2005 Legislative Update
from the New York State Assembly
Committee on Banks

Sheldon Silver, Speaker • Catherine Nolan, Chair • November 2005
Assemblywoman Catherine Nolan
Message from the Chair

As Chairwoman of the Assembly Banks Committee, I am pleased to provide an update on the Committee’s activities during the 2005 legislative session. Thanks to the continued support of Speaker Sheldon Silver and the cooperation of my Assembly colleagues, the Banks Committee enjoyed a very productive session. The Committee passed legislation that would protect homeowners in default or foreclosure against home equity theft scams, and also passed legislation that fights identity theft. The Committee also worked on new laws that will deter counterfeit check scams, help Holocaust victims settle unresolved financial claims, and improve the supervision of New York’s regulated financial entities. In addition, the Assembly Banks Committee held four public hearings, on the topics of: identity theft, refund anticipation loans, home equity theft, and the Banking Development District Program – a program which gives banks incentives to open branches in underserved locations.

As always, I strongly encourage any person with questions or concerns for the Banks Committee to contact me.

Catherine Nolan

Protecting Homeowners against Home Equity Theft
In May 2005, the Assembly Banks Committee conducted a public hearing on the topic of home equity theft. Equity theft scams involve homeowners, many of whom are low- and middle-income or elderly, who fall behind on their mortgages, at which point they are approached by unscrupulous individuals or businesses who promise to help solve their problems. Instead of receiving assistance, however, the homeowners are misled into surrendering their property titles for little or no benefit to themselves.

Home Equity Theft Prevention Act — In response to the concerns raised at this hearing, the Banks Committee reported and the Assembly passed A.7667-A (Nolan), which would enact the Home Equity Theft Prevention Act. This legislation would provide protections for homeowners in default or foreclosure who sell their homes, including: requiring that any sales agreement between an equity seller and an equity purchaser be in writing; prohibiting equity purchasers from engaging in deceitful practices; and, affording homeowners a reasonable opportunity to rescind sales to equity purchasers.

photo Assemblywoman Nolan was pleased to welcome New York City Comptroller William Thompson, Jr., and his staff when he addressed the Banking Committee in Albany this session.

Deterring Counterfeit Check Scams
Counterfeit checks threaten the financial system in a variety of ways. In one type of counterfeit check scam, individuals are recruited by larger operations to cash fraudulent checks. These individuals, who are promised a small share of the checks as compensation for their services, are often unaware of the serious consequences they will face for cashing a counterfeit check.

New York State Counterfeit Check Awareness ActA.6808-A (Nolan), which has been signed into law by the Governor (Chapter 268), will be a deterrent against this type of scam by requiring licensed check cashers to post a statement informing the public that cashing a forged check is illegal, and that any individual who knowingly cashes a forged check will be prosecuted under the Penal Law.

Preventing Identity Theft
Identity theft is one of the most common consumer fraud complaints in the nation. Through various means, thieves gain access to bank accounts and credit card information, and use this to defraud unsuspecting victims.

Registration of “Non-Bank” ATMs — In one common variety of identity theft, thieves tamper with automated teller machines (ATMs) – or even set up counterfeit machines – therefore compromising the privacy of customers who use those machines. Currently, ATMs operated by entities other than banks do not have to be registered with the New York State Banking Department. A.1360 (Nolan) would require such “non-bank” ATMs to register with the Department; this state oversight would ensure greater protection for ATM customers’ private financial information. This bill has passed the Assembly.

Protecting the Banking Interests of Holocaust Survivors
The New York State Assembly, under the leadership of Speaker Sheldon Silver, has long been a leader in protecting the interests of its residents who suffered or have family members who suffered as a consequence of the Holocaust.

Holocaust Claims Processing Office Annual ReportsA.1911 (Nolan), which has been signed into law by the Governor (Chapter 249), will require the Superintendent of Banks to submit annual reports concerning the policies and activities of the Holocaust Claims Processing Office. These reports will draw further attention to the mission and accomplishments of this important office, and also will be used to improve the office’s ability to settle the financial claims of Holocaust survivors.

Supporting Community Development Initiatives
A strong and stable local economy is essential to any community’s overall well-being. Community Development Financial Institutions (CDFIs) promote community development in economically distressed areas by providing loans, investments and/or banking services to individuals and small businesses that reside in such areas.

photo Assemblywoman Catherine Nolan joined members of New Yorkers for Responsible Lending, including representatives from AARP, the Children’s Defense Fund, the Greater Upstate Law Project, the Neighborhood Economic Development Advocacy Project, and the New York Coalition of Community Development Financial Institutions, in Albany this session to discuss Refund Anticipation Loans and other ways to protect New York’s consumers.

Community Development Financial Institutions ActA.1205 (Nolan) would create the Community Development Financial Institutions Fund. This fund would provide financial and technical assistance to CDFIs, so that they in turn could provide improved financing opportunities to individuals and businesses that are not being served by traditional lenders. This bill has passed the Assembly.

Ensuring the Effective Regulation of the Banking Industry
A sound, efficient regulatory framework is an important component in maintaining the health of New York State’s financial sector.

A.8472 (Boyland) — This bill, which has been signed into law by the Governor (Chapter 233), will codify in statute certain aspects of the New York State Banking Department’s current regulatory policy in regards to the location and operation of licensed check cashers.

A.8474 (Nolan) — This bill, which has been signed into law by the Governor (Chapter 232), will strengthen the Banking Department’s ability to supervise the money transmitter industry by prohibiting certain entities from engaging in money transmission activities.

Establishing Fair Practices in the use of Payroll Cards
Payroll cards increasingly are being utilized by employers as a cost-efficient method of paying wages. The cards are issued to employees who then use them to make periodic withdrawals from a bank for an amount equal to their pay.

New York State Banking Payroll Card Protection ActA.5456 (Nolan) would establish the New York State Banking Payroll Card Protection Act, which would clarify rights and obligations for employees regarding fees, costs, statements and other issues related to the use of payroll cards. This bill has passed the Assembly.

Assemblymember Catherine Nolan • Chairwoman, Committee on Banks
Room 424 LOB • Albany, NY 12248 • 518.455.4851

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