BILL NUMBER: S5369A

SPONSOR: TEDISCO
 
TITLE OF BILL:  An act to amend the vehicle and traffic law, in
relation to repossession of motor vehicle or motorcycle

 
PURPOSE OR GENERAL IDEA OF BILL:

To remove a bureaucratic obstacle and simplify the ability of a motor
vehicle owner to redeem a motor vehicle Or motorcycle which has been
repossessed.

 
SUMMARY OF SPECIFIC PROVISIONS:

This bill amends Section 425(1) of the Vehicle and Traffic Law to change
the time frame in which the repossessor of a motor vehicle must submit
the license plates to DMV. It also provides an additional option for
notifying the affected vehicle owner.

 
EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:
              

Vehicle and Traffic Law presently requires the delivery of license
plates from repossessed or retaken vehicles to be delivered to the
Department of Motor Vehicles within 24 hours of the repossession or
retaking, and requires notice to the owner personally, or by registered
or certified mail.

 
JUSTIFICATION:

Section 425 of the Vehicle and Traffic Law was enacted in 1957 to ensure
that the police were immediately notified when a motor vehicle was
repossessed. The problem was that police agencies were receiving reports
of stolen vehicles, and then issuing alerts and initiating investi-
gations, only to later discover that the vehicle was not stolen but had
been legally repossessed. The 1957 law addressed this problem by requir-
ing the repossessor to notify the police and give them the vehicle's
license plates. The law was subsequently amended to require that the
license plates be sent directly to the Department of Motor Vehicles.

However, this law has presented problems for affected motorists. Under
existing law, the owner is afforded a reasonable period of time general-
ly presumed to be a 10 day window -in which to redeem the vehicle.
However, the owner is faced with an additional bureaucratic burden and
costs because the vehicle no longer has its license plates.

As a result, the vehicle owner must first arrange for transportation to
a DMV office (which may involve paying for a cab or public transporta-
tion). Then, in most cases, the returned plates have not yet been proc-
essed and therefore the vehicle owner must pay to reregister the vehicle
and get new plates issued.

It would be more convenient and efficient for all parties involved to
delay the submission of the license plates until after the redemption
period has expired. This would eliminate an unnecessary and costly
burden on the motorist. It would also make the process more efficient
for DMV, since they would only have to process those returned plates for
vehicles which are being removed from the system. The bill would also
allow the repossessor an additional option to notify the vehicle owner
by first class mail, with a certificate of mailing properly endorsed by
the U.S. Postal Service to be obtained. Current law requires notifica-
tion to be made personally or by registered or certified mail. However,
in practice, there can be delays in receiving registered or certified
mail if no one is home at the time to sign for the delivery. This bill
gives lenders an additional option to contact the debtor.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

Minimal to the state. This change should make the process more efficient
for DMV. This should result in a decrease in the number of persons need-
ing to reregister a repossessed vehicle; however, the small loss of
revenue would generally be offset by the savings in not having to proc-
ess and issue new plates.

 
EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law.