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A06869 Summary:

BILL NOA06869
 
SAME ASSAME AS UNI. S06742
 
SPONSORZebrowski
 
COSPNSR
 
MLTSPNSR
 
Amd 104, 205 & 301, Fin Serv L; add 419-b, 419-c & 419-d, amd 415, V & T L; amd 302, Pers Prop L
 
Grants the department of financial services jurisdiction over the financing of motor vehicles; requires motor vehicle dealer finance managers to be licensed by the department of financial services.
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A06869 Actions:

BILL NOA06869
 
05/08/2023referred to banks
01/03/2024referred to banks
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A06869 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
            S. 6742                                                  A. 6869
 
                               2023-2024 Regular Sessions
 
                SENATE - ASSEMBLY
 
                                       May 8, 2023
                                       ___________
 
        IN  SENATE -- Introduced by Sen. THOMAS -- read twice and ordered print-
          ed, and when printed to be committed to the Committee on Banks
 
        IN ASSEMBLY -- Introduced by  M.  of  A.  ZEBROWSKI  --  read  once  and
          referred to the Committee on Banks
 
        AN ACT to amend the financial services law, in relation to the jurisdic-
          tion  of  the  department  of financial services over the financing of
          motor vehicles; to amend the vehicle and traffic law, in  relation  to
          the  licensing  of motor vehicle dealer finance managers and requiring
          certain mandatory disclosures by motor vehicle dealers; and  to  amend
          the personal property law, in relation to the right of cancellation
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subparagraph (B)  of  paragraph  2  of  subsection  (a)  of
     2  section 104 of the financial services law is amended to read as follows:
     3    (B)  "Financial product or service" shall also not include the follow-
     4  ing, when offered or  provided  by  a  provider  of  consumer  goods  or
     5  services:  (i) the extension of credit directly to a consumer exclusive-
     6  ly  for  the purpose of enabling that consumer to purchase such consumer
     7  good or service directly from the seller, (ii) the  collection  of  debt
     8  arising  from  such credit, or (iii) the sale or conveyance of such debt
     9  that is delinquent or otherwise in default.  Provided, however, that the
    10  provisions of this subparagraph shall not apply to  the  sale  of  motor
    11  vehicles. Every sale of a motor vehicle that involves financing, whether
    12  originated  at a motor vehicle dealer or at a lending institution, shall
    13  be deemed to be a "financial product or service" within the jurisdiction
    14  of the department.
    15    § 2. The opening paragraph of section 205 of  the  financial  services
    16  law  is  designated  subsection (a) and a new subsection (b) is added to
    17  read as follows:

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02286-01-3

        S. 6742                             2                            A. 6869
 
     1    (b) The superintendent may, in his  or  her  discretion,  establish  a
     2  motor  vehicle financing bureau, and to promulgate any and all rules and
     3  regulations necessary to regulate motor vehicle  financing  transactions
     4  and motor vehicle dealer financing departments.
     5    § 3. Paragraphs 6 and 7 of subsection (c) of section 301 of the finan-
     6  cial  services  law  are amended and four new paragraphs 8, 9, 10 and 11
     7  are added to read as follows:
     8    (6) providing technical assistance to local governments  and  not-for-
     9  profits  in the development of consumer protection measures with respect
    10  to financial products and services; [and]
    11    (7)  continuing  and  expanding  the  detection,   investigation   and
    12  prevention of insurance fraud[.];
    13    (8)  promulgating  rules  and  regulations  for  motor  vehicle dealer
    14  finance departments and finance managers;
    15    (9) establishing educational materials and/or mandated instruction for
    16  motor vehicle dealer finance managers applying for licensing pursuant to
    17  paragraph d of subdivision three of section four hundred fifteen of  the
    18  vehicle  and  traffic  law.  No  such  mandate  instruction shall exceed
    19  sixteen hours during any biennial licensing period;
    20    (10) imposing a licensing and course  fee  for  motor  vehicle  dealer
    21  finance  manager applicants pursuant to paragraph d of subdivision three
    22  of section four hundred fifteen of the vehicle and traffic law; provided
    23  that such fee shall not exceed two hundred  dollars  for  each  biennial
    24  licensing period; and
    25    (11)  establishing and imposing penalties, and license suspensions and
    26  revocations for violations by motor vehicle dealers  and  motor  vehicle
    27  dealer finance managers.
    28    §  4.  Subdivision  3 of section 415 of the vehicle and traffic law is
    29  amended by adding a new paragraph d to read as follows:
    30    d. (i) Every dealer which sells motor vehicles that are  financed,  or
    31  which  facilitates  in  any  manner the financing of the purchase of any
    32  motor vehicle, shall act as or  employ  an  individual  to  act  as  the
    33  finance  manager  for  such  dealer,  and  every  such  manager shall be
    34  licensed by the department of financial services.
    35    (ii) Every licensed finance manager shall have completed  such  course
    36  of  instruction  as  shall be established by the department of financial
    37  services.
    38    § 5. The vehicle and traffic law is amended by adding  a  new  section
    39  419-b to read as follows:
    40    §  419-b.  Mandatory  disclosures  by  dealers to purchasers regarding
    41  pricing. 1. Every dealer shall clearly and conspicuously post:
    42    a. the total sales price,  which  shall  include  any  administrative,
    43  service  or other fees charged by the dealer, exclusive of all taxes and
    44  fees for securing a registration or certificate of title, of each  motor
    45  vehicle offered for sale at the place of business, by means of a sign on
    46  the  dashboard  of each motor vehicle or by means of a sign at the point
    47  of display of each motor vehicle; and
    48    b. the total sales price of any add-on product  offered  for  sale  by
    49  means  of a sign at the point of display of each motor vehicle for which
    50  such product is available for purchase, or at each location  within  the
    51  dealer's  place  of business where any such product is offered for sale.
    52  Such sign shall inform consumers that the purchase of any add-on product
    53  is optional and that the purchase of an add-on product is  not  required
    54  to obtain financing.

