NY State Senate Bill 2021-S133

Senate Bill S133

Signed By Governor

2021-2022 Legislative Session

Relates to establishing a set grace period for the use of credit card reward points

download bill text pdf

Archive: Last Bill Status - Signed by Governor

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

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Dec 10, 2021	signed chap.667
Nov 29, 2021	delivered to governor
Jun 09, 2021	returned to senate passed assembly
Jun 07, 2021	ordered to third reading rules cal.442 substituted for a5698b referred to consumer affairs and protection returned to assembly repassed senate
Jun 01, 2021	amended on third reading 133b
May 24, 2021	amended on third reading 133a
May 24, 2021	vote reconsidered - restored to third reading returned to senate recalled from assembly
May 04, 2021	referred to consumer affairs and protection delivered to assembly passed senate
Apr 28, 2021	advanced to third reading
Apr 27, 2021	2nd report cal.
Apr 26, 2021	1st report cal.769
Jan 06, 2021	referred to consumer protection

Votes

- Jun 7, 2021 - Floor Vote
  S133
  
  62
  
  Aye
  
  1
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jun 7, 2021
      
      aye (62)
      
      Addabbo Jr.
      
      Akshar
      
      Bailey
      
      Benjamin
      
      Biaggi
      
      Borrello
      
      Boyle
      
      Breslin
      
      Brisport
      
      Brooks
      
      Brouk
      
      Comrie
      
      Cooney
      
      Felder
      
      Gallivan
      
      Gaughran
      
      Gianaris
      
      Gounardes
      
      Griffo
      
      Harckham
      
      Helming
      
      Hinchey
      
      Hoylman-Sigal
      
      Jackson
      
      Jordan
      
      Kaminsky
      
      Kaplan
      
      Kavanagh
      
      Kennedy
      
      Krueger
      
      Lanza
      
      Liu
      
      Mannion
      
      Martucci
      
      Mattera
      
      May
      
      Mayer
      
      Myrie
      
      O'Mara
      
      Ortt
      
      Palumbo
      
      Parker
      
      Persaud
      
      Ramos
      
      Rath III
      
      Reichlin-Melnick
      
      Ritchie
      
      Rivera
      
      Ryan
      
      Salazar
      
      Sanders Jr.
      
      Savino
      
      Sepúlveda
      
      Serino
      
      Serrano
      
      Skoufis
      
      Stavisky
      
      Stec
      
      Stewart-Cousins
      
      Tedisco
      
      Thomas
      
      Weik
      
      nay (1)
      
      Oberacker
  May 4, 2021 - Floor Vote
  S133
  
  63
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: May 4, 2021
      
      aye (63)
      
      Addabbo Jr.
      
      Akshar
      
      Bailey
      
      Benjamin
      
      Biaggi
      
      Borrello
      
      Boyle
      
      Breslin
      
      Brisport
      
      Brooks
      
      Brouk
      
      Comrie
      
      Cooney
      
      Felder
      
      Gallivan
      
      Gaughran
      
      Gianaris
      
      Gounardes
      
      Griffo
      
      Harckham
      
      Helming
      
      Hinchey
      
      Hoylman-Sigal
      
      Jackson
      
      Jordan
      
      Kaminsky
      
      Kaplan
      
      Kavanagh
      
      Kennedy
      
      Krueger
      
      Lanza
      
      Liu
      
      Mannion
      
      Martucci
      
      Mattera
      
      May
      
      Mayer
      
      Myrie
      
      O'Mara
      
      Oberacker
      
      Ortt
      
      Palumbo
      
      Parker
      
      Persaud
      
      Ramos
      
      Rath III
      
      Reichlin-Melnick
      
      Ritchie
      
      Rivera
      
      Ryan
      
      Salazar
      
      Sanders Jr.
      
      Savino
      
      Sepúlveda
      
      Serino
      
      Serrano
      
      Skoufis
      
      Stavisky
      
      Stec
      
      Stewart-Cousins
      
      Tedisco
      
      Thomas
      
      Weik
  Apr 26, 2021 - Consumer Protection Committee Vote
  S133
  
  7
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Consumer Protection Committee Vote: Apr 26, 2021
      
      aye (7)
      
      Gounardes
      
      Kavanagh
      
      Mattera
      
      Myrie
      
      Reichlin-Melnick
      
      Tedisco
      
      Thomas

Bill Amendments

Original

B (Active)

co-Sponsors

View additional co-sponsors

2021-S133 - Details

Law Section:: General Business Law
Laws Affected:: Add §520-e, Gen Bus L
Versions Introduced in 2019-2020 Legislative Session:: S7104

2021-S133 - Summary

Relates to establishing a set grace period for the use of credit card reward points when an account is modified, cancelled, closed or terminated; provides ninety days shall be provided for the use of such points from the date notice of modification, cancellation, or termination of the card is provided.

