Assembly Bill A7268

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

                                 7268--A

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                             March 27, 2009
                               ___________

Introduced  by  M.  of A. PHEFFER, BENJAMIN -- read once and referred to
  the Committee on Consumer Affairs and Protection -- recommitted to the
  Committee on Consumer Affairs and Protection in accordance with Assem-
  bly Rule 3, sec. 2 -- reported and referred to the Committee on  Codes
  --  committee  discharged,  bill amended, ordered reprinted as amended
  and recommitted to said committee

AN ACT to amend the  general  business  law  and  the  banking  law,  in
  relation to providing for budget planning and debt settlement services

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

  Section 1. The article heading of article 28-B of the general business
law, as added by chapter 1031 of the laws of 1965, is amended to read as
follows:
              BUDGET PLANNING AND DEBT SETTLEMENT SERVICES
  S 2. Section 455 of the general business law, as  amended  by  chapter
629  of the laws of 2002, subdivisions 1 and 4 as amended by chapter 456
of the laws of 2006, is amended to read as follows:
  S 455. Definitions. 1. FOR THE PURPOSES OF THIS ARTICLE, THE FOLLOWING
TERMS SHALL HAVE THE FOLLOWING MEANINGS:
  (A) Budget planning[, as used in this article,] means the making of  a
contract  between  a  person or entity engaged in the business of budget
planning with a particular debtor whereby (i) the debtor agrees to pay a
sum or sums of money in any manner or form  and  the  person  or  entity
engaged  in  the business of budget planning distributes, or supervises,
coordinates or controls  the  distribution  of,  or  has  a  contractual
relationship  with  another person or entity that distributes, or super-
vises, coordinates or controls such  distribution  of,  the  same  among
certain  specified  creditors  in accordance with a plan agreed upon and
(ii) the debtor agrees to pay to such person or entity,  or  such  other
person  or  entity  that  distributes,  or  supervises,  coordinates  or
controls such distribution of, a sum or  sums  of  money,  any  valuable

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10740-12-0
              

A. 7268--A                          2

consideration  for  such  services or for any other services rendered in
connection therewith. [For the purposes of this article,  a]  SUCH  TERM
SHALL  NOT  INCLUDE  A PERSON OR ENTITY PROVIDING OR OFFERING TO PROVIDE
DEBT  SETTLEMENT  SERVICES  AS DEFINED IN PARAGRAPH (B) OF THIS SUBDIVI-
SION.
  (B) DEBT SETTLEMENT SERVICES MEANS THE MAKING OF A CONTRACT BETWEEN  A
PERSON  OR  ENTITY  ENGAGED IN THE BUSINESS OF PROVIDING DEBT SETTLEMENT
SERVICES, WHICH MEANS ANY ONE OR MORE OF THE FOLLOWING ACTIVITIES:
  (1) OFFERING TO PROVIDE ADVICE, OR OFFERING TO ACT  OR  ACTING  AS  AN
INTERMEDIARY BETWEEN A DEBTOR AND ONE OR MORE OF THE DEBTOR'S CREDITORS,
WHERE THE PRIMARY PURPOSE OF THE ADVICE OR ACTION IS TO OBTAIN A SETTLE-
MENT FOR LESS THAN THE FULL AMOUNT OF DEBT, WHETHER IN PRINCIPAL, INTER-
EST, FEES, OR OTHER CHARGES, INCURRED PRIMARILY FOR PERSONAL, FAMILY, OR
HOUSEHOLD  PURPOSES INCLUDING, BUT NOT LIMITED TO, OFFERING DEBT NEGOTI-
ATION, DEBT REDUCTION, OR DEBT RELIEF SERVICES; OR
  (2) ADVISING, ENCOURAGING, ASSISTING, OR COUNSELING A DEBTOR TO  ACCU-
MULATE  FUNDS  IN  AN  ACCOUNT FOR FUTURE PAYMENT OF A REDUCED AMOUNT OF
DEBT TO ONE OR MORE OF THE DEBTOR'S CREDITORS.
  ANY PERSON SO ENGAGED OR HOLDING OUT AS SO ENGAGED  IS  DEEMED  TO  BE
ENGAGED  IN  THE  PROVISION  OF  DEBT SETTLEMENT SERVICES, REGARDLESS OF
WHETHER OR NOT A FEE IS CHARGED FOR SUCH SERVICES.
  ANY ATTORNEY-AT-LAW OR LAW FIRM ENGAGING OR OFFERING TO ENGAGE IN  THE
ACTIVITIES  DESCRIBED  IN SUBPARAGRAPHS ONE AND TWO OF THIS PARAGRAPH IN
SUCH CAPACITY ON BEHALF OF AND IN THE NAME OF A  CLIENT  SOLELY  THROUGH
ACTIVITIES  THAT MAY ONLY BE PERFORMED BY A LICENSED ATTORNEY, SHALL NOT
BE CONSIDERED  TO  BE  ENGAGED  IN  THE  PROVISION  OF  DEBT  SETTLEMENT
SERVICES,  PROVIDED,  HOWEVER,  THAT  ANY ATTORNEY-AT-LAW OR LAW FIRM OR
PART THEREOF WHO  REGULARLY  ENGAGES  IN  THE  ACTIVITIES  DESCRIBED  IN
SUBPARAGRAPHS ONE AND TWO SHALL BE DEEMED TO BE ENGAGED IN THE PROVISION
OF DEBT SETTLEMENT SERVICES.
  A  person  or entity shall be considered as engaged in the business of
budget planning OR DEBT SETTLEMENT SERVICES in New York, and subject  to
this  article  and  the  licensing  and  other  requirements  of article
twelve-C OR ARTICLE TWELVE-CC of the banking  law,  if  such  person  or
entity  solicits budget planning OR DEBT SETTLEMENT business within this
state and, in connection with such solicitation, enters into a  contract
for  budget planning OR DEBT SETTLEMENT SERVICES with an individual then
resident in this state.
  2. Person, as used in this article, shall not include a person  admit-
ted to practice law in this state.
  3. Entity, as used in this article, shall not include a firm, partner-
ship,  professional  corporation,  or  other  organization,  all  of the
members or principals of which are admitted  to  practice  law  in  this
state.
  4.  [Person or entity as used in this article shall not include a type
B not-for-profit corporation as defined in section two  hundred  one  of
the  not-for-profit corporation law of this state, or an entity incorpo-
rated in another state  and  having  a  similar  not-for-profit  status,
licensed  by  the  superintendent,  to  engage in the business of budget
planning as defined in this section.
  5.] Any attorney licensed to practice law in this state who is engaged
in budget planning shall (a) negotiate directly with creditors on behalf
of the client; (b) ensure that all moneys received from the  client  are
deposited in the attorney's account maintained for client funds; (c) pay
creditors  from  such  account;  and  (d) offer budget planning services
through the same legal entity that the attorney uses to practice law.

A. 7268--A                          3

  S 3. Section 456 of the general business law, as  amended  by  chapter
456 of the laws of 2006, is amended to read as follows:
  S  456.  Budget  planning  AND DEBT SETTLEMENT SERVICES prohibited. No
person or entity shall engage in the business of budget planning OR DEBT
SETTLEMENT SERVICES as defined in section  four  hundred  fifty-five  of
this  article,  except as authorized in article twelve-C OR TWELVE-CC of
the banking law.
  S 4.  Section 457 of the general business law, as amended  by  chapter
629 of the laws of 2002, is amended to read as follows:
  S 457. [Penalty] PENALTIES FOR VIOLATION OF THIS ARTICLE; CRIMINAL AND
CIVIL.    (A)  Whoever  either  individually  or as officer, director or
employee of any person, firm, association or corporation,  violates  any
of  the provisions of the preceding section shall be guilty of a CLASS A
misdemeanor [for each such violation] PUNISHABLE AS PROVIDED IN ARTICLES
SEVENTY AND EIGHTY OF THE PENAL LAW.
  (B) WHENEVER THERE SHALL BE A VIOLATION OF THIS  ARTICLE,  APPLICATION
MAY  BE  MADE  BY  THE ATTORNEY GENERAL IN THE NAME OF THE PEOPLE OF THE
STATE OF NEW YORK TO A COURT OR JUSTICE HAVING JURISDICTION BY A SPECIAL
PROCEEDING TO ISSUE AN INJUNCTION, AND UPON NOTICE TO THE  DEFENDANT  OF
NOT  LESS THAN FIVE DAYS, TO ENJOIN AND RESTRAIN THE CONTINUANCE OF SUCH
VIOLATIONS; AND IF IT SHALL APPEAR TO THE SATISFACTION OF THE  COURT  OR
JUSTICE  THAT  THE  DEFENDANT  HAS,  IN  FACT, VIOLATED THIS ARTICLE, AN
INJUNCTION MAY BE  ISSUED  BY  SUCH  COURT  OR  JUSTICE,  ENJOINING  AND
RESTRAINING  ANY  FURTHER  VIOLATION,  WITHOUT  REQUIRING PROOF THAT ANY
PERSON HAS, IN FACT, BEEN INJURED OR DAMAGED THEREBY. IN CONNECTION WITH
ANY SUCH PROPOSED APPLICATION, THE ATTORNEY  GENERAL  IS  AUTHORIZED  TO
TAKE  PROOF  AND MAKE A DETERMINATION OF THE RELEVANT FACTS AND TO ISSUE
SUBPOENAS IN ACCORDANCE WITH THE CIVIL PRACTICE LAW AND RULES.  WHENEVER
THE  COURT  SHALL  DETERMINE  THAT  A  VIOLATION OF SECTION FOUR HUNDRED
FIFTY-SIX OF THIS ARTICLE HAS OCCURRED, THE COURT  MAY  IMPOSE  A  CIVIL
PENALTY  OF  NOT  MORE  THAN  FIVE  HUNDRED DOLLARS PER CONTRACT MADE IN
VIOLATION OF SUCH SECTION, NOT TO EXCEED ONE HUNDRED THOUSAND DOLLARS.
  S 5. Section 579 of the banking law, as amended by chapter 629 of  the
laws of 2002, is amended to read as follows:
  S  579. Doing business without license prohibited. [Only a type B not-
for-profit corporation as defined in section  two  hundred  one  of  the
not-for-profit  corporation law of this state, or an entity incorporated
in another state and having a similar not-for-profit status,] NO  PERSON
OR  ENTITY shall engage in the business of budget planning as defined in
subdivision one of section four hundred fifty-five of the general  busi-
ness  law of this state except as authorized by this article and without
first obtaining a license from the superintendent.
  S 6. Subdivision 2 of section 584-a of the banking law,  as  added  by
chapter 629 of the laws of 2002, is amended to read as follows:
  2.  the  total fees agreed to for such services, including any adjust-
ments for estimated available  rebates  from  creditors,  provided  that
nothing  in  this  subdivision shall require a licensee to share rebates
with its clients AND PROVIDED THAT ANY FEES OR CHARGES IMPOSED  MUST  BE
FAIR, REASONABLE AND EASILY UNDERSTOOD;
  S 7. Subdivisions 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 of section 584-b
of  the  banking  law are renumbered subdivisions 5, 6, 7, 8, 9, 10, 11,
12, 13 and 14 and a new subdivision 4 is added to read as follows:
  4. NO LICENSEE SHALL IMPOSE ANY FEE OR CHARGE WHATSOEVER THAT  IS  NOT
FAIR, REASONABLE AND ABLE TO BE EASILY UNDERSTOOD.
  S  8. Section 585 of the banking law, as amended by chapter 629 of the
laws of 2002, is amended to read as follows:

A. 7268--A                          4

  S 585. Superintendent  authorized  to  examine.  For  the  purpose  of
discovering  violations of this article or securing information lawfully
required by him or her hereunder, the superintendent may  at  any  time,
and  as  often  as  he  or  she may determine, either personally or by a
person duly designated by him or her, investigate the business and exam-
ine the books, accounts, records, and files used therein of every licen-
see  hereunder.  For that purpose the superintendent and his or her duly
designated representative shall have free  access  to  the  offices  and
place  of  business,  books, accounts, papers, records, files, safes and
vaults of all such licensees. The superintendent  and  any  person  duly
designated  by him or her shall have authority to require the attendance
of and to examine under oath all persons whose testimony he or  she  may
require  relative  to such business. The expenses incurred in making any
examination pursuant to this section shall be assessed against and  paid
by  the  licensee  so  examined,  except  that traveling and subsistence
expenses so incurred shall be charged against and paid by  licensees  in
such  proportions  as the superintendent shall deem just and reasonable,
and such proportionate charges shall be added to the assessment  of  the
other  expenses  incurred  upon each examination. Upon written notice by
the superintendent of the total amount of such assessment, the  licensee
shall become liable for and shall pay such assessment to the superinten-
dent.  If, upon review, the superintendent shall determine that the fees
or service charges set by  the  licensee  are  UNFAIR,  unreasonable  OR
UNCLEAR, he or she shall direct the licensee to make adjustments in said
fees  and  service charges in accordance with his or her findings, which
shall set forth a detailed factual basis and reasoning  supporting  such
finding.
  S  9. The banking law is amended by adding a new article 12-CC to read
as follows:
                             ARTICLE XII-CC
                    DEBT SETTLEMENT SERVICE LICENSES
SECTION 588-A. DOING BUSINESS WITHOUT LICENSE PROHIBITED.
        588-B. APPLICATION FOR LICENSE.
        588-C. CONDITIONS FOR ISSUANCE OF  A  LICENSE;  PROCEDURE  WHERE
                 APPLICATION DENIED.
        588-D. LICENSE PROVISIONS.
        588-E. CHANGES IN OFFICERS OR DIRECTORS OF LICENSEE.
        588-F. CHANGES IN CONTROL.
        588-G. GROUNDS  FOR  SUSPENSION OR REVOCATION OF LICENSE; PROCE-
                 DURE.
        588-H. CONTRACTS WITH DEBTORS; FEES.
        588-I. PERIODIC ACCOUNTING.
        588-J. CHOICE OF LANGUAGE.
        588-K. OBLIGATION OF GOOD FAITH.
        588-L. WAIVER.
        588-M. CANCELLATION OF CONTRACT.
        588-N. PROHIBITED ACTIVITIES.
        588-O. SUPERINTENDENT AUTHORIZED TO EXAMINE.
        588-P. LICENSEE'S BOOKS AND RECORDS; REPORTS.
        588-Q. AUTHORITY OF SUPERINTENDENT.
        588-R. PRIVATE ENFORCEMENT.
  S 588-A. DOING BUSINESS WITHOUT LICENSE PROHIBITED. NO PERSON OR ENTI-
TY SHALL ENGAGE IN THE BUSINESS OF DEBT SETTLEMENT SERVICES  AS  DEFINED
IN  SUBDIVISION  ONE  OF  SECTION FOUR HUNDRED FIFTY-FIVE OF THE GENERAL
BUSINESS LAW OF THIS STATE EXCEPT AS  AUTHORIZED  BY  THIS  ARTICLE  AND
WITHOUT FIRST OBTAINING A LICENSE FROM THE SUPERINTENDENT.

A. 7268--A                          5

  S  588-B.  APPLICATION  FOR  LICENSE.  1.  APPLICATION  FOR  A LICENSE
REQUIRED UNDER THIS ARTICLE SHALL BE IN WRITING, UNDER OATH, AND IN  THE
FORM PRESCRIBED BY THE SUPERINTENDENT, AND SHALL CONTAIN THE FOLLOWING:
  (A)  THE  EXACT  NAME AND THE ADDRESS OF THE APPLICANT AND ITS DATE OF
INCORPORATION; AND
  (B) THE NAME AND COMPLETE BUSINESS AND RESIDENTIAL ADDRESS AND OCCUPA-
TION OF EACH OFFICER AND DIRECTOR OF THE APPLICANT; AND
  (C) THE COMPLETE ADDRESS WHERE THE BUSINESS OF THE APPLICANT IS TO  BE
CONDUCTED, SHOWING THE STREET AND NUMBER, IF ANY, POST OFFICE AND BUILD-
ING  AND  ROOM  NUMBER,  IF ANY, THE OFFICE BUILDING AND ROOM NUMBER, IF
ANY, AND THE MUNICIPALITY AND COUNTY; AND
  (D) IF THE APPLICANT HAS ONE OR MORE BRANCHES, SUBSIDIARIES OR  AFFIL-
IATES  OPERATING  IN THIS STATE, THE COMPLETE ADDRESS OF EACH SUCH PLACE
OF BUSINESS; AND
  (E)  SUCH  OTHER  PERTINENT  INFORMATION  AS  THE  SUPERINTENDENT  MAY
REQUIRE,  INCLUDING  BUT  NOT  LIMITED  TO  EVIDENCE INDICATING THAT THE
APPLICANT, OR OFFICER, DIRECTOR, OR MANAGER OF  SUCH  APPLICANT  HAS  AT
LEAST  ONE  YEAR  OF  EXPERIENCE IN FINANCIAL SERVICES OR RELATED FIELDS
APPLICABLE TO DEBT SETTLEMENT SERVICES.
  2. WHERE AN APPLICANT OPERATES SEVERAL PLACES  OF  BUSINESS,  SEPARATE
APPLICATIONS FOR LICENSE SHALL BE MADE FOR EACH SUCH PLACE OF BUSINESS.
  3.  UPON ORIGINAL APPLICATION FOR A LICENSE OR LICENSES TO OPERATE ONE
OR MORE PLACES OF BUSINESS, THE APPLICANT SHALL PAY AN INVESTIGATION FEE
IN AN AGGREGATE AMOUNT AS PRESCRIBED PURSUANT TO SECTION  EIGHTEEN-A  OF
THIS  CHAPTER. NO ADDITIONAL INVESTIGATION FEE SHALL BE REQUIRED FOR ANY
SUBSEQUENT APPLICATION FOR A LICENSE UNLESS SUCH APPLICATION  IS  SUBSE-
QUENT TO A DENIAL OF A LICENSE OR TO A REVOCATION, SUSPENSION OR SURREN-
DER OF A LICENSE.
  4.  AS A CONDITION FOR THE ISSUANCE AND RETENTION OF A DEBT SETTLEMENT
SERVICES LICENSE, AND SUBJECT TO SUCH REGULATIONS AS THE  SUPERINTENDENT
SHALL  PRESCRIBE,  APPLICANTS  FOR  A LICENSE SHALL FILE WITH THE SUPER-
INTENDENT A SURETY BOND  IN  FORM  SATISFACTORY  TO  THE  SUPERINTENDENT
ISSUED  BY A BONDING COMPANY OR INSURANCE COMPANY AUTHORIZED TO DO BUSI-
NESS IN THIS STATE. SUCH BOND SHALL RUN TO THIS STATE FOR THE BENEFIT OF
THIS STATE AND OF INDIVIDUALS WHO RESIDE IN THIS STATE WHEN  THEY  AGREE
TO  RECEIVE  DEBT SETTLEMENT SERVICES FROM THE LICENSEE, AS THEIR INTER-
ESTS MAY APPEAR. EXCEPT AS PROVIDED HEREUNDER, THE PRINCIPAL  AMOUNT  OF
SUCH  BOND  SHALL BE TWO HUNDRED FIFTY THOUSAND DOLLARS. THE SUPERINTEN-
DENT MAY REQUIRE A LARGER BOND IF HE OR SHE DETERMINES, IN  HIS  OR  HER
SOLE  DISCRETION,  THAT  A  LICENSEE HAS ENGAGED IN A PATTERN OF CONDUCT
RESULTING IN BONA FIDE CONSUMER COMPLAINTS OF MISCONDUCT AND  THAT  SUCH
INCREASED  BOND  IS  NECESSARY  FOR  THE PROTECTION OF CONSUMERS; OR THE
SUPERINTENDENT MAY INCREASE OR DECREASE  THE  AMOUNT  OF  SUCH  BOND  OR
DEPOSIT  BASED  UPON  THE APPLICANT'S OR LICENSEE'S FINANCIAL CONDITION,
BUSINESS PLAN, AND THE ACTUAL OR ESTIMATED AGGREGATE AMOUNT OF  PAYMENTS
AND  FEES  PAID  BY  DEBTORS  TO SUCH LICENSEE. IN LIEU OF SUCH BOND, AN
APPLICANT MAY KEEP ON DEPOSIT WITH SUCH BANKS,  SAVINGS  BANKS,  SAVINGS
AND LOAN ASSOCIATIONS, TRUST COMPANIES, PRIVATE BANKERS, NATIONAL BANKS,
FEDERAL  SAVINGS  BANKS, OR FEDERAL SAVINGS AND LOAN ASSOCIATIONS IN THE
STATE AS SUCH LICENSEE MAY DESIGNATE AND THE SUPERINTENDENT MAY APPROVE,
INTEREST-BEARING BONDS, NOTES, DEBENTURES, OR OTHER OBLIGATIONS  OF  THE
UNITED STATES OR ANY AGENCY OR INSTRUMENTALITY THEREOF, OR GUARANTEED BY
THE  UNITED  STATES,  OR  OF  THIS  STATE,  OR  OF A CITY, COUNTY, TOWN,
VILLAGE, SCHOOL DISTRICT, OR INSTRUMENTALITY OF THIS STATE OR GUARANTEED
BY THIS STATE, OR DOLLAR DEPOSITS, OR SUCH OTHER ASSETS  OR  LETTERS  OF
CREDIT  AS  THE  SUPERINTENDENT  SHALL BY RULE OR REGULATION PERMIT. THE

