Governor Hochul Signs Legislation Strengthening Consumer Protections and Addressing Inequities in the Financial Services System
Governor Kathy Hochul today signed legislation that strengthens consumer protections and addresses inequities in the state’s financial services system. The legislation (S.1684/A.8293) directs the Department of Financial Services to conduct a study of underbanked communities and households in New York City and make recommendations to improve their access to financial services. The legislation (S.4894/A.1693) protects consumers from potentially dangerous banking products by prohibiting the issuance of unsolicited postal loan checks.
“This legislation is the first step in addressing the lack of safe and accessible banking services that contribute to inequities in our state’s financial system,” Governor Hochul said. “Dangerous postal loan checks and banking deserts prevent already underserved New Yorkers from safely accessing the services they need to build wealth and pursue economic prosperity. I am proud to sign this legislation that will strengthen consumer protections for New Yorkers and explore ways to bring these much-needed resources to consumers.”
“Protecting consumers and implementing data-driven policies to help build a fairer and more resilient financial sector in New York is a top priority for DFS,” said Superintendent of Financial Services Adrienne A. Harris. “We look forward to engaging with all stakeholders to shed light on the current state of financial services in underserved areas and to offer collaborative recommendations to increase access to financial services for the benefit of all New -Yorkers.”
The legislation (S.1684/A.8293) directs the Department of Financial Services to conduct a study of underbanked communities and households in New York City and make recommendations to improve their access to financial services. Access to safe and affordable financial services is necessary to achieve financial stability, but far too many New Yorkers are either unbanked, without access to a checking or savings account, or underbanked, with access to some banking services but also need to use alternatives and riskier financial services like payday loans. This bill will update the number of unbanked and underbanked households and analyze the data to develop an assessment for the New York State Department of Financial Services to more effectively assist these communities.
Assembly Member Patricia Fahy said: “Far too many communities in New York State do not have equitable access to our financial system and our banking services. Often it is our underresourced communities and communities of color, while a lack of banking services contributes to the financial instability that keeps New Yorkers from building I thank Governor Hochul for signing my legislation that will require the Department of Financial Services to update its list of underbanked and unbanked households in New York, to further help these New Yorkers achieve financial stability and reach their full economic potential.
The legislation (S.4894/A.1693) protects consumers from potentially dangerous banking products by prohibiting banking institutions from issuing unsolicited postal loan checks. A postal loan check is an unsolicited loan offer that is sent through the mail that, when cashed or deposited, binds the recipient to the terms of the loan, which may include high interest rates for several years. The practice of mailing unsolicited loan checks can be confusing and dangerous to consumers and this legislation will protect New Yorkers from the associated risk.
State Senator James Sanders Jr. said: “Safe and affordable financial services are necessary to establish financial stability, but banks see low-income families as a burden. Many of these people live check to check and find it difficult to leave the minimum amount over accounts, forcing banks to charge an unreasonable overdraft S.1684/A.8293 will help ensure that communities with significantly more unbanked and underbanked households get the assistance they need on the In addition, S.4894/A.1693 protects consumers from unsafe banking products by prohibiting banking organizations from issuing mail-order loan checks without a request or request. unsolicited money received in the mail can be cashed by an unknown recipient causing the recipient to repay the loan.This bill would avoid this problem.
Assemblyman Gary Pretlow said: “I am pleased to be one of the sponsors of this legislation correcting this dangerous banking practice of sending unsolicited loan checks through the mail. This has caused unnecessary hardship for consumers when checks were in cash in their name. without any knowledge of those transactions. This bill will negate that issue before.”