2021-S133 - Sponsor Memo

                                
 
BILL NUMBER: S133

SPONSOR: MAYER
 
TITLE OF BILL:

An act to amend the general business law, in relation to establishing a
set grace period for the use of credit card reward points

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this legislation is to protect credit card holders from
the unmerited cancellation of their reward points by creating a grace
period for the use of reward points after the closing of a credit card
account.

 
SUMMARY OF PROVISIONS:

Section 1 adds a new section 520-e to the general business law to:

(1) define certain terms related to credit card rewards programs;

(2) require that notice be given to credit card holders within fifteen
days of the cancellation, closure, termination or modification of a
credit card account and establish a 90-day grace period (beginning on
the day such notice is sent) for the use of accumulated credit card
points, except in the case of fraud or misuse of the credit card or
related awards program by the credit card holder;

(3) prohibit agreements that provide for the expiration of credit card
points;

(4) create an exemption for fraud or misuse of the card holder; and

(5) prohibit agreements that waive, limit, or disclaim the rights set
forth in the new section 520-e.

Section 2 provides the effective date.

 
JUSTIFICATION:

According to the Consumer Financial Protection Bureau, points, loyalty
programs, and other rewards are among the most important factors for
consumers when selecting a credit card, and more than 6096 of all new
credit card accounts were for rewards cards (see
https://www.consumerfinance.gov/data-research/
research-reports/the-consumercredit-market-2019/).

However, credit card rewards programs are often governed by agreements
that are not transparent to consumers. One particular provision in many
credit card agreements allows the credit card issuer to cancel all accu-
mulated rewards points or other rewards benefits upon the closure of the
credit card account, without affording the credit card holder any oppor-
tunity to use accumulated points. This becomes a consumer protection
issue when the issuer unilaterally closes such an account. Card agree-
ments allow for point cancellation without a grace period in connection
with certain account closures, for example, if a holder fails to make a
payment, as well as for unspecified reasons that fall under catch-all
clauses such as if the issuer believes the holder may be unwilling or

unable to pay their debts on time. In some cases, the card agreement
allows the issuer to cancel the account for no reason at all.

Credit card holders often save up their points, so the cancellation of
such points can result in substantial loss of value for the holder.  In
one instance, a cardholder had just reached one million points (worth
approximately $50,000) which they had saved up for use during their
retirement, when the issuer closed their account and cancelled all their
points. The issuer's card agreement allowed the issuer to do so for any
reason, or no reason, and without notice.

Rewards points are understood by consumers to be part of the bargain
when they sign up for a credit card, regardless of how they may be
described in a card agreement. Canceling points without notice and with-
out a grace period to use them constitutes a failure by the issuer to
honor consumers' understanding of that bargain. Although issuers provide
for a grace period in some situations, consumers should always have the
ability to use their accumulated points after the closure of their
account so long as they have not engaged in fraudulent or other improper
activities relating to that card or the related rewards program.

 
PRIOR LEGISLATIVE HISTORY:

2020: Passed Senate, died in Assembly Consumer Affairs and Protection

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect one year after it shall have become a law.

2021-S133 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    133
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced by Sens. MAYER, JACKSON, KRUEGER, LIU, MYRIE, SALAZAR -- read
   twice  and  ordered  printed,  and when printed to be committed to the
   Committee on Consumer Protection
 
 AN ACT to amend the general business law, in relation to establishing  a
   set grace period for the use of credit card reward points
 
