S T A T E   O F   N E W   Y O R K
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                                  11263

                          I N  A S S E M B L Y

                              May 25, 2010
                               ___________

Introduced  by M. of A. MORELLE -- read once and referred to the Commit-
  tee on Judiciary

AN ACT to amend the personal property law, in relation to motor  vehicle
  leasing and installment sales

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 6 of section 301 of the personal property  law,
as  amended  by  chapter  1  of  the laws of 1994, is amended to read as
follows:
  6. "Cash sale price" means the cash sale  price  stated  in  a  retail
instalment  contract  for  which the seller would sell to the buyer, and
the buyer would buy from the seller, the  motor  vehicle  which  is  the
subject matter of the retail instalment contract if the sale were a sale
for  cash  instead  of a retail instalment sale. The cash sale price may
include any taxes, registration, license and other fees and charges  for
insurance, FOR A GUARANTEED ASSET PROTECTION WAIVER, for accessories and
their installation and for delivering, servicing, repairing or improving
the motor vehicle and for other services incidental to the agreement. It
also  may  include  the  unpaid  balance of any amount financed under an
outstanding motor vehicle loan agreement or motor vehicle retail instal-
ment contract or the unpaid portion of the early termination  obligation
under an outstanding motor vehicle retail lease agreement.
  S  2. Section 302A of the personal property law, as amended by chapter
111 of the laws of 1995, is amended to read as follows:
  S [302A] 302-A.  Total loss notice and waiver of the gap amount. 1. If
the retail instalment contract provides that the buyer shall be  respon-
sible  upon a total loss of the vehicle occasioned by its theft, confis-
cation or physical damage for the gap amount  as  defined  in  paragraph
fifty-two  of  subsection (a) of section one hundred seven of the insur-
ance law, the holder, prior to the execution of the contract, shall by a
notice on a separate document conspicuously disclose that fact  and  the
obligations  for  which  the buyer would remain liable in the event of a
theft, confiscation or total loss of  the  vehicle.  If  the  holder  is
required  under  subdivision  two  of this section to offer to waive its

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

                                                           LBD17155-01-0

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contractual right to hold the buyer liable for the  gap  amount  in  the
event of a total loss of the vehicle occasioned by its theft or physical
damage,  the  notice  shall  also:  (a) state that for a separate charge
disclosed  in  the notice the holder will waive its contractual right to
hold the buyer liable for the gap amount in the event of a total loss of
the vehicle occasioned by its theft or physical damage;  (b)  contain  a
provision  informing  the buyer that he or she may, as an alternative to
purchasing a waiver, be able to  purchase  insurance  covering  the  gap
amount  from  an insurance company which has been licensed by the super-
intendent of insurance to write motor vehicle debtor  gap  insurance  in
this state; and (c) contain a provision permitting the buyer to indicate
whether  he  or  she  wants the holder to waive its contractual right to
hold the buyer liable for the gap amount in the event of a total loss of
the vehicle occasioned by its theft or physical damage. The notice shall
be signed by the buyer. The holder shall provide a copy  of  the  signed
notice  to the buyer and shall maintain a copy in the holder's files for
at least the term of the contract. Failure to provide the notice and  to
obtain  the  buyer's  signature  as  required  by this subdivision shall
invalidate any provision of the agreement which otherwise would obligate
a buyer to pay to the holder, after a total loss of  the  motor  vehicle
occasioned  by  its  theft,  confiscation  or  physical  damage, the gap
amount. No retail installment contract shall  be  conditioned  upon  the
buyer's  obtaining of motor vehicle debtor gap insurance as set forth in
subparagraph (B) of paragraph twenty-six of subsection  (a)  of  section
one thousand one hundred thirteen of the insurance law.
  2.  If the retail instalment contract provides that the buyer shall be
responsible upon a total loss of the vehicle occasioned by its theft  or
physical  damage  for the gap amount, the holder, prior to the execution
of the agreement, shall offer to waive its contractual right to hold the
buyer liable for the gap amount in the event of  a  total  loss  of  the
vehicle  occasioned by its theft or physical damage, only if motor vehi-
cle creditor gap insurance coverage is available to the holder and  such
coverage  is  obtained from a property/casualty insurance company, which
has been licensed by the superintendent of insurance of  this  state  to
write motor vehicle creditor gap insurance in this state. This offer may
be  made  contingent  upon the payment by the buyer of a separate charge
that shall not exceed the cost of motor vehicle creditor  gap  insurance
covering  the retail instalment contract UNLESS SUCH WAIVER IS A GUARAN-
TEED ASSET PROTECTION WAIVER AS ESTABLISHED  IN  SECTION  THREE  HUNDRED
TWO-B  OF  THIS  ARTICLE.    Nothing  contained in this section shall be
construed to authorize a waiver, in connection with a  transaction  with
respect  to  which  motor  vehicle  creditor  gap insurance has not been
obtained, of a contractual right to hold the buyer liable  for  the  gap
amount  in  the  event  of a total loss of the vehicle occasioned by its
theft or physical damage.
  3. A holder shall not be  obligated  under  subdivision  two  of  this
section to offer to waive its contractual right to hold the buyer liable
for  the  gap  amount if, during the current calendar year or during the
odd-numbered calendar year immediately preceding the  calendar  year  in
which the agreement is entered into, the holder has received motor vehi-
cle  creditor  gap  insurance  declination  notices or other evidence of
unavailability from every insurance company whose name  appears  on  the
insurance  department  compilation  of  insurance companies which during
that calendar year were authorized to write motor vehicle  creditor  gap
insurance  in  this  state.  Evidence  of  these  declinations  shall be

