NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4099
SPONSOR: Cunningham TITLE OF BILL:
An act to amend the vehicle and traffic law, in relation to electronic
lien records
PURPOSE OR GENERAL IDEA OF BILL:
To establish a program that allows for the delivery and certificate of
of title and liens electronically
SUMMARY OF PROVISIONS:
Section 1 amends section 2107 of the vehicle and traffic law by adding
gender neutral and allowing for electronic record of liens by the DMV
commissioner
Section 2 amends section 2109 of the vehicle and traffic law to provide
for electronic communications on liens
Section 3 amends section 2112 of the vehicle and traffic law to set
statues and limitation on the applications for obtaining a duplicate
certificate
Section 4 amends subdivision c of section 2119 of the vehicle and traf-
fic law to change language to fit with procedures in electronic communi-
cations of issuance of new certificates
Section 5 amends section 2119-a of the vehicle and traffic law to create
the Electronic Lien and Title Program
Section 6 amends subdivision b of section 2120 of the vehicle and traf-
fic law to allow an assignor to deliver records to the commissioner
Section 7 amends subdivision a of section 2121 of the vehicle and traf-
fic law to allow for electronic release of record upon the satisfaction
of a security interest
Section 8 sets the effective date
JUSTIFICATION:
Introducing electronic lien transfers for car purchases in New York
would bring numerous benefits to both consumers and the Department of
Motor Vehicles (DMV). Firstly, electronic lien transfers streamline the
vehicle purchasing process, reducing paperwork and administrative
burdens for all parties involved. Traditionally, lien transfers require
the exchange of physical documents, which can be time-consuming and
prone to errors or delays. By enabling electronic lien transfers, buyers
and sellers can complete transactions more efficiently, with digital
documents processed and transmitted instantaneously. This not only saves
time but also reduces the risk of errors, ensuring smoother and more
reliable transactions.
Secondly, electronic lien transfers enhance data accuracy and security.
Digital systems allow for real-time validation and verification of lien
information, reducing the likelihood of errors or discrepancies in lien
documentation. By automating the lien transfer process, the DMV can
ensure that accurate and up-to-date lien information is recorded prompt-
ly, minimizing the risk of fraud or misrepresentation. Additionally,
electronic lien systems employ advanced encryption and security measures
to protect sensitive information, safeguarding against unauthorized
access or tampering. This enhances data security and integrity,
instilling greater trust and confidence in the lien transfer process for
both buyers and sellers.
Furthermore, electronic lien transfers promote transparency and accessi-
bility in vehicle transactions. Digital platforms enable stakeholders,
including buyers, sellers, lenders, and the DMV, to access and track
lien information in real time. This transparency fosters accountability
and trust among all parties involved, as the status of liens can be
easily verified and monitored throughout the transaction process. Addi-
tionally, electronic systems can facilitate seamless communication and
collaboration between stakeholders, enabling faster resolution of any
issues or discrepancies that may arise. Overall, electronic lien trans-
fers improve the efficiency, accuracy, and transparency of vehicle tran-
sactions in New York, benefiting consumers, businesses, and regulatory
agencies alike.
PRIOR LEGISLATIVE HISTORY:
2023-24: A10085/S9554 - Referred to Transportation
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
4099
2025-2026 Regular Sessions
IN ASSEMBLY
January 31, 2025
___________
Introduced by M. of A. CUNNINGHAM -- read once and referred to the
Committee on Transportation
AN ACT to amend the vehicle and traffic law, in relation to electronic
lien records
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 2107 of the vehicle and traffic law, as added by
2 chapter 1134 of the laws of 1971, paragraphs 2 and 3 of subdivision (b)
3 as amended and subdivision (c) as added by chapter 521 of the laws of
4 1972, is amended to read as follows:
5 § 2107. Issuance and records. (a) The commissioner shall file each
6 application received and, when satisfied as to its genuineness and regu-
7 larity and that the applicant is entitled to the issuance of a certif-
8 icate of title, shall issue a certificate of title of the vehicle,
9 except that the commissioner may require that any such vehicle be
10 inspected in a manner prescribed by [him] the commissioner for conformi-
11 ty to the description given in the application before [he] the commis-
12 sioner issues a certificate of title.
13 (b) The commissioner shall maintain a record of all certificates of
14 title issued by [him] the commissioner:
15 (1) Under a distinctive title number assigned to the vehicle;
16 (2) Under the identifying number of the vehicle;
17 (3) Alphabetically, under the name of the owner, unless [he] the
18 commissioner maintains alphabetical records of all owners holding
19 certificates of registration;
20 (4) Under the registration number of the vehicle; and
21 (5) In the discretion of the commissioner, in any other method [he]
22 the commissioner determines.
23 (c) When the commissioner issues a certificate of title for a vehicle
24 as a result of an original application for a title or as a result of the
25 filing of a security interest, [he] the commissioner shall [also] issue
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03573-01-5
A. 4099 2
1 and mail the certificate of title to the first lienholder [or lienhold-
2 ers] named in the original application, or to the lienholder who filed
3 the subsequent security interest [a notice of recorded lien] except as
4 provided by section twenty-one hundred nineteen-a of this article.
5 § 2. Section 2109 of the vehicle and traffic law, as added by chapter
6 1134 of the laws of 1971, is amended to read as follows:
7 § 2109. Delivery. The certificate of title shall be mailed to the
8 owner except as provided in subdivision (c) of section twenty-one
9 hundred seven of this article.
