What's happening
This bill prohibits lenders from revoking or blocking access to credit line mortgage funds if the borrower is current on payments.
Why it matters
Protects borrowers’ ability to access approved credit. If you have a credit line mortgage and are up to date on your payments, your lender can’t suddenly freeze or reduce your access to those funds, which can be crucial for managing finances or emergencies.
Limits lender discretion. Previously, lenders could often freeze or revoke access to credit lines for reasons unrelated to payment history (like changes in property value or credit score); this bill stops that practice when you’re current, offering greater predictability.
Enhances financial stability for homeowners. By ensuring uninterrupted access to credit lines, the law helps households rely on home equity for renovations, medical bills, tuition, or other large expenses, reducing the risk of financial disruption.
Shifts power balance toward consumers. The amendment gives homeowners more security and bargaining power in their relationship with lenders, reducing the risk of sudden, unilateral changes to their mortgage terms.
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Who cares
Borrowers with credit line mortgages
The bill would protect their access to credit line funds and prevent revocation of mortgage terms while they are current on repayment.
Savings and loan associations
The bill would expressly bar them from blocking credit line funds or revoking credit line mortgage terms for borrowers who are current on repayment.
Other authorized mortgage lenders
The bill would impose the same restrictions on their ability to freeze credit line funds or revoke credit line mortgage terms for borrowers who are current on repayment.
Headline styles
Stop Lenders Freezing Credit Lines
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
4001
2019-2020 Regular Sessions
IN ASSEMBLY
January 31, 2019
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.
LBD08228-01-9
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.