A. 7268--A                          6

PROCEEDS OF EACH BOND OR DEPOSIT SHALL CONSTITUTE A  TRUST  FUND  TO  BE
USED  EXCLUSIVELY  TO  REIMBURSE  PAYMENTS BY DEBTORS THAT HAVE NOT BEEN
PROPERLY DISTRIBUTED TO CREDITORS OR TO REIMBURSE FEES DETERMINED BY THE
SUPERINTENDENT  TO  BE IMPROPERLY CHARGED OR COLLECTED AND, IN THE EVENT
OF THE INSOLVENCY, LIQUIDATION, OR BANKRUPTCY OF SUCH LICENSEE,  TO  PAY
OUTSTANDING BANKING DEPARTMENT EXAMINATION COSTS AND ASSESSMENTS. WITHIN
NINETY  DAYS AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION, EACH LICENSEE
SHALL COMPLY WITH THE REQUIREMENTS OF THIS SUBDIVISION.
  5. APPLICATION FOR A LICENSE SHALL BE ACCOMPANIED BY A FEE ESTABLISHED
PURSUANT TO SECTION EIGHTEEN-A OF THIS CHAPTER.
  S 588-C. CONDITIONS FOR ISSUANCE OF A LICENSE; PROCEDURE WHERE  APPLI-
CATION  DENIED.  1.  UPON THE FILING OF AN APPLICATION FOR A LICENSE, IF
THE SUPERINTENDENT SHALL FIND THAT THE FINANCIAL RESPONSIBILITY, EXPERI-
ENCE, CHARACTER, AND GENERAL FITNESS OF THE APPLICANT, AND OF THE  OFFI-
CERS  AND DIRECTORS THEREOF ARE SUCH AS TO COMMAND THE CONFIDENCE OF THE
COMMUNITY AND TO WARRANT BELIEF  THAT  THE  BUSINESS  WILL  BE  OPERATED
HONESTLY,  FAIRLY,  AND EFFICIENTLY WITHIN THE PURPOSES OF THIS ARTICLE,
HE OR SHE SHALL THEREUPON ISSUE A LICENSE IN DUPLICATE TO ENGAGE IN DEBT
SETTLEMENT SERVICES IN ACCORDANCE WITH THE PROVISIONS OF  THIS  ARTICLE.
THE SUPERINTENDENT SHALL TRANSMIT ONE COPY OF SUCH LICENSE TO THE APPLI-
CANT  AND  FILE  ANOTHER  IN  THE OFFICE OF THE BANKING DEPARTMENT. SUCH
LICENSE SHALL REMAIN IN FULL FORCE AND EFFECT UNTIL IT IS SURRENDERED BY
THE LICENSEE OR REVOKED OR SUSPENDED AS  HEREINAFTER  PROVIDED;  IF  THE
SUPERINTENDENT  SHALL NOT SO FIND HE OR SHE SHALL NOT ISSUE SUCH LICENSE
AND HE OR SHE SHALL NOTIFY THE APPLICANT OF THE DENIAL. THE  SUPERINTEN-
DENT SHALL APPROVE OR DENY EVERY APPLICATION FOR LICENSE HEREUNDER WITH-
IN NINETY DAYS FROM THE FILING THEREOF.
  2. THE SUPERINTENDENT MAY DENY LICENSURE IF:
  (A)  THE APPLICATION CONTAINS INFORMATION THAT IS MATERIALLY ERRONEOUS
OR INCOMPLETE;
  (B) AN OFFICER OR DIRECTOR OF THE APPLICANT HAS BEEN  CONVICTED  OF  A
CRIME AGAINST THE LAWS OF THIS STATE OR ANY OTHER STATE OR OF THE UNITED
STATES  INVOLVING MORAL TURPITUDE OR FRAUDULENT OR DISHONEST ACTIONS, OR
THE ENTRY OF A FINAL JUDGMENT  IN  A  COURT  OF  COMPETENT  JURISDICTION
AGAINST  THE  OFFICER  OR DIRECTOR IN A CIVIL ACTION ARISING FROM FRAUD,
MISREPRESENTATION, OR DECEIT; OR
  (C) THE APPLICANT OR ANY OF ITS OFFICERS OR DIRECTORS HAS DEFAULTED IN
THE PAYMENT OF MONEY COLLECTED FOR OTHERS.
  S 588-D. LICENSE PROVISIONS. 1. EACH LICENSE ISSUED UNDER THIS ARTICLE
SHALL STATE THE ADDRESS OR ADDRESSES AT WHICH  THE  BUSINESS  IS  TO  BE
CONDUCTED  AND  SHALL STATE FULLY THE NAME OF THE LICENSEE, AND THE DATE
AND PLACE OF ITS INCORPORATION. A COPY OF SUCH LICENSE SHALL  BE  PROMI-
NENTLY  POSTED  IN  EACH PLACE OF BUSINESS OF THE LICENSEE. SUCH LICENSE
SHALL NOT BE TRANSFERABLE OR ASSIGNABLE. IN THE EVENT  THE  LOCATION  AT
WHICH  THE  BUSINESS  IS  TO BE CONDUCTED SHALL BE CHANGED, THE LICENSEE
SHALL FORTHWITH NOTIFY THE SUPERINTENDENT WHO  SHALL  THEREUPON  WITHOUT
CHARGE  ATTACH  TO  THE  LICENSE  A  RIDER  SETTING  FORTH  SUCH CHANGED
LOCATION. EACH  LICENSEE,  WITHIN  NINETY  DAYS  OF  THE  CLOSE  OF  THE
LICENSEE'S  FISCAL YEAR, SHALL SUBMIT AN INDEPENDENTLY AUDITED FINANCIAL
STATEMENT TO THE SUPERINTENDENT.
  2. THE SUPERINTENDENT SHALL MAINTAIN A LIST OF LICENSED  DEBT  SETTLE-
MENT  SERVICES LICENSEES. THE LIST SHALL BE MADE AVAILABLE TO THE PUBLIC
IN WRITTEN FORM UPON REQUEST AND ON THE DEPARTMENT'S INTERNET WEBSITE.
  S 588-E. CHANGES IN OFFICERS OR DIRECTORS OF LICENSEE.  IN  THE  EVENT
THAT  THERE  SHALL  BE ANY CHANGE AMONG THE OFFICERS OR DIRECTORS OF ANY
LICENSEE, THE LICENSEE SHALL PROMPTLY NOTIFY THE SUPERINTENDENT  OF  THE