A. 11263                            3

retained by such a holder of such a holder for a  period  of  six  years
after the expiration of the calendar year in which they were issued.
  4. In order to enable holders or their anticipated assignees to comply
with  the  requirements  imposed by subdivision two of this section, the
superintendent of insurance shall compile and make available  a  period-
ically updated list of those insurance companies which are authorized to
write motor vehicle creditor gap insurance coverage in this state.
  5.  Nothing in this section shall be construed to apply to the holder,
under a retail instalment contract under which the buyer is  not  liable
upon  a  total loss of the vehicle occasioned by its theft, confiscation
or physical damage for the gap amount.
  S 3. The personal property law is amended  by  adding  a  new  section
302-B to read as follows:
  S  302-B.    GUARANTEED ASSET PROTECTION WAIVERS. 1. "GUARANTEED ASSET
PROTECTION WAIVER" OR "GAP WAIVER" MEANS A CONTRACTUAL AGREEMENT WHEREIN
A CREDITOR AGREES FOR A SEPARATE CHARGE TO CANCEL OR WAIVE ALL  OR  PART
OF  AMOUNTS  DUE TO BORROWER'S FINANCE AGREEMENT IN THE EVENT OF A TOTAL
PHYSICAL DAMAGE LOSS OR UNRECOVERED THEFT OF THE  MOTOR  VEHICLE,  WHICH
AGREEMENT  MUST  BE  PART  OF,  OR A   SEPARATE ADDENDUM TO, THE FINANCE
AGREEMENT.  FOR PURPOSES OF THIS SECTION, THE TERM MOTOR  VEHICLE  SHALL
INCLUDE  SELF  PROPELLED  OR  TOWED  VEHICLES  DESIGNED  FOR PERSONAL OR
COMMERCIAL USE, INCLUDING, BUT NOT LIMITED TO, MOTOR VEHICLES AS DEFINED
IN SECTION THREE HUNDRED  ONE  OF  THIS  ARTICLE,  TRUCKS,  MOTORCYCLES,
RECREATIONAL  VEHICLES,  ALL  TERRAIN  VEHICLES,  SNOWMOBILES,  CAMPERS,
BOATS, PERSONAL WATERCRAFT, AND MOTORCYCLE, BOAT, CAMPER,  AND  PERSONAL
WATERCRAFT TRAILERS.
  2. GAP WAIVERS SHALL BE OFFERED ACCORDING TO THE FOLLOWING:
  (A)  NEITHER THE EXTENSION OF CREDIT, THE TERM OF CREDIT, NOR THE TERM
