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<p>ALBANY, New York – Credit unions and banks are not often on the same side of the fence on key issues, but supporters of New York State’s Innocent Lienholder bill are counting both credit unions and banks among their supporters. Governor George Pataki pocket vetoed the Innocent Lienholder bill which would have created standardized lienholder notification across the state in cases where automobiles have been impounded by law enforcement agencies due to drunk driving or drug-related charges. The veto continues the practice of a county law enforcement agency selling a car or truck and keeping the proceeds without notifying a credit union, for example, if it is the lienholder. It is an issue where both credit unions and banks find themselves in agreement. The right of auto lienholders varies county by county throughout New York State. Some municipalities are required to return vehicles to lienholders. Others are required to provide notice of a seizure during a specific period of time. And still, others are not required to return cars or notify lienholders at all. “It’s a hybrid of issues,” said Michael Lanotte, Sr., vice president and general counsel for the New York State Credit Union League (NYSCUL). Pataki was able to enact a pocket veto because of the legislature’s delay in sending him the bill. In such a veto, no explanation is needed as to why a measure has been turned down. A New York Times article, however, revealed that New York City Police Commissioner Raymond W. Kelly argued against the bill. His view was that financial institutions might return cars to drivers and renew the loans, defeating the purpose of the seizure program. “Credit unions would never do that,” said Lanotte in response. “There has even been talk about lienholders guaranteeing to authorities that, upon return of a vehicle, it would not be given back to a member. We are not interested in returning cars to people who are offenders or repeat offenders.” New York City and Suffolk County law enforcement officials have also reported that the bill would interfere with their ability to seize vehicles. Lanotte responds, “I see this as an `after-the-fact’ issue. This is simply just due process for the lienholder. There isn’t anything in the bill that will impede law enforcement officials’ ability to stop individuals from driving while intoxicated, and, there is nothing that credit unions want to do that would prohibit the ability of police to do so.” The police department also claimed the bill would encourage drug couriers to grant “sham” liens to others in collusion who would reclaim the cars. Asked if he thought the existing rules are in place so that municipalities or law enforcement agencies can gain extra income, Lanotte said, “I would hate to speculate on that motivation. I truly believe that, on some level, the bill, in some way, would have made it burdensome for the other parties in regard to administering the seized property. I don’t believe they are looking to create additional revenue.” Supporters of the bill are looking for a mandatory time period for notification of a seized vehicle. “A reasonable time would be 20 days,” said Lanotte. This would prevent the accumulation of exorbitant storage fees and give ample time for the municipality to contact the lienholder. In Nassau County, which allows vehicles to be returned to lienholders, a credit union would have to file a claim proving that it is the innocent lienholder. In some instances, depending on the crime, there is also a requirement that the lienholder would not return the vehicle over the violator. According to Amy Kramer, director of government affairs for NYSCUL, the next move in support of the bill is to find out more about the opposition from the Governor’s office. Credit unions will also write to Pataki in support of the bill, and its sponsors will hopefully meet with the Governor. -</p> <p>[email protected]</p>

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