Regular Session - January 18, 2023
411
1 NEW YORK STATE SENATE
2
3
4 THE STENOGRAPHIC RECORD
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9 ALBANY, NEW YORK
10 January 18, 2023
11 11:12 a.m.
12
13
14 REGULAR SESSION
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16
17
18 SENATOR ROXANNE J. PERSAUD, Acting President
19 ALEJANDRA N. PAULINO, ESQ., Secretary
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1 P R O C E E D I N G S
2 ACTING PRESIDENT PERSAUD: The
3 Senate will come to order.
4 I ask everyone present to please
5 rise and recite the Pledge of Allegiance.
6 (Whereupon, the assemblage recited
7 the Pledge of Allegiance to the Flag.)
8 ACTING PRESIDENT PERSAUD: In the
9 absence of clergy, let us bow our heads in a
10 moment of silent reflection or prayer.
11 (Whereupon, the assemblage respected
12 a moment of silence.)
13 ACTING PRESIDENT PERSAUD: Reading
14 of the Journal.
15 THE SECRETARY: In Senate, Tuesday,
16 January 17, 2023, the Senate met pursuant to
17 adjournment. The Journal of Sunday, January 15,
18 2023, was read and approved. On motion, Senate
19 adjourned.
20 ACTING PRESIDENT PERSAUD: Without
21 objection, the Journal stands approved as read.
22 Presentation of petitions.
23 Messages from the Assembly.
24 The Secretary will read.
25 THE SECRETARY: Senator May moves
413
1 to discharge, from the Committee on Rules,
2 Assembly Bill Number 607 and substitute it for
3 the identical Senate Bill 820, Third Reading
4 Calendar 29.
5 ACTING PRESIDENT PERSAUD: The
6 substitution is so ordered.
7 Messages from the Governor.
8 Reports of standing committees.
9 Reports of select committees.
10 Communications and reports from
11 state officers.
12 Motions and resolutions.
13 Senator Gianaris.
14 SENATOR GIANARIS: Good morning,
15 Madam President.
16 Let me welcome Senator Griffo to the
17 Floor Leader chair on the Republican side. It's
18 a pleasure to work with him today.
19 I move to adopt the Resolution
20 Calendar.
21 ACTING PRESIDENT PERSAUD: All
22 those in favor of adopting the Resolution
23 Calendar, please signify by saying aye.
24 (Response of "Aye.")
25 ACTING PRESIDENT PERSAUD: Opposed,
414
1 nay.
2 (No response.)
3 ACTING PRESIDENT PERSAUD: The
4 Resolution Calendar is adopted.
5 Senator Gianaris.
6 SENATOR GIANARIS: Please take up
7 the calendar at this time.
8 ACTING PRESIDENT PERSAUD: The
9 Secretary will read.
10 THE SECRETARY: Calendar Number 26,
11 Senate Print 817, by Senator Hoylman-Sigal, an
12 act to amend the Elder Law.
13 ACTING PRESIDENT PERSAUD: Read the
14 last section.
15 THE SECRETARY: Section 2. This
16 act shall take effect on the same date and in the
17 same manner as a chapter of the Laws of 2022.
18 ACTING PRESIDENT PERSAUD: Call the
19 roll.
20 (The Secretary called the roll.)
21 ACTING PRESIDENT PERSAUD: Announce
22 the results.
23 THE SECRETARY: In relation to
24 Calendar Number 26, those Senators voting in the
25 negative are Senators Lanza, Oberacker, Ortt and
415
1 Walczyk.
2 Ayes, 55. Nays, 4.
3 ACTING PRESIDENT PERSAUD: The bill
4 is passed.
5 THE SECRETARY: Calendar Number 29,
6 Assembly Print 607, by Assemblymember Barrett, an
7 act to amend a chapter of the Laws of 2022.
8 ACTING PRESIDENT PERSAUD: Read the
9 last section.
10 THE SECRETARY: Section 2. This
11 act shall take effect on the same date and in the
12 same manner as a chapter of the Laws of 2022.
13 ACTING PRESIDENT PERSAUD: Call the
14 roll.
15 (The Secretary called the roll.)
16 ACTING PRESIDENT PERSAUD: Announce
17 the results.
18 THE SECRETARY: Ayes, 60.
19 ACTING PRESIDENT PERSAUD: The bill
20 is passed.
