NY State Senate Bill 2023-S4774

Senate Bill S4774

2023-2024 Legislative Session

Limits the amount of certain credit service charges in motor vehicle retail installment contracts

download bill text pdf

Current 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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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to consumer protection
Feb 14, 2023	referred to consumer protection

co-Sponsors

2023-S4774 (ACTIVE) - Details

See Assembly Version of this Bill:: A4485
Current Committee:: Senate Consumer Protection
Law Section:: Personal Property Law
Laws Affected:: Amd §303, Pers Prop L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S5947, A7585
2021-2022: S3237, A819

2023-S4774 (ACTIVE) - Summary

Limits the amount of certain credit service charges in motor vehicle retail installment contracts.

2023-S4774 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S4774

SPONSOR: SANDERS
 
TITLE OF BILL:

An act to amend the personal property law, in relation to limiting the
amount of certain credit service charges in motor vehicle retail
installment contracts

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would cap the amount of a credit service charge that can be
imposed on motor vehicle retail installment contracts to 16% annually.

 
SUMMARY OF PROVISIONS:

Section one of the bill amends the personal property law, as it relates
to limiting the credit service charge on motor vehicle retail install-
ment contracts to no more than sixteen dollars per hundred dollars per
year.

Section two of the bill relates to the effective date.

 
JUSTIFICATION:

In New York, motor vehicle financing are done through motor vehicle
retail installment contracts where a finance company allows the buyer to
pay for the vehicle in installments in exchange for a credit service
charge. The credit service charge is a form of interest and the retail
installment contract operates similarly to a loan but is not subject to
our usury limits. Unfortunately , these contracts are able to charge
customers interest in amounts well over the usury cap.  New York consum-
ers have seen interest rates upwards of 24% for the purchase of new or
used vehicles. This extremely high amount of credit service charge has
led to consumer paying more service charge than principal for the vehi-
cle.

This bill reinstates previously imposed credit service charge limits to
no more than sixteen percent; aligning with the civil usury cap.

 
PRIOR LEGISLATIVE HISTORY:

2021-22 REFERRED TO SENATE CONSUMER PROTECTION

2021-22 referred to assembly consumer affairs and protection

2019-20 REFERRED TO SENATE CONSUMER PROTECTION

2019-20 referred to assembly consumer affairs and protection

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2023-S4774 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4774
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             February 14, 2023
                                ___________
 
 Introduced  by  Sens. SANDERS, CLEARE, JACKSON -- read twice and ordered
   printed, and when printed to be committed to the Committee on Consumer
   Protection
 
 AN ACT to amend the personal property law, in relation to  limiting  the
   amount  of  certain  credit  service  charges  in motor vehicle retail
   installment contracts

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision 1 of section 303 of the personal property law,
 as amended by chapter 641 of the laws of 1984, is  amended  to  read  as
 follows:
   1.  A retail seller may contract for in a retail [instalment] INSTALL-
 MENT contract and charge, receive and collect the credit service  charge
 authorized by this article at [the rate or rates agreed to by the retail
 seller  and  the  buyer]  A  RATE  NOT TO EXCEED SIXTEEN DOLLARS PER ONE
 HUNDRED DOLLARS PER ANNUM.
   The credit service charge authorized  by  this  subdivision  shall  be
 computed  on  an amount equal to the total of the difference between the
 cash sale price of the motor vehicle and the amount of the buyer's  down
 payment  and the amount of official fees, and such charge may be made on
 the amount included in the contract for insurance  as  determined  under
 subdivision six of section three hundred two of this [chapter] ARTICLE.
   §  2.  This  act shall take effect on the thirtieth day after it shall
 have become a law.
 
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03215-01-3

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Senate Bill S4774

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Sponsored By

James Sanders Jr.