What's happening
This bill caps the annual credit service charge on motor vehicle retail installment contracts at $16 per $100.
Why it matters
Directly limits how much interest and fees car buyers can be charged. on financed auto purchases, potentially saving consumers significant amounts over the life of a loan—especially for those with lower credit or fewer financing options.
Prevents predatory lending practices. by eliminating the previous system where sellers and buyers could agree to much higher service charges, protecting vulnerable consumers from unexpected or excessive costs.
Creates more predictable and transparent financing terms. for consumers shopping for vehicles, making it easier to compare offers and understand the true cost of financing a car.
May impact availability or structure of subprime auto loans. , as lenders who previously relied on higher service charges to offset risk might adjust their lending criteria, possibly affecting access for higher-risk borrowers.
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Who cares
Headline styles
Cap Car Loan Fees
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to consumer protection
- Referred to consumer protection
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.
Cap Auto Loan Fees
In Assembly Committee · Consumer Affairs And Protection · Sponsor Kenneth Zebrowski
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5947
2019-2020 Regular Sessions
IN SENATE
May 16, 2019
Introduced by Sen. SANDERS -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection
AN ACT to amend the personal property law, in relation to limiting the amount of certain credit service charges in motor vehicle retail installment contracts
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 1 of section 303 of the personal property law, as amended by chapter 641 of the laws of 1984, is amended to read as follows:
1. A retail seller may contract for in a retail [instalment] installment contract and charge, receive and collect the credit service charge authorized by this article at [the rate or rates agreed to by the retail seller and the buyer] a rate not to exceed sixteen dollars per one hundred dollars per annum.
The credit service charge authorized by this subdivision shall be computed on an amount equal to the total of the difference between the cash sale price of the motor vehicle and the amount of the buyer's down payment and the amount of official fees, and such charge may be made on the amount included in the contract for insurance as determined under subdivision six of section three hundred two of this [chapter] article.
§ 2. 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.
LBD11211-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the personal property law, in relation to limiting the amount of certain credit service charges in motor vehi- cle retail installment contracts
Purpose or general idea of bill
This bill would cap the amount of a credit service charge that can be imposed on motor vehicle retail installment contracts to 16% annually.
Summary of provisions
Section one of the bill amends the personal property law, as it relates to limiting the credit service charge on motor vehicle retail install- ment contracts to no more than sixteen dollars per hundred dollars per year.
Section two of the bill relates to the effective date.
Justification
In New York, motor vehicle financing are done through motor vehicle retail installment contracts where a finance company allows the buyer to pay for the vehicle in installments in exchange for a credit service charge. The credit service charge is a form of interest and the retail installment contract operates similarly to a loan but is not subject to our usury limits. Unfortunately , these contracts are able to charge customers interest in amounts well over the usury cap. New York consum- ers have seen interest rates upwards of 24% for the purchase of new or used vehicles. This extremely high amount of credit service charge has led to consumer paying more service charge than principal for the vehi- cle.
This bill reinstates previously imposed credit service charge limits to no more than sixteen percent; aligning with the civil usury cap.
Prior legislative history
New bill.
Fiscal implications for state and local governments
None.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.