NY Imposes Notice Requirements on Electronic Repossessions

October 4, 2018 at 9:12 am 2 comments

Image result for kid playing video gamesEarlier this week, Governor Cuomo signed legislation requiring that creditors or their agents give borrowers notice of their use of technology that can remotely disable their car in the event that it needs to be repossessed. The prohibition applies to any “payment assurance device” – how’s that for a euphemism? – which is defined as “any device installed in the motor vehicle that can be used to remotely disable the vehicle.”

Chapter 312 signed by the Governor on October 2nd, amends both New York’s UCC Article 9 and the General Business Law to prohibit creditors or their agents from repossessing a vehicle without first giving written notice of the possibility of the remote disabling. What I’m trying to say in a not so artful way – I clearly need another cup of coffee after watching the Yankee game last night – is that the new law requires two distinct notices: 1) The loan agreement must inform the borrower that you use a Payment Assurance Device and 2) A separate notice, postmarked at least ten days prior to the disabling, explaining that the car may be disabled. This notice must be sent out using registered or certified mail.

The new law took effect immediately. An unanswered question for anybody already currently using this technology is whether it prohibits you from electronically disabling a car for which the now required initial disclosures were not provided?

Full disclosure: since I first heard of this technology it has given me the creeps. One question that I would consider in adopting this technology is clarifying who has rights to the information generated by these remote access devices. It seems to me the type of stuff that data companies would love to get their hands on.

NCUA Issues Guidance Letter on New Merger Requirements

I need to get going but I wanted to just give you a heads up that the NCUA issued this guidance letter dealing with new member to member communication requirements as part of a merger. These requirements apply to federally insured credit unions.

Entry filed under: New York State, Regulatory, technology. Tags: , , .

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2 Comments Add your own

  • 1. Michael Murrock  |  October 4, 2018 at 9:36 am

    What concerns me is the issue of liability. What if the vehicle is disabled while it is moving? What about if the vehicle were needed in an emergency situation? I wouldn’t want to be on the wrong end of this…

    • 2. Henry Meier  |  October 4, 2018 at 11:05 am

      Hi Michael-I agree that there are huge potential liability issues. . The technology should be handled with care and you better have ironclad agreements in place with the technology provider with warranties and uncapped damage provisions.


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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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