Relates to penalties for violations of article fifteen of the executive law committed by mortgage bankers and mortgage brokers; includes such violations as grounds for suspension or revocation of license or registration.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A2124
SPONSOR: Jean-Pierre
 
TITLE OF BILL:
An act to amend the banking law, in relation to penalties for certain
violations committed by mortgage bankers and mortgage brokers
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill provides the superintendent of the Department of Financial
Services with greater discretion in disciplining mortgage bankers or
brokers found to violate provisions of New York State Human Rights Law.
 
SUMMARY OF PROVISIONS:
Section one amends paragraph (a) of subdivision 1 of section 595 of the
banking law by including a violation of state human rights law as a
reason to suspend or revoke the license of a mortgage banker or broker.
Section two amends paragraphs (g) and (h) of subdivision 1 of section
595-a of the banking law and adds a new paragraph (i) to include a
violation of the state human right law as a reason for imposing a fine
or penalty on a mortgage banker or broker.
Section three sets the effective date.
 
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
N/A.
 
JUSTIFICATION:
Article 15 of the Executive Law, known as the New York State Human
Rights Law, prohibits discrimination on the basis of a protected charac-
teristic, including race, creed, national origin, sex, age, disability,
marital status, military status, family status, sexual orientation or
gender identity. Mortgage lenders are bound by this law, but recent data
from the Home Mortgage Disclosure Act reveals that black mortgage appli-
cants are denied at a rate that is 80% higher than that of white appli-
cants. Black applicants are also more likely to be denied when they live
in predominately black zip codes.
Mortgage lenders play an extremely important role in the homeownership
process, serving as the financial gateway to owning a home. An individ-
ual's race, creed, national origin, sex, age, disability, marital
status, military status, family status, sexual orientation or gender
identity should not play a part in the mortgage lending process. The
Department of Financial Services currently has the power to fine,
suspend, or revoke the license of a mortgage banker or broker for a long
list of offenses. However, the Department does not specifically have the
ability to fine, suspend, or ,revoke the license of a mortgage banker or
broker for discriminating in their official capacity. This legislation
builds on recently chaptered legislation (chapter 131 of 2020) by
extending additional authority to the Department to deter and help elim-
inate discrimination in the homeownership process, specifically the
mortgage lending process.
 
PRIOR LEGISLATIVE HISTORY:
2019-20: A10980
2021-22: A2131
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
2124
2023-2024 Regular Sessions
IN ASSEMBLY
January 23, 2023
___________
Introduced by M. of A. JEAN-PIERRE -- read once and referred to the
Committee on Banks
AN ACT to amend the banking law, in relation to penalties for certain
violations committed by mortgage bankers and mortgage brokers
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (a) of subdivision 1 of section 595 of the bank-
2 ing law, as amended by chapter 291 of the laws of 2014, is amended to
3 read as follows:
4 (a) Through a course of conduct, the licensee or registrant has
5 violated any provisions of this article, or article fifteen of the exec-
6 utive law committed in his or her capacity as a mortgage banker or mort-
7 gage broker, or any rule or regulation promulgated by the superintendent
8 of financial services under and within the authority of this article or
9 of any other law, rule or regulation of this state or the federal
10 government;
11 § 2. Paragraphs (g) and (h) of subdivision 1 of section 595-a of the
12 banking law, paragraph (g) as amended and paragraph (h) as added by
13 chapter 308 of the laws of 2006, are amended and a new paragraph (i) is
14 added to read as follows:
15 (g) Violation of section six-j of this chapter; [and]
16 (h) Making a mortgage loan, or indirectly or directly providing for
17 the making of a mortgage loan, to an equity purchaser, as defined in
18 section two hundred sixty-five-a of the real property law, if the mort-
19 gage banker, mortgage broker or exempt organization had knowledge that
20 the equity purchaser was not complying with the provisions of section
21 two hundred sixty-five-a of the real property law with respect to such
22 transaction[.]; and
23 (i) Violation of article fifteen of the executive law committed in his
24 or her capacity as a mortgage banker or mortgage broker.
25 § 3. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02934-01-3