NY State Senate Bill 2023-S5401

Current Bill Status - In Senate Committee Banks 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 banks
Mar 03, 2023	referred to banks

co-Sponsors

2023-S5401 (ACTIVE) - Details

See Assembly Version of this Bill:: A4125
Current Committee:: Senate Banks
Law Section:: Banking Law
Laws Affected:: Add §13, Bank L
Versions Introduced in 2021-2022 Legislative Session:: S7609

2023-S5401 (ACTIVE) - Summary

Prohibits a state chartered banking institution from providing financing to a landlord who has engaged in certain bad faith acts.

2023-S5401 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S5401

SPONSOR: HOYLMAN-SIGAL
 
TITLE OF BILL:

An act to amend the banking law, in relation to prohibiting bank invest-
ments in bad faith landlords

 
PURPOSE:

To prevent landlords convicted of fraud or violating housing laws from
receiving financing from state-chartered banks.

 
SUMMARY OF PROVISIONS:

Section one prevents state chartered banking institution from providing
financing or investing in any person or business entity engaged in leas-
ing residential real estate if the person or entity has been convicted
of illegal conduct against a tenant, convicted of financial fraud or
embezzlement, or has entered into certain consent decrees with the
office of the attorney general.

Section two establishes the effective date.

 
JUSTIFICATION:

When a landlord is found time and again to disregard housing law and
target tenants with harassment, it is reasonable to expect financial
institutions to analyze this record when considering future financing.
Certain bad actors have been convicted of illegal harassment, coercion,
or fraud against tenants, only to turn around and get financing for a
new building to exploit.

Perhaps the most notorious example of this phenomenon has been Steve
Croman, the New York City landlord who in 2017 was sentenced to one year
of jail time and ordered to pay $8 million in restitution to tenants for
his crimes. A consent decree required that Croman place over 100 of his
properties under new independent management, with a monitor in place to
oversee compliance. However, after his stint in jail, Croman returned
only to go on a buying spree of new buildings.  Despite his past legal
troubles, tenants report a landlord that continues old patterns of
harassment and neglect.

This bill would help address the lack of accountability by prohibiting
State chartered banks from issuing loans to landlords that have been
convicted of violating housing laws. Bad actors that act with impunity
should not be given the chance to continue victimizing New Yorkers.

 
LEGISLATIVE HISTORY:

S.7609 of 2021-2022 (Hoylman): Died in Banks

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2023-S5401 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5401
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               March 3, 2023
                                ___________
 
 Introduced  by  Sens.  HOYLMAN-SIGAL,  JACKSON -- read twice and ordered
   printed, and when printed to be committed to the Committee on Banks
 
 AN ACT to amend the banking law, in relation to prohibiting bank invest-
   ments in bad faith landlords
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  banking law is amended by adding a new section 13 to
 read as follows:
   § 13. INVESTMENTS IN BAD FAITH LANDLORDS BY  STATE  CHARTERED  BANKING
 INSTITUTIONS.  1.  NO  STATE CHARTERED BANKING INSTITUTION SHALL PROVIDE
 FINANCING FOR OR INVEST IN THE STOCKS, SECURITIES, OR OTHER  OBLIGATIONS
 OF  ANY PERSON, INSTITUTION, COMPANY, OR SUBSIDIARY ENGAGED IN THE BUSI-
 NESS OF LEASING RESIDENTIAL REAL ESTATE THAT HAS:
   (A) BEEN CONVICTED OF ENGAGING IN ILLEGAL CONDUCT  AGAINST  A  TENANT,
 INCLUDING (I) HARASSMENT, (II) COERCION, OR (III) FRAUD;
   (B)  BEEN  CONVICTED  OF  FRAUDULENT  REFINANCING OF LOANS, TAX FRAUD,
 EMBEZZLEMENT, OR OTHER FRAUD OR THEFT RELATED TO  FINANCIAL  MANAGEMENT;
 OR
   (C)  ENTERED  INTO  A  CONSENT  DECREE WITH THE OFFICE OF THE ATTORNEY
 GENERAL IN SETTLEMENT OF A LAWSUIT REGARDING UNFAIR OR  DECEPTIVE  PRAC-
 TICES  AGAINST A TENANT, THAT (I) ESTABLISHES A TENANT RESTITUTION FUND,
 PURSUANT TO SUBDIVISION TWELVE OF SECTION SIXTY-THREE OF  THE  EXECUTIVE
 LAW,  WITH  TOTAL  CONTRIBUTIONS  IN EXCESS OF ONE MILLION DOLLARS, (II)
 RESULTS IN AN INDEPENDENT  PROPERTY  MANAGEMENT  COMPANY  ACQUIRING  THE
 PRIMARY  MANAGEMENT  RESPONSIBILITIES OF ANY OF THE RESPONDENT'S PROPER-
 TIES, OR (III) REQUIRES A  MONITOR  TO  ENGAGE  IN  THE  REVIEW  OF  THE
 RESPONDENT'S  COMPLIANCE  WITH  THE  POLICIES  AND  PROVISIONS OF SUCH A
 DECREE.
   2. FOR PURPOSES OF THIS SECTION:
   (A) "STATE CHARTERED BANKING INSTITUTION" SHALL HAVE THE SAME  MEANING
 AS DEFINED IN SUBDIVISION ONE OF SECTION TWELVE-A OF THIS ARTICLE;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07614-01-3

 S. 5401                             2
 
   (B) "CONSENT DECREE" SHALL MEAN AN AGREEMENT BETWEEN THE PARTIES IN AN
 ACTION TO RESOLVE THE ACTION, WHICH IS ENTERED, APPROVED, AND ORDERED BY
 A COURT;
   (C)  "TENANT RESTITUTION FUND" SHALL MEAN A FUND, TRUST, OR ACCOUNT IN
 WHICH MONEY IS DEPOSITED FOR THE  BENEFIT  OF  POTENTIAL  CLAIMANTS  WHO
 QUALIFY FOR RESTITUTIONS UNDER THE COURT ACTION THAT LED TO THE CREATION
 OF  THE  TENANT  RESTITUTION FUND AND THE OFFICE OF THE ATTORNEY GENERAL
 SHALL HAVE OVERSIGHT OF THE FUND AND BE RESPONSIBLE FOR MAKING  DISTRIB-
 UTIONS TO CLAIMANTS;
   (D)  "PROPERTY  MANAGEMENT  COMPANY"  SHALL MEAN A COMPANY THAT IS NOT
 OWNED BY A PARTY TO THE CONSENT DECREE THAT IS QUALIFIED TO  MANAGE  THE
 PROPERTIES THAT ARE SUBJECT TO A CONSENT DECREE; AND
   (E)  "MONITOR"  SHALL  MEAN AN INDIVIDUAL WHO HAS BEEN APPROVED BY THE
 OFFICE OF THE ATTORNEY GENERAL TO REVIEW AND REPORT ON WHETHER THE OTHER
 PARTY TO THE CONSENT  DECREE  AND/OR  THE  PROPERTY  MANAGEMENT  COMPANY
 COMPLY WITH THE POLICIES AND PROVISIONS OF THE CONSENT DECREE.
   §  2.  This  act  shall take effect immediately and shall apply to all
 contracts entered into, renewed, modified or amended on  or  after  such
 effective date.

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Senate Bill S5401

Sponsored By

Current Bill Status - In Senate Committee Banks Committee

co-Sponsors

2023-S5401 (ACTIVE) - Details

2023-S5401 (ACTIVE) - Summary

2023-S5401 (ACTIVE) - Sponsor Memo

2023-S5401 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S5401

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Sponsored By

Brad Hoylman-Sigal

Current Bill Status - In Senate Committee Banks Committee

co-Sponsors

Robert Jackson

2023-S5401 (ACTIVE) - Details

2023-S5401 (ACTIVE) - Summary

2023-S5401 (ACTIVE) - Sponsor Memo

2023-S5401 (ACTIVE) - Bill Text download pdf

Comments