21 THE SECRETARY: Calendar Number 30,
22 Senate Print 821, by Senator Harckham, an act to
23 amend the Tax Law.
24 ACTING PRESIDENT PERSAUD: Read the
25 last section.
416
1 THE SECRETARY: Section 2. This
2 act shall take effect on the same date and in the
3 same manner as a chapter of the Laws of 2022.
4 ACTING PRESIDENT PERSAUD: Call the
5 roll.
6 (The Secretary called the roll.)
7 ACTING PRESIDENT PERSAUD: Announce
8 the results.
9 THE SECRETARY: Ayes, 60.
10 ACTING PRESIDENT PERSAUD: The bill
11 is passed.
12 THE SECRETARY: Calendar Number 33,
13 Senate Print 824, by Senator Sanders, an act to
14 amend the Insurance Law.
15 ACTING PRESIDENT PERSAUD: Read the
16 last section.
17 THE SECRETARY: Section 7. This
18 act shall take effect immediately.
19 ACTING PRESIDENT PERSAUD: Call the
20 roll.
21 (The Secretary called the roll.)
22 ACTING PRESIDENT PERSAUD: Announce
23 the results.
24 THE SECRETARY: Ayes, 60.
25 ACTING PRESIDENT PERSAUD: The bill
417
1 is passed.
2 THE SECRETARY: Calendar Number 34,
3 Senate Print 825, by Senator Hoylman-Sigal, an
4 act to amend the Insurance Law.
5 ACTING PRESIDENT PERSAUD: Read the
6 last section.
7 THE SECRETARY: Section 5. This
8 act shall take effect immediately.
9 ACTING PRESIDENT PERSAUD: Call the
10 roll.
11 (The Secretary called the roll.)
12 ACTING PRESIDENT PERSAUD: Announce
13 the results.
14 THE SECRETARY: In relation to
15 Calendar Number 34, those Senators voting in the
16 negative are Senators Griffo, Ortt, Stec and
17 Tedisco.
18 Ayes, 56. Nays, 4.
19 ACTING PRESIDENT PERSAUD: The bill
20 is passed.
21 THE SECRETARY: Calendar Number 70,
22 Senate Print 101, by Senator Ryan, an act to
23 amend the Vehicle and Traffic Law.
24 ACTING PRESIDENT PERSAUD: Read the
25 last section.
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1 THE SECRETARY: Section 9. This
2 act shall take effect one year after it shall
3 have become a law.
4 ACTING PRESIDENT PERSAUD: Call the
5 roll.
6 (The Secretary called the roll.)
7 ACTING PRESIDENT PERSAUD: Announce
8 the results.
9 THE SECRETARY: In relation to
10 Calendar Number 70, voting in the negative:
11 Senator Oberacker.
12 Ayes, 59. Nays, 1.
13 ACTING PRESIDENT PERSAUD: The bill
14 is passed.
15 THE SECRETARY: Calendar Number 71,
16 Senate Print 177, by Senator Gianaris, an act to
17 amend the Banking Law.
18 ACTING PRESIDENT PERSAUD: Read the
19 last section.
20 THE SECRETARY: Section 2. This
21 act shall take effect on the 180th day after it
22 shall have become a law.
23 ACTING PRESIDENT PERSAUD: Call the
24 roll.
25 (The Secretary called the roll.)
419
1 ACTING PRESIDENT PERSAUD: Announce
2 the results.
3 THE SECRETARY: In relation to
4 Calendar 71, those Senators voting in the
5 negative are Senators Gallivan, Helming,
6 Oberacker, Ortt, Palumbo, Stec, Tedisco and Weik.
7 Ayes, 52. Nays, 8.
8 ACTING PRESIDENT PERSAUD: The bill
9 is passed.
10 THE SECRETARY: Calendar Number 72,
11 Senate Print 492A, by Senator Comrie, an act to
12 amend the Public Authorities Law.
13 ACTING PRESIDENT PERSAUD: Read the
14 last section.
15 THE SECRETARY: Section 7. This
16 act shall take effect on the 120th day after it
17 shall have become a law.
18 ACTING PRESIDENT PERSAUD: Call the
19 roll.
20 (The Secretary called the roll.)