        S. 6742                             3                            A. 6869
 
     1    If multiple add-on products are grouped together on the same sign each
     2  add-on  product  must  be  listed  separately    to  the  right  of  the
     3  description.
     4    2. Nothing in this section shall prevent a dealer from selling a motor
     5  vehicle or an add-on product at a lower sales price than the price post-
     6  ed pursuant to subdivision one of this section.
     7    3.  Any  person  who  violates  subdivision one of this section or any
     8  other applicable rule or regulation shall be subject to a civil  penalty
     9  of not more than the following:
    10    a. five hundred dollars for the first violation;
    11    b. seven hundred fifty dollars for a second violation committed within
    12  one year of the first violation; and
    13    c.  one  thousand  dollars  for  a  third  or any subsequent violation
    14  committed within one year of the first violation.
    15    4. For the purposes of  assessing  a  civil  penalty,  all  violations
    16  committed  by  the  same  dealer  on  the  same  day  shall count as one
    17  violation.
    18    § 6. The vehicle and traffic law is amended by adding  a  new  section
    19  419-c to read as follows:
    20    §  419-c.  Mandatory  disclosures  by  dealers  to consumers regarding
    21  financing. 1. Every dealer shall disclose to each prospective  purchaser
    22  of  a  motor  vehicle  that such purchaser may obtain financing from the
    23  dealer or may obtain a loan from a financial institution.
    24    2. Every dealer shall verify the income and employment information  of
    25  each  prospective  purchaser seeking financing from the dealer. A dealer
    26  shall not represent that  benefits  received  as  supplemental  security
    27  income  or  social security disability income shall be a sole sufficient
    28  source of income for the purpose  of  securing  consumer  motor  vehicle
    29  financing.
    30    3.  Every  dealer  shall  disclose  to  each prospective purchaser all
    31  financing offers received by the dealer, including any mark  up  in  the
    32  cost  of such motor vehicle.  For the purpose of this section, "mark up"
    33  shall mean the wholesale annual percentage rate  (APR)  over  which  the
    34  dealer  makes  a  profit  when  it negotiates a retail APR with a credit
    35  purchaser.  No dealer mark up shall exceed two percent  for  loans  with
    36  terms of sixty months or less or one and one-half percent for loans with
    37  a term over sixty months.
    38    4.  Dealers  shall  disclose  to each prospective purchaser whenever a
    39  loan has an APR that is higher than the average prime offer rate.
    40    5. The superintendent of financial services shall create  a  standard-
    41  ized form for financing disclosures.
    42    6. Failure by a dealer to comply with this section may result in revo-
    43  cation or suspension of the dealer's license.
    44    §  7.  The  vehicle and traffic law is amended by adding a new section
    45  419-d to read as follows:
    46    § 419-d. Mandatory disclosures by dealers to the department of  finan-
    47  cial services. Every dealer shall make annual disclosures to the depart-
    48  ment  of financial services disclosing how many motor vehicle purchasers
    49  obtained financing from the dealer and how many motor vehicle purchasers
    50  obtained a loan from a financial institution. For each loan financed  by
    51  the  dealer,  the  dealer  shall disclose to the department of financial
    52  services the borrower's credit score,  motor  vehicle  monthly  payment,
    53  estimated income level, employment status, make, model, and value of the
    54  motor vehicle purchased, loan amount, and whether there was a co-borrow-
    55  er.

        S. 6742                             4                            A. 6869
 
     1    §  8.  Subdivision  3  of section 302 of the personal property law, as
     2  added by chapter 633 of the laws of 1956, is amended to read as follows:
     3    3. The seller shall deliver to the buyer, or mail to him or her at his
     4  or  her  address shown on the contract, a copy of the contract signed by
     5  the seller.  [Until the seller does so, a] A buyer who has not  received
     6  delivery  of  the  motor  vehicle  shall  have an unconditional right to
     7  cancel the contract and to receive immediate refund of all payments made
     8  and redelivery of all goods traded-in to the seller on account of or  in
     9  contemplation  of  the  contract  within  forty-eight  hours signing the
    10  contract or receiving a copy of  the  contract  signed  by  the  seller,
    11  whichever  is  longer.  Any acknowledgment by the buyer of delivery of a
    12  copy of the contract shall be printed or written in a size equal  to  at
    13  least  ten point bold type and, if contained in the contract, shall also
    14  appear directly above the legend required above the buyer's signature by
    15  paragraph (a) of [sub-division] subdivision two [(a)] of this section.
    16    § 9. This act shall take effect one year after it shall have become  a
    17  law.
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