   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 section
 520-e to read as follows:
   § 520-E. GRACE PERIOD FOR USE OF CREDIT CARD REWARD POINTS. 1. AS USED
 IN THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "CREDIT CARD POINTS" OR "POINTS" SHALL MEAN DENOMINATED UNITS THAT
 CAN BE ACCUMULATED IN AN  ACCOUNT  IN  CONNECTION  WITH  A  CREDIT  CARD
 REWARD, LOYALTY, OR OTHER INCENTIVE PROGRAM, OFTEN REFERRED TO AS POINTS
 OR  FOR  CERTAIN  TRAVEL-RELATED REWARDS AS MILES, WHICH ARE REDEEMABLE,
 FUNGIBLE, OR OTHERWISE EXCHANGEABLE, IN WHOLE OR IN PART, FOR REWARDS;
   (B) "REWARDS" SHALL MEAN GOODS, SERVICES, CASH, MERCHANT-SPECIFIC GIFT
 CARDS, TRAVEL BENEFITS, OR ONE OR MORE OTHER THINGS OF VALUE; AND
   (C) "REWARDS PROGRAM" SHALL MEAN ANY AGREEMENT BETWEEN A HOLDER AND AN
 ISSUER REGARDING POINTS RELATED TO AN ACCOUNT.
   2. IF  ANY  CREDIT  CARD  ACCOUNT  OR  REWARDS  PROGRAM  IS  MODIFIED,
 CANCELLED, CLOSED OR TERMINATED, THE HOLDER MUST RECEIVE NOTICE FROM THE
 ISSUER  OF  SUCH  CANCELLATION,  CLOSURE, TERMINATION OR MODIFICATION AS
 SOON AS POSSIBLE, AND IN ANY EVENT WITHIN FIFTEEN DAYS OF SUCH CANCELLA-
 TION, CLOSURE, TERMINATION OR MODIFICATION. BEGINNING WITH THE  DATE  ON
 WHICH  NOTICE  IS  SENT,  THE  HOLDER  SHALL HAVE NINETY DAYS TO REDEEM,
 EXCHANGE, OR OTHERWISE USE ANY CREDIT CARD POINTS THAT THE HOLDER  ACCU-
 MULATED  AT  THE  TIME  OF  SUCH MODIFICATION, CANCELLATION, CLOSURE, OR
 TERMINATION AS PERMITTED UNDER THE TERMS OF THE AGREEMENT OR  AGREEMENTS
 BETWEEN  THE  HOLDER  AND  THE  ISSUER WHICH IS SERVICING THE APPLICABLE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD02666-01-1

 S. 133                              2
 
 CREDIT CARD ACCOUNT OR RELATED REWARDS PROGRAM, SUBJECT  TO  THE  AVAIL-
 ABILITY OF REWARDS.
   3.  IT  SHALL  BE  UNLAWFUL  FOR ANY AGREEMENT BETWEEN AN ISSUER AND A
 HOLDER, OR ANY REWARDS PROGRAM, TO PROVIDE FOR THE EXPIRATION OF  CREDIT
 CARD POINTS.
   4.  THE  PROVISIONS OF SUBDIVISION TWO OF THIS SECTION SHALL NOT APPLY
 IN THE CASE OF FRAUD BY THE HOLDER  WITH  RESPECT  TO  THE  CREDIT  CARD
 ACCOUNT  OR  ANY RELATED REWARDS PROGRAM, OR MISUSE BY THE HOLDER OF THE
 CREDIT CARD ACCOUNT OR ANY RELATED REWARDS PROGRAM.
   5. ANY AGREEMENT ENTERED INTO BY  A  HOLDER  THAT  WAIVES,  LIMITS  OR
 DISCLAIMS THE RIGHTS SET FORTH IN THIS SECTION SHALL BE VOID AS CONTRARY
 TO PUBLIC POLICY.
   §  2. This act shall take effect one year after it shall have become a
 law.

co-Sponsors

View additional co-sponsors

2021-S133A - Details

Law Section:: General Business Law
Laws Affected:: Add §520-e, Gen Bus L
Versions Introduced in 2019-2020 Legislative Session:: S7104

2021-S133A - Summary

2021-S133A - Sponsor Memo

                                
 
BILL NUMBER: S133A

SPONSOR: MAYER
 
TITLE OF BILL:

An act to amend the general business law, in relation to establishing a
set grace period for the use of credit card reward points

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this legislation is to protect credit card holders from
the unmerited cancellation of their reward points by creating a grace
period for the use of reward points after the closing of a credit card
account.