21 ACTING PRESIDENT PERSAUD: Announce
22 the results.
23 THE SECRETARY: In relation to
24 Calendar Number 72, those Senators voting in the
25 negative are Senators Borrello, Helming, Murray
420
1 and Palumbo.
2 Ayes, 57. Nays, 4.
3 ACTING PRESIDENT PERSAUD: The bill
4 is passed.
5 THE SECRETARY: Calendar Number 74,
6 Senate Print 564A, by Senator Kavanagh, an act to
7 amend the Banking Law.
8 SENATOR GRIFFO: Lay it aside.
9 ACTING PRESIDENT PERSAUD: Lay it
10 aside.
11 THE SECRETARY: Calendar Number 78,
12 Senate Print 935, by Senator Kennedy, an act to
13 amend the Real Property Tax Law.
14 ACTING PRESIDENT PERSAUD: Read the
15 last section.
16 THE SECRETARY: Section 2. This
17 act shall take effect on the 90th day after it
18 shall have become a law.
19 ACTING PRESIDENT PERSAUD: Call the
20 roll.
21 (The Secretary called the roll.)
22 ACTING PRESIDENT PERSAUD: Announce
23 the results.
24 THE SECRETARY: Ayes, 61.
25 ACTING PRESIDENT PERSAUD: The bill
421
1 is passed.
2 THE SECRETARY: Calendar Number 80,
3 Senate Print 967, by Senator Ryan, an act to
4 amend the Real Property Tax Law.
5 ACTING PRESIDENT PERSAUD: Read the
6 last section.
7 THE SECRETARY: Section 2. This
8 act shall take effect immediately.
9 ACTING PRESIDENT PERSAUD: Call the
10 roll.
11 (The Secretary called the roll.)
12 ACTING PRESIDENT PERSAUD: Announce
13 the results.
14 THE SECRETARY: Ayes, 62.
15 ACTING PRESIDENT PERSAUD: The bill
16 is passed.
17 THE SECRETARY: Calendar Number 82,
18 Senate Print 1065, by Senator Mayer, an act to
19 amend the Banking Law.
20 ACTING PRESIDENT PERSAUD: Read the
21 last section.
22 THE SECRETARY: Section 2. This
23 act shall take effect one year after it shall
24 have become a law.
25 ACTING PRESIDENT PERSAUD: Call the
422
1 roll.
2 (The Secretary called the roll.)
3 ACTING PRESIDENT PERSAUD: Announce
4 the results.
5 THE SECRETARY: In relation to
6 Calendar Number 82, those Senators voting in the
7 negative are Senators Borrello, Griffo,
8 Oberacker, Palumbo, Stec, Tedisco, Walczyk and
9 Weik.
10 Ayes, 54. Nays, 8.
11 ACTING PRESIDENT PERSAUD: The bill
12 is passed.
13 THE SECRETARY: Calendar Number 83,
14 Senate Print 1144, by Senator Sanders, an act to
15 amend the Banking Law and the Penal Law.
16 ACTING PRESIDENT PERSAUD: Read the
17 last section.
18 THE SECRETARY: Section 11. This
19 act shall take effect on the 30th day after it
20 shall have become a law.
21 ACTING PRESIDENT PERSAUD: Call the
22 roll.
23 (The Secretary called the roll.)
24 ACTING PRESIDENT PERSAUD: Announce
25 the results.
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1 THE SECRETARY: In relation to
2 Calendar Number 83, those Senators voting in the
3 negative are Senators Ashby, Borrello, Gallivan,
4 Griffo, Helming, Mattera, Murray, Oberacker,
5 Ortt, Palumbo, Rolison, Stec, Tedisco, Walczyk
6 and Weik. Also Senator Lanza.
7 Ayes, 46. Nays, 16.
8 ACTING PRESIDENT PERSAUD: The bill
9 is passed.
10 THE SECRETARY: Calendar Number 84,
11 Senate Print 1242, by Senator Felder, an act to
12 amend the Vehicle and Traffic Law.
13 ACTING PRESIDENT PERSAUD: Read the
14 last section.
15 THE SECRETARY: Section 2. This
16 act shall take effect on the first of April.
17 ACTING PRESIDENT PERSAUD: Call the
18 roll.
19 (The Secretary called the roll.)