A. 7268--A                          7

NAME,  ADDRESS,  AND  OCCUPATION  OF  EACH  NEW  OFFICER OR DIRECTOR AND
PROVIDE SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  S  588-F.  CHANGES IN CONTROL. 1. IT SHALL BE UNLAWFUL EXCEPT WITH THE
PRIOR APPROVAL OF THE SUPERINTENDENT FOR ANY ACTION TO  BE  TAKEN  WHICH
RESULTS  IN  A CHANGE OF CONTROL OF THE BUSINESS OF A LICENSEE. PRIOR TO
ANY CHANGE OF CONTROL, THE PERSON DESIROUS OF ACQUIRING CONTROL  OF  THE
BUSINESS OF A LICENSEE SHALL MAKE WRITTEN APPLICATION TO THE SUPERINTEN-
DENT  AND  PAY  AN  INVESTIGATION  FEE AS PRESCRIBED PURSUANT TO SECTION
EIGHTEEN-A OF THIS CHAPTER TO THE SUPERINTENDENT. THE APPLICATION  SHALL
CONTAIN  SUCH  INFORMATION AS THE SUPERINTENDENT, BY RULE OR REGULATION,
MAY PRESCRIBE AS NECESSARY OR APPROPRIATE FOR THE PURPOSE OF MAKING  THE
DETERMINATION REQUIRED BY SUBDIVISION TWO OF THIS SECTION.
  2.  THE SUPERINTENDENT SHALL APPROVE OR DISAPPROVE THE PROPOSED CHANGE
OF CONTROL OF A LICENSEE IN ACCORDANCE WITH THE  PROVISIONS  OF  SECTION
FIVE  HUNDRED  EIGHTY-EIGHT-E  OF THIS ARTICLE. THE SUPERINTENDENT SHALL
APPROVE OR DISAPPROVE THE APPLICATION  IN  WRITING  WITHIN  NINETY  DAYS
AFTER THE DATE THE APPLICATION IS FILED WITH THE SUPERINTENDENT.
  3.  FOR  A PERIOD OF SIX MONTHS FROM THE DATE OF QUALIFICATION THEREOF
AND FOR SUCH  ADDITIONAL  PERIOD  OF  TIME  AS  THE  SUPERINTENDENT  MAY
PRESCRIBE,  IN  WRITING,  THE  PROVISIONS OF SUBDIVISIONS ONE AND TWO OF
THIS SECTION SHALL NOT APPLY TO A TRANSFER OF CONTROL  BY  OPERATION  OF
LAW  TO THE LEGAL REPRESENTATIVE, AS HEREINAFTER DEFINED, OF ONE WHO HAS
CONTROL OF A  LICENSEE.  THEREAFTER,  SUCH  LEGAL  REPRESENTATIVE  SHALL
COMPLY  WITH THE PROVISIONS OF SUBDIVISIONS ONE AND TWO OF THIS SECTION.
THE PROVISIONS OF SUBDIVISIONS ONE AND TWO  OF  THIS  SECTION  SHALL  BE
APPLICABLE  TO  AN APPLICATION MADE UNDER SUCH SECTION BY A LEGAL REPRE-
SENTATIVE. THE TERM "LEGAL REPRESENTATIVE", FOR  THE  PURPOSES  OF  THIS
SECTION, SHALL MEAN ONE DULY APPOINTED BY A COURT OF COMPETENT JURISDIC-
TION  TO ACT AS EXECUTOR, ADMINISTRATOR, TRUSTEE, COMMITTEE, CONSERVATOR
OR RECEIVER, INCLUDING ONE WHO SUCCEEDS A LEGAL REPRESENTATIVE  AND  ONE
ACTING   IN  AN  ANCILLARY  CAPACITY  THERETO  IN  ACCORDANCE  WITH  THE
PROVISIONS OF SUCH COURT APPOINTMENT.
  4. AS USED IN THIS SECTION:
  (A) THE TERM "PERSON"  INCLUDES  AN  INDIVIDUAL,  PARTNERSHIP,  CORPO-
RATION, ASSOCIATION OR ANY OTHER ORGANIZATION; AND
  (B)  THE  TERM "CONTROL" MEANS THE POSSESSION, DIRECTLY OR INDIRECTLY,
OF THE POWER TO DIRECT OR CAUSE THE  DIRECTION  OF  THE  MANAGEMENT  AND
POLICIES OF A LICENSEE, WHETHER THROUGH THE OWNERSHIP OF VOTING STOCK OF
SUCH  LICENSEE,  THE  OWNERSHIP  OF  VOTING  STOCK  OF  ANY PERSON WHICH
POSSESSES SUCH POWER OR OTHERWISE. CONTROL SHALL BE PRESUMED TO EXIST IF
ANY PERSON, DIRECTLY OR INDIRECTLY, OWNS, CONTROLS OR HOLDS  WITH  POWER
TO VOTE TEN PER CENTUM OR MORE OF THE VOTING STOCK OF ANY LICENSEE OR OF
ANY  PERSON  WHICH  OWNS,  CONTROLS  OR HOLDS WITH POWER TO VOTE TEN PER
CENTUM OR MORE OF THE VOTING STOCK OF ANY LICENSEE, BUT NO PERSON  SHALL
BE  DEEMED TO CONTROL A LICENSEE SOLELY BY REASON OF BEING AN OFFICER OR
DIRECTOR OF SUCH LICENSEE OR PERSON. THE SUPERINTENDENT MAY  IN  HIS  OR
HER  DISCRETION,  UPON  THE APPLICATION OF A LICENSEE OR ANY PERSON WHO,
DIRECTLY OR INDIRECTLY, OWNS, CONTROLS OR HOLDS WITH POWER  TO  VOTE  OR
SEEKS  TO  OWN,  CONTROL  OR HOLD WITH POWER TO VOTE ANY VOTING STOCK OF
SUCH LICENSEE, DETERMINE WHETHER OR NOT THE OWNERSHIP, CONTROL OR  HOLD-
ING OF SUCH VOTING STOCK CONSTITUTES OR WOULD CONSTITUTE CONTROL OF SUCH
LICENSEE FOR PURPOSES OF THIS SECTION.
  S  588-G.  GROUNDS FOR SUSPENSION OR REVOCATION OF LICENSE; PROCEDURE.
1.  FOR THE PURPOSES OF THIS SECTION, "INSOLVENT" MEANS:
  (A) HAVING GENERALLY CEASED TO PAY DEBTS IN  THE  ORDINARY  COURSE  OF
BUSINESS OTHER THAN AS A RESULT OF GOOD-FAITH DISPUTE;

A. 7268--A                          8

  (B) BEING UNABLE TO PAY DEBTS AS THEY BECOME DUE; OR
  (C)  BEING INSOLVENT WITHIN THE MEANING OF THE FEDERAL BANKRUPTCY LAW,
11 U.S.C. SECTION 101 ET SEQ., AS AMENDED.
  2. THE SUPERINTENDENT MAY REVOKE ANY LICENSE ISSUED HEREUNDER IF HE OR
SHE SHALL FIND THAT:
  (A) THE LICENSEE HAS VIOLATED ANY PROVISIONS OF THIS  ARTICLE,  OR  OF
ANY  RULE  OR REGULATION MADE BY THE SUPERINTENDENT UNDER AND WITHIN THE
AUTHORITY OF THIS ARTICLE;
  (B) ANY FACT OR CONDITION EXISTS WHICH, IF IT HAD EXISTED AT THE  TIME
OF  THE  ORIGINAL APPLICATION FOR SUCH LICENSE, WOULD HAVE WARRANTED THE
SUPERINTENDENT IN REFUSING ORIGINALLY TO ISSUE SUCH LICENSE;
  (C) THE CONVICTION OF A LICENSEE FOR A CRIME AGAINST THE LAWS OF  THIS
STATE  OR ANY OTHER STATE OR OF THE UNITED STATES INVOLVING MORAL TURPI-
TUDE OR FRAUDULENT OR DISHONEST ACTIONS, OR THE ENTRY OF A  FINAL  JUDG-
MENT  IN  A  COURT  OF  COMPETENT JURISDICTION AGAINST THE LICENSEE IN A
CIVIL ACTION ARISING FROM FRAUD, MISREPRESENTATION, OR DECEIT;
  (D) THE LICENSEE IS INSOLVENT;
  (E) THE LICENSEE OR AN EMPLOYEE  OR  AFFILIATE  OF  THE  LICENSEE  HAS
REFUSED  TO  PERMIT THE SUPERINTENDENT TO MAKE AN EXAMINATION AUTHORIZED
BY THIS ARTICLE; OR
  (F) THE LICENSEE HAS NOT RESPONDED WITHIN A REASONABLE TIME AND IN  AN
APPROPRIATE MANNER TO COMMUNICATIONS FROM THE SUPERINTENDENT.
  3.  THE  SUPERINTENDENT  MAY, ON GOOD CAUSE SHOWN, SUSPEND ANY LICENSE
FOR A PERIOD NOT EXCEEDING THIRTY DAYS, PENDING INVESTIGATION.
  4. NO LICENSE SHALL BE REVOKED OR SUSPENDED EXCEPT AFTER NOTICE AND  A
HEARING THEREON.
  5.  ANY LICENSEE MAY SURRENDER ANY LICENSE BY DELIVERING TO THE SUPER-
INTENDENT WRITTEN NOTICE THAT IT THEREBY SURRENDERS  SUCH  LICENSE,  BUT
SUCH  SURRENDER  SHALL  NOT  AFFECT  SUCH  LICENSEE'S  CIVIL OR CRIMINAL
LIABILITY FOR ACTS COMMITTED PRIOR TO SUCH SURRENDER.
  6. NO REVOCATION, SUSPENSION OR SURRENDER OF ANY LICENSE SHALL  IMPAIR
OR AFFECT THE OBLIGATION OF ANY PRE-EXISTING LAWFUL CONTRACT BETWEEN THE
LICENSEE AND ANY PERSON.
  7.  EVERY  LICENSE  ISSUED  HEREUNDER SHALL REMAIN IN FORCE AND EFFECT
UNTIL THE SAME SHALL HAVE BEEN  SURRENDERED,  REVOKED  OR  SUSPENDED  IN
ACCORDANCE  WITH  THE PROVISIONS OF THIS ARTICLE, BUT THE SUPERINTENDENT
SHALL HAVE AUTHORITY TO REINSTATE A SUSPENDED LICENSE OR TO ISSUE A  NEW
LICENSE  TO  A LICENSEE WHOSE LICENSE SHALL HAVE BEEN REVOKED IF NO FACT
OR CONDITION THEN EXISTS WHICH WOULD HAVE WARRANTED  THE  SUPERINTENDENT
IN REFUSING ORIGINALLY TO ISSUE SUCH LICENSE UNDER THIS ARTICLE.
  8.  WHENEVER  THE  SUPERINTENDENT  SHALL  REVOKE  OR SUSPEND A LICENSE
ISSUED PURSUANT TO THIS ARTICLE, HE OR SHE SHALL  FORTHWITH  EXECUTE  IN
DUPLICATE  A WRITTEN ORDER TO THAT EFFECT. THE SUPERINTENDENT SHALL FILE
ONE COPY OF SUCH ORDER IN THE OFFICE OF THE DEPARTMENT  OF  BANKING  AND
SHALL  FORTHWITH  SERVE THE OTHER COPY UPON THE LICENSEE. ANY SUCH ORDER
MAY BE REVIEWED IN THE MANNER PROVIDED BY ARTICLE SEVENTY-EIGHT  OF  THE
CIVIL  PRACTICE LAW AND RULES. SUCH APPLICATION FOR REVIEW AS AUTHORIZED
BY THIS SECTION MUST BE MADE WITHIN THIRTY DAYS FROM THE  DATE  OF  SUCH
ORDER OF SUSPENSION OR REVOCATION.
  S  588-H.  CONTRACTS WITH DEBTORS; FEES. 1. EACH LICENSEE SHALL SUBMIT
TO THE DEPARTMENT ANY FORM OF WRITTEN CONTRACT IT INTENDS TO USE BETWEEN
ITSELF AND SUCH DEBTOR. SUCH  FORM  CONTRACT  SHALL,  AT  MINIMUM,  MAKE
PROVISION FOR THE FOLLOWING INFORMATION:
  (A) THE COMMENCEMENT AND TERMINATION DATE OF THE CONTRACT;