 
SUMMARY OF PROVISIONS:

Section 1 adds a new section 520-e to the general business law to:

(1) define certain terms related to credit card rewards programs;

(2) require that notice be provided to credit card holders within
forty-five days of the cancellation, closure, termination or modifica-
tion of a credit card account and establish a 90-day grace period
(beginning on the day such notice is sent) for the use of accumulated
credit card points;

(3) prohibit agreements that provide for the expiration of credit card
points;

(4) create an exemption for fraud or misuse by the card holder; and

(5) prohibit agreements that waive, limit, or disclaim the rights set
forth in the new section 520-e creating these consumer protections.

Section 2 provides an effective date of one year after the act becomes
law, and provides the provisions of the act apply to agreements entered
into, renewed, modified, or amended on or after such effective date.

 
JUSTIFICATION:

According to the Consumer Financial Protection Bureau, points, loyalty
programs, and other rewards are among the most important factors for
consumers when selecting a credit card, and more than 60% of all new
credit card accounts were for rewards cards (see
https://consumerfinance.gov/data-research/research-reports/the-consumer
-credit-market-2019/).

However, credit card rewards programs are often governed by agreements
that are not transparent to consumers. One particular provision in many
credit card agreements allows the credit card issuer to cancel all accu-
mulated rewards points or other rewards benefits upon the closure of the
credit card account, without affording the credit card holder any oppor-
tunity to use accumulated points. This becomes a consumer protection
issue when the issuer unilaterally closes such an account. Card agree-
ments allow for point cancellation without a grace period in connection
with certain account closures, for example, if a holder fails to make a
payment, as well as for unspecified reasons that fall under catch-all
clauses such as if the issuer believes the holder may be unwilling or
unable to pay their debts on time. In some cases, the card agreement
allows the issuer to cancel the account for no reason at all.

Credit card holders often save up their points, so the cancellation of
such points can result in substantial loss of value for the holder.  In
one instance, a cardholder had just reached one million points (worth
approximately $50,000) which they had saved up for use during their
retirement, when the issuer closed their account and cancelled all their
points. The issuer's card agreement allowed the issuer to do so for any
reason, or no reason, and without notice.

Rewards points are understood by consumers to be part of the bargain
when they sign up for a credit card, regardless of how they may be
described in a card agreement. Canceling points without notice and with-
out a grace period to use them constitutes a failure by the issuer to
honor consumers' understanding of that bargain. Although issuers provide
for a grace period in some situations, consumers should always have the
ability to use their accumulated points after the closure of their
account so long as they have not engaged in fraudulent or other improper
activities relating to that card or the related rewards program.

 
PRIOR LEGISLATIVE HISTORY:

2020: S7104-A / A9588-A - Passed Senate, died in Assembly Consumer
Affairs and Protection Committee

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect one year after it shall have become a law,
and applies to card agreements entered into, renewed, modified, or
amended on or after such effective date.

2021-S133A - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  133--A
     Cal. No. 769
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced  by  Sens.  MAYER,  GAUGHRAN, JACKSON, KRUEGER, LIU, MANNION,
   MYRIE, SALAZAR -- read twice and ordered printed, and when printed  to
   be  committed  to  the  Committee  on  Consumer Protection -- reported
   favorably from said committee, ordered to  first  and  second  report,
   ordered  to  a  third  reading,  passed by Senate and delivered to the
   Assembly, recalled, vote  reconsidered,  restored  to  third  reading,
   amended  and  ordered  reprinted,  retaining its place in the order of
   third reading
 
 AN ACT to amend the general business law, in relation to establishing  a
   set grace period for the use of credit card reward points
 
