Prohibits certain financial institutions from charging a fee based on the frequency of payments or for changing the frequency of mortgage payments

S T A T E   O F   N E W   Y O R K
        ________________________________________________________________________

                                          9588

                                  I N  A S S E M B L Y

                                    January 21, 2026
                                       ___________

        Introduced by M. of A. TORRES -- read once and referred to the Committee
          on Banks

        AN  ACT  to  amend  the  banking law, in relation to prohibiting certain
          financial institutions from charging a fee for changing the  frequency
          of mortgage payments

          THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
        BLY, DO ENACT AS FOLLOWS:

     1    Section 1. The banking law is amended by adding a new section 9-aa  to
     2  read as follows:
     3    §  9-AA.  FEES  FOR CERTAIN MORTGAGE PAYMENTS PROHIBITED. 1.  NOTWITH-
     4  STANDING ANY OTHER PROVISION OF LAW OR RULE OR REGULATION TO THE CONTRA-
     5  RY, NO FINANCIAL INSTITUTION SUBJECT TO THE PROVISIONS OF THIS  CHAPTER,
     6  INCLUDING  ANY BANKING ORGANIZATION, MORTGAGE BROKER OR MORTGAGE BANKER,
     7  INTERSTATE BRANCH ESTABLISHED PURSUANT TO ARTICLE FIVE-C OF  THIS  CHAP-
     8  TER, OR OTHER INVESTMENT ENTITY SUBJECT TO REGULATION BY THE DEPARTMENT,
     9  WHICH  PROVIDES  AN  ACCOUNT,  MORTGAGE,  OR MORTGAGE LOAN SERVICES TO A
    10  CUSTOMER SHALL CHARGE A FEE FOR SUCH ACCOUNTHOLDER TO PAY THEIR MORTGAGE
    11  MONTHLY, SEMI-MONTHLY, OR BIWEEKLY. SUCH PROHIBITED FEES SHALL  INCLUDE,
    12  BUT NOT BE LIMITED TO:
    13    (A)  ADDITIONAL  COSTS,  PAYMENTS,  FEES,  PENALTIES,  OR PREMIUMS FOR
    14  CHANGING BETWEEN MONTHLY, SEMI-MONTHLY, AND BIWEEKLY MORTGAGE PAYMENTS.
    15    (B) PAYMENT OF AN ADDITIONAL MORTGAGE PAYMENT, OR  ANY  PART  THEREOF,
    16  BEFORE  BEING  PERMITTED  TO  CHANGE  BETWEEN MONTHLY, SEMI-MONTHLY, AND
    17  BIWEEKLY MORTGAGE PAYMENTS.
    18    2. NOTWITHSTANDING ANY OTHER PROVISION OF LAW OR RULE OR REGULATION TO
    19  THE CONTRARY, EACH FINANCIAL INSTITUTION SUBJECT TO  THE  PROVISIONS  OF
    20  THIS  CHAPTER,  INCLUDING  ANY  BANKING ORGANIZATION, MORTGAGE BROKER OR
    21  MORTGAGE BANKER,  INTERSTATE  BRANCH  ESTABLISHED  PURSUANT  TO  ARTICLE
    22  FIVE-C OF THIS CHAPTER, OR OTHER INVESTMENT ENTITY SUBJECT TO REGULATION
    23  BY  THE  DEPARTMENT, WHICH PROVIDES A MORTGAGE OR MORTGAGE LOAN SERVICES
    24  TO A CUSTOMER SHALL PROVIDE SUCH CUSTOMER WITH AN AMORTIZATION  SCHEDULE
    25  AND  POTENTIAL INTEREST SAVINGS IF SUCH CUSTOMER WERE TO CHOOSE A MONTH-
    26  LY, SEMI-MONTHLY, OR BIWEEKLY MORTGAGE PAYMENT SCHEDULE AND  INFORMATION
    27  ON HOW TO CHANGE TO A DIFFERENT PAYMENT SCHEDULE.

         EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13935-01-5
        A. 9588                             2

     1    3.  IF  ANY PROVISION OF THIS SECTION OR ITS APPLICATION TO ANY PERSON
     2  OR CIRCUMSTANCE IS HELD INVALID, THE INVALIDITY DOES  NOT  AFFECT  OTHER
     3  PROVISIONS  OR  APPLICATION  OF  THIS  SECTION WHICH CAN BE GIVEN EFFECT
     4  WITHOUT THE INVALID PROVISION  OR  APPLICATION,  AND  TO  THIS  END  THE
     5  PROVISIONS OF THIS SECTION ARE SEVERABLE.
     6    § 2. This act shall take effect on the one hundred eightieth day after
     7  it shall have become a law.