Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
|
---|---|
Apr 29, 2010 |
referred to banks |
Senate Bill S7669
2009-2010 Legislative Session
Sponsored By
(D, WF) Senate District
Archive: Last Bill Status - In Senate Committee Banks Committee
- Introduced
-
- In Committee Assembly
- In Committee Senate
-
- On Floor Calendar Assembly
- On Floor Calendar Senate
-
- Passed Assembly
- Passed Senate
- Delivered to Governor
- Signed By Governor
Actions
2009-S7669 (ACTIVE) - Details
- See Assembly Version of this Bill:
- A10977
- Current Committee:
- Senate Banks
- Law Section:
- Banking Law
- Laws Affected:
- Amd ยงยง590-b, 6-l & 6-m, Bank L
- Versions Introduced in 2011-2012 Legislative Session:
-
S886, A5407, A7329
2009-S7669 (ACTIVE) - Sponsor Memo
BILL NUMBER: S7669 TITLE OF BILL : An act to amend the banking law, in relation to prohibiting compensation based on the terms of a home loan by mortgage brokers and mortgage lenders PURPOSE OR GENERAL IDEA OF BILL : The purpose of this bill is to ban yield spread premiums which will help prevent the abuse of steering or directing a consumer to rates or payment terms that are more expensive than that for which the consumer qualifies. SUMMARY OF SPECIFIC PROVISIONS : Bans the use of yield spread premiums by prohibiting mortgage brokers or mortgage lenders from receiving compensation that is based on or varies with the terms of any home loan. JUSTIFICATION : "Yield spread premium," or YSP's, is the fee paid by the lender to the mortgage broker in exchange for placing the borrower in a loan with a higher interest rate. Though the borrower may qualify for a loan with a lower rate, the broker can receive payment from the lender for giving the borrower a higher rate loan. This practice rewards brokers for acting against the interest of borrowers and provides a mechanism
2009-S7669 (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K ________________________________________________________________________ 7669 I N S E N A T E April 29, 2010 ___________ Introduced by Sen. SCHNEIDERMAN -- read twice and ordered printed, and when printed to be committed to the Committee on Banks AN ACT to amend the banking law, in relation to prohibiting compensation based on the terms of a home loan by mortgage brokers and mortgage lenders THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 590-b of the banking law is amended by adding a new subdivision 3-a to read as follows: 3-A. IN CONNECTION WITH THE MAKING OR BROKERING OF A HOME LOAN, NO PERSON MAY PROVIDE, AND NO MORTGAGE BROKER OR MORTGAGE LENDER MAY RECEIVE, DIRECTLY OR INDIRECTLY, ANY COMPENSATION THAT IS BASED ON, OR VARIES WITH, THE TERMS OF ANY HOME LOAN. THIS SUBDIVISION SHALL NOT PROHIBIT COMPENSATION BASED ON THE PRINCIPAL BALANCE OF THE LOAN. S 2. Paragraph (s) of subdivision 2 of section 6-l of the banking law, as amended by chapter 507 of the laws of 2009, is amended to read as follows: (s) No [abusive] yield spread premiums. [In arranging a high-cost home loan, the mortgage broker shall, within three days after receipt of an application, disclose the exact amount and methodology of total compen- sation that the broker will receive. Such amount may be paid as direct compensation from the lender, direct compensation from the borrower, or a combination of the two if permitted by applicable law. The provisions of this paragraph shall not restrict the ability of a borrower to utilize a yield spread premium in order to offset any up front costs by accepting a higher interest rate if permitted by applicable law. If the borrower chooses this option, any compensation from the lender that exceeds the amount of total compensation owed to the broker must be credited to the borrower. The superintendent shall prescribe the form that such disclosure shall take. This provision shall not restrict a broker from accepting a lesser amount of compensation.] IN CONNECTION WITH THE MAKING OR BROKERING OF A HOME LOAN, NO PERSON MAY PROVIDE, AND NO MORTGAGE BROKER OR MORTGAGE LENDER MAY RECEIVE, DIRECTLY OR INDIRECT- LY, ANY COMPENSATION THAT IS BASED ON, OR VARIES WITH, THE TERMS OF ANY EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted.
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