   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 section
 520-e to read as follows:
   § 520-E. GRACE PERIOD FOR USE OF CREDIT CARD REWARD POINTS. 1. AS USED
 IN THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "CREDIT CARD POINTS" OR "POINTS" SHALL MEAN DENOMINATED UNITS THAT
 CAN BE ACCUMULATED IN AN  ACCOUNT  IN  CONNECTION  WITH  A  CREDIT  CARD
 REWARD, LOYALTY, OR OTHER INCENTIVE PROGRAM, OFTEN REFERRED TO AS POINTS
 OR  FOR  CERTAIN  TRAVEL-RELATED REWARDS AS MILES, WHICH ARE REDEEMABLE,
 FUNGIBLE, OR OTHERWISE EXCHANGEABLE, IN WHOLE OR IN PART, FOR REWARDS;
   (B) "REWARDS" SHALL MEAN GOODS, SERVICES, CASH, MERCHANT-SPECIFIC GIFT
 CARDS, TRAVEL BENEFITS, OR ONE OR MORE OTHER THINGS OF VALUE; AND
   (C) "REWARDS PROGRAM" SHALL MEAN ANY AGREEMENT BETWEEN A HOLDER AND AN
 ISSUER REGARDING POINTS RELATED TO AN ACCOUNT.
   2. IF  ANY  CREDIT  CARD  ACCOUNT  OR  REWARDS  PROGRAM  IS  MODIFIED,
 CANCELLED, CLOSED OR TERMINATED, THE HOLDER MUST BE PROVIDED NOTICE FROM
 THE ISSUER OF SUCH CANCELLATION, CLOSURE, TERMINATION OR MODIFICATION AS
 SOON  AS  POSSIBLE,  AND  IN  ANY  EVENT  WITHIN FORTY-FIVE DAYS OF SUCH
 CANCELLATION, CLOSURE, TERMINATION OR MODIFICATION. BEGINNING  WITH  THE

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02666-03-1

 S. 133--A                           2
 
 DATE  ON  WHICH  NOTICE  IS  SENT,  THE HOLDER SHALL HAVE NINETY DAYS TO
 REDEEM, EXCHANGE, OR OTHERWISE USE ANY CREDIT CARD POINTS THAT THE HOLD-
 ER ACCUMULATED AT THE TIME OF SUCH MODIFICATION, CANCELLATION,  CLOSURE,
 OR  TERMINATION  AS PERMITTED UNDER THE TERMS OF THE AGREEMENT OR AGREE-
 MENTS BETWEEN THE HOLDER AND THE ISSUER WHICH IS SERVICING THE  APPLICA-
 BLE  CREDIT  CARD  ACCOUNT  OR  RELATED  REWARDS PROGRAM, SUBJECT TO THE
 AVAILABILITY OF REWARDS.
   3. IT SHALL BE UNLAWFUL FOR ANY AGREEMENT  BETWEEN  AN  ISSUER  AND  A
 HOLDER,  OR ANY REWARDS PROGRAM, TO PROVIDE FOR THE EXPIRATION OF CREDIT
 CARD POINTS.
   4. THE PROVISIONS OF SUBDIVISION TWO OF THIS SECTION SHALL  NOT  APPLY
 IN  THE  CASE  OF  FRAUD  BY  THE HOLDER WITH RESPECT TO THE CREDIT CARD
 ACCOUNT OR ANY RELATED REWARDS PROGRAM, OR MISUSE BY THE HOLDER  OF  THE
 CREDIT CARD ACCOUNT OR ANY RELATED REWARDS PROGRAM.
   5.  ANY  AGREEMENT  ENTERED  INTO  BY  A HOLDER THAT WAIVES, LIMITS OR
 DISCLAIMS THE RIGHTS SET FORTH IN THIS SECTION SHALL BE VOID AS CONTRARY
 TO PUBLIC POLICY.
   § 2. This act shall take effect one year after it shall have become  a
 law,  and  shall  apply  to  all  credit  card  agreements entered into,
 renewed, modified or amended on or after such effective date.

co-Sponsors

View additional co-sponsors

2021-S133B (ACTIVE) - Details

Law Section:: General Business Law
Laws Affected:: Add §520-e, Gen Bus L
Versions Introduced in 2019-2020 Legislative Session:: S7104

2021-S133B (ACTIVE) - Summary

2021-S133B (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S133B

SPONSOR: MAYER
 
TITLE OF BILL:

An act to amend the general business law, in relation to establishing a
set grace period for the use of credit card reward points

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this legislation is to protect credit card holders from
the unmerited cancellation of their reward points by creating a grace
period for the use of reward points after the closing of a credit card
account.

 
SUMMARY OF PROVISIONS:

Section 1 adds a new section 520-e to the general business law to:

(1) define certain terms related to credit card rewards programs;

(2) require that notice be provided to credit card holders within
forty-five days of the cancellation, closure, termination or modifica-
tion of a credit card account and establish a 90-day grace period
(beginning on the day such notice is sent) for the use of accumulated
credit card points;

(3) prohibit agreements that provide for the expiration, forfeiture or
cancellation of credit card points;

(4) create an exemption for fraud or misuse by the card holder; and

(5) prohibit agreements that waive, limit, or disclaim the rights set
forth in the new section 520-e creating these consumer protections.

