NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1085A
SPONSOR: Dinowitz (MS) TITLE OF BILL:
An act to amend the general obligations law, in relation to requirements
for the use of plain language in consumer transactions
PURPOSE:
Increases the applicability of the plain language law to consumer
contracts involving amounts up to $100,000
SUMMARY OF PROVISIONS:
Section One amends the closing paragraph of subdivision a of section
5-702 of the general business law.
Section Two is the effective date.
JUSTIFICATION:
New York State first enacted the plain language law in 1977. The statute
requires "plain language" in certain written agreements to which a
consumer is a party, and where the subject money, property or services
are primarily used for personal, family, or household purposes. A dollar
threshold was placed on the definition of "consumer contracts", making
the statute only applicable to transactions valued at less than $50,000.
In 1977, the $50,000 threshold covered essentially all consumer
contracts. Today the $50,000 threshold may not even cover the cost of an
automobile. This bill proposes to increase the threshold to $100,000.
Since the enactment of this statute, several states have followed New
York's lead and have adopted its own "plain language" statutes (Connec-
ticut in 1980, Pennsylvania in 1993, Florida in 2003, and Minnesota in
1968). The state of California enacted their plain language law in 1988.
PRIOR LEGISLATIVE HISTORY:
2015-16 - A.1152 - Passed Assembly / S.3135 - Referred to Judiciary
2013-14: A.7777- Passed Assembly / S.5206- Referred to Judiciary
FISCAL IMPLICATIONS:
None
EFFECTIVE DATE:
One hundred eighty days after becoming law
STATE OF NEW YORK
________________________________________________________________________
1085--A
Cal. No. 75
2017-2018 Regular Sessions
IN ASSEMBLY
January 10, 2017
___________
Introduced by M. of A. DINOWITZ, WEPRIN, SKOUFIS, GOTTFRIED, ARROYO,
JOYNER -- Multi-Sponsored by -- M. of A. HEVESI, HIKIND -- read once
and referred to the Committee on Judiciary -- ordered to a third read-
ing -- passed by Assembly and delivered to the Senate, recalled from
the Senate, vote reconsidered, bill amended, ordered reprinted,
retaining its place on the special order of third reading
AN ACT to amend the general obligations law, in relation to requirements
for the use of plain language in consumer transactions
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The closing paragraph of subdivision a of section 5-702 of
2 the general obligations law, as amended by chapter 1 of the laws of
3 1994, is amended to read as follows:
4 Any creditor, seller or lessor who fails to comply with this subdivi-
5 sion shall be liable to a consumer who is a party to a written agreement
6 governed by this subdivision in an amount equal to any actual damages
7 sustained plus a penalty of fifty dollars. The total class action penal-
8 ty against any such creditor, seller or lessor shall not exceed ten
9 thousand dollars in any class action or series of class actions arising
10 out of the use by a creditor, seller or lessor of an agreement which
11 fails to comply with this subdivision. No action under this subdivision
12 may be brought after both parties to the agreement have fully performed
13 their obligation under such agreement, nor shall any creditor, seller or
14 lessor who attempts in good faith to comply with this subdivision be
15 liable for such penalties. This subdivision shall not apply to a good
16 faith attempt to describe the constant yield or other method of deter-
17 mining the lease charge and depreciation portions of each base rental
18 payment under a lease of personal property. It also shall not apply to
19 agreements involving amounts in excess of [fifty] one hundred thousand
20 dollars nor prohibit the use of words or phrases or forms of agreement
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03570-03-8
A. 1085--A 2
1 required by state or federal law, rule or regulation or by a govern-
2 mental instrumentality.
3 § 2. This act shall take effect on the one hundred eightieth day after
4 it shall have become a law and shall apply to any contract entered into
5 after such effective date.
