Posted by Mark Smith on May 10, 2000 at 07:44:57:
From the New York Daily News, Wednesday, May 10, 2000:
Bill Would Peak Interest From Security Deposits
by Joe Mahoney
Attorney General Eliot Spitzer proposed legislation yesterday to give tenants a better return on interest from security deposit accounts that landlords set up with banks.
Too often, tenants who live in multiple-dwelling buildings are shortchanged on interest — to the benefit of banks and landlords, Spitzer charged.
Many banks pay 1.1% on security deposit accounts, and current law allows landlords to retain a 1% fee — so the tenants in those instances would only receive one-tenth of 1% interest, he said.
Spitzer said his bill would provide an incentive to landlords to find higher-interest accounts by setting the landlord fee at 20% of the interest earned and giving the tenants the other 80%.
"We want to use the markets to maximize the return to tenants," Spitzer said.
The measure, sponsored by Assemblywoman Helene Weinstein (D-Brooklyn) and state Sen. Frank Padavan (R-Queens) is backed by the Brooklyn Tenants Council.
An estimated $1.3 billion sits in tenant security accounts from security deposits for about 2.2 million tenants statewide, Spitzer said.
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