A. 7268--A                          9

  (B) THE TELEPHONE NUMBER AT WHICH THE CONSUMER MAY SPEAK WITH A REPRE-
SENTATIVE  OF  THE DEBT SETTLEMENT SERVICES LICENSEE DURING NORMAL BUSI-
NESS HOURS;
  (C) A COMPLETE LIST OF THE CONSUMER'S ACCOUNTS, DEBTS, AND OBLIGATIONS
COVERED  UNDER  THE  DEBT  SETTLEMENT  SERVICE  COVERED BY THE CONTRACT,
INCLUDING THE NAME OF EACH CREDITOR AND PRINCIPAL AMOUNT OF EACH DEBT;
  (D) A DESCRIPTION OF THE SERVICES TO BE PROVIDED BY THE  DEBT  SETTLE-
MENT SERVICES LICENSEE;
  (E)  A  CLEAR AND CONSPICUOUS ITEMIZED LIST OF ALL FEES, INCLUDING ANY
ENROLLMENT FEE AND A DESCRIPTION OF THE SETTLEMENT FEES TO  BE  PAID  BY
THE  CONSUMER  TO  THE DEBT SETTLEMENT SERVICES LICENSEE UPON REACHING A
SETTLEMENT, THE DATE, APPROXIMATE DATE,  OR  CIRCUMSTANCES  UNDER  WHICH
EACH  FEE  WILL  BECOME  DUE, AND A CLEAR AND CONSPICUOUS STATEMENT OF A
GOOD FAITH ESTIMATE OF THE TOTAL  AMOUNT  OF  ALL  FEES,  WHICH  MAY  BE
PROVIDED  AS  RANGING  BETWEEN  TWO AMOUNTS, TO BE COLLECTED BY THE DEBT
SETTLEMENT SERVICES LICENSEE FROM THE CONSUMER FOR THE PROVISION OF DEBT
SETTLEMENT SERVICE UNDER THE CONTRACT;
  (F) A CLEAR AND CONSPICUOUS STATEMENT OF THE  PROPOSED  SAVINGS  GOALS
FOR  THE  CONSUMER,  STATING  THE  AMOUNT TO BE SAVED PER MONTH OR OTHER
PERIOD, THE TIME PERIOD OVER WHICH THE SAVINGS  GOALS  EXTEND,  AND  THE
TOTAL AMOUNT OF THE SAVINGS EXPECTED TO BE PAID BY THE CONSUMER PURSUANT
TO THE TERMS OF THE CONTRACT;
  (G) A NOTICE TO THE CONSUMER THAT UNLESS THE CONSUMER IS INSOLVENT, IF
A CREDITOR SETTLES A DEBT FOR AN AMOUNT LESS THAN THE CONSUMER'S CURRENT
OUTSTANDING  BALANCE AT THE TIME OF SETTLEMENT, THE CONSUMER MAY INCUR A
TAX LIABILITY;
  (H) A WRITTEN NOTICE TO THE CONSUMER, WHICH INCLUDES A FORM  THAT  THE
CONSUMER  MAY  USE  AND THE ADDRESS TO WHICH THE FORM MAY BE RETURNED TO
THE DEBT SETTLEMENT SERVICES LICENSEE THAT THE CONSUMER MAY  CANCEL  THE
CONTRACT   PURSUANT   TO   THE   PROVISIONS   OF  SECTION  FIVE  HUNDRED
EIGHTY-EIGHT-M OF THIS ARTICLE; AND
  (I) A CLEAR AND CONSPICUOUS NOTICE TO THE CONSUMER THAT  THE  CONSUMER
MAY  CONTACT  THE  BANKING  DEPARTMENT  WITH ANY QUESTIONS OR COMPLAINTS
REGARDING THE LICENSEE ALONG WITH THE  ADDRESS,  TELEPHONE  NUMBER,  AND
INTERNET WEBSITE OF THE BANKING DEPARTMENT.
  2.  (A)  A  LICENSEE SHALL, BEFORE THE EARLIER OF THE DATE OF ENTERING
INTO A WRITTEN CONTRACT WITH A CONSUMER FOR DEBT SETTLEMENT SERVICES  OR
RENDERING DEBT SETTLEMENT SERVICES TO A CONSUMER, PROVIDE TO THE CONSUM-
ER IN WRITING THE FOLLOWING:
  (1) AN INDIVIDUALIZED FINANCIAL ANALYSIS OF THE CONSUMER, INCLUDING AN
ASSESSMENT OF THE CONSUMER'S INCOME, EXPENSES, AND DEBTS.
  (2)  A DESCRIPTION OF THE DEBT SETTLEMENT SERVICE BEING OFFERED TO THE
CONSUMER BY THE DEBT SETTLEMENT PROVIDER, INCLUDING THE FOLLOWING:
  (A) A DESCRIPTION OF THE DEBT SETTLEMENT PROGRAM BEING OFFERED AS PART
OF THE SERVICE.
  (B) A LIST OF EACH  OF  THE  CONSUMER'S  DEBTS,  CREDITORS,  AND  DEBT
COLLECTORS THAT WILL BE COVERED UNDER THE PROGRAM.
  (C)  TO  THE EXTENT PRACTICABLE, WITH RESPECT TO ALL CREDITORS IDENTI-
FIED BY THE INDIVIDUAL OR OTHERWISE KNOWN BY THE LICENSEE TO  BE  CREDI-
TORS OF THE INDIVIDUAL, PROVIDE THE INDIVIDUAL WITH A LIST OF:
  (I) CREDITORS THAT THE LICENSEE EXPECTS TO PARTICIPATE IN THE PLAN AND
GRANT CONCESSIONS;
  (II)  CREDITORS  THAT  THE LICENSEE EXPECTS TO PARTICIPATE IN THE PLAN
BUT NOT GRANT CONCESSIONS;
  (III) CREDITORS THAT THE LICENSEE EXPECTS NOT TO  PARTICIPATE  IN  THE
PLAN; AND

A. 7268--A                         10

  (IV) ALL OTHER CREDITORS.
  (3) A STATEMENT CONTAINING THE FOLLOWING:
  (A) A GOOD-FAITH ESTIMATE OF THE LENGTH OF TIME IT MAY TAKE TO ACHIEVE
SETTLEMENT OF EACH DEBT COVERED UNDER THE PROGRAM.
  (B)  THE  TOTAL  AMOUNT OF DEBT OWNED BY THE CONSUMER TO EACH CREDITOR
COVERED UNDER THE PROGRAM.
  (C) AN ESTIMATE OF THE TOTAL AND  THE  MONTHLY  AMOUNT  OF  FUNDS  THE
CONSUMER WILL BE REQUIRED TO ACCUMULATE TO COMPLETE THE PROGRAM.
  (4) A CLEAR AND CONSPICUOUS NOTICE TO THE CONSUMER THAT:
  (A) THE UTILIZATION OF DEBT SETTLEMENT SERVICE MAY NOT BE SUITABLE FOR
ALL CONSUMERS;
  (B)  THE  UTILIZATION  OF DEBT SETTLEMENT SERVICE MAY ADVERSELY IMPACT
THE CONSUMER'S CREDIT HISTORY AND CREDIT SCORE;
  (C) THE CONSUMER MAY INQUIRE ABOUT OTHER MEANS OF DEALING WITH INDEBT-
EDNESS, INCLUDING CREDIT COUNSELING AND BANKRUPTCY;
  (D) THE CONSUMER REMAINS LEGALLY OBLIGATED TO MAKE PERIODIC OR  SCHED-
ULED  PAYMENTS  TO  CREDITORS  WHILE  PARTICIPATING IN A DEBT SETTLEMENT
PROGRAM;
  (E) THE LICENSEE WILL NOT MAKE ANY PERIODIC OR SCHEDULED  PAYMENTS  TO
CREDITORS ON BEHALF OF THE CONSUMER;
  (F)  ANY  SAVINGS  THE CONSUMER REALIZES FROM USE OF A DEBT SETTLEMENT
SERVICE MAY BE TAXABLE INCOME; AND
  (G) THE FAILURE TO MAKE PERIODIC OR SCHEDULED PAYMENTS TO A CREDITOR:
  (I) IS LIKELY TO AFFECT ADVERSELY THE CONSUMER'S CREDITWORTHINESS;
  (II) MAY RESULT IN CONTINUED COLLECTION ACTIVITY BY CREDITORS OR  DEBT
COLLECTORS;
  (III)  MAY  RESULT IN THE CONSUMER BEING SUED BY ONE OR MORE CREDITORS
OR DEBT COLLECTORS, AND IN THE GARNISHMENT OF THE CONSUMER'S WAGES; AND
  (IV) MAY INCREASE THE AMOUNT OF MONEY THE CONSUMER OWES TO ONE OR MORE
CREDITORS OR DEBT COLLECTORS DUE TO THE IMPOSITION BY  THE  CREDITOR  OF
INTEREST CHARGES, LATE FEES, AND OTHER PENALTY FEES.
  (B)  A  LICENSEE MAY NOT ENTER INTO A WRITTEN CONTRACT WITH A CONSUMER
UNLESS THE LICENSEE  MAKES  WRITTEN  DETERMINATIONS,  SUPPORTED  BY  THE
FINANCIAL ANALYSIS, THAT:
  (1)  THE CONSUMER CAN REASONABLY MEET THE REQUIREMENTS OF THE PROPOSED
DEBT SETTLEMENT PROGRAM INCLUDED IN THE DEBT SETTLEMENT SERVICE  OFFERED
TO THE CONSUMER, INCLUDING THE FEES AND THE PERIODIC SAVINGS AMOUNTS SET
FORTH IN THE SAVINGS GOALS UNDER THE PROGRAM;
  (2)  THERE  IS  A  NET  TANGIBLE  FINANCIAL BENEFIT TO THE CONSUMER OF
ENTERING INTO THE PROPOSED DEBT SETTLEMENT PROGRAM; AND
  (3) THE DEBT SETTLEMENT PROGRAM IS SUITABLE FOR THE  CONSUMER  AT  THE
TIME THE CONTRACT IS TO BE SIGNED.
  3. (A) FOR PURPOSES OF THIS SECTION:
  (1)  THE  TERM  "ENROLLMENT FEE" MEANS ANY FEE, OBLIGATION, OR COMPEN-
SATION PAID OR TO BE PAID BY THE CONSUMER TO A DEBT SETTLEMENT  SERVICES
LICENSEE  IN  CONSIDERATION  OF  OR  IN  CONNECTION  WITH ESTABLISHING A
CONTRACT OR OTHER AGREEMENT WITH A CONSUMER RELATED TO THE PROVISION  OF
DEBT SETTLEMENT SERVICE.
  (2)  THE  TERM "MAINTENANCE FEE" MEANS ANY FEE, OBLIGATION, OR COMPEN-
SATION PAID OR TO BE PAID BY A CONSUMER ON A PERIODIC BASIS TO A  LICEN-
SEE  IN CONSIDERATION OF MAINTAINING THE RELATIONSHIP AND SERVICES TO BE
PROVIDED BY A LICENSEE IN ACCORDANCE WITH A  CONTRACT  WITH  A  CONSUMER
RELATED TO THE PROVISION OF DEBT SETTLEMENT SERVICE.
  (3)  THE TERM "PRINCIPAL AMOUNT OF THE DEBT" MEANS THE TOTAL AMOUNT OR
OUTSTANDING BALANCE OWED BY A CONSUMER TO ONE OR MORE  CREDITORS  FOR  A
DEBT  THAT  IS INCLUDED IN A CONTRACT FOR DEBT SETTLEMENT SERVICE AT THE

