New York A 1427: Establishes the uniform debt-management services act

Bill Text

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A01427 Summary:

BILL NOA01427 

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SAME ASNo Same As

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SPONSORDinowitz

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COSPNSRBenedetto

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MLTSPNSR

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Amd §§455 & 457, Gen Bus L; amd §§579, 584-a, 584-b, 585, 36, 39 & 44, add Art 12-CC §§588-a - 588-v, Bank L

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Provides for budget planning and debt settlement services; requires debt settlement companies to obtain a license.

Go to top A01427 Actions:

BILL NOA01427 

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01/09/2025referred to consumer affairs and protection

01/07/2026referred to consumer affairs and protection

Go to topA01427 Committee&nbspVotes:

Go to topA01427 Floor&nbspVotes:

There are no Assembly votes for this bill in this legislative session.

Go to topA01427 Text:

 STATE OF NEW YORK
 ________________________________________________________________________

 1427

 2025-2026 Regular Sessions

 IN ASSEMBLY

 January 9, 2025
 ___________

 Introduced by M. of A. DINOWITZ, BENEDETTO -- read once and referred to
 the Committee on Consumer Affairs and Protection

 AN ACT to amend the general business law and the banking law, in
 relation to providing for budget planning and debt settlement services

 The People of the State of New York, represented in Senate and Assem-
 bly, do enact as follows:

 1 Section 1. Section 455 of the general business law, as amended by
 2 chapter 629 of the laws of 2002, subdivision 1 as amended by chapter 456
 3 of the laws of 2006, and subdivision 4 as amended by chapter 549 of the
 4 laws of 2013, is amended to read as follows:
 5 § 455. Definitions. 1. Budget planning, as used in this article, means
 6 the making of a contract between a person or entity engaged in the busi-
 7 ness of budget planning with a particular debtor whereby:
 8 (i) the debtor agrees to pay a sum or sums of money in any manner or
 9 form and the person or entity engaged in the business of budget planning
 10 distributes, or supervises, coordinates or controls the distribution of,
 11 or has a contractual relationship with another person or entity that
 12 distributes, or supervises, coordinates or controls such distribution
 13 of, the same among certain specified creditors in accordance with a
 14 periodic payment plan agreed upon; and
 15 (ii) the debtor agrees to pay to such person or entity, or such other
 16 person or entity that distributes, or supervises, coordinates or
 17 controls such distribution of, a sum or sums of money, any valuable
 18 consideration for such services or for any other services rendered in
 19 connection therewith; provided, however, that "budget planning" does not
 20 include "debt settlement services" as defined in section five hundred
 21 eighty-eight-a of the banking law. For the purposes of this article, a
 22 person or entity shall be considered as engaged in the business of budg-
 23 et planning in New York, and subject to this article and the licensing
 24 and other requirements of article twelve-C of the banking law, if such
 25 person or entity solicits budget planning business within this state

 EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD03186-01-5

 A. 1427 2

 1 and, in connection with such solicitation, enters into a contract for
 2 budget planning with an individual then resident in this state.
 3 2. Person, as used in this article, shall not include a person admit-
 4 ted to practice law in this state.
 5 3. Entity, as used in this article, shall not include a firm, partner-
 6 ship, professional corporation, or other organization, all of the
 7 members or principals of which are admitted to practice law in this
 8 state.
 9 4. [Person or entity as used in this article shall not include a char-
 10 itable corporation as defined in paragraph (a) of section one hundred
 11 two (Definitions) of the not-for-profit corporation law of this state,
 12 or an entity incorporated in another state and having a similar not-for-
 13 profit status, licensed by the superintendent, to engage in the business
 14 of budget planning as defined in this section.
 15 5.] Any attorney licensed to practice law in this state who is engaged
 16 in budget planning shall:
 17 (a) negotiate directly with creditors on behalf of the client;
 18 (b) ensure that all moneys received from the client are deposited in
 19 the attorney's account ma