20 ACTING PRESIDENT PERSAUD: Announce
21 the results.
22 THE SECRETARY: In relation to
23 Calendar Number 84, those Senators voting in the
24 negative are Senators Borrello, Gallivan, Griffo,
25 Helming, Krueger, Ortt, Walczyk and Weik.
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1 Ayes, 54. Nays, 8.
2 ACTING PRESIDENT PERSAUD: The bill
3 is passed.
4 Senator Gianaris, that completes the
5 reading of today's calendar.
6 SENATOR GIANARIS: Please let's
7 move on to the controversial calendar.
8 ACTING PRESIDENT PERSAUD: The
9 Secretary will ring the bell.
10 The Secretary will read.
11 THE SECRETARY: Calendar Number 74,
12 Senate Print 564A, by Senator Kavanagh, an act to
13 amend the Banking Law.
14 ACTING PRESIDENT PERSAUD: Senator
15 Borrello.
16 SENATOR BORRELLO: Yes,
17 Madam President, would the sponsor yield for a
18 question?
19 ACTING PRESIDENT PERSAUD: Does the
20 sponsor yield?
21 SENATOR KAVANAGH: Yes,
22 Madam President.
23 ACTING PRESIDENT PERSAUD: The
24 sponsor yields.
25 SENATOR BORRELLO: Thank you,
425
1 Madam President. Through you, Madam President.
2 Senator Kavanagh, thank you. We
3 were just discussing debating yesterday, and here
4 we are today. So -- oh, happy birthday also.
5 (Cheers from members.)
6 SENATOR BORRELLO: I'm done with my
7 questions. No, I don't -- no (laughing).
8 (Applause.)
9 SENATOR KAVANAGH: I cannot think
10 of a better activity to be doing on my birthday.
11 (Laughter.)
12 SENATOR BORRELLO: So I have some
13 concerns with this, obviously. You start talking
14 about lenders, we already are seeing pressure
15 with rising interest rates. Mortgages are
16 obviously part of the American dream, being able
17 to own your own home, and then I have some
18 concerns.
19 Can you first -- we -- you're
20 talking about basically holding lenders liable
21 for a number of things, well beyond what the
22 current laws are and well beyond, you know, even
23 federal limitations. But could you -- you talk
24 about material noncompliance. Can you really --
25 there's no definition in this bill on what
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1 material noncompliance really is. Can you please
2 tell me what that means?
3 SENATOR KAVANAGH: Through you,
4 Madam President, yes. We debated this bill on
5 this floor, I believe it was last year. And one
6 of the concerns that I heard from the other side
7 of the aisle was the bill was written in such a
8 way that it said noncompliance. And there was an
9 implication that any noncompliance at all with
10 the regulations or the law would result in
11 adverse impacts on lenders and mortgage
12 servicers.
13 So we've added a provision that
14 specifies that the violation has to be material.
15 So the private right of action in this bill would
16 require that the borrower, the homeowner bringing
17 the action, would have to show that they've been
18 injured and meet the other requirements of --
19 that one would normally -- common, that are
20 common in litigation.
21 But in addition, they'd have to show
22 that any -- any violation is material. There is
23 not, as has been noted, a -- we don't specify
24 what "material" means in this context because
25 there are many different regulations. But, you
427
1 know, materiality is the notion that it has been
2 nontrivial, it has to be significant, it has to
3 have -- like they can't be a sort of de minimis
4 injury, there has to be a significant injury, a
5 real -- a real -- what we would think of as a
6 real injury.
7 But that is the sort of thing that
8 judges and litigants have to work to establish on
9 the merits all the time.
10 SENATOR BORRELLO: Madam President,
11 will the sponsor continue to yield.
12 ACTING PRESIDENT PERSAUD: Does the
13 sponsor yield?
14 SENATOR KAVANAGH: Yes, Madam
15 President.
16 ACTING PRESIDENT PERSAUD: The
17 sponsor yields.
18 SENATOR BORRELLO: Through you,
19 Madam President. So we're creating a private
20 right action, which we don't currently have.
21 Which means anyone can bring an action against
22 a -- a lender, one of the -- a borrower.
23 So when you -- when you do that, so
24 you're saying that we really don't have a
25 definition for, you know, what a -- what material
428
1 noncompliance is, and a definition of an injury.