OF THE RELATED MOTOR VEHICLE SALE MAY BE CONDITIONED UPON  THE  PURCHASE
OF A GAP WAIVER.
  (B)  THE  GAP  WAIVER REMAINS A PART OF THE FINANCE AGREEMENT UPON THE
ASSIGNMENT, SALE OR TRANSFER OF SUCH FINANCE AGREEMENT BY THE CREDITOR.
  (C) NOTWITHSTANDING ANY OTHER  PROVISION  OF  LAW,  ANY  COST  TO  THE
BORROWER  FOR  A GAP WAIVER ENTERED INTO IN COMPLIANCE WITH THE TRUTH IN
LENDING ACT (15 U.S.C. 1601 ET. SEQ.) AND ITS IMPLEMENTING  REGULATIONS,
AS THEY MAY BE AMENDED FROM  TIME TO TIME, MUST BE SEPARATELY STATED AND
IS NOT TO BE CONSIDERED A FINANCE CHARGE OR INTEREST.
  (D)  A  BUYER  MAY  CANCEL THE GAP WAIVER WITHIN A FREE LOOK PERIOD AS
SPECIFIED IN THE WAIVER, AND WILL BE ENTITLED TO A FULL  REFUND  OF  THE
PURCHASE  PRICE,  SO  LONG  AS NO BENEFITS HAVE BEEN PROVIDED; OR IN THE
EVENT BENEFITS HAVE BEEN PROVIDED, THE BORROWER MAY RECEIVE  A  FULL  OR
PARTIAL  REFUND PURSUANT TO THE TERMS OF THE WAIVER. A GAP WAIVER MAY BE
CANCELLABLE OR NON-CANCELLABLE AFTER THE FREE  LOOK  PERIOD.  IF  A  GAP
WAIVER IS CANCELLED AFTER THE FREE LOOK PERIOD AND NO BENEFITS HAVE BEEN
PAID,  A  BORROWER  MAY BE ENTITLED TO A REFUND PURSUANT TO THE TERMS OF
THE WAIVER. IN THE EVENT THE GAP  WAIVER  IS  CANCELLED  OR  UPON  EARLY
TERMINATION  OF THE FINANCE AGREEMENT, THE GAP WAIVER SHALL DISCLOSE THE
METHODOLOGY FOR CALCULATING ANY REFUND OF THE UNEARNED PURCHASE PRICE OF
THE GAP WAIVER DUE. IN ORDER TO  RECEIVE  A  REFUND,  THE  BORROWER,  IN
ACCORDANCE  WITH  ANY APPLICABLE TERMS OF THE GAP WAIVER, MUST PROVIDE A
WRITTEN REQUEST TO THE CREDITOR, ADMINISTRATOR OR  OTHER  PARTY,  WITHIN
NINETY  DAYS  OF  THE EVENT TERMINATING THE GAP WAIVER OR FINANCE AGREE-
MENT.
  (E) THE GAP WAIVER MUST DISCLOSE IN CLEAR AND UNDERSTANDABLE  LANGUAGE
THE  TERMS OF THE GAP WAIVER INCLUDING, BUT NOT LIMITED TO, THE REQUIRE-
MENTS FOR PROTECTION, CONDITIONS, OR EXCLUSIONS ASSOCIATED WITH THE  GAP

