New York State SmartTranscripts:

[Senator James Sanders Jr. (Chair, Banks Committee)]: Good morning. Good morning, all. Welcome back to the Banks Committee. I am chair Sanders, and we have senator Brisport. But we also have our ranker Yes. Who will not only introduce himself, but introduce our leading Republican.

[Senator George M. Borrello (Ranking Member)]: Good morning, mister chairman. Thank you. I'm senator George M. Borrello, the ranking member, and with me is my colleague, senator Mark Walczyk.

[Senator Mark Walczyk]: Leading Republican.

[Senator James Sanders Jr. (Chair, Banks Committee)]: That's

[Senator George M. Borrello (Ranking Member)]: right. And happy birthday, senator. Oh my goodness. Thank you.

[Senator James Sanders Jr. (Chair, Banks Committee)]: I knew there was something special.

[Senator George M. Borrello (Ranking Member)]: Thanks.

[Senator James Sanders Jr. (Chair, Banks Committee)]: The rest comes. Talia, you're going to introduce yourself, and then you're going to go through these bills.

[Talia (Counsel to Senator Sanders)]: My name is Talia. I'm counsel for Senator Sanders. Our first bill is Senate Bill four sponsored by Senator Sanders, an act to amend the banking law in relation to establishing criteria for the closure of banking accounts in the state of New York. K.

[Senator James Sanders Jr. (Chair, Banks Committee)]: Questions, comments, or statement?

[Senator Mark Walczyk]: Yes. So this is the one that you pulled off the agenda before?

[Senator James Sanders Jr. (Chair, Banks Committee)]: I've worked on this one so many times. Absolutely. What were changes going

[Senator Mark Walczyk]: to be made? Were those were there any because I don't see an a print on this.

[Senator James Sanders Jr. (Chair, Banks Committee)]: Yes. Would you either of you tell which changes we are going to make?

[Unidentified Committee Staff Counsel]: So there was feedback from the industry that while the bill does indicate that nothing in the bill shall, you know, violate federal law. So if federal law preempts something in the bill, that federal law would be controlling. The feedback from the industry was that it would be helpful to clarify the instances, including where the Bank Secrecy Act or the Anti Money Laundering Law ultimately are controlling or if the bank suspects fraud. So even though those are implied, the request was that those be explicitly outlined in the bill.

[Senator Mark Walczyk]: I I share those same concerns, chairman, that if we're requiring banks to return money when they're closing out account, if there's if that money needs to be held for very good reason because there's prosecution for fraud or crimes that are connected with that money, I wouldn't wanna see that go back to the defendant in those crimes.

[Senator James Sanders Jr. (Chair, Banks Committee)]: We Okay. We agreed with that. It made sense. Okay. If there are other no questions, I'll take a motion. Move the bill. I second. All in favor say aye. Aye. All opposed say nay.

[Senator Mark Walczyk]: I'll be a no.

[Senator George M. Borrello (Ranking Member)]: I'll be a

[Senator James Sanders Jr. (Chair, Banks Committee)]: Without reck. This bill is reported out.

[Talia (Counsel to Senator Sanders)]: K. Senate bill seven six five four sponsored by senator Baino. An act to amend the financial services law in relation to authorizing the superintendent of financial services to oversee and regulate sales of motor vehicles to consumers, to amend the personal property law in relation to the contents of motor vehicle retail installment contracts, and to amend the vehicle and traffic law in relation to acquiring motor vehicle dealers to provide credit applicants with a copy of all loan applicant application documents and prohibiting conditional delivery deliveries of motor vehicles.

[Senator James Sanders Jr. (Chair, Banks Committee)]: We're finding that the greatest scandals or theft is actually happening in the automotive used cars. Used cars have always had a bad rep, but we're finding a lot of problems in this area, and the DFS did not have oversight. Mhmm. And it was a gray area where everybody was saying we don't have oversight.

[Senator George M. Borrello (Ranking Member)]: Yes. Thank you, mister chairman. You know, I know this bill has been around for a while. I believe it was Senator Savino's

[Senator James Sanders Jr. (Chair, Banks Committee)]: prior to Mark Walczyk.