A. 7268--A                         11

TIME WHEN THE CONSUMER  ENTERS  INTO  A  CONTRACT  FOR  DEBT  SETTLEMENT
SERVICE.
  (4)  THE  TERM  "SETTLEMENT FEE" MEANS ANY FEE, OBLIGATION, OR COMPEN-
SATION PAID OR TO BE PAID BY A CONSUMER TO A LICENSEE  IN  CONSIDERATION
OF  OR  IN CONNECTION WITH AN AGREEMENT OR OTHER ARRANGEMENT ON THE PART
OF A CREDITOR TO ACCEPT LESS THAN THE PRINCIPAL AMOUNT OF  THE  DEBT  AS
SATISFACTION OF THE CREDITOR'S CLAIM AGAINST THE CONSUMER.
  (B)  THE  TYPES  OF FEES THAT A LICENSEE MAY CHARGE A CONSUMER ARE THE
FOLLOWING:
  (1) ENROLLMENT FEES.
  (2) SETTLEMENT FEES.
  (C) ALL FEE TYPES NOT INCLUDED UNDER PARAGRAPH (B) OF THIS SUBDIVISION
ARE PROHIBITED, INCLUDING MAINTENANCE FEES.
  (D) THE AMOUNT OF AN ENROLLMENT FEE CHARGED BY A  LICENSEE  SHALL  NOT
EXCEED THE LESSER OF:
  (1) THE AMOUNT THAT IS REASONABLE AND COMMENSURATE TO THE DEBT SETTLE-
MENT SERVICE PROVIDED TO A CONSUMER; AND
  (2) FIFTY DOLLARS.
  (E)  THE  AMOUNT  OF  A SETTLEMENT FEE CHARGED BY A LICENSEE SHALL NOT
EXCEED THE LESSER OF:
  (1) THE AMOUNT THAT IS REASONABLE AND COMMENSURATE TO THE DEBT SETTLE-
MENT SERVICE PROVIDED TO A CONSUMER; AND
  (2) THE AMOUNT THAT IS TWENTY PERCENT OF THE DIFFERENCE BETWEEN:
  (A) THE PRINCIPAL AMOUNT OF THAT DEBT; AND
  (B) THE AMOUNT:
  (I) PAID BY THE LICENSEE TO THE  CREDITOR  PURSUANT  TO  A  SETTLEMENT
NEGOTIATED  BY  THE  LICENSEE  ON  BEHALF  OF  THE  CONSUMER AS FULL AND
COMPLETE SATISFACTION OF THE CREDITOR'S CLAIM WITH REGARD TO THAT  DEBT;
OR
  (II) NEGOTIATED BY THE LICENSEE AND PAID BY THE CONSUMER TO THE CREDI-
TOR PURSUANT TO A SETTLEMENT NEGOTIATED BY THE LICENSEE ON BEHALF OF THE
CONSUMER  AS FULL AND COMPLETE SATISFACTION OF THE CREDITOR'S CLAIM WITH
REGARD TO THAT DEBT.
  (F) A LICENSEE SHALL NOT  COLLECT  ANY  DEBT  SETTLEMENT  FEE  FROM  A
CONSUMER UNTIL:
  (1)  A  CREDITOR  ENTERS INTO A LEGALLY ENFORCEABLE AGREEMENT WITH THE
CONSUMER TO ACCEPT FUNDS  IN  A  SPECIFIC  DOLLAR  AMOUNT  AS  FULL  AND
COMPLETE  SATISFACTION OF THE CREDITOR'S CLAIM WITH REGARD TO THAT DEBT;
AND
  (2) THOSE FUNDS ARE PROVIDED:
  (A) BY THE LICENSEE ON BEHALF OF THE CONSUMER; OR
  (B) DIRECTLY BY THE CONSUMER TO THE CREDITOR PURSUANT TO A  SETTLEMENT
NEGOTIATED BY THE LICENSEE.
  4.  A  CONTRACT MAY CONFER ON A LICENSEE A POWER OF ATTORNEY TO SETTLE
THE INDIVIDUAL'S DEBT FOR NO MORE THAN FIFTY PERCENT  OF  THE  PRINCIPAL
AMOUNT  OF  THE  DEBT.  A CONTRACT MAY NOT CONFER A POWER OF ATTORNEY TO
SETTLE A DEBT FOR MORE THAN FIFTY PERCENT OF THAT AMOUNT, BUT MAY CONFER
A POWER OF ATTORNEY TO NEGOTIATE WITH CREDITORS  OF  THE  INDIVIDUAL  ON
BEHALF OF THE INDIVIDUAL. A CONTRACT MUST PROVIDE THAT THE LICENSEE WILL
OBTAIN  THE  ASSENT OF THE INDIVIDUAL AFTER A CREDITOR HAS ASSENTED TO A
SETTLEMENT FOR MORE THAN FIFTY PERCENT OF THE PRINCIPAL  AMOUNT  OF  THE
DEBT.
  5. A CONTRACT MAY NOT:
  (A)  PROVIDE FOR APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN
THE UNITED STATES AND THIS STATE;

A. 7268--A                         12

  (B) EXCEPT AS PERMITTED BY SECTION 2 OF THE FEDERAL ARBITRATION ACT, 9
U.S.C. SECTION 2, AS AMENDED, OR ARTICLE SEVENTY-FIVE OF THE CIVIL PRAC-
TICE LAW AND RULES CONTAIN A PROVISION THAT MODIFIES OR LIMITS OTHERWISE
AVAILABLE FORUMS OR PROCEDURAL RIGHTS, INCLUDING THE RIGHT TO  TRIAL  BY
JURY,  THAT  ARE  GENERALLY  AVAILABLE TO THE INDIVIDUAL UNDER LAW OTHER
THAN THIS ARTICLE;
  (C) CONTAIN A PROVISION THAT RESTRICTS THE INDIVIDUAL'S REMEDIES UNDER
THIS ARTICLE OR LAW OTHER THAN THIS ARTICLE; OR
  (D) CONTAIN A PROVISION THAT:
  (1) LIMITS OR RELEASES THE LIABILITY OF ANY PERSON FOR NOT  PERFORMING
THE CONTRACT OR FOR VIOLATING THIS ARTICLE; OR
  (2) INDEMNIFIES ANY PERSON FOR LIABILITY ARISING UNDER THE CONTRACT OR
THIS ARTICLE.
  6.  ALL  RIGHTS  AND OBLIGATIONS SPECIFIED IN THIS SECTION AND SECTION
FIVE HUNDRED EIGHTY-EIGHT-M OF THIS ARTICLE EXIST EVEN IF  NOT  PROVIDED
IN  THE  CONTRACT.  A PROVISION IN A CONTRACT WHICH VIOLATES SUBDIVISION
FOUR OR FIVE OF THIS SECTION IS VOID.
  7. (A) A LICENSEE MAY NOT PROVIDE  A  DEBT  SETTLEMENT  SERVICE  TO  A
CONSUMER  OR  RECEIVE  ANY  FEE  FROM  A  CONSUMER FOR A DEBT SETTLEMENT
SERVICE WITHOUT A WRITTEN CONTRACT DESCRIBED IN  THIS  SECTION  THAT  IS
SIGNED BY THE CONSUMER.
  (B) A CONTRACT SHALL NOT BE ENFORCEABLE AGAINST THE CONSUMER UNTIL THE
CONSUMER HAS RECEIVED A SIGNED COPY.
  S 588-I. PERIODIC ACCOUNTING. 1. A LICENSEE SHALL PROVIDE THE ACCOUNT-
ING REQUIRED BY SUBDIVISION TWO OF THIS SECTION:
  (A) UPON CANCELLATION OR TERMINATION OF A CONTRACT; AND
  (B) BEFORE CANCELLATION OR TERMINATION OF ANY CONTRACT:
  (1) AT LEAST ONCE EACH MONTH; AND
  (2)  WITHIN  FIVE  BUSINESS DAYS AFTER A REQUEST BY AN INDIVIDUAL, BUT
THE LICENSEE NEED NOT COMPLY WITH MORE THAN ONE REQUEST IN ANY  CALENDAR
MONTH.
  2.  A  LICENSEE  SHALL  PROVIDE EACH INDIVIDUAL FOR WHOM IT HAS ESTAB-
LISHED A PLAN AN ACCOUNTING OF ALL  FEES  PAID,  SETTLEMENTS  COMPLETED,
REMAINING DEBTS, AND ANY OTHER INFORMATION CONSIDERED APPROPRIATE BY THE
SUPERINTENDENT.
  3.  A  LICENSEE SHALL MAINTAIN RECORDS FOR EACH INDIVIDUAL FOR WHOM IT
PROVIDES SERVICES FOR FIVE YEARS AFTER THE FINAL  PAYMENT  MADE  BY  THE
INDIVIDUAL AND PRODUCE A COPY OF THEM TO THE INDIVIDUAL WITHIN A REASON-
ABLE  TIME  AFTER A REQUEST FOR THEM. THE LICENSEE MAY USE ELECTRONIC OR
OTHER MEANS OF STORAGE OF THE RECORDS.
  S 588-J. CHOICE OF LANGUAGE. IF A LICENSEE COMMUNICATES WITH A CONSUM-
ER PRIMARILY IN A  LANGUAGE  OTHER  THAN  ENGLISH,  THE  LICENSEE  SHALL
FURNISH  TO  THE CONSUMER A TRANSLATION OF THE DISCLOSURES AND DOCUMENTS
REQUIRED BY THIS ARTICLE IN THAT OTHER LANGUAGE.
  S 588-K. OBLIGATION OF GOOD FAITH. A LICENSEE SHALL ACT IN GOOD  FAITH
IN ALL MATTERS UNDER THIS ARTICLE.
  S  588-L. WAIVER. 1. A WAIVER BY A CONSUMER OF ANY PROTECTION PROVIDED
OR ANY RIGHT OF THE CONSUMER UNDER SECTIONS FIVE HUNDRED EIGHTY-EIGHT-H,
FIVE  HUNDRED  EIGHTY-EIGHT-J,  FIVE  HUNDRED  EIGHTY-EIGHT-K  AND  FIVE
HUNDRED EIGHTY-EIGHT-N OF THIS ARTICLE:
  (A) IS VOID; AND
  (B) MAY NOT BE ENFORCED BY ANY OTHER PERSON.
  2.  ANY  ATTEMPT BY ANY PERSON TO OBTAIN A WAIVER FROM ANY CONSUMER OF
ANY PROTECTION PROVIDED BY OR ANY RIGHT OR PROTECTION OF THE CONSUMER OR
ANY OBLIGATION OR REQUIREMENT OF THE LICENSEE UNDER THIS  ARTICLE  SHALL
BE CONSIDERED A VIOLATION OF A PROVISION OF THIS ARTICLE.

