senate Bill S4278

Relates to extending the provisions of chapter 591 of the laws of 2001 relating to limiting the check cashing exemption for national banks

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 19 / Mar / 2013
    • REFERRED TO BANKS
  • 23 / Apr / 2013
    • 1ST REPORT CAL.429
  • 24 / Apr / 2013
    • 2ND REPORT CAL.
  • 29 / Apr / 2013
    • ADVANCED TO THIRD READING
  • 06 / May / 2013
    • SUBSTITUTED BY A5057

Summary

Relates to extending the provisions of chapter 591 of the laws of 2001 relating to limiting the check cashing exemption for national banks.

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Bill Details

See Assembly Version of this Bill:
A5057
Versions:
S4278
Legislative Cycle:
2013-2014
Law Section:
Banks
Laws Affected:
Amd ยง2, Chap 591 of 2001

Votes

17
0
17
Aye
0
Nay
2
aye with reservations
0
absent
0
excused
0
abstained
show Banks committee vote details

Sponsor Memo

BILL NUMBER:S4278

TITLE OF BILL: An act to amend chapter 591 of the laws of 2001
amending the banking law relating to limiting the check cashing
exemption for national banks and other regulated entities, in relation
to the effectiveness of such chapter

PURPOSE:

To provide greater certainty and stability to the check cashing
industry by extending the sunset provisions on Chapter 591 of 2001.

SUMMARY OF PROVISIONS:

This bill extends, until August 1, 2018, the provisions of law enacted
by Chapter 591 of 2001.

EXISTING LAW:

The provisions of Chapter 591 of 2001 - which provides that any
separate check cashing facilities established by banking institution
shall be subject to the existing distance standard, which applies to
the licensing of check casher operations - are currently scheduled to
expire on August 1, 2013.

JUSTIFICATION:

This bill seeks to provide greater certainty, stability and
predictability in the industry by extending the sunset date on the
provisions of Chapter 591 of the Laws of 2001. That law -which is
currently scheduled to expire on August 1, 2013 - provides that any
separate check cashing facilities established by banking institutions
shall be subject to the existing distance standard which applies to
the licensing of check casher operations.

In New York State, the check cashing industry is strictly regulated,
including being subject to limits on the maximum amount that a
licensee may charge for cashing a check. The maximum fee of 1.91% is
significantly lower than the rates charged in other states. Given
these fee limits, check cashers must rely on a large volume of
business in order to be financially viable. In recognition of this
situation, State law and policy have long provided for a three-tenths
of a mile distance standard in the licensing of check cashers.

This system gave rise to an industry which provides low-cost financial
services in many neighborhoods. However, by the year 2001, the
stability and continued viability of this industry were in question
due to concerns about challenges from unregulated competitors. Some
new stand- alone facilities had been established which were taking
advantage of the traditional exemption of banking institutions from
the check casher law. As a result, these new entities were not subject
to any of the regulatory requirements -including the distance standard
and the fee limitations' - that applied to licensed check cashers.

There were concerns about the potential impact of these exempt
entities on the stability of the check cashing industry and, on the
level of fees charged to consumers. There were also questions about


whether these new developments were consistent with the intent of the
traditional exemption for banking institutions from the check dasher
law. Although these new facilities were bank-owned, they were separate
from the bank itself, did not provide other traditional banking
services, and were generally indistinguishable from licensed check
cashers. in response to this situation, Chapter 591 of 2001 provided
that a bank which establishes a separate facility for the purpose of
cashing checks must abide by the existing distance standards. Chapter
591 was amended in early 2002 to set a three-year sunset date, thereby
providing an opportunity to review and evaluate the impact of this new
law. The sunset date was subsequently extended for another two years
in 2008 and extended for another three years in 2010.

LEGISLATIVE HISTORY:

New.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediate.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4278

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             March 19, 2013
                               ___________

Introduced  by  Sens.  GRIFFO, FARLEY -- read twice and ordered printed,
  and when printed to be committed to the Committee on Banks

AN ACT to amend chapter 591 of the laws of 2001 amending the banking law
  relating to limiting the check cashing exemption  for  national  banks
  and other regulated entities, in relation to the effectiveness of such
  chapter

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 2 of chapter 591 of the laws of 2001  amending  the
banking  law  relating  to  limiting  the  check  cashing  exemption for
national banks and other regulated entities, as amended by  chapter  209
of the laws of 2010, is amended to read as follows:
  S  2.  This  act shall take effect immediately and shall expire and be
deemed repealed August 1, [2013] 2018.
  S 2. This act shall take effect immediately.






 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08371-01-3

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