NY State Senate Bill 2021-S7919

Senate Bill S7919

2021-2022 Legislative Session

Provides for a cap on the credit service charge computed and collected on a retail instalment contract

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Archive: Last Bill Status - In Senate Committee Consumer Protection 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

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 19, 2022	referred to consumer protection

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2021-S7919 (ACTIVE) - Details

See Assembly Version of this Bill:: A8897
Current Committee:: Senate Consumer Protection
Law Section:: Personal Property Law
Laws Affected:: Amd §404, Pers Prop L
Versions Introduced in 2023-2024 Legislative Session:: S363, A419, A10022

2021-S7919 (ACTIVE) - Summary

Provides for a cap on the credit service charge computed and collected on a retail instalment contract.

2021-S7919 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S7919

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the personal property law, in relation to providing for
a cap on the credit service charge computed and collected on a retail
instalment contract

 
PURPOSE:

To cap the interest on retail instalment contracts at the state civil
usury rate

 
SUMMARY OF PROVISIONS:

Section 1 of the bill amends section 404 of the personal property law to
prohibit interest on retail instalment contracts from going above the
rate set for civil usury in fourteen-a of the banking law.

Section 2 of the bill states the effective date.

 
JUSTIFICATION:

Installment credit can be beneficial for consumers because it allows
them to take home and use products while they make payments towards the
product's total cash price. However, there are abusive practices within
the industry that are not in the best interests of consumers, such as
exorbitant interest.

In New York, the state civil usury rate is 16% however, this rate does
not apply to installment credit because of the time price doctrine.
Under the time price doctrine a retail installment contract is not
considered a loan and is then exempted from state usury laws. The retail
installment sales act, which governs these transactions, states that the
maximum interest rate that can be charged is whatever rate is written in
the contract and agreed to by the buyer.

This bill curbs that abusive practice by setting a cap on installment
credit interest rates that is equal to the state usury rate.

 
LEGISLATIVE HISTORY:

2021: New legislation.

 
FISCAL IMPLICATIONS:

None to the state.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2021-S7919 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
     S. 7919                                                  A. 8897
 
                       S E N A T E - A S S E M B L Y
 
                             January 19, 2022
                                ___________
 
 IN  SENATE -- Introduced by Sen. THOMAS -- read twice and ordered print-
   ed, and when printed to be committed  to  the  Committee  on  Consumer
   Protection
 
 IN  ASSEMBLY  -- Introduced by M. of A. JOYNER -- read once and referred
   to the Committee on Consumer Affairs and Protection
 
 AN ACT to amend the personal property law, in relation to providing  for
   a  cap on the credit service charge computed and collected on a retail
   instalment contract
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision 1 of section 404 of the personal property law,
 as amended by chapter 883 of the laws of 1980, is  amended  to  read  as
 follows:
   1.  A  seller  may,  in  a  retail  instalment contract or obligation,
 contract for and, if so contracted for, the holder thereof  may  charge,
 receive  and  collect  a credit service charge computed on the principal
 balance of the contract or obligation  from  the  date  thereof  to  and
 including  the date when the final instalment is payable, at the rate or
 rates agreed to by the buyer, BUT SUCH CREDIT SERVICE CHARGE  SHALL  NOT
 EXCEED  THE  INTEREST RATE ESTABLISHED PURSUANT TO SECTION FOURTEEN-A OF
 THE BANKING LAW.
   § 2. This act shall take effect immediately.
 
 
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD13025-01-1

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Senate Bill S7919

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Sponsored By

Kevin Thomas