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WAIVER.  THE  GAP  WAIVER MUST ALSO DISCLOSE THE PROCEDURES THE BORROWER
MUST FOLLOW, IF ANY, TO OBTAIN GAP WAIVER BENEFITS.
  (F)  NOTWITHSTANDING  PARAGRAPH  THREE  OF SUBSECTION B OF SECTION ONE
THOUSAND ONE HUNDRED ONE OF THE  INSURANCE  LAW,  GAP  WAIVERS  GOVERNED
UNDER  THIS  SECTION ARE NOT INSURANCE AND ARE EXEMPT FROM THE INSURANCE
LAWS OF THIS STATE. PERSONS MARKETING, SELLING OR OFFERING TO  SELL  GAP
WAIVERS  TO BORROWERS THAT COMPLY WITH THIS SECTION ARE EXEMPT FROM THIS
STATE'S INSURANCE LICENSING REQUIREMENTS.
  S 4. Subdivision 2 of section 335 of the  personal  property  law,  as
amended  by  chapter  111  of  the  laws  of 1995, is amended to read as
follows:
  2. If the retail lease agreement provides that  the  lessee  shall  be
responsible  upon a total loss of the vehicle occasioned by its theft or
physical damage for the gap amount, the lessor, prior to  the  execution
of the agreement, shall offer to waive its contractual right to hold the
lessee  liable  for  the  gap amount in the event of a total loss of the
vehicle occasioned by its theft or physical damage, only if motor  vehi-
cle  lessor  gap  insurance  coverage  is available to the lessor or the
anticipated  assignee   and   such   coverage   is   obtained   from   a
property/casualty  insurance  company,  which  has  been licensed by the
superintendent of insurance of this state to write motor vehicle  lessor
gap  insurance in this state. This offer may be made contingent upon the
payment by the lessee of a separate charge that  shall  not  exceed  the
cost  of lessor gap insurance covering the retail lease transaction plus
an administrative fee not to exceed ten dollars UNLESS SUCH WAIVER IS  A
GUARANTEED  ASSET  PROTECTION  WAIVER  AS  ESTABLISHED  IN SECTION THREE
HUNDRED THIRTY-FIVE-A OF THIS ARTICLE. Nothing contained in this section
shall be construed to authorize a waiver, in connection  with  a  trans-
action with respect to which lessor gap insurance has not been obtained,
of  a  contractual right to hold the lessee liable for the gap amount in
the event of a total loss of the vehicle  occasioned  by  its  theft  or
physical damage.
  S  5.  The  personal  property  law is amended by adding a new section
335-A to read as follows:
  S 335-A. GUARANTEED ASSET PROTECTION  WAIVERS.  1.  "GUARANTEED  ASSET
PROTECTION WAIVER" OR "GAP WAIVER" MEANS A CONTRACTUAL AGREEMENT WHEREIN
A  CREDITOR  AGREES FOR A SEPARATE CHARGE TO CANCEL OR WAIVE ALL OR PART
OF AMOUNTS DUE TO BORROWER'S FINANCE AGREEMENT IN THE EVENT OF  A  TOTAL
PHYSICAL  DAMAGE  LOSS  OR UNRECOVERED THEFT OF THE MOTOR VEHICLE, WHICH
AGREEMENT MUST BE PART OF, OR A SEPARATE ADDENDUM TO, THE FINANCE AGREE-
MENT. FOR PURPOSES OF THIS SECTION, THE TERM MOTOR VEHICLE SHALL INCLUDE
SELF PROPELLED OR TOWED VEHICLES DESIGNED FOR PERSONAL OR COMMERCIAL  OR
BUSINESS  USE,  INCLUDING, BUT NOT LIMITED TO, MOTOR VEHICLES AS DEFINED
IN SECTION THREE HUNDRED  ONE  OF  THIS  CHAPTER,  TRUCKS,  MOTORCYCLES,
RECREATIONAL  VEHICLES,  ALL  TERRAIN  VEHICLES,  SNOWMOBILES,  CAMPERS,
BOATS, PERSONAL WATERCRAFT, AND MOTORCYCLE, BOAT, CAMPER,  AND  PERSONAL
WATERCRAFT TRAILERS.
  2. GAP WAIVERS SHALL BE OFFERED ACCORDING TO THE FOLLOWING:
  (A)  NEITHER THE EXTENSION OF CREDIT, THE TERM OF CREDIT, NOR THE TERM
OF THE RELATED MOTOR VEHICLE LEASE MAY BE CONDITIONED UPON THE  PURCHASE
OF A GAP WAIVER.
  (B)  THE  GAP WAIVER REMAINS A PART OF THE RETAIL LEASE AGREEMENT UPON
THE ASSIGNMENT, SALE OR TRANSFER OF SUCH RETAIL LEASE AGREEMENT  BY  THE
CREDITOR.
  (C)  NOTWITHSTANDING  ANY  OTHER  PROVISION  OF  LAW,  ANY COST TO THE
BORROWER FOR A GAP WAIVER ENTERED INTO IN COMPLIANCE WITH THE  TRUTH  IN

