NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2653A
SPONSOR: Dinowitz (MS) TITLE OF BILL: An act to amend the general obligations law, in
relation to requirements for the use of plain language in consumer tran-
sactions
PURPOSE:
Increases the applicability of the plain language law to consumer
contracts involving amounts up to $250,000
SUMMARY OF PROVISIONS:
Section One amends the closing paragraph of subdivision a of section
5-702 of the general business law.
Section Two is the effective date.
JUSTIFICATION:
New York State first enacted the plain language law in 1977. The statute
requires "plain language" in certain written agreements to which a
consumer is a party, and where the subject money, property or services
are primarily used for personal, family, or household purposes. A dollar
threshold was placed on the definition of "consumer contracts", making
the former statute only applicable to transactions valued at less than
$50,000. In 2018, Chapter 484 of the Laws of 2018 increased this thresh-
old to $100,000. That legislation was a compromise measure at the time
that continues to fall short of a truly pro consumer dollar amount. This
bill aims to rectify that compromise.
In 1977, the $50,000 threshold covered essentially all consumer
contracts. Today the $100,000 threshold still does not go far enough to
truly benefit consumers not familiar with legalese. This bill proposes
to increase the threshold to $250,000.
Since the enactment of this statute, several states have followed New
York's lead and have adopted its own "plain language" statutes (Connec-
ticut in 1980, Pennsylvania in 1993, Florida in 2003, and Minnesota in
1968). The state of California enacted their plain language law in 1988.
PRIOR LEGISLATIVE HISTORY:
Similar to Chapter 484 of the laws of 2018.
FISCAL IMPLICATIONS:
None
EFFECTIVE DATE:
One hundred eighty days after it shall have become a law and shall apply
to any contract entered into after such effective date; provided, howev-
er, that if chapter 484 of the laws of 2018 shall not have taken effect
on or before such date then section one of this act shall take effect on
the same date and in the same manner as such chapter of the laws of 2018
takes effect.
STATE OF NEW YORK
________________________________________________________________________
2653--A
2019-2020 Regular Sessions
IN ASSEMBLY
January 24, 2019
___________
Introduced by M. of A. DINOWITZ, WEPRIN, GOTTFRIED, ARROYO, JOYNER,
REYES, SAYEGH, GALEF, EPSTEIN, D'URSO -- Multi-Sponsored by -- M. of
A. ENGLEBRIGHT, HEVESI, SIMON -- read once and referred to the Commit-
tee on Judiciary -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the general obligations law, in relation to requirements
for the use of plain language in consumer transactions
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The closing paragraph of subdivision a of section 5-702 of
2 the general obligations law, as amended by chapter 484 of the laws of
3 2018, is amended to read as follows:
4 Any creditor, seller or lessor who fails to comply with this subdivi-
5 sion shall be liable to a consumer who is a party to a written agreement
6 governed by this subdivision in an amount equal to any actual damages
7 sustained plus a penalty of fifty dollars. The total class action penal-
8 ty against any such creditor, seller or lessor shall not exceed ten
9 thousand dollars in any class action or series of class actions arising
10 out of the use by a creditor, seller or lessor of an agreement which
11 fails to comply with this subdivision. No action under this subdivision
12 may be brought after both parties to the agreement have fully performed
13 their obligation under such agreement, nor shall any creditor, seller or
14 lessor who attempts in good faith to comply with this subdivision be
15 liable for such penalties. This subdivision shall not apply to a good
16 faith attempt to describe the constant yield or other method of deter-
17 mining the lease charge and depreciation portions of each base rental
18 payment under a lease of personal property. It also shall not apply to
19 agreements involving amounts in excess of [one] two hundred fifty thou-
20 sand dollars nor prohibit the use of words or phrases or forms of agree-
21 ment required by state or federal law, rule or regulation or by a
22 governmental instrumentality.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00635-03-9
A. 2653--A 2
1 § 2. This act shall take effect on the one hundred eightieth day after
2 it shall have become a law and shall apply to any contract entered into
3 after such effective date; provided, however, that if chapter 484 of the
4 laws of 2018 shall not have taken effect on or before such date then
5 section one of this act shall take effect on the same date and in the
6 same manner as such chapter of the laws of 2018 takes effect.