2 So essentially there's going to have to be
3 litigation. And -- and a judge will have to
4 determine what material noncompliance would be.
5 Is there any way to cure this
6 without having to go to litigation?
7 SENATOR KAVANAGH: So first of all,
8 like any -- it's not true that anyone could
9 bring -- I mean, anyone is entitled to assert
10 that they have an action. But in order to have
11 an action, you would have to be someone who has
12 been -- a homeowner, typically, somebody who has
13 received mortgage funds. You'd have to be
14 someone who has been injured by reason of a
15 violation of the rules and regulations.
16 That's what -- so this creates -- to
17 the extent this is creating something new, it is
18 creating this notion that if you are injured
19 because your lender or your mortgage servicer has
20 violated the law, then you have some recourse in
21 court. And that is the core purpose of the bill.
22 In terms of having to litigate
23 once -- if you're a homeowner and you've decided
24 you've been injured, yes, you have to litigate --
25 you're going to have to litigate the question of
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1 really whether you've been injured. You're going
2 to have to litigate the question of whether
3 your -- whether this party that you're suing has
4 in fact violated the law, and you're going to
5 have to litigate whether that violation is a
6 material violation or, say, a trivial violation.
7 And yeah, that's -- so we have
8 added -- again, partly in response to some
9 concerns we heard on this floor from the other
10 side of the aisle last year, we've added an
11 additional element that the plaintiffs, the
12 people bringing the action, would have to
13 demonstrate -- because, you know, we heard last
14 year that lack -- like there was no -- there was
15 no standard that said the violation had to be a
16 meaningful violation. So we've decided to add
17 that.
18 So yes, it does add another element
19 that needs to be litigated. But litigation is
20 the way parties decide who's been injured and to
21 what extent there's -- there's recourse.
22 In terms of your question about
23 cure, there are provisions in the state law for
24 some of the violation -- for some of the rules
25 that the violation of which could be a predicate
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1 for a suit in this -- for this private right of
2 action we're adding, there are in some cases
3 provisions that specify how one might cure a
4 violation of that provision.
5 That -- that approach is also
6 paralleled in some of the federal law. And I
7 would note there is a private right of action
8 under federal law already. There's also private
9 rights of action in Ohio and California. This is
10 not novel. We're not, you know, doing something
11 to -- to lenders in New York that hasn't happened
12 in other places and, indeed, isn't available in
13 federal law in every state in the country.
14 But so in some circumstances
15 somebody may have violated and then cured it,
16 presumably it would be -- you would be
17 hard-pressed to say you've been injured if the
18 injury has been cured.
19 But again, all -- all of -- I think
20 all of that would be -- the significance of a
21 cure or a failure to cure I think would be
22 something that the parties would have to
23 litigate.
24 SENATOR BORRELLO: Madam President,
25 will the sponsor continue to yield.
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1 ACTING PRESIDENT PERSAUD: Does the
2 sponsor yield?
3 SENATOR KAVANAGH: Yes, Madam
4 President.
5 ACTING PRESIDENT PERSAUD: The
6 sponsor yields.
7 SENATOR BORRELLO: So I just want
8 to dig a little deeper on this. You're saying,
9 then, that, you know, there would be an
10 opportunity to cure. In other words, if it was a
11 mistake, an honest mistake, they could fix that
12 mistake and that would then cure the injury from
13 a legal standpoint?
14 SENATOR KAVANAGH: Again, I don't
15 want to prejudge how the judiciary would view
16 this. And in another building -- in the building
17 across the street people are discussing how the
18 judiciary is going -- going to be managed in the
19 next -- in the coming years.
20 But what I'm saying is that there
21 are -- in some cases there are provisions that
22 are in the rules that are referenced in this bill
23 where the provision itself specifies how to cure
24 a violation of that. So there are -- there are
25 some circumstances where there's black-letter law
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1 that says if you violated this, you may cure it
2 in this way. And that's true at the federal
3 level, it's true at the state level.
4 This bill does not add a
5 general-purpose cure provision that says if you
6 cured it, you're fine. Presumably courts would
7 be empowered to determine whether -- whether
8 efforts the party that violated the rule --
9 whether their efforts to, you know, compensate
10 the borrower or their efforts to cure the
11 violation are relevant to the question of whether
12 the person's been injured and whether the injury
13 is -- whether the violation is material.
