Requires issuers of credit cards to give the cardholder at least 45 days written notice via email, text message, or written letter before closing the cardholder's account.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8744
SPONSOR: Jackson TITLE OF BILL:
An act to amend the general business law, in relation to requiring
issuers of credit cards to give the cardholder at least 45 days notice
before closing the cardholder's account
PURPOSE:
To ensure a cardholder is given proper notification prior to an account
being closed by the issuer.
SUMMARY OF PROVISIONS:
Section 1 amends the general business law by adding new section 520-f,
requiring credit card issuers to give cardholders a 45-day written
notice before a specific account is closed.
Section 2 provides the effective date.
JUSTIFICATION:
Under current law, credit card issuers may close accounts without any
notice to the account holder. Credit card companies shut down accounts
for a variety of reasons;, the account is inactive, in default, or
balances are too high. However, a credit card issuer is not legally
required to notify the holder if and when they are going to close an
account pursuant to any of these reasons. This abrupt action may
surprise holders especially if timely payments were being made and the
balance is relatively low.
The consequences for the account holder after their account has been
unceremoniously closed can be significant. For example, a customer with
a balance on a closed credit card account could see their credit utili-
zation rate rise, and, consequently, their credit score drop. Cardhold-
ers deserve to know when and why their account is going to be closed to
avoid these adverse consequences that can permanently affect their cred-
it score. An advanced notification from the Issuer would allow the hold-
er to solve any potential issues and avoid future problems with the card
issuer.
LEGISLATIVE HISTORY:
S223 of 2023-24: Referred to Consumer Protection
S9583 of 2022: Referred to Rules
FISCAL. IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
8744
2025-2026 Regular Sessions
IN ASSEMBLY
June 2, 2025
___________
Introduced by M. of A. JACKSON -- read once and referred to the Commit-
tee on Consumer Affairs and Protection
AN ACT to amend the general business law, in relation to requiring
issuers of credit cards to give the cardholder at least 45 days notice
before closing the cardholder's account
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The general business law is amended by adding a new section
2 520-f to read as follows:
3 § 520-f. Issuer cancelation. 1. No issuer shall close a holder's
4 account with the issuer without giving the holder at least forty-five
5 days written notice via email, text message, or written letter that such
6 account is being closed.
7 2. The cancelation or deactivation of a credit card in violation of
8 the provisions of subdivision one of this section shall constitute a
9 violation.
10 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05393-01-5
