|SAME AS||No Same As|
|COSPNSR||Dickens, Arroyo, Sayegh|
|Amd §301, Fin Serv L; amd §302, Pers Prop L; add §§417-d & 417-e, V & T L|
|Authorizes the superintendent of financial services to oversee and regulate car dealer transactions with consumers; requires motor vehicle retail installment contracts to include an itemized listing of all costs related to the purchase of a motor vehicle and disclosure of the prohibition of conditional delivery; requires motor vehicle dealers to provide credit applicants with copies of all credit application documents; prohibits the conditional delivery of a motor vehicle.|
|02/05/2019||referred to consumer affairs and protection|
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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4856 SPONSOR: Blake
TITLE OF BILL: An act to amend the financial services law, in relation to authorizing the superintendent of financial services to oversee and regulate sales of motor vehicles to consumers; to amend the personal property law, in relation to the contents of motor vehicle retail installment contracts; and to amend the vehicle and traffic law, in relation to requiring motor vehicle dealers to provide credit applicants with a copy of all loan application documents, and prohibiting conditional deliveries of motor vehicles   PURPOSE: This bill will make the auto loan financing process more transparent through disclosure and documentation requirements. It will also provide remedies for consumers who are not provided with documentation Finally, it prevents conditional deliveries of vehicles.   SUMMARY OF PROVISIONS: Section 1: Amends Section 301 of the financial services law to add a new subsection (d) which permits the superintendent of the Department of Financial Services to oversee and regulate the financing of new and used motor vehicles. Section 2: Amends Section 302 of the personal property law to add new subdivisions 5-a and 5-b. 5-a will require a disclosure on motor vehicle retail installment contracts to consumers that conditional deliveries are not allowed. 5-b will require that all motor vehicle retail install- ment contracts itemize the following: the price paid for the vehicle, the price of each option, add-on and additional charge relating to the sale of the motor vehicle, all fees imposed by a lender upon the dealer or buyer which are related to the financing of the motor vehicle, and the total price of the motor vehicle including all charges. Section 3: Amends the vehicle and traffic law to add two new sections 417-c and 417-d which provide that dealers must review and confirm with all credit applicants the accuracy of the information contained on any loan application forms, and both the dealer and applicant must attest to the truth of the information to the best of their knowledge. Failure of the dealer to comply with these provisions shall entitle the buyer to void the sale of the vehicle within thirty days and receive a full refund for the vehicle and financing charges, and the fair market private sale value of any vehicle traded in. Prevailing plaintiffs under this section will be entitled to court costs and reasonable attor- ney's fees. This section also explicitly prohibits conditional deliv- eries. All sale terms must be in writing and clearly disclosed to the consumer. Every dealer shall provide a copy of the written disclosures and maintain them for a period of not less than seven years. Section 4: This act shall take effect on the first of January next succeeding the date on which it shall have become a law.   EXISTING LAW: Under current law, conditional deliveries are not explicitly prohibited. Disclosure requirements during the financing and sale of vehicles, as well as remedies for consumers, are not as robust. The Department of Financial Services does not currently have jurisdiction over the financ- ing of motor vehicles.   JUSTIFICATION: Abuses in the auto loan financing industry are harming many of New York's most vulnerable consumers. Most consumers do not have the indus- try-specific knowledge to properly negotiate with auto dealers on even footing, and the auto loan financing process is opaque. Requirements for disclosures and maintenance of important loan documents must be improved. Additionally, consumers are often not aware that with subprime auto loans, the cost of financing can be more than double the actual value of the purchased vehicle, due to high APRs and expensive add-ons like warranties and service contracts. To make matters worse, dealerships sometimes provide fraudulent loan applications to lenders without informing consumers that the application was ever filed. Lenders some- times turn a blind eye to this activity, even when consumers inform lenders of it. False applications result in the approval of loans which consumers cannot afford. Another confusing issue for purchasers buying vehicles are conditional deliveries, sometimes used to scam consumers into taking bad deals on autos. Spot delivery scams are a problem that could be addressed through conditional delivery bans and transparency measures that inform consum- ers of the ban. Conditional delivery scams are also known as "spot delivery" scams or "yo-yo financing" scams. These scams involve putting a buyer into a vehicle and having the buyer take it home; the dealership then calls the buyer later to tell them the favorable terms on which they purchased the vehicle are invalid. The buyer, enjoying their new vehicle and fearing they have no other options, often agrees to the less favorable terms simply for the sake of keeping the vehicle. The less favorable terms are more profitable for the dealer. This legislation would help consumers better understand the auto financ- ing process with more transparent documentation, and would prevent confusing and deceptive tactics like spot delivery scams.   LEGISLATIVE HISTORY: 2015-16 A.7866 Referred to Consumer Affairs / S.5490 Reported and committed to Rules   FISCAL IMPLICATIONS: None.   LOCAL FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
