S T A T E   O F   N E W   Y O R K
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                                  8437

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                              June 15, 2011
                               ___________

Introduced by M. of A. DINOWITZ -- read once and referred to the Commit-
  tee on Consumer Affairs and Protection

AN  ACT  to amend the general business law, in relation to the signature
  of authorized representatives on certain instruments

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

  Section 1. The general business law is amended by adding a new article
38-B to read as follows:
                              ARTICLE 38-B
                 SIGNATURE OF AUTHORIZED REPRESENTATIVES
SECTION 825. DEFINITIONS.
        826. SIGNATURE BY AUTHORIZED REPRESENTATIVE.
  S 825. DEFINITIONS. AS USED IN THIS ARTICLE:
  (A)  "ACCOUNT"  MEANS ANY ACCOUNT WITH A BANK AND INCLUDES A CHECKING,
TIME, INTEREST, SAVINGS, OR NEGOTIABLE ORDER OF WITHDRAWAL ACCOUNT;
  (B) "BANK" MEANS AND INCLUDES ANY ENTITY ENGAGED IN  THE  BUSINESS  OF
BANKING;
  (C) "CONSUMER" MEANS ANY NATURAL PERSON;
  (D)  "CONSUMER  TRANSACTION"  MEANS  THE  PURCHASE  OR LEASE OF OR THE
ATTEMPT TO PURCHASE OR LEASE ANY GOODS OR SERVICES BY A CONSUMER, OR THE
EXTENSION OF OR THE ATTEMPT  TO  EXTEND  CREDIT  TO  ANY  CONSUMER,  FOR
PERSONAL, HOUSEHOLD, OR FAMILY PURPOSES;
  (E) "ENTITY" MEANS A NATURAL PERSON, PARTNERSHIP, CORPORATION, LIMITED
LIABILITY COMPANY, ASSOCIATION, OR OTHER LEGAL ORGANIZATION;
  (F)  "ITEM"  MEANS  ANY INSTRUMENT FOR THE PAYMENT OF MONEY, INCLUDING
BUT NOT LIMITED TO A NONNEGOTIABLE  INSTRUMENT,  BUT  DOES  NOT  INCLUDE
MONEY; AND
  (G)  "NEGOTIABLE ORDER OF WITHDRAWAL ACCOUNT" MEANS AN ACCOUNT AUTHOR-
IZED BY SUBDIVISION A OF SECTION EIGHTEEN HUNDRED  THIRTY-TWO  OF  TITLE
TWELVE OF THE UNITED STATES CODE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00933-01-1

              

A. 8437                             2

  S 826. SIGNATURE BY AUTHORIZED REPRESENTATIVE. (A) NOTWITHSTANDING THE
PROVISIONS  OF  ANY  OTHER  LAW,  NO ENTITY SHALL SEEK TO ACQUIRE, SHALL
ACQUIRE, OR SHALL EXERCISE THE POWERS  OR  AUTHORITY  OF  AN  AUTHORIZED
REPRESENTATIVE  OF A CONSUMER, AS PROVIDED IN PART FOUR OF ARTICLE THREE
OF  THE  UNIFORM  COMMERCIAL  CODE,  IN  A  CONSUMER TRANSACTION FOR THE
PURPOSE OF SIGNING  ANY  ITEM,  UNLESS  SUCH  POWERS  OR  AUTHORITY  ARE
CONFERRED IN A WRITING THAT IS SIGNED BY THE CONSUMER WHO IS TO BE BOUND
THEREBY  AND  IN  WHICH  THE  SCOPE  OF  THE AUTHORIZED REPRESENTATIVE'S
AUTHORITY IS CLEARLY AND SPECIFICALLY DESCRIBED IN SUCH CONSUMER'S HAND-
WRITING.
  (B) ANY ITEM SIGNED BY AN  AUTHORIZED  REPRESENTATIVE  IN  A  CONSUMER
TRANSACTION IN VIOLATION OF SUBDIVISION (A) OF THIS SECTION IS NOT PROP-
ERLY PAYABLE FROM THE ACCOUNT OF ANY CONSUMER AT A BANK. IF SUCH ITEM IS
PAID BY A BANK IN VIOLATION OF THIS SECTION, THE CONSUMER IS ENTITLED TO
A  CREDIT  FOR  THE  AMOUNT OF THE ITEM ON THE DAY FOLLOWING THE DATE ON
WHICH SUCH CONSUMER DEMANDS SUCH CREDIT.
  (C) IN CASE OF A DISPUTE AS TO  WHETHER  OR  NOT  A  SIGNATURE  BY  AN
AUTHORIZED  REPRESENTATIVE ON AN ITEM IN A CONSUMER TRANSACTION COMPLIES
WITH THE REQUIREMENTS OF THIS SECTION, A BANK HAS THE BURDEN OF  PROVING
COMPLIANCE  AND,  UNTIL  IT DOES SO, SHALL CREDIT THE CONSUMER'S ACCOUNT
FOR THE FULL AMOUNT OF SUCH ITEM ON THE BANKING DAY FOLLOWING  THE  DATE
ON  WHICH  THE CONSUMER HAS DEMANDED SUCH CREDIT AS PROVIDED IN SUBDIVI-
SION (B) OF THIS SECTION.
  (D) ANY ENTITY THAT SIGNS AN ITEM AS AN AUTHORIZED REPRESENTATIVE OF A
CONSUMER IN A CONSUMER TRANSACTION IN VIOLATION  OF  THE  PROVISIONS  OF
THIS  SECTION, AND ANY BANK THAT FAILS TO CREDIT A CONSUMER'S ACCOUNT IN
ACCORDANCE WITH THE PROVISIONS SPECIFIED IN THIS SECTION, IS  LIABLE  TO
SUCH  CONSUMER  FOR  THREE TIMES THE AMOUNT OF SUCH ITEM OR FIVE HUNDRED
DOLLARS, WHICHEVER IS GREATER, PLUS COURT COSTS  AND  REASONABLE  ATTOR-
NEY'S FEES.
  S 2. This act shall take effect immediately.