Bill Text: NY A00588 | 2013-2014 | General Assembly | Introduced

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Bill Title: Relates to prohibiting a lender from blocking access to funds issued under a credit line mortgage.

Spectrum: Moderate Partisan Bill (Democrat 12-2)

Status: (Introduced - Dead) 2014-01-08 - referred to banks [A00588 Detail]

Download: New_York-2013-A00588-Introduced.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                          588
                              2013-2014 Regular Sessions
                                 I N  A S S E M B L Y
                                      (PREFILED)
                                    January 9, 2013
                                      ___________
       Introduced  by M. of A. WEPRIN -- Multi-Sponsored by -- M. of A. ABINAN-
         TI, COOK, DenDEKKER, DUPREY, GABRYSZAK, GALEF, GIBSON, JAFFEE, MAISEL,
         McDONOUGH, RIVERA, ROBERTS, ROBINSON, SCARBOROUGH, ZEBROWSKI  --  read
         once and referred to the Committee on Banks
       AN  ACT  to amend the banking law and the real property law, in relation
         to credit line mortgages
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  Section 380-g of the banking law, as added by chapter 625
    2  of the laws of 1976, is amended to read as follows:
    3    S 380-g. Power to engage in line of credit  financing  of  residential
    4  real  estate.  1. A savings and loan association is authorized to invest
    5  an amount, not exceeding the lesser of (a) ten per centum of the sum  of
    6  its  surplus,  undivided  profits, and reserves or (b) one per centum of
    7  its assets, in loans or in interests therein the  principal  purpose  of
    8  which  is to provide financing with respect to what is or is expected to
    9  become primarily residential real estate within this  state,  where  (i)
   10  the  association  relies  substantially  for repayment on the borrower's
   11  general credit standing, with or without other  security,  or  (ii)  the
   12  association  relies on other assurances for repayment, including but not
   13  limited to a guaranty or similar obligation of a third  party,  and,  in
   14  either  case  described  in clause (i) or (ii), regardless of whether or
   15  not the association takes security.
   16    2. A SAVINGS AND LOAN ASSOCIATION SHALL  NOT  HAVE  THE  AUTHORITY  TO
   17  BLOCK  ACCESS  TO CREDIT LINE FUNDS BY A BORROWER OR TO OTHERWISE REVOKE
   18  THE TERMS OF A CREDIT LINE MORTGAGE WHEN A BORROWER IS CURRENT ON REPAY-
   19  MENT OF SUCH INDEBTEDNESS.
   20    S 2. Section 281 of the real property law is amended by adding  a  new
   21  subdivision 2-a to read as follows:
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD03861-01-3
       A. 588                              2
    1    2-A. AN AUTHORIZED LENDER SHALL NOT HAVE THE AUTHORITY TO BLOCK ACCESS
    2  TO CREDIT LINE FUNDS BY A BORROWER OR TO OTHERWISE REVOKE THE TERMS OF A
    3  CREDIT  LINE  MORTGAGE  WHEN  A BORROWER IS CURRENT ON REPAYMENT OF SUCH
    4  INDEBTEDNESS.
    5    S 3. This act shall take effect immediately.