BILL NUMBER: S1957           Revised 1/7/2020

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the executive law, in relation to motor vehicle dealer
advertising

 
PURPOSE:

This bill seeks to increase the quality of motor vehicle advertising by
enabling the Department of State's Consumer Protection Division, in
consultation with the Department of Financial Services, to promulgate
regulations relating to advertising and marketing by motor vehicle deal-
ers and prohibiting advertisements that represent that Social Security
Disability (SSD) and Supplemental Security Income (SSI) are adequate
sources of income for auto loans.

 
SUMMARY OF PROVISIONS:

Section 1 Amends the executive law to add a new section, 94-c.
              

- Subdivision 1 of section 94-c states that the Consumer Protection
division of the Department of State in consultation with the Law Depart-
ment and the Department of Financial Services will oversee the regu-
lation of motor vehicle advertising and marketing.

- Subdivision 2 of section 94-c states that the regulations created in
subdivision 1 of section 94-c must forbid motor vehicle dealers or offi-
cers thereof from representing that SSI or SSD income as a sole source
of income is sufficient to secure motor vehicle financing.

- Subdivision 3 of section 94-c states that the Department of Law has
the jurisdiction to enforce regulations promulgated pursuant to subdivi-
sion 1 of section 94-c.

- Subdivision 4 of section 94-c states that the Consumer Protection
division of the Department of State shall have the authority to estab-
lish fines of up to ten thousand dollars for any violation of regu-
lations that are established pursuant to subdivision 1 of section 94-c.

Section 2 provides the effective date, which is one hundred and eighty
days after this bill becomes a law.

 
JUSTIFICATION:

Automobiles are a commonly used form of transportation in New York, and
for many New Yorkers automobiles are the second largest purchases they
make in their lifetimes. While many auto dealerships conduct themselves
with integrity, advertisements are sometimes dishonest and misleading.
For example, in 2017, the New York State Department of Motor Vehicles
announced it had recovered $1.3 million from auto dealers who engaged in
fraudulent practices, a rise of $200,000 from the previous year. Unfor-
tunately, these advertising and marketing campaigns often target the
most vulnerable New Yorkers, such as those who have poor credit, the
disabled, the elderly, or those that rely on public benefits as their
sole source of income. Consumers are often bombarded with false promises
and misleading information, increasing the difficultly for people to
determine which claims are substantiated. Increased oversight of dealer-
ship advertising and marketing will address these critical issues, as
New York State can set rules that ensure proper and complete information
are available to all parties doing business.

New York's Department of State Consumer Protection Division, Department
of Law, and Department of Financial Services possess unique knowledge of
auto dealership advertisement and marketing. By granting these profes-
sionals the ability to oversee auto dealer advertising and marketing,
New York can protect innocent consumers who seek reliable, affordable
vehicles, and can ensure that honest dealers are not disadvantaged by
conducting business with integrity.

 
LEGISLATIVE HISTORY:

S.5488 of 2015- Referred to Finance

S.5488 of 2016- Referred to Finance

S.5277 of 2017- Referred to Finance

S.5277 of 2018- Referred to Finance

S.1957 of 2019- Referred to Finance

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become law.