NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7855
SPONSOR: Kavanagh (MS) TITLE OF BILL:
An act to amend the uniform commercial code and the general business
law, in relation to prohibiting auto lenders from remotely disabling a
vehicle without first giving notice of the disabling to the borrower
PURPOSE:
The bill prohibits auto lenders from remotely disabling a vehicle with-
out first giving notice of the lender's ability to disable the vehicle
ten days in advance of obtaining that right.
SUMMARY OF PROVISIONS:
Section one of this bill amends Section 9-102(a) of the Uniform Commer-
cial Code by adding new paragraph 60-a defining a "payment assurance
device" as any device installed in a vehicle that can remotely disable
that vehicle.
Section two of this bill amends Section 601 of the General Business Law
by renumbering subdivision 10 as subdivision 11 and adding a new subdi-
vision 10. This new subdivision prohibits auto lenders from remotely
disabling vehicles without having first provided notice to the debtor in
accordance with the method required by the contract between the debtor
and the lender. This notice is to be postmarked no fewer than ten days
prior to the date on which the lender obtains the right to remotely
disable the vehicle.
Section three of this bill states that this act shall take effect imme-
diately.
JUSTIFICATION:
Auto lenders are currently allowed to install devices in cars that serve
both as GPS tracking devices as well as remote ignition disablers. This
allows these lenders to track their cars and, if the borrower is delin-
quent on payments, remotely disable the car. This presents a serious
safety issue for those who borrow these cars.
The purpose of these devices is to make the repossession process more
efficacious by tracking the vehicles location. However, the added step
of remotely disabling a vehicle is unnecessary since these lenders can
already track the cars. This disabling device is important to have in
vehicles for theft situations, but should be used for lending purposes
only after the lender has made significant efforts to make the borrower
aware.
We have seen instances where these devices have led to severe safety
risks. In 2014, a woman in Las Vegas needed to drive her ten year old
son to the emergency room because he had an asthma attack and a 103.5
degree fever, but was not able to because her lender disabled her car in
the driveway over a $389 delinquent charge.
These lenders assure drivers that these devices will not be used while
the vehicle is in motion, but there have been cases where vehicles have
been disabled even on busy interstates. In 2012, a woman almost crashed
because her car was remotely deactivated on a three-lane highway. Some-
times, individuals have had their vehicles disabled in dangerous neigh-
borhoods, and there is the possibility that individuals could have their
vehicles disabled while on vacations or long trips, leaving them strand-
ed far away from their homes, families and jobs.
This bill would provide that lenders give borrowers an additional writ-
ten notice at least ten days in advance before they acquire the right to
remotely disable a vehicle. This requirement would prevent these poten-
tial risks to borrowers' safety without burdening lenders.
LEGISLATIVE HISTORY:
New bill.
FISCAL IMPACT ON THE STATE:
None.
FISCAL IMPACT ON LOCALITIES:
None.
IMPACT ON REGULATION OF BUSINESSES AND INDIVIDUALS:
None.
IMPACT ON FINES, IMPRISONMENT, FORFEITURE OF RIGHTS, OR OTHER PENAL
SANCTIONS:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