[Senator George M. Borrello (Ranking Member)]: Yeah, very smart woman. My concern is that and I'm very specific to my district, you know, we border the state of Pennsylvania. And in fact, you can stand with one foot in my district and another foot in the state of Pennsylvania for about 100 miles straight. And we already lose a lot of car sales to the state of Pennsylvania. They have billboards up all over the Southern tier bringing people down to PA because it's just easier and cheaper to do business in Pennsylvania than is in New York. So while I certainly believe that DFS could be very responsible, I just consider this to be another nail in the coffin of an already struggling industry, particularly in the Southern tier. Where you have to compete with the state of Pennsylvania. I'll be a no on

[Senator James Sanders Jr. (Chair, Banks Committee)]: this. Mhmm. Worth it. Worth your point. Any more questions, comments, or statements? I'll accept the motion. Move the bill. I second it. All in favor, say aye. Aye. All opposed, say nay. Nay. Wreck, the bill is reported out.

[Talia (Counsel to Senator Sanders)]: Senate bill eight one zero three sponsored by senator Comrie, an act to amend the financial services law in relation to enacting Department of Financial Services Open Data Act.

[Senator James Sanders Jr. (Chair, Banks Committee)]: Questions, comments, or statements?

[Senator George M. Borrello (Ranking Member)]: This is this is not the AI bill. This the AI bill? No. It's the next one. That's the next one. You could

[Senator James Sanders Jr. (Chair, Banks Committee)]: say it. Alright. Use it now. Motions on this one.

[Senator Mark Walczyk]: Move them.

[Senator George M. Borrello (Ranking Member)]: Oh, sorry. Go ahead. No. I insist. I I I AWR, but I will move the bill. Second. Second. All

[Senator James Sanders Jr. (Chair, Banks Committee)]: in favor say aye. Aye. All without rec.

[Senator George M. Borrello (Ranking Member)]: Without rec.

[Senator James Sanders Jr. (Chair, Banks Committee)]: Or nays, the bill is reported out. Reported to

[Talia (Counsel to Senator Sanders)]: Finance.

[Senator James Sanders Jr. (Chair, Banks Committee)]: Finance. Reported to finance. The next one is what I think you were speaking. Yes. But I know the author is really

[Senator George M. Borrello (Ranking Member)]: I I have tremendous amount of respect.

[Senator James Sanders Jr. (Chair, Banks Committee)]: Tuesdays. On Tuesdays especially.

[Talia (Counsel to Senator Sanders)]: Senate Bill eight one one five, sponsored by senator Sanders, an act to amend the banking law in relation to the use of automated decision tools to make lending decisions.

[Senator James Sanders Jr. (Chair, Banks Committee)]: Wouldn't you want to have the option to say to the person, I want a person instead of a machine?

[Senator George M. Borrello (Ranking Member)]: I don't disagree with that. I think there's a couple challenges with this bill. First of all, as normal, this only applies to state chartered banks. Those So are typically our community banks, right? These are the people that are already well known for local lending decisions as it is. The other challenge is the fact that we just have a less and less willing workforce out there, people that are willing to do these jobs. So I think that one of the challenges that you face in the banking industry is you also have people that want say, you know what, I know that person, I want to give this person a loan and that's great. But as you kind of grow that to a bigger circle then it potentially could become a more risky investment for the bank which is I think where the AI comes in as guardrails for those decisions. So, and again, if we're not going to be able to apply the same standard to Citibank or some other out of state national conglomerate, then I think it's just a burden. So for that reason, I'm an A on the bill. Again, I understand we all would love to have a real human at the other end of the line.

[Senator James Sanders Jr. (Chair, Banks Committee)]: That's so

[Senator George M. Borrello (Ranking Member)]: so sure.

[Senator James Sanders Jr. (Chair, Banks Committee)]: You should have the option. You should have the ability of saying, hell, I'm perfectly fine with the machine. Say what to do with my life. You should you should have the option, but you should also the libertarian in me says, listen. Give me choice.

[Senator George M. Borrello (Ranking Member)]: You heard it here first. Libertarian.

[Senator James Sanders Jr. (Chair, Banks Committee)]: I didn't know there was a libertarian Oh, sure. I have a libertarian streak. Yeah. Not a Republican streak.

[Senator George M. Borrello (Ranking Member)]: That's right. That's right.

[Senator James Sanders Jr. (Chair, Banks Committee)]: Abraham Lincoln, Republican.

