Magazine article American Banker

2 Credit Card Bills Pass NY Legislature; One Sets Counterfeiting Jail Term; the Other Allows Variable Rates

Magazine article American Banker

2 Credit Card Bills Pass NY Legislature; One Sets Counterfeiting Jail Term; the Other Allows Variable Rates

Article excerpt

ALBANY, N.J. -- Two bills concerning credit cards -- one dealing with interest rates and the other with counterfeiting -- are on their way to New York Gov. Mario M. Cuomo after being passed by both house of the state legislature earlier this week.

A bill allowing variable rates of interest on credit cards was passed by the New York State Senate on Wednesday. It had passed the Assembly on Monday.

The Senate also approved a bill Tuesday making the manufacture or possession of counterfeit credit cards punishable by one to four years in jail and a fine of up to $10,000. The state Assembly passed the legislation on Monday.

The interest rate legislation permits variable rates on revolving credit loans, credit card transactions, auto loans, and retail installment contracts. It also will permit an individual to borrow up to $25,000 from a bank or trust company on both closed-and open-end loans.

The law must be reviewed by June 30,1987, under a sunset provision in the bill.

Currently, credit card companies and banks are required to give 30 days' notice before interest can be changed on open-end loans, and banks are limited to offering individuals an aggregate of $25,000 on both closed- and open-end loans.

James Murphy, executive vice president of the New York State Bankers Association, said the legislation benefits both consumers and the banking industry. He predicted that most banks in the state would take advantage of the rate legislation within a year.

Mr. Murphy said the bill, "will have an immediate benefit" to prospective bank borrowers. …

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