10 § 3. Section 2112 of the vehicle and traffic law, as amended by chap-
11 ter 175 of the laws of 1982, is amended to read as follows:
12 § 2112. Lost, stolen or mutilated certificates. (a) If a certificate
13 of title is lost, stolen, mutilated or destroyed or becomes illegible,
14 the owner or legal representative of the owner named in the certificate,
15 as shown by the records of the commissioner, shall promptly make appli-
16 cation for and may obtain a duplicate upon furnishing information satis-
17 factory to the commissioner. Unless the original certificate of title is
18 surrendered to the commissioner, the duplicate certificate of title
19 shall contain the legend "This is a duplicate certificate and may be
20 subject to the rights of a person under the original certificate." If
21 the records of the commissioner show one or more lienholders, the owner
22 shall provide a release of security interest with the application from
23 each lienholder. It shall be mailed to the owner.
24 (b) A first lienholder named in the certificate may make application
25 for and may obtain a duplicate upon furnishing information satisfactory
26 to the commissioner. A lienholder who is not the first may make applica-
27 tion and may obtain a duplicate upon furnishing information satisfactory
28 to the commissioner and shall include a release of security interest
29 with the application for each lienholder with preceding priority.
30 (c) A person recovering an original certificate of title for which a
31 duplicate has been issued shall promptly notify the commissioner of such
32 recovery and shall comply with the directions of the commissioner relat-
33 ing to the disposition of such documents.
34 (d) The commissioner shall not issue a duplicate if the original
35 certificate was issued as provided by section twenty-one hundred nine-
36 teen-a of this article unless the lienholder is out of business or is
37 unable to comply with subdivision (c) of section twenty-one hundred
38 nineteen-a of this article as determined by the commissioner.
39 § 4. Subdivision (c) of section 2119 of the vehicle and traffic law,
40 as added by chapter 1134 of the laws of 1971, is amended to read as
41 follows:
42 (c) Upon receipt of the certificate of title, application and the
43 required fee, the commissioner shall [either endorse on the certificate,
44 or] issue a new certificate containing, the name and address of the new
45 lienholder, and [mail] provide the certificate to the [owner] lienholder
46 as provided in subdivision (c) of section twenty-one hundred seven of
47 this article.
48 § 5. The vehicle and traffic law is amended by adding a new section
49 2119-a to read as follows:
50 § 2119-a. Electronic lien and title program. (a) The commissioner
51 shall develop, establish, and maintain an electronic data and communi-
52 cation system with banks, credit unions, and other financial insti-
53 tutions for the purposes of electronically recording the existence of
54 security interests under the provisions of this article. Lienholders
55 shall electronically transmit liens and lien satisfactions to the
56 department in a format determined by the commissioner. Individuals and
A. 4099 3
1 lienholders who the commissioner determines are not normally engaged in
2 the business or practice of financing vehicles are exempt from partic-
3 ipating in the program.
4 (b) Unless an individual or lienholder is exempt from this section by
5 the commissioner as provided in subdivision (a) of this section, the
6 lien shall be recorded electronically in the system. A certificate of
7 title reflecting an electronically recorded lien under this section
8 shall not be printed unless subsequently requested by the lienholder for
9 the purposes of conducting business or upon lien satisfaction.
10 (c) A lien recorded electronically shall be reported as satisfied
11 electronically to the commissioner. Unless there are additional recorded
12 liens, upon receiving the report of lien satisfaction, the commissioner
13 shall release the lienholder's rights on the certificate and issue a new
14 certificate to the owner or any person who delivers to the lienholder an
15 authorization from the owner to receive the certificate. If there are
16 additional recorded liens, upon receiving the report of lien satisfac-
17 tion, the commissioner shall release the lienholder's rights on the
18 certificate. The certificate of title shall remain electronic until all
19 liens have been reported as satisfied.
20 § 6. Subdivision (b) of section 2120 of the vehicle and traffic law,
21 as added by chapter 1134 of the laws of 1971, is amended to read as
22 follows:
23 (b) The assignee may, but need not to perfect the assignment, have the
24 certificate of title endorsed or issued with the assignee named as lien-
25 holder, upon delivering to the commissioner an assignment by the lien-
26 holder named in the certificate in the form the commissioner prescribes.
27 Upon the request of the assignee the commissioner shall request the
28 owner or assignor to deliver to the commissioner the certificate of
29 title.
30 § 7. Subdivision (a) of section 2121 of the vehicle and traffic law,
31 as amended by chapter 691 of the laws of 1985 and as designated by chap-
32 ter 493 of the laws of 2012, is amended to read as follows:
33 (a) Upon the satisfaction of a security interest in a vehicle the
34 lienholder shall immediately upon clearance of payment execute a release
35 of [his] such lienholder's security interest: (i) in a manner prescribed
36 by the commissioner and mail or deliver the release, and certificate of
37 title if applicable, to the owner or any person who delivers to the
38 lienholder an authorization from the owner to receive the certificate,
39 or (ii) as provided by subdivision (c) of section twenty-one hundred
40 nineteen-a of this article. Payment sufficient to satisfy the security
41 interest by an insurer of the owner shall be deemed an authorization by
42 the owner for the delivery of the release of the security interest to
43 the insurer. If the payment in satisfaction of the security interest is
44 in cash, certified check, intra-bank transfer of funds or an uncertified
45 check or draft issued by an insurance company authorized to do business
46 in this state, the payment shall be deemed to be cleared immediately
47 upon receipt. The owner, other than a dealer holding the vehicle for
48 resale, may cause the certificate and release to be mailed or delivered
49 to the commissioner, who shall release the lienholder's rights on the
50 certificate [or] and issue a new certificate.
51 § 8. This act shall take effect immediately.