[Senator George M. Borrello (Ranking Member)]: Well

[Senator James Sanders Jr. (Chair, Banks Committee)]: Yes. If if someone if

[Senator Mark Walczyk]: someone made an error on their loan application, this would allow them a period of time to correct that error. Is that correct?

[Unidentified Committee Staff Counsel]: That is correct.

[Senator Mark Walczyk]: But you have to test it. You have to you can't lie on a loan application. You have to sign off on that thing.

[Senator James Sanders Jr. (Chair, Banks Committee)]: It's different between a error and a lie, of course. Saying that you understand everything to be true on that application. Imagine for a moment that you live at 1490, and you said it was 1480. Mhmm. I don't know. Memory slips for a second. That's called an error. You should have the right to correct it.

[Senator Mark Walczyk]: So these are the errors that you're These are

[Senator James Sanders Jr. (Chair, Banks Committee)]: some of human errors. Humans are flawed creatures and going to have errors which are different than a lie. Yeah. I'm not speaking about I am going to, you know, I'm going to say, I was well, I'll be kind of being taped so that to say what Trump was supposed to do, but I won't. I will suppose I decide that I want a loan so bad that I say, I own the LOB. Now there's a difference in that and my address, problem.

[Senator Mark Walczyk]: Yeah. I think, chairman, that's that's part of the concern is that the the language, at least by my read, isn't tight enough to say that that wouldn't be revisited even if you lied and said that you own the LOB. I have

[Senator George M. Borrello (Ranking Member)]: a list of complaints for you by the way.

[Senator James Sanders Jr. (Chair, Banks Committee)]: Yeah. There's there's a there's a while there is a vast difference between a memory slip of your address, you're saying it fast. You didn't say and it's hard to it's hard to explain in sensible language as a as a rational person saying that you own the LOB. Most people the only defense that you could come up with is temporary insanity if you're not lying. However, I suspect that I my argument did not get you. No. Did not. If

[Senator Mark Walczyk]: I were if I were a bank creating algorithms, I would probably put down, you know, on a loan application, if they say that they own a building that is owned by the government, that get an

[Senator James Sanders Jr. (Chair, Banks Committee)]: automatic Yes. No. I'm sure. And

[Senator Mark Walczyk]: not get revisited. Well, the

[Senator James Sanders Jr. (Chair, Banks Committee)]: same is true for a person. If a person is in front of you and you say that you own the LOB, anyone in Albany, I'm suspecting that the loan would be here, was saying, that's news to me, sir. Red flag. Yes. However, I we can we should go on with this, but on another day. Today, we will see if there's a motion on this one. Move the bill. It has been motioned and second. All in favor say aye. Aye. All opposed say nay. Nay. All without rec. This one is referred to Internet and technology with wiser minds will do wiser things, I'm sure.

[Talia (Counsel to Senator Sanders)]: Sponsored by senator Sanders, an act to direct the Department of Financial Services to conduct a study on the banking development district program and to make recommendations to include such program.

[Senator George M. Borrello (Ranking Member)]: Great bill. I'll move the bill if that's

[Senator James Sanders Jr. (Chair, Banks Committee)]: It has been moved. Movement is happening. And second, all in favor say aye. Aye. All opposed say nay. All without rec. Without rec. Without rec. One is reported out. My friend, we have

[Senator George M. Borrello (Ranking Member)]: Otherwise, I'm happy to stay.

[Senator James Sanders Jr. (Chair, Banks Committee)]: I'm sure. I'm sure. It's been a joy working with you. Same. And and I think that the discussions are such that the other committees really need to learn from these things. We really need to figure a way to share it. Discussion does not mean mutiny or any of these other things. It means a better by you putting things in, you made better bills. We pulled several things and worked on them. You made better bills. We appreciate it.

[Senator George M. Borrello (Ranking Member)]: We appreciate the open engagement.

[Senator James Sanders Jr. (Chair, Banks Committee)]: Is there any last words that you want

[Senator George M. Borrello (Ranking Member)]: I would say appreciate the open engagement and thank you very much and we will hopefully have a nice rest of session. Thank you.

[Senator James Sanders Jr. (Chair, Banks Committee)]: I like it. Since I can't do any better than those words, this meeting is now adjourned.