BILL NUMBER: S9570A
SPONSOR: SKOUFIS
 
TITLE OF BILL:
An act to amend the banking law, in relation to the prohibition of lend-
ing institutions issuing unsolicited mail-loan checks
 
PURPOSE:
This bill seeks to protect consumers from deceptive and predatory lend-
ing practices by prohibiting lenders, financial institutions, and other
entities from mailing unsolicited "live loan checks" to New York resi-
dents. These instruments resemble legitimate checks but automatically
bind the recipient to a loan or financial obligation when deposited.
 
SUMMARY OF PROVISIONS:
Section One: Provides legislative findings describing the deceptive
nature and harmful impact of unsolicited loan checks.
Section Two: Prohibits issuance of mail loan checks, unless affirmative-
ly requested by a consumer. Also excludes replacement checks, legitimate
refunds or rebates, and government-issued documents.
Section Three: Establishes that any debt, interest, fees, or obligations
resulting from an illegal mail-loan check are considered invalid, unen-
forceable, and cannot be collected or reported to credit agencies. Any
payments made toward such illegal obligations are refundable to the
consumer. Prohibited lenders from attempting to bypass these rules
through misleading structures, labels, assignments, or any other tactics
designed to evade the law.
Section Four: Effective Date.
 
JUSTIFICATION:
New Yorkers are increasingly receiving unsolicited "live loan checks,"
which appear to be legitimate negotiable instruments but are, in fact,
predatory loan solicitations. When a recipient unknowingly deposits or
cashes-one of these checks, they are automatically bound to a loan-often
with high interest rates, hidden fees, or disadvantageous terms.
 
LEGISLATIVE HISTORY:
None.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
becomes law

Statutes affected:
S9570A: 9-t banking law, 9-t(3) banking law