses, potentially affecting how and where they do business.
For businesses, this may mean new compliance costs and risks, as they must ensure they are properly licensed and following New York’s rules if they solicit New York residents. This could deter some out-of-state or purely online companies from targeting New Yorkers, or require them to update their practices to avoid legal penalties.
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Who cares
Headline styles
Expand Consumer Contract Protections
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Referred to banks
- Returned to senate
- Died in assembly
- Referred to banks
- Delivered to assembly
- Passed senateVote 61–0
- Advanced to third reading
- 2nd report cal.
- 1st report cal.295
- Referred to banks
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3759
2017-2018 Regular Sessions
IN SENATE
January 26, 2017
Introduced by Sens. HAMILTON, SAVINO -- read twice and ordered printed, and when printed to be committed to the Committee on Banks
AN ACT to amend the banking law, in relation to retail instalment contracts and transmitters of money
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivisions 6-a and 6-b of section 491 of the banking law, subdivision 6-a as amended by chapter 289 of the laws of 1962 and subdivision 6-b as added by chapter 358 of the laws of 1958, are amended to read as follows:
6-a. "Retail instalment obligation" or "obligation" means an agreement, entered into in this state, pursuant to which the buyer promises to pay, in instalments, the time sale price or prices of goods and/or services, or any part thereof. The term does not include [(a)] a retail instalment contract[, (b)] or a retail instalment credit agreement [or (c) an obligation which is intended to be and is ultimately insured or guaranteed under title three of the act of Congress entitled "Servicemen's Readjustment Act of 1944"]. The term includes such an agreement wherever entered into if executed by the buyer in this state and if solicited in person by a salesperson or other person acting on his or her own behalf or that of the seller.
6-b. "Retail instalment credit agreement" or "credit agreement" means an agreement entered into in this state, pursuant to which the buyer promises to pay, in instalments, his or her outstanding indebtedness from time to time to a retail seller, not evidenced by a retail instalment contract or obligation, for one or more items of goods or services, whenever purchased or obtained, which provides for a service charge and under which instalment payments apply to his or her outstanding indebtedness from time to time. The term includes such an agreement wherever entered into if executed by the buyer in this state and if solicited in
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08421-01-7
S. 3759 2
person by a salesperson or other person acting on his or her own behalf or that of the seller.
§ 2. Subdivision 1 of section 641 of the banking law, as amended by chapter 677 of the laws of 2004, is amended to read as follows:
1. No person shall engage in this state in the business of selling or issuing checks, or engage in the business of receiving money for transmission or transmitting the same, without a license therefor obtained from the superintendent as provided in this article, nor shall any person engage in such business as an agent, except as an agent of a licensee or as agent of a payee; provided, however, that nothing in this article shall apply to a bank, trust company, private banker, foreign banking corporation licensed pursuant to article two of this chapter or foreign banking company authorized to operate pursuant to the International Banking Act of 1978 (12 USC 3101 et seq.), as amended, savings bank, savings and loan association, an investment company, a national banking association, federal reserve bank, corporation organized under the provisions of section twenty-five-a of an act of congress entitled the "Federal Reserve Act", federal savings bank, federal savings and loan association or state or federal credit union or out-of-state state bank. A person engages in this state in the business of selling or issuing checks or receiving money for transmission or transmitting the same if such person induces another person who is a resident of, or located in, this state to enter into a transaction by solicitation in or into this state by any means, including but not limited to, mail, electronic mail, telephone, radio, television, the internet or any other electronic means.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the banking law, in relation to retail instalment contracts and transmitters of money
Purpose
To ensure that all sales finance companies and money transmitters which do business with residents of New York State are subject to regulation and oversight by the State Banking Department.
Summary of provisions
Section one of the bill amends the definitions of "retail instalment obligation" and "retail instalment credit agreement" in Section 491 of the Banking Law to specify that such terms include agreements wherever entered into if executed by the buyer in this state and if solicited in person by a salesperson or other person acting on his or her own behalf or that of the seller.
Section two of the bill amends Section 641 of the Banking Law, which relates to the regulation and licensing of money transmitters. These amendments specify that a person is considered to engage in the money transmitter business in this state if such person induces another person to enter into a transaction by solicitation in or into this state by any means (including mail, e-mail, telephone, radio, television or internet).
Justification
This bill seeks to protect residents of New York State by clarifying and ensuring that sales finance companies and money transmitters which enter into transactions with persons in this state are subject to the legal protections of State law and the regulatory oversight provided by the Banking Department. This regulatory system is designed to protect consumers and ensure they are dealing with companies that are legitimate and financially viable.
Given the ease by which companies can solicit business in New York over the internet or by mail, e-mail, phone, radio or television, it is especially important to ensure that New Yorkers are afforded the same protections with out-of-state companies that they receive with regulated in-state companies. This also ensures that businesses are operating on a level playing field.
Fiscal implications
None
Effective date
Immediately
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.