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STATE OF NEW YORK ________________________________________________________________________ 4856 2019-2020 Regular Sessions IN ASSEMBLY February 5, 2019 ___________ Introduced by M. of A. BLAKE -- read once and referred to the Committee on Consumer Affairs and Protection AN ACT to amend the financial services law, in relation to authorizing the superintendent of financial services to oversee and regulate sales of motor vehicles to consumers; to amend the personal property law, in relation to the contents of motor vehicle retail installment contracts; and to amend the vehicle and traffic law, in relation to requiring motor vehicle dealers to provide credit applicants with a copy of all loan application documents, and prohibiting conditional deliveries of motor vehicles The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 301 of the financial services law is amended by 2 adding a new subsection (d) to read as follows: 3 (d) The superintendent shall have the power to oversee and regulate 4 the financing of both new and used motor vehicles purchased in this 5 state, including the implementation of article nine of the personal 6 property law, and motor vehicle dealer transactions with consumers, 7 including those subject to the provisions of article sixteen of the 8 vehicle and traffic law. 9 § 2. Section 302 of the personal property law is amended by adding two 10 new subdivisions 5-a and 5-b to read as follows: 11 5-a. Every retail installment contract shall include the following 12 statement in twelve point type: 13 "Conditional Deliveries Prohibited: In accordance with Section 417-d 14 of the New York State Vehicle and Traffic Law, when this contract is 15 signed by the dealer and the buyer, and the buyer takes the vehicle off 16 the dealer lot, the buyer is the owner of the vehicle and has the right 17 to keep the vehicle except for reasons of non-payment of this contract. 18 The dealer may not demand that the vehicle be returned for any reason, 19 including alleged denial of any financing. Dealers and lenders may only EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05901-01-9A. 4856 2 1 demand the vehicle be returned for reasons of non-payment by the buyer. 2 Dealers cannot make an exception to this provision with another contract 3 or document." 4 5-b. Every retail installment contract shall separately itemize each 5 of the following: 6 (a) the price paid for the motor vehicle; 7 (b) the price of each option, add-on and additional charge relating to 8 the sale of the motor vehicle; 9 (c) all fees imposed by a lender upon the dealer or buyer related to 10 financing the purchase of the motor vehicle; 11 (d) the total price of the motor vehicle including all charges imposed 12 pursuant to paragraphs (a), (b) and (c) of this subdivision. 13 § 3. The vehicle and traffic law is amended by adding two new sections 14 417-d and 417-e to read as follows: 15 § 417-d. Credit applications for purchase of motor vehicles. 1. Every 16 dealer which applies for or grants eligibility for the provision of 17 credit for the purchase of a motor vehicle shall review and confirm with 18 the applicant for such credit all information included in the applica- 19 tion therefor. Such review and confirmation shall include specific 20 consideration of each item of information as to its accuracy to the best 21 of the knowledge of the parties. No such application shall be deemed 22 complete nor shall it be submitted unless the dealer and the credit 23 applicant shall have signed their signatures attesting that all informa- 24 tion in the application is accurate and true to the best of their know- 25 ledge. 26 2. The failure of any dealer to comply with the provisions of this 27 section, shall grant any credit applicant, who takes delivery of a motor 28 vehicle purchased on the basis of credit acquired for him or her by such 29 dealer, the option to void the sale of such motor vehicle within thirty 30 days of the delivery of such vehicle. Upon the voiding of any sale 31 pursuant to this subdivision the dealer shall immediately repay to the 32 purchaser all costs incurred by such purchaser as a consequence of the 33 voided sale, including any financing charges and interest, and the fair 34 market private sale value of any motor vehicle traded-in in the course 35 of such sale. Furthermore, in the event a purchaser commences a cause of 36 action to enforce the provisions of this subdivision, a prevailing 37 purchaser shall be entitled to court costs and reasonable attorney's 38 fees. 39 3. The provisions of this section shall not be deemed to limit any 40 other right or remedy of a plaintiff in law or equity. 41 § 417-e. Conditional deliveries; prohibited. 1. No motor vehicle sold 42 by a dealer shall be delivered to the possession of a purchaser subject 43 to any condition to be complied with after delivery of possession of the 44 motor vehicle. 45 2. All terms and conditions of the sale of a motor vehicle shall be 46 fully and clearly disclosed, in writing, to the purchaser prior to the 47 delivery of possession of such vehicle, and shall be signed by both the 48 dealer and the purchaser. 49 3. Every dealer shall provide a copy of the written disclosures 50 required by subdivision two of this section, and shall also maintain a 51 copy thereof for a period of not less than seven years. 52 § 4. This act shall take effect on the first of January next succeed- 53 ing the date on which it shall have become a law.