NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3499B
SPONSOR: Carroll TITLE OF BILL:
An act to amend the general business law and the vehicle and traffic
law, in relation to automobile broker businesses
PURPOSE OR GENERAL IDEA OF BILL::
To provide additional disclosures to consumers seeking to purchase or
lease automobiles with the assistance of an automobile broker.
SUMMARY OF SPECIFIC PROVISIONS::
Section 1 amends subdivision 1 of section 736 of the General Business
Law to clarify which types of automobile related businesses shall not be
considered an automobile broker business.
Section 2 amends section 736 of the General Business Law to add a new
subdivision 4 defining "place of business."
Section 3 amends the General Business Law to add a new section 736-b to
clarify that automobile broker businesses must maintain a permanent
location for their place of business; requires that the broker timely
update a certificate of registration if the place of business changes;
and that the certificate of registration will be displayed so a consumer
may see it at the place of business.
Section 4 amends section 738 of the General Business Law to clarify that
an automobile broker must enter into a written contract with a consumer
before an automobile may be purchased or leased through the broker;
details what must be included in such contract, including how the broker
business shall be paid for their services, whether by either the dealer
or buyer/lessee, and that the consumer may have the option to take
delivery of the acquired vehicle at the selling or leasing dealership;
and ensures that the Notice of Cancellation is printed in twelve-point
font.
Section 5 amends section 741-a regarding broker-advertising to clarify
that the broker must state in all marketing materials that the broker is
not affiliated with any manufacturer, dealer, or dealership group.
Section 6 amends the General Business Law to add a new a new section
741-c to enhance consumer data protections.
Section 7 amends section 415 of the Vehicle and Traffic Law to add in
compliance and recordkeeping requirements for brokers and dealers; and
to stipulate that compensation for a broker's services in a
broker/consumer contract may be provided by either the dealer or the
consumer, but not by both.
Section 8 amends the General Business Law to add a new section 745
establishing state preemption.
Section 9 amends section 741-b of the General Business Law to clarify
what must be included in the disclosures that brokers are obligated to
make to consumers at the outset of the relationship, before the broker
takes an order to search for a vehicle. These disclosures shall include
either an express detailing of the fees that the broker will be taking,
and either from the dealer or consumer; or a statement that such fees
are unknown at the time of the disclosure but will be disclosed as part
of the sale or lease agreement.
Section 10 amends the General Business Law to add a new section 741-d
prohibiting certain acts by brokers.
Section 11 amends section 743 of the General Business Law to clarify
that the relevant provisions of the General Business law may be enforced
concurrently by the attorney general and a municipal consumer affairs
office.
Section 12 establishes a severability clause.
Section 13 is the effective date of 180 days but authorizes the Depart-
ment of Motor Vehicles to immediately issue or amend any relevant regu-
lations or forms.
JUSTIFICATION::
In exchange for the right to sell, lease, and service particular new
motor vehicle brands, and according to franchise agreements, dealers
must maintain high levels of customer satisfaction. There has been a
proliferation of broker businesses in recent years, and it is important
to ensure that there is full consumer confidence in the brokers'
services as well. Increased disclosure and restrictions on certain
advertising practices will result in better protections for New York
consumers. This bill will strengthen the broker registration process,
increase disclosures, and enforcement provisions.
PRIOR LEGISLATIVE HISTORY::
A3499A of 2023 Amended on Third Reading
A1932C of 2021-22, passed Assembly
FISCAL IMPLICATIONS::
None to the state.
EFFECTIVE DATE::
180 days after enactment.