A. 7268--A                         13

  3.  ANY  CONTRACT  FOR  A DEBT SETTLEMENT SERVICE THAT DOES NOT IN ALL
MATERIAL RESPECTS COMPLY WITH THE PROVISIONS OF THIS ARTICLE:
  (A) SHALL BE TREATED AS VOID;
  (B) MAY NOT BE ENFORCED BY ANY OTHER PERSON; AND
  (C)  UPON  NOTICE  OF A VOID CONTRACT, A REFUND BY THE LICENSEE TO THE
CONSUMER SHALL BE MADE AS IF THE CONTRACT HAD BEEN CANCELLED AS PROVIDED
IN SECTION FIVE HUNDRED EIGHTY-EIGHT-M OF THIS ARTICLE.
  S 588-M. CANCELLATION OF CONTRACT. 1.   AN  INDIVIDUAL  MAY  CANCEL  A
CONTRACT BEFORE MIDNIGHT OF THE THIRD BUSINESS DAY  AFTER THE INDIVIDUAL
ASSENTS  TO IT, UNLESS THE CONTRACT DOES NOT COMPLY WITH SUBDIVISION TWO
OF THIS SECTION OR SECTION FIVE HUNDRED EIGHTY-EIGHT-N OF  THIS  ARTICLE
IN WHICH EVENT THE INDIVIDUAL MAY CANCEL THE CONTRACT WITHIN THIRTY DAYS
AFTER THE INDIVIDUAL ASSENTS TO IT. TO EXERCISE THE RIGHT TO CANCEL, THE
INDIVIDUAL  MUST GIVE NOTICE IN A RECORD TO THE LICENSEE. NOTICE BY MAIL
IS GIVEN WHEN MAILED.
  2. A CONTRACT MUST BE ACCOMPANIED BY A FORM THAT CONTAINS IN AT  LEAST
TWELVE POINT BOLD-FACE TYPE, SURROUNDED BY BOLD BLACK LINES:

                       "NOTICE OF RIGHT TO CANCEL

  YOU  MAY  CANCEL  THIS CONTRACT, WITHOUT ANY PENALTY OR OBLIGATION, AT
ANY TIME BEFORE MIDNIGHT OF THE THIRD BUSINESS DAY THAT BEGINS  THE  DAY
AFTER YOU AGREE TO IT BY ELECTRONIC COMMUNICATION OR BY SIGNING IT.
  TO CANCEL THIS CONTRACT DURING THIS PERIOD, SEND AN E-MAIL TO
_________________________________
  E-MAIL ADDRESS OF LICENSEE
OR  MAIL  OR  DELIVER  A SIGNED, DATED COPY OF THIS NOTICE, OR ANY OTHER
WRITTEN NOTICE TO
_______________________ AT __________________________ BEFORE MIDNIGHT ON
NAME OF LICENSEE             ADDRESS OF LICENSEE
____________________.
DATE
  IF YOU CANCEL THIS CONTRACT WITHIN THE 3-DAY PERIOD,  WE  WILL  REFUND
ALL MONEY YOU ALREADY HAVE PAID US.
  I CANCEL THIS CONTRACT, ________________________________
  PRINT YOUR NAME ________________________________________
  SIGNATURE_______________________________________________
  DATE____________________________________________________"
  3.(A) IN ADDITION TO THE RIGHT OF CANCELLATION PROVIDED IN SUBDIVISION
TWO  OF  THIS  SECTION,  A  CONSUMER  MAY  CANCEL A CONTRACT WITH A DEBT
SETTLEMENT PROVIDER NOT LATER THAN NINETY DAYS AFTER  THE  DATE  OF  THE
EXECUTION OF THE CONTRACT OR AT ANY TIME UPON A VIOLATION OF A PROVISION
OF  THIS  ARTICLE  BY THE DEBT SETTLEMENT SERVICES LICENSEE AND THE DEBT
SETTLEMENT SERVICES LICENSEE SHALL REFUND TO THE CONSUMER ALL:
  (1) FEES PAID TO THE LICENSEE BY THE CONSUMER, WITH THE  EXCEPTION  OF
ANY EARNED SETTLEMENT FEE; AND
  (2) FUNDS PAID BY THE CONSUMER TO THE LICENSEE THAT:
  (A) HAVE ACCUMULATED IN A CONSUMER SETTLEMENT ACCOUNT; AND
  (B) THE LICENSEE HAS NOT DISBURSED TO CREDITORS.
  (B)  A  LICENSEE SHALL MAKE ANY REFUND REQUIRED UNDER THIS SUBDIVISION
NOT LATER THAN FIVE BUSINESS DAYS AFTER A NOTICE OF CANCELLATION IS MADE
ON BEHALF OF THE CONSUMER UNDER PARAGRAPH (A) OF THIS SUBDIVISION.
  (C) UPON CANCELLATION OF A CONTRACT BY A CONSUMER:
  (1) ALL POWERS OF ATTORNEY AND DIRECT DEBIT AUTHORIZATIONS GRANTED  TO
THE  DEBT  SETTLEMENT  SERVICES LICENSEE BY THE CONSUMER ARE REVOKED AND
VOIDED; AND

A. 7268--A                         14

  (2) THE LICENSEE  SHALL  IMMEDIATELY  TAKE  ANY  ACTION  NECESSARY  TO
REFLECT  CANCELLATION OF THE CONTRACT, INCLUDING NOTIFYING THE RECIPIENT
OF ANY DIRECT DEBIT AUTHORIZATION.
  (D) UPON THE CANCELLATION OF A CONTRACT UNDER THIS SECTION, THE LICEN-
SEE  SHALL PROVIDE TIMELY NOTICE OF THE CANCELLATION OF SUCH CONTRACT TO
EACH OF THE CREDITORS WITH WHOM THE LICENSEE HAS HAD ANY PRIOR  COMMUNI-
CATION ON BEHALF OF THE CONSUMER IN CONNECTION WITH THE PROVISION OF ANY
DEBT SETTLEMENT SERVICE.
  S  588-N.  PROHIBITED  ACTIVITIES.  1. NO PERSON, PARTNERSHIP, ASSOCI-
ATION, CORPORATION, OR OTHER ENTITY, EXCEPT A  LICENSEE,  MAY  MAKE  ANY
REPRESENTATION,  DIRECTLY  OR  INDIRECTLY, ORALLY OR IN WRITING THAT HE,
SHE, OR IT IS LICENSED UNDER THIS ARTICLE.
  2. NO PERSON OR ANY OTHER ENTITY, OTHER THAN A LICENSEE, SHALL USE THE
TITLE "DEBT SETTLEMENT SERVICES PROVIDER" OR "LICENSED  DEBT  SETTLEMENT
SERVICES  PROVIDER" OR THE TERM "DEBT SETTLEMENT SERVICES" IN ANY PUBLIC
ADVERTISEMENT, BUSINESS CARD, OR LETTERHEAD.
  3. NO LICENSEE SHALL EXECUTE ANY CONTRACT OR CONTRACT TO BE SIGNED  BY
THE  DEBTOR  UNLESS THE CONTRACT OR CONTRACT IS FULLY COMPLETED, AND THE
DURATION OF ANY SUCH CONTRACT SHALL BE IN CONFORMANCE WITH  ANY  LIMITA-
TIONS SPECIFIED PURSUANT TO REGULATIONS OF THE SUPERINTENDENT.
  4.  NO  LICENSEE  SHALL  DISCLOSE  OR THREATEN TO DISCLOSE INFORMATION
CONCERNING THE EXISTENCE OF A DEBT, OR ANY OTHER  CONDUCT,  WHICH  COULD
COERCE PAYMENT OF THE DEBT OF A DEBTOR WITH WHOM IT HAS A CONTRACT.
  5. NO LICENSEE SHALL USE A COMMUNICATION WHICH SIMULATES IN ANY MANNER
A  LEGAL  OR  JUDICIAL  PROCESS,  OR WHICH GIVES THE FALSE APPEARANCE OF
BEING AUTHORIZED, ISSUED, OR  APPROVED  BY  A  GOVERNMENT,  GOVERNMENTAL
AGENCY, OR ATTORNEY-AT-LAW.
  6. NO LICENSEE SHALL:
  (A)  SETTLE  A  DEBT  ON  BEHALF  OF AN INDIVIDUAL FOR MORE THAN FIFTY
PERCENT OF THE PRINCIPAL AMOUNT OF THE DEBT OWED A CREDITOR, UNLESS  THE
INDIVIDUAL ASSENTS TO THE SETTLEMENT AFTER THE CREDITOR HAS ASSENTED;
  (B)  TAKE  A  POWER  OF  ATTORNEY THAT AUTHORIZES IT TO SETTLE A DEBT,
UNLESS THE POWER OF ATTORNEY EXPRESSLY LIMITS THE  LICENSEE'S  AUTHORITY
TO  SETTLE DEBTS FOR NOT MORE THAN FIFTY PERCENT OF THE PRINCIPAL AMOUNT
OF THE DEBT OWED A CREDITOR;
  (C) EXERCISE OR ATTEMPT TO EXERCISE A POWER OF ATTORNEY AFTER AN INDI-
VIDUAL HAS TERMINATED A CONTRACT;
  (D) INITIATE A TRANSFER FROM AN INDIVIDUAL'S ACCOUNT AT A BANK OR WITH
ANOTHER PERSON UNLESS THE TRANSFER IS:
  (1) A RETURN OF MONEY TO THE INDIVIDUAL; OR
  (2) BEFORE TERMINATION OF  A  CONTRACT,  PROPERLY  AUTHORIZED  BY  THE
CONTRACT AND THIS ARTICLE, AND FOR:
  (A) PAYMENT TO ONE OR MORE CREDITORS PURSUANT TO A CONTRACT; OR
  (B) PAYMENT OF A FEE;
  (E)  OFFER  A GIFT OR BONUS, PREMIUM, REWARD, OR OTHER COMPENSATION TO
AN INDIVIDUAL FOR EXECUTING A CONTRACT.
  (F) OFFER, PAY, OR GIVE A GIFT OR BONUS,  PREMIUM,  REWARD,  OR  OTHER
COMPENSATION  TO  A  PERSON FOR REFERRING A PROSPECTIVE CUSTOMER, IF THE
PERSON MAKING THE REFERRAL HAS A FINANCIAL INTEREST IN  THE  OUTCOME  OF
DEBT  SETTLEMENT  SERVICES  PROVIDED TO THE CUSTOMER, UNLESS NEITHER THE
LICENSEE NOR THE PERSON MAKING THE REFERRAL COMMUNICATES TO THE PROSPEC-
TIVE CUSTOMER THE IDENTITY OF THE SOURCE OF THE REFERRAL;
  (G) SETTLE A DEBT OR LEAD AN INDIVIDUAL TO BELIEVE THAT A PAYMENT TO A
CREDITOR IS IN SETTLEMENT OF A DEBT TO THE CREDITOR UNLESS, AT THE  TIME
OF  SETTLEMENT,  THE INDIVIDUAL RECEIVES A CERTIFICATION BY THE CREDITOR
THAT THE PAYMENT IS IN FULL SETTLEMENT OF THE DEBT;

A. 7268--A                         15

  (H) MISREPRESENT THAT IT IS AUTHORIZED OR COMPETENT TO  FURNISH  LEGAL
ADVICE OR PERFORM LEGAL SERVICES;
  (I) MAKE A REPRESENTATION THAT:
  (1)  THE  LICENSEE  WILL FURNISH MONEY TO PAY BILLS OR PREVENT ATTACH-
MENTS;
  (2) PAYMENT OF A CERTAIN AMOUNT WILL PERMIT SATISFACTION OF A  CERTAIN
AMOUNT OR RANGE OF INDEBTEDNESS; OR
  (3)  PARTICIPATION  IN A PLAN WILL OR MAY PREVENT LITIGATION, GARNISH-
MENT,  ATTACHMENT,  REPOSSESSION,  FORECLOSURE,  EVICTION,  OR  LOSS  OF
EMPLOYMENT;
  7.  A LICENSEE MAY NOT MAKE LOANS OR OFFER CREDIT OR SOLICIT OR ACCEPT
ANY NOTE, MORTGAGE, OR NEGOTIABLE INSTRUMENT OTHER THAN A  CHECK  SIGNED
BY THE CONSUMER AND DATED NO LATER THAN THE DATE OF SIGNATURE.
  8.  A  LICENSEE MAY NOT RECEIVE ANY FEE, GIFT, BONUS, PREMIUM, REWARD,
OR OTHER COMPENSATION FROM ANY PERSON OTHER THAN THE CONSUMER EXPLICITLY
FOR THE PROVISION OF DEBT SETTLEMENT SERVICE TO THAT CONSUMER.
  9. A LICENSEE MAY NOT, WITHOUT PRIOR WRITTEN CONSENT OF THE  CONSUMER,
DISCLOSE  TO  ANYONE  THE NAME OR ANY PERSONAL INFORMATION OF A CONSUMER
FOR WHOM THE LICENSEE HAS  PROVIDED  OR  IS  PROVIDING  DEBT  SETTLEMENT
SERVICE  OTHER THAN TO A CONSUMER'S OWN CREDITORS OR THE DEBT SETTLEMENT
SERVICES LICENSEE'S AGENTS, AFFILIATES, OR CONTRACTORS FOR  THE  PURPOSE
OF PROVIDING DEBT OR SETTLEMENT SERVICE.
  10.  A  LICENSEE MAY NOT MISREPRESENT, DIRECTLY OR BY IMPLICATION, ANY
MATERIAL FACT, MAKE  A  MATERIAL  OMISSION,  OR  MAKE  A  FALSE  PROMISE
DIRECTED  TO  ONE OR MORE CONSUMERS IN CONNECTION WITH THE SOLICITATION,
OFFERING, CONTRACTING OR PROVISION OF DEBT SETTLEMENT SERVICE, INCLUDING
THE FOLLOWING:
  (A) THE TOTAL COSTS TO PURCHASE, RECEIVE, OR USE THE SERVICES, OR  THE
NATURE OF THE SERVICES TO BE PROVIDED.
  (B)  ANY MATERIAL RESTRICTION, LIMITATION, OR CONDITION TO RECEIVE THE
OFFERED DEBT SETTLEMENT SERVICE.
  (C) ANY MATERIAL ASPECT  OF  THE  PERFORMANCE,  EFFICACY,  NATURE,  OR
CENTRAL CHARACTERISTICS OF THE OFFERED DEBT SETTLEMENT SERVICE.
  (D)  ANY  ASPECT  OF  THE NATURE OF TERMS OF THE SELLER'S CANCELLATION
POLICIES.
  (E) ANY CLAIM OF AFFILIATION WITH, OR ENDORSEMENT OR  SPONSORSHIP  BY,
ANY PERSON OR GOVERNMENT ENTITY.
  (F) THE AMOUNT OF TIME NECESSARY TO ACHIEVE SETTLEMENT OF ALL DEBT.
  (G)  THE AMOUNT OF MONEY OR THE PERCENTAGE OF THE DEBT AMOUNT THAT THE
CONSUMER MUST ACCUMULATE BEFORE THE PROVIDER WILL INITIATE ATTEMPTS WITH
THE CONSUMER'S CREDITORS OR DEBT COLLECTORS TO SETTLE THE DEBT.
  (H) THE EFFECT OF THE SERVICE ON A CONSUMER'S CREDIT WORTHINESS.
  11. A LICENSEE MAY NOT PURCHASE DEBTS OR ENGAGE  IN  THE  PRACTICE  OR
BUSINESS OF DEBT COLLECTION.
  12.  A  LICENSEE  MAY  NOT  INCLUDE IN A DEBT SETTLEMENT AGREEMENT ANY
SECURED DEBT.
  13. A LICENSEE MAY NOT EMPLOY ANY  ACT  OR  PRACTICE  DECLARED  TO  BE
UNLAWFUL  PURSUANT  TO ARTICLE TWENTY-TWO-A OF THE GENERAL BUSINESS LAW,
INCLUDING THE KNOWING OMISSION OF ANY MATERIAL INFORMATION.
  14. A LICENSEE SHALL NOT STATE OR IMPLY CLAIMS, RESULTS,  OR  OUTCOMES
IN  ANY  ADVERTISING,  MARKETING,  OR OTHER COMMUNICATION WITH CONSUMERS
THAT REPRESENT OR REFLECT  RESULTS  OR  OUTCOMES,  INCLUDING  ABOUT  THE
PERCENTAGE OR DOLLAR AMOUNT BY WHICH DEBT MAY BE REDUCED OR THE AMOUNT A
CONSUMER  MAY  SAVE  OR  THE HISTORICAL EXPERIENCE OF ITS CUSTOMERS WITH
RESPECT TO DEBT REDUCTION, THAT ARE MATERIALLY DIFFERENT FROM THE ACTUAL

A. 7268--A                         16

AVERAGE RESULT OR OUTCOME ACHIEVED BY THAT LICENSEE ON ALL OF  THE  DEBT
OF CONSUMERS WHO ENTER THE PROGRAM.
  15. A LICENSEE MAY NOT:
  (A) BE NAMED ON A CONSUMER'S BANK ACCOUNT;
  (B) TAKE A POWER OF ATTORNEY IN A CONSUMER'S BANK ACCOUNT;
  (C) CREATE A DEMAND DRAFT ON A CONSUMER'S BANK ACCOUNT;
  (D) EXERCISE ANY CONTROL OVER ANY BANK ACCOUNT HELD BY OR ON BEHALF OF
THE CONSUMER; OR
  (E)  REQUIRE  THAT  IN  ORDER  TO  OBTAIN DEBT SETTLEMENT SERVICES THE
CONSUMER MUST ESTABLISH A SETTLEMENT ACCOUNT WITH AN ENTITY THAT (I)  IS
OWNED  BY, CONTROLLED BY, OR IN ANY WAY AFFILIATED WITH THE LICENSEE; OR
(II) GIVES OR ACCEPTS ANY MONEY OR OTHER COMPENSATION  IN  EXCHANGE  FOR
REFERRALS OF BUSINESS INVOLVING THE LICENSEE.
  S  588-O.  SUPERINTENDENT  AUTHORIZED  TO  EXAMINE. FOR THE PURPOSE OF
DISCOVERING VIOLATIONS OF THIS ARTICLE OR SECURING INFORMATION  LAWFULLY
REQUIRED  BY  HIM  OR HER HEREUNDER, THE SUPