N.Y. Vehicle & Traffic Law § 2121: Release of security interest

§ 2121. Release of security interest. (a) Upon the satisfaction of a

security interest in a vehicle the lienholder shall immediately upon

clearance of payment execute a release of his security interest in a

manner prescribed by the commissioner and mail or deliver the release to

the owner or any person who delivers to the lienholder an authorization

from the owner to receive the certificate. Payment sufficient to satisfy

the security interest by an insurer of the owner shall be deemed an

authorization by the owner for the delivery of the release of the

security interest to the insurer. If the payment in satisfaction of the

security interest is in cash, certified check, intra-bank transfer of

funds or an uncertified check or draft issued by an insurance company

authorized to do business in this state, the payment shall be deemed to

be cleared immediately upon receipt. The owner, other than a dealer

holding the vehicle for resale, may cause the certificate and release to

be mailed or delivered to the commissioner, who shall release the

lienholder's rights on the certificate or issue a new certificate.

(b) A dealer who receives a motor vehicle for the purposes of resale

and who arranges for the satisfaction of any security interest in such

vehicle, and for which a release of security interest has not been

issued, may submit to the commissioner sufficient evidence to

demonstrate that such security interest has been satisfied and shall

provide notice to the lienholder two weeks prior to submission to the

commissioner. The commissioner shall, upon receipt of such evidence, a

proper application and the appropriate fee pursuant to section

twenty-one hundred twenty-five of this article, promptly issue, within

no more than fifteen business days of receipt by the department of all

required information and fees, either a duplicate certificate without

such lien included thereon, or a certificate without such lien included

thereon. Evidence that a security interest has been satisfied shall

include: (i) evidence that an interbank or electronic transfer of funds

has been made; or (ii) evidence that a copy of a cashier's or bank check

has been delivered; or (iii) other evidence as determined to be

satisfactory by the commissioner; and (iv) evidence that the amount

delivered to the lienholder is equal to the amount which has been

represented to the dealer by the lienholder as sufficient to satisfy

such lien. Such evidence shall be accepted by the commissioner as

sufficient. Any evidence submitted to the commissioner pursuant to this

subdivision may, subject to approval of the commissioner, be submitted

in electronic form. In addition to the penalties imposed by section

twenty-one hundred thirty of this article, any dealer who alters or

forges evidence of payment, or fails to make a payment, shall be liable

to any party for any damages resulting from the issuance of a new

certificate by the commissioner, plus attorney's fees and costs incurred

in recovering such damages, provided however no subsequent purchaser of

a vehicle where the security interest was removed by the commissioner

under the provisions of this subdivision shall be liable for any errors

in the removal of such security interest, and any dealer who so applied

for the removal of such security interest on such vehicle shall

indemnify any such purchaser and lienholder. The commissioner is

authorized to adopt and enforce reasonable rules and regulations

necessary to carry out the provisions of this subdivision.