Section 2 provides an effective date of one year after the act becomes
law, and provides the provisions of the act apply to agreements entered
into, renewed, modified, or amended on or after such effective date.

 
JUSTIFICATION:

According to the Consumer Financial Protection Bureau, points, loyalty
programs, and other rewards are among the most important factors for
consumers when selecting a credit card, and more than 60% of all new
credit card accounts were for rewards cards (see https://www.consuert,
ance.gov/data-research/research-reports/the-consumercredit-
market-2019/).

However, credit card rewards programs are often governed by agreements
that are not transparent to consumers. One particular provision in many
credit card agreements allows the credit card issuer to cancel all accu-
mulated rewards points or other rewards benefits upon the closure of the
credit card account, without affording the credit card holder any oppor-
tunity to use accumulated points. This becomes a consumer protection
issue when the issuer unilaterally closes such an account. Card agree-
ments allow for point cancellation without a grace period in connection
with certain account closures, for example, if a holder fails to make a
payment, as well as for unspecified reasons that fall under catch-all
clauses such as if the issuer believes the holder may be unwilling or
unable to pay their debts on time. In some cases, the card agreement
allows the issuer to cancel the account for no reason at all.

Credit card holders often save up their points, so the cancellation of
such points can result in substantial loss of value for the holder.  In
one instance, a cardholder had just reached one million points (worth
approximately $50,000) which they had saved up for use during their
retirement, when the issuer closed their account and cancelled all their
points. The issuer's card agreement allowed the issuer to do so for any
reason, or no reason, and without notice.

Rewards points are understood by consumers to be part of the bargain
when they sign up for a credit card, regardless of how they may be
described in a card agreement. Canceling points without notice and with-
out a grace period to use them constitutes a failure by the issuer to
honor consumers' understanding of that bargain. Although issuers provide
for a grace period in some situations, consumers should always have the
ability to use their accumulated points after the closure of their
account so long as they have not engaged in fraudulent or other improper
activities relating to that card or the related rewards program.

 
PRIOR LEGISLATIVE HISTORY:

2020: S7104-A / A9588-A - Passed Senate, died in Assembly Consumer
Affairs and Protection Committee

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect one year after it shall have become a law,
and applies to card agreements entered into, renewed, modified, or
amended on or after such effective date.

2021-S133B (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  133--B
     Cal. No. 769
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced  by  Sens.  MAYER,  GAUGHRAN, JACKSON, KRUEGER, LIU, MANNION,
   MYRIE, SALAZAR -- read twice and ordered printed, and when printed  to
   be  committed  to  the  Committee  on  Consumer Protection -- reported
   favorably from said committee, ordered to  first  and  second  report,
   ordered  to  a  third  reading,  passed by Senate and delivered to the
   Assembly, recalled, vote  reconsidered,  restored  to  third  reading,
   amended  and  ordered  reprinted,  retaining its place in the order of
   third reading -- again amended and ordered  reprinted,  retaining  its
   place in the order of third reading
 
 AN  ACT to amend the general business law, in relation to establishing a
   set grace period for the use of credit card reward points
 
   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 section
 520-e to read as follows:
   § 520-E. GRACE PERIOD FOR USE OF CREDIT CARD REWARD POINTS. 1. AS USED
 IN THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "CREDIT CARD POINTS" OR "POINTS" SHALL MEAN DENOMINATED UNITS THAT
 CAN  BE  ACCUMULATED  IN  AN  ACCOUNT  IN  CONNECTION WITH A CREDIT CARD
 REWARD, LOYALTY, OR OTHER INCENTIVE PROGRAM, OFTEN REFERRED TO AS POINTS
 OR FOR CERTAIN TRAVEL-RELATED REWARDS AS MILES,  WHICH  ARE  REDEEMABLE,
 FUNGIBLE, OR OTHERWISE EXCHANGEABLE, IN WHOLE OR IN PART, FOR REWARDS;
   (B) "REWARDS" SHALL MEAN GOODS, SERVICES, CASH, MERCHANT-SPECIFIC GIFT
 CARDS, TRAVEL BENEFITS, OR ONE OR MORE OTHER THINGS OF VALUE;
   (C) "REWARDS PROGRAM" SHALL MEAN ANY AGREEMENT BETWEEN A HOLDER AND AN
 ISSUER REGARDING POINTS RELATED TO AN ACCOUNT; AND
   (D)  "MODIFIED"  OR  "MODIFICATION"  SHALL  MEAN A CHANGE THAT HAS THE
 EFFECT OF ELIMINATING POINTS, REDUCING THE VALUE  OF  POINTS,  AFFECTING
 THE  ABILITY  OF  A  HOLDER  TO  ACCUMULATE POINTS, LIMITING OR REDUCING
 REWARDS AVAILABILITY, LIMITING A HOLDER'S USE OF POINTS  OR  THE  CREDIT

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02666-04-1

 S. 133--B                           2
 
 CARD  ACCOUNT, OTHERWISE DIMINISHING THE VALUE OF THE REWARDS PROGRAM OR
 THE CREDIT CARD ACCOUNT TO THE HOLDER OR CHANGING THE OBLIGATIONS OF THE
 HOLDER WITH RESPECT TO THE REWARDS PROGRAM OR CREDIT CARD ACCOUNT.
   2.  IF  ANY  CREDIT  CARD  ACCOUNT  OR  REWARDS  PROGRAM  IS MODIFIED,
 CANCELLED, CLOSED OR TERMINATED, THE HOLDER MUST BE PROVIDED NOTICE FROM
 THE ISSUER OF SUCH CANCELLATION, CLOSURE, TERMINATION OR MODIFICATION AS
 SOON AS POSSIBLE, AND IN  ANY  EVENT  WITHIN  FORTY-FIVE  DAYS  OF  SUCH
 CANCELLATION,  CLOSURE,  TERMINATION OR MODIFICATION. BEGINNING WITH THE
 DATE ON WHICH NOTICE IS SENT, THE  HOLDER  SHALL  HAVE  NINETY  DAYS  TO
 REDEEM, EXCHANGE, OR OTHERWISE USE ANY CREDIT CARD POINTS THAT THE HOLD-
 ER  ACCUMULATED AT THE TIME OF SUCH MODIFICATION, CANCELLATION, CLOSURE,
 OR TERMINATION AS PERMITTED UNDER THE TERMS OF THE AGREEMENT  OR  AGREE-
 MENTS  BETWEEN THE HOLDER AND THE ISSUER WHICH IS SERVICING THE APPLICA-
 BLE CREDIT CARD ACCOUNT OR  RELATED  REWARDS  PROGRAM,  SUBJECT  TO  THE
 AVAILABILITY OF REWARDS.
   3.  IT  SHALL  BE  UNLAWFUL  FOR ANY AGREEMENT BETWEEN AN ISSUER AND A
 HOLDER, OR ANY REWARDS PROGRAM, TO PROVIDE FOR THE  EXPIRATION,  FORFEI-
 TURE  OR  CANCELLATION  OF CREDIT CARD POINTS PRIOR TO THE EXPIRATION OF
 THE NINETY DAY PERIOD SET FORTH IN SUBDIVISION TWO OF THIS SECTION.
   4. THE PROVISIONS OF SUBDIVISIONS TWO AND THREE OF THIS SECTION  SHALL
 NOT  APPLY IN THE CASE OF FRAUD BY THE HOLDER WITH RESPECT TO THE CREDIT
 CARD ACCOUNT OR ANY RELATED REWARDS PROGRAM, OR MISUSE BY THE HOLDER  OF
 THE CREDIT CARD ACCOUNT OR ANY RELATED REWARDS PROGRAM.
   5.  ANY  AGREEMENT  ENTERED  INTO  BY  A HOLDER THAT WAIVES, LIMITS OR
 DISCLAIMS THE RIGHTS SET FORTH IN THIS SECTION SHALL BE VOID AS CONTRARY
 TO PUBLIC POLICY.
   § 2. This act shall take effect one year after it shall have become  a
 law,  and  shall  apply  to  all  credit  card  agreements entered into,
 renewed, modified or amended on or after such effective date.

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Senate Bill S133

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Archive: Last Bill Status - Signed by Governor

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2021-S133 - Details

2021-S133 - Summary

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2021-S133 - Bill Text download pdf

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2021-S133A - Details

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2021-S133B (ACTIVE) - Details

2021-S133B (ACTIVE) - Summary

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2021-S133B (ACTIVE) - Bill Text download pdf

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