Bill Text: NY A08610 | 2009-2010 | General Assembly | Amended

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Bill Title: Provides that where a home improvement contractor is acting as a mortgage broker without being registered as required under the Banking Law, a mortgage banker, mortgage broker or exempt organization may not engage in such transaction with the contractor, and shall promptly notify the banking department that such person is acting as an unregistered broker.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2010-06-03 - print number 8610a [A08610 Detail]

Download: New_York-2009-A08610-Amended.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        8610--A
                              2009-2010 Regular Sessions
                                 I N  A S S E M B L Y
                                     May 29, 2009
                                      ___________
       Introduced  by  M. of A. HOYT -- read once and referred to the Committee
         on Banks -- recommitted to the Committee on Banks in  accordance  with
         Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered
         reprinted as amended and recommitted to said committee
       AN  ACT  to  amend  the  banking  law  and  the general business law, in
         relation to home improvement contractors
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. The banking law is amended by adding a new section 595-c to
    2  read as follows:
    3    S  595-C. RESTRICTIONS ON RELATIONSHIPS WITH HOME IMPROVEMENT CONTRAC-
    4  TORS. 1. A MORTGAGE BANKER, EXEMPT ORGANIZATION OR MORTGAGE BROKER SHALL
    5  NOT PAY A REFERRAL FEE OR  OTHER  COMPENSATION  TO  A  HOME  IMPROVEMENT
    6  CONTRACTOR  IN CONNECTION WITH THE MAKING OF A MORTGAGE LOAN, UNLESS (A)
    7  THE HOME IMPROVEMENT CONTRACTOR IS AN AGENT OR EMPLOYEE OF SUCH MORTGAGE
    8  BANKER, EXEMPT ORGANIZATION OR MORTGAGE BROKER (B) SUCH RELATIONSHIP HAS
    9  BEEN PREVIOUSLY REPORTED TO THE  DEPARTMENT  (C)  SUCH  RELATIONSHIP  IS
   10  SEPARATELY  AND  CONSPICUOUSLY  DISCLOSED IN WRITING TO THE CONSUMER (D)
   11  AND SUCH  RELATIONSHIP  IS  SUBJECT  TO  ANY  ADDITIONAL  CONDITIONS  OR
   12  REQUIREMENTS  AS  PROVIDED  IN  REGULATIONS  PROMULGATED  BY THE BANKING
   13  BOARD.  FOR PURPOSES OF THIS SUBDIVISION, THE  TERM  COMPENSATION  SHALL
   14  NOT  MEAN  OR INCLUDE THE PAYMENT OF LOAN PROCEEDS FOR WORK PERFORMED OR
   15  MATERIALS PURCHASED.
   16    2. IF THE SUPERINTENDENT DETERMINES, IN HIS OR  HER  SOLE  DISCRETION,
   17  THAT  THERE  IS  A  PATTERN OF BONA FIDE COMPLAINTS OF ABUSIVE PRACTICES
   18  INVOLVING A RELATIONSHIP BETWEEN A MORTGAGE BANKER, MORTGAGE  BROKER  OR
   19  EXEMPT  ORGANIZATION  AND  A  HOME IMPROVEMENT CONTRACTOR OR CONTRACTORS
   20  WITH WHOM IT HAS A FORMAL OR INFORMAL BUSINESS ARRANGEMENT,  THE  SUPER-
   21  INTENDENT  MAY,  AFTER  NOTICE  AND A HEARING, IMPOSE CONDITIONS ON SUCH
   22  MORTGAGE BANKER, MORTGAGE BROKER OR EXEMPT ORGANIZATION,  INCLUDING  BUT
   23  NOT  LIMITED  TO: REQUIRING THE TERMINATION OF ANY RELATIONSHIP OR BUSI-
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD07654-04-0
       A. 8610--A                          2
    1  NESS ARRANGEMENT WITH  A  SPECIFIC  CONTRACTOR  WHICH  HAS  RESULTED  IN
    2  ABUSIVE PRACTICES; REQUIRING VERIFICATION PRIOR TO MAKING ANY LOANS THAT
    3  A CONTRACTOR IS LICENSED AND MEETING ANY OTHER REQUIREMENTS OF ANY LOCAL
    4  LAWS;  OBTAINING  A  COPY OF THE SIGNED WRITTEN AGREEMENT REQUIRED UNDER
    5  SECTION SEVEN HUNDRED SEVENTY-ONE OF THE GENERAL BUSINESS LAW AND  VERI-
    6  FYING  THAT THE APPLICANT HAS RECEIVED SUCH A COPY; NOTIFYING THE APPLI-
    7  CANT OF THEIR RIGHT TO  CONSULT  WITH  THE  ATTORNEY  GENERAL'S  OFFICE,
    8  CONSUMER  PROTECTION BOARD OR BETTER BUSINESS BUREAU TO DETERMINE IF ANY
    9  COMPLAINTS HAVE BEEN FILED AGAINST A CONTRACTOR; REQUIRING  THE  DISCLO-
   10  SURE  OF  THE  RESPONSIBILITIES  OF HOME IMPROVEMENT CONTRACTORS AND THE
   11  RIGHTS OF CONSUMERS AND OPTIONS FOR PURSUING REMEDIES IN  THE  EVENT  OF
   12  PROBLEMS;  REQUIRING  THE  INSPECTION  OF ANY WORK DONE TO DATE; AND ANY
   13  OTHER RESTRICTIONS OR CONDITIONS THAT THE SUPERINTENDENT DEEMS NECESSARY
   14  AND APPROPRIATE TO PROTECT CONSUMERS.
   15    3. FOR THE PURPOSES OF THIS SECTION:
   16    (A) "HOME IMPROVEMENT"  MEANS  THE  REPAIRING,  REMODELING,  ALTERING,
   17  CONVERTING,  OR  MODERNIZING  OF, OR ADDING TO, RESIDENTIAL PROPERTY AND
   18  SHALL INCLUDE, BUT  NOT  BE  LIMITED  TO,  THE  CONSTRUCTION,  ERECTION,
   19  REPLACEMENT,  OR IMPROVEMENT OF DRIVEWAYS, SWIMMING POOLS, SIDING, INSU-
   20  LATION, ROOFING, WINDOWS, TERRACES, PATIOS, LANDSCAPING, FENCES,  PORCH-
   21  ES,  GARAGES,  SOLAR  ENERGY  SYSTEMS,  FLOORING,  BASEMENTS,  AND OTHER
   22  IMPROVEMENTS OF THE RESIDENTIAL PROPERTY  AND  ALL  STRUCTURES  OR  LAND
   23  ADJACENT  TO  IT. "HOME IMPROVEMENT" SHALL ALSO MEAN THE INSTALLATION OF
   24  HOME IMPROVEMENT GOODS OR THE FURNISHING OF HOME  IMPROVEMENT  SERVICES.
   25  "HOME IMPROVEMENT" SHALL NOT INCLUDE:
   26    (1) THE SALE OR CONSTRUCTION OF A NEW HOME;
   27    (2)  THE SALE OF GOODS BY A SELLER WHO NEITHER ARRANGES TO PERFORM NOR
   28  PERFORMS, DIRECTLY OR INDIRECTLY, ANY WORK OR LABOR IN  CONNECTION  WITH
   29  THE INSTALLATION OR APPLICATION OF THE GOODS;
   30    (3) THE SALE OR INSTALLATION OF APPLIANCES, SUCH AS STOVES, REFRIGERA-
   31  TORS,  FREEZERS,  ROOM AIR CONDITIONERS, DISHWASHERS, CLOTHES WASHERS OR
   32  DRYERS, WHICH ARE DESIGNED TO BE REMOVABLE  FROM  THE  PREMISES  WITHOUT
   33  MATERIAL ALTERATION THEREOF;
   34    (4)  THE SALE OR INSTALLATION OF DECORATIVE GOODS OR SERVICES, SUCH AS
   35  DRAPERIES AND CARPETS; OR
   36    (5) THE PERFORMANCE OF REPAIRS, REPLACEMENTS, OR OTHER SERVICES PURSU-
   37  ANT TO AN EXPRESS OR IMPLIED WARRANTY, OR A MAINTENANCE AGREEMENT.
   38    (B) "HOME IMPROVEMENT CONTRACTOR" MEANS A PERSON, FIRM OR  CORPORATION
   39  WHICH  OWNS  OR  OPERATES A HOME IMPROVEMENT BUSINESS OR WHO UNDERTAKES,
   40  OFFERS TO UNDERTAKE OR AGREES TO PERFORM ANY HOME IMPROVEMENT FOR A  FEE
   41  AND  FOR WHOM THE TOTAL CASH PRICE OF ALL OF HIS OR HER HOME IMPROVEMENT
   42  CONTRACTS WITH ALL HIS  CUSTOMERS  EXCEEDS  ONE  THOUSAND  FIVE  HUNDRED
   43  DOLLARS DURING ANY PERIOD OF TWELVE CONSECUTIVE MONTHS. HOME IMPROVEMENT
   44  CONTRACTOR DOES NOT INCLUDE A PERSON, FIRM, CORPORATION, LANDLORD, COOP-
   45  ERATIVE  CORPORATION,  CONDOMINIUM  BOARD  OF  MANAGERS, JOINT TENANT OR
   46  CO-TENANT THAT OWNS, IN WHOLE OR IN PART, THE PROPERTY TO BE IMPROVED.
   47    S 2. Subdivision 1 of section 771  of  the  general  business  law  is
   48  amended by adding a new paragraph (i) to read as follows:
   49    (I)  WHERE  THE CONTRACTOR IS REFERRING OR RECOMMENDING THE OWNER TO A
   50  BANKING INSTITUTION, MORTGAGE BANKER OR OTHER  FINANCING  ENTITY  FOR  A
   51  LOAN  TO  BE SECURED BY A MORTGAGE ON OR A SECURITY INTEREST IN THE REAL
   52  PROPERTY, THE FOLLOWING NOTICE TO THE OWNER  IN  CLEAR  AND  CONSPICUOUS
   53  BOLD  FACE  TYPE:  "IF  YOU  OBTAIN  OR USE ANY TYPE OF MORTGAGE LOAN TO
   54  FINANCE THIS PROJECT, YOU COULD LOSE YOUR HOME AND ANY  MONEY  YOU  HAVE
   55  PUT INTO IT IF YOU DO NOT MEET YOUR OBLIGATIONS UNDER THE LOAN."
       A. 8610--A                          3
    1    S 3. This act shall take effect on the one hundred twentieth day after
    2  it shall have become a law, provided that any such rules and regulations
    3  as  shall  be  necessary  to  implement  the  provisions of this act are
    4  authorized to be promulgated prior to such effective date; and  provided
    5  that section two of this act shall take effect on the one hundred eight-
    6  ieth day after it shall have become a law.