What's happening
This bill authorizes regulations and penalties for misleading advertising by motor vehicle dealers, especially regarding disability or supplemental security income as sole financing sources.
Why it matters
Protects vulnerable consumers. by explicitly banning car dealers from claiming that Supplemental Security Income (SSI) or Social Security Disability Income (SSDI) alone is enough to secure a car loan, thereby reducing misleading sales tactics that target people with disabilities or low incomes.
Empowers state oversight. by granting the Consumer Protection Division, in coordination with other agencies, the authority to set detailed rules about motor vehicle dealer advertising, ensuring advertising standards can be updated and enforced as needed.
Introduces significant penalties. (up to $10,000 per violation) and legal remedies, giving the Department of Law strong tools to deter and address deceptive practices in the auto sales industry.
Fills regulatory gaps. by clarifying that these new rules do not limit the state’s existing ability to enforce other consumer protection laws, ensuring comprehensive protection for car buyers.
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Who cares
Motor vehicle dealers and their employees
Advertising rules would bar them from representing that SSI or Social Security disability income alone is sufficient to secure vehicle financing, with fines of up to $10,000 per violation.
SSI and Social Security disability income recipients
The bill would prohibit dealer marketing that portrays their benefits as a sufficient sole source of income for vehicle financing.
Consumer protection division and Department of Financial Services
The division would be authorized to write dealer advertising and marketing rules in consultation with Financial Services and the Department of Law, and to establish fines.
Department of Law
The department would have authority to enforce the rules, assess civil penalties and seek injunctions without limiting its other enforcement powers over dealers.
Headline styles
Crack Down on Car Ads
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to finance
- Referred to finance
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.
Restrict Car Dealer Financing Claims
In Assembly Committee · Governmental Operations · Sponsor David Weprin
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1957
2019-2020 Regular Sessions
IN SENATE
January 18, 2019
Introduced by Sen. THOMAS -- read twice and ordered printed, and when printed to be committed to the Committee on Finance
AN ACT to amend the executive law, in relation to motor vehicle dealer advertising
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The executive law is amended by adding a new section 94-c to read as follows:
§ 94-c. Motor vehicle dealer advertising. 1. The consumer protection division shall, in consultation with the department of law and the department of financial services, be authorized to promulgate regulations relating to advertising and marketing by motor vehicle dealers.
2. Such regulations shall prohibit the representation, in any form, by a motor vehicle dealer or any officer or employee thereof, that benefits received as supplemental security income or social security disability income shall be a sole sufficient source of income for the purpose of securing consumer motor vehicle financing.
3. The department of law shall have jurisdiction to enforce the regulations promulgated pursuant to subdivision one of this section, and assess civil penalties and seek injunctions relating thereto. Provided, that nothing in this section shall be deemed to limit such department's ability to enforce any other provision of law, rule or regulation relating to motor vehicle dealers.
4. The consumer protection division shall be authorized to establish fines of not more than ten thousand dollars for any violation of the regulations established pursuant to subdivision one of this section.
§ 2. This act shall take effect on the one hundred eightieth day after it shall have become law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05529-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the executive law, in relation to motor vehicle dealer advertising
Purpose
This bill seeks to increase the quality of motor vehicle advertising by enabling the Department of State's Consumer Protection Division, in consultation with the Department of Financial Services, to promulgate regulations relating to advertising and marketing by motor vehicle deal- ers and prohibiting advertisements that represent that Social Security Disability (SSD) and Supplemental Security Income (SSI) are adequate sources of income for auto loans.
Summary of provisions
Section 1 Amends the executive law to add a new section, 94-c.
- Subdivision 1 of section 94-c states that the Consumer Protection division of the Department of State in consultation with the Law Depart- ment and the Department of Financial Services will oversee the regu- lation of motor vehicle advertising and marketing.
- Subdivision 2 of section 94-c states that the regulations created in subdivision 1 of section 94-c must forbid motor vehicle dealers or offi- cers thereof from representing that SSI or SSD income as a sole source of income is sufficient to secure motor vehicle financing.
- Subdivision 3 of section 94-c states that the Department of Law has the jurisdiction to enforce regulations promulgated pursuant to subdivi- sion 1 of section 94-c.
- Subdivision 4 of section 94-c states that the Consumer Protection division of the Department of State shall have the authority to estab- lish fines of up to ten thousand dollars for any violation of regu- lations that are established pursuant to subdivision 1 of section 94-c.
Section 2 provides the effective date, which is one hundred and eighty days after this bill becomes a law.
Justification
Automobiles are a commonly used form of transportation in New York, and for many New Yorkers automobiles are the second largest purchases they make in their lifetimes. While many auto dealerships conduct themselves with integrity, advertisements are sometimes dishonest and misleading. For example, in 2017, the New York State Department of Motor Vehicles announced it had recovered $1.3 million from auto dealers who engaged in fraudulent practices, a rise of $200,000 from the previous year. Unfor- tunately, these advertising and marketing campaigns often target the most vulnerable New Yorkers, such as those who have poor credit, the disabled, the elderly, or those that rely on public benefits as their sole source of income. Consumers are often bombarded with false promises and misleading information, increasing the difficultly for people to determine which claims are substantiated. Increased oversight of dealer- ship advertising and marketing will address these critical issues, as New York State can set rules that ensure proper and complete information are available to all parties doing business.
New York's Department of State Consumer Protection Division, Department of Law, and Department of Financial Services possess unique knowledge of auto dealership advertisement and marketing. By granting these profes- sionals the ability to oversee auto dealer advertising and marketing, New York can protect innocent consumers who seek reliable, affordable vehicles, and can ensure that honest dealers are not disadvantaged by conducting business with integrity.
Legislative history
S.5488 of 2015- Referred to Finance
S.5488 of 2016- Referred to Finance
S.5277 of 2017- Referred to Finance
S.5277 of 2018- Referred to Finance
S.1957 of 2019- Referred to Finance
Fiscal implications for state and local governments
None.
Effective date
This act shall take effect on the one hundred eightieth day after it shall have become law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.