14 SENATOR BORRELLO: Through you,
15 Madam President, will the sponsor continue to
16 yield?
17 ACTING PRESIDENT PERSAUD: Does the
18 sponsor yield?
19 SENATOR KAVANAGH: Yes,
20 Madam President.
21 ACTING PRESIDENT PERSAUD: The
22 sponsor yields.
23 SENATOR BORRELLO: So if a
24 noncompliance is discovered and it's cured by
25 the -- the servicer, the -- you know, the -- the
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1 lender, would that still essentially forever bar
2 them from foreclosing? In other words, if there
3 was a violation but it was cured, does -- are
4 they now barred from being able to foreclose?
5 SENATOR KAVANAGH: So if -- if
6 somebody has violated the law and the
7 regulations that they're violating provide for a
8 cure and they do what's necessary to cure the
9 violation, I would -- the way I would think about
10 it is at that point they are not in violation of
11 the regulations.
12 And again, there would also have to
13 be presumably -- there would also still have --
14 there would have to be an injury that the party
15 is asserting. So if -- you know, if somebody,
16 you know, borrowed money from you and didn't pay
17 you back and then they pay you back, you'd be
18 hard -- you'd be in a -- maybe I shouldn't use a
19 borrower analogy.
20 But -- but if you -- if a violation
21 has occurred and then the violation has been
22 cured, presumably the cure diminishes the extent
23 to which you're able to assert that you've been
24 injured by the violation.
25 But again, DFS has power -- this --
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1 this bill references statute but also regs. DFS
2 does have the power to specify under what
3 circumstances someone is effectively curing.
4 My assumption -- and again, I --
5 I -- it's possible that somebody in the judiciary
6 would read this differently. But my assumption
7 is if you cured a violation, it would be such
8 that you're -- that the borrower is not -- is no
9 longer injured by the violation, and so they
10 probably wouldn't have a -- a cause at that
11 point.
12 SENATOR BORRELLO: Thank you.
13 Madam President, will the sponsor
14 continue to yield.
15 ACTING PRESIDENT PERSAUD: Does the
16 sponsor yield?
17 SENATOR KAVANAGH: Yes,
18 Madam President.
19 ACTING PRESIDENT PERSAUD: The
20 sponsor yields.
21 SENATOR BORRELLO: Thank you.
22 Through you, Madam President.
23 So you bring up DFS. And in fact,
24 you know, loan servicers are regularly examined
25 and -- and penalized by DFS. So what's the
435
1 purpose of this bill if we already have a -- a
2 procedure in place to ensure that servicers
3 are -- are being honest and -- and -- and doing
4 their job?
5 SENATOR KAVANAGH: The purpose of
6 this bill is to ensure -- through you,
7 Madam President -- to ensure that homeowners who
8 have been injured by a failure of lenders or
9 mortgage servicers to follow the law, that those
10 people, when they've been injured, they have some
11 recourse.
12 SENATOR BORRELLO: Madam President,
13 will the sponsor continue to yield?
14 ACTING PRESIDENT PERSAUD: Does the
15 sponsor yield?
16 SENATOR KAVANAGH: Yes,
17 Madam President.
18 ACTING PRESIDENT PERSAUD: The
19 sponsor yields.
20 SENATOR BORRELLO: All right. So
21 thank you for that.
22 So -- so I want to go back to the
23 private right of action. You know, this is a
24 concern of mine on so many bills that we have
25 here, that we are creating fertile ground, in my
436
1 opinion, for frivolous lawsuits.
2 So let's say a -- a mortgage
3 servicer has done -- has created some kind of a
4 technical violation. They gave a notice
5 incorrectly or, you know, a little late. Could
6 conceivably this create a situation for a
7 class-action lawsuit? In other words, this ABC
8 mortgage lender sent a notice out, you know,
9 30 days late and now everybody is in a class, to
10 create a class action lawsuit by a law firm
11 against that servicer and essentially could be,
12 you know, financially devastating if every loan
13 that they have out, or within a certain period of
14 time, is now subject to a class-action lawsuit.
15 Or even a group of lenders.
16 So my concern is that, and the
17 potential impact. Because that could be a --
18 certainly a big money situation. And, you know,
19 could break the back of an individual lender,
20 potentially.