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LENDING  ACT (15 U.S.C. 1601 ET. SEQ.) AND ITS IMPLEMENTING REGULATIONS,
AS THEY MAY BE AMENDED FROM TIME TO TIME, MUST BE SEPARATELY STATED  AND
IS NOT TO BE CONSIDERED A FINANCE CHARGE OR INTEREST.
  (D)  A  BUYER  MAY  CANCEL THE GAP WAIVER WITHIN A FREE LOOK PERIOD AS
SPECIFIED IN THE WAIVER, AND WILL BE ENTITLED TO A FULL  REFUND  OF  THE
PURCHASE  PRICE,  SO  LONG  AS NO BENEFITS HAVE BEEN PROVIDED; OR IN THE
EVENT BENEFITS HAVE BEEN PROVIDED, THE BORROWER MAY RECEIVE  A  FULL  OR
PARTIAL  REFUND PURSUANT TO THE TERMS OF THE WAIVER. A GAP WAIVER MAY BE
CANCELLABLE OR NON-CANCELLABLE AFTER THE FREE  LOOK  PERIOD.  IF  A  GAP
WAIVER IS CANCELLED AFTER THE FREE LOOK PERIOD AND NO BENEFITS HAVE BEEN
PAID,  A  BORROWER  MAY BE ENTITLED TO A REFUND PURSUANT TO THE TERMS OF
THE WAIVER. IN THE EVENT THE GAP  WAIVER  IS  CANCELLED  OR  UPON  EARLY
TERMINATION  OF THE FINANCE AGREEMENT, THE GAP WAIVER SHALL DISCLOSE THE
METHODOLOGY FOR CALCULATING ANY REFUND OF THE UNEARNED PURCHASE PRICE OF
THE GAP WAIVER DUE. IN ORDER TO  RECEIVE  A  REFUND,  THE  BORROWER,  IN
ACCORDANCE  WITH  ANY APPLICABLE TERMS OF THE GAP WAIVER, MUST PROVIDE A
WRITTEN REQUEST TO THE CREDITOR, ADMINISTRATOR OR  OTHER  PARTY,  WITHIN
NINETY  DAYS  OF  THE EVENT TERMINATING THE GAP WAIVER OR FINANCE AGREE-
MENT.
  (E) THE GAP WAIVER MUST DISCLOSE IN CLEAR AND UNDERSTANDABLE  LANGUAGE
THE  TERMS OF THE GAP WAIVER INCLUDING, BUT NOT LIMITED TO, THE REQUIRE-
MENTS FOR PROTECTION, CONDITIONS, OR EXCLUSIONS ASSOCIATED WITH THE  GAP
WAIVER.  THE  GAP  WAIVER MUST ALSO DISCLOSE THE PROCEDURES THE BORROWER
MUST FOLLOW, IF ANY, TO OBTAIN GAP WAIVER BENEFITS.
  (F) NOTWITHSTANDING PARAGRAPH THREE OF SUBSECTION  B  OF  SECTION  ONE
THOUSAND  ONE  HUNDRED  ONE OF THE INSURANCE LAW, GAP WAIVERS UNDER THIS
SECTION ARE NOT INSURANCE AND ARE EXEMPT FROM THE INSURANCE LAWS OF THIS
STATE. PERSONS MARKETING, SELLING OR OFFERING TO  SELL  GAP  WAIVERS  TO
BORROWERS  THAT  COMPLY  WITH  THIS SECTION ARE EXEMPT FROM THIS STATE'S
INSURANCE LICENSING REQUIREMENTS.
  S 6. This act shall take effect immediately.