21 SENATOR KAVANAGH: Through you,
22 Madam President, that's a bit hypothetical.
23 Perhaps you could elaborate a little more? In
24 the hypothetical, what is the injury that the --
25 SENATOR BORRELLO: The late notice.
437
1 SENATOR KAVANAGH: I'm sorry?
2 SENATOR BORRELLO: The late notice
3 to borrowers, their -- a required notice.
4 SENATOR KAVANAGH: Okay. So again,
5 through you, Madam President, in my mind a late
6 notice would be a violation of the law. It
7 would -- it would have to be determined whether
8 that late notice is material.
9 But also they'd have to
10 demonstrate -- the bill we have in front of us
11 clearly distinguishes between the notion that
12 you're violating the law and you're -- and as a
13 result of that violation, the borrower is
14 injured.
15 So a 30-day-late notice, a borrower
16 in that circumstance would have to demonstrate
17 that they had in fact been injured by that, by
18 that notice. And I guess it's conceivable that
19 they -- you know, that they have been. Maybe
20 they lost a great deal of money as a result of
21 that late notice. I'm not sure of the
22 circumstances of this hypothetical.
23 But if somebody -- that yeah, we're
24 saying if a homeowner loses a lot of money or has
25 some other injury to them, and that injury is not
438
1 cured in some way, then they have recourse.
2 And if thousands of people are
3 injured in that way, the -- a class action is the
4 mechanism. As -- as I'm sure my colleague knows,
5 it's not so easy to certify a class and get a
6 class action going. But a class action is the
7 mechanism when very large numbers of -- of people
8 have been injured in a way that is sufficiently
9 similar that a class action is the most efficient
10 way for the judiciary to do it.
11 I don't think there's -- you know,
12 that this statute is more likely to lead to class
13 actions than numerous other statutes we've
14 passed. But that is -- that is the mechanism for
15 that.
16 SENATOR BORRELLO: Thank you.
17 Madam President, on the bill.
18 ACTING PRESIDENT PERSAUD: Senator
19 Borrello on the bill.
20 SENATOR BORRELLO: Senator
21 Kavanagh, thank you again for the birthday
22 debate, appreciate it.
23 You know, I -- I look at bills like
24 this and others and I say to myself, what is the
25 goal? The goal is to protect consumers, and I
439
1 get that. But when you -- when you do things
2 like this, you limit choice, you raise costs.
3 And that, to me, is a bigger injury to consumers.
4 This -- and so many other bills that
5 we vote on -- creates a private right of action,
6 which creates fertile ground for frivolous
7 lawsuits. Now, last week in this chamber we had
8 a very vigorous debate on why we should limit the
9 ability for someone who feels that their
10 constitutional rights have been violated --
11 instead of having a choice of 62 counties to
12 bring their lawsuit, it should only come down to
13 five. Because we wanted to streamline the
14 process and reduce frivolous lawsuits.
15 Yet since that bill was debated, I'm
16 counting this as the third bill that creates more
17 opportunity for frivolous lawsuits. Now, you
18 might say to yourself, well, what's the material
19 violation? Well, that's a good question. But it
20 may cost money to get that answer through
21 litigation.
22 And in the case of a -- of a class
23 action lawsuit, you could create a situation
24 where a minor violation, a notice that was sent
25 out to all borrowers, was illegal because it was
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1 a few days late. That now creates the situation
2 for a class-action lawsuit.
3 Now, maybe the -- the result isn't
4 that the company has to refund all the mortgages.
5 That would be unreasonable. But it could be
6 like, as we've all experienced, as all of us
7 probably have been part of a class-action
8 lawsuit, that I get a check in the mail for $1.86
9 that I probably never bother cashing, but the
10 law firm made hundreds of thousands, if not
11 millions of dollars in that process. And that's
12 what this type of legislation incubates, in my
13 opinion.
14 But when we start talking about
15 mortgages and the ability for someone to own a
16 home in New York State, there's kind of a sense
17 of arrogance, in my opinion, that everybody wants
18 to do business in New York State because this is
19 the great State of New York. Well, that's just
20 not the case. We're seeing that every day. We
21 see businesses leave New York State every day
22 because they can't do business here, they can no
23 long afford to do business here.
24 But in the case of mortgage lenders,
25 that means less people are going to have the
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1 ability to own a home in this state. And that,
2 to me, is a real tragedy, because that is the
3 American dream.
4 So I'll be voting no on this, and
5 I'll certainly be encouraging my colleagues to do
6 the same.
7 Thank you, Madam President.
8 ACTING PRESIDENT PERSAUD: Thank
9 you, Senator.
10 Are there any other Senators wishing
11 to be heard?
12 Seeing and hearing none, debate is
13 closed.
14 Senator Gianaris.
15 SENATOR GIANARIS: By agreement
16 with our colleagues across the aisle, we are
17 returning this bill to the noncontroversial
18 calendar.
19 So if we can please do that and take
20 it up for a vote.
21 ACTING PRESIDENT PERSAUD: The bill
22 is restored to the noncontroversial calendar.
23 Read the last section.
24 THE SECRETARY: Section 2. This
25 act shall take effect on the 30th day after it
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1 shall have become a law.
2 ACTING PRESIDENT PERSAUD: Call the
3 roll.
4 (The Secretary called the roll.)
5 ACTING PRESIDENT PERSAUD: Senator
6 Kavanagh to explain his vote.
7 SENATOR KAVANAGH: Thank you,
8 Madam President.
9 And thank you for the opportunity to
10 debate today. And, you know, a good, lively
11 discussion. I would note that last year's debate
12 has resulted in specific amendments to the bill,
13 so we always appreciate the opportunity to
14 discuss it.
15 Just to say, again, this is about
16 circumstances where lenders and mortgage
17 servicers are violating the law and it is harming
18 homeowners. It is true that any cause of action
19 that -- any -- any law that creates an
20 opportunity for people to bring a legitimate
21 cause of action also creates the opportunity for
22 people to claim they've been injured when they
23 haven't. But we have had cases in New York where
24 mortgage servicers have aggressively and
25 apparently intentionally charged fees to
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1 homeowners that were legally impermissible. We
2 have had commentary in our courts that say, you
3 know, it's up to the Legislature to determine
4 whether there ought to be a private right of
5 action.
6 And it is -- you know, it's the
7 judgment -- the judgment that's reflected in this
8 bill is that homeowners who are also facing
9 the -- the challenges that -- the challenges that
10 my colleague mentioned, you know, the -- the
11 rising interest rates and the difficulties in the
12 economy, should have some ability to assert their
13 rights. That's what this bill is about.
14 I would note again there are private
15 rights of actions at the state level in at least
16 two other states, including the largest state in
17 the United States, California, and certainly
18 Ohio, and also there is a private right of action
19 under federal law. So this rash of frivolous
20 litigation -- you know, many, many people in
21 America have a right to sue right now under
22 federal law and they have the defense -- they
23 have a defense under federal law, and that has
24 not led to the kind of -- this kind of pernicious
25 frivolous litigation that -- that we're talking
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1 about here today.
2 Again, so I -- I vote aye and again
3 I thank the leader and my colleagues in the house
4 for supporting this bill.
5 ACTING PRESIDENT PERSAUD: Senator
6 Kavanagh to be recorded in the affirmative.
7 Announce the results.
8 THE SECRETARY: In relation to
9 Calendar 74, those Senators voting in the
10 negative are Senators Ashby, Borrello, Gallivan,
11 Griffo, Helming, Lanza, Mattera, Murray,
12 Oberacker, Ortt, Palumbo, Rolison, Stec, Tedisco,
13 Walczyk, Weber and Weik.
14 Ayes, 45. Nays, 17.
15 ACTING PRESIDENT PERSAUD: The bill
16 is passed.
17 Senator Gianaris, that completes the
18 reading of today's calendar.
19 SENATOR GIANARIS: Is there any
20 further business at the desk?
21 ACTING PRESIDENT PERSAUD: There is
22 no further business at the desk.
23 SENATOR GIANARIS: I move to
24 adjourn until Monday, January 23rd, at 3:00 p.m.,
25 with the intervening days being legislative days.
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1 ACTING PRESIDENT PERSAUD: On
2 motion, the Senate stands adjourned until Monday,
3 January 23rd, at 3:00 p.m., with intervening days
4 being legislative days.
5 (Whereupon, at 11:43 a.m., the
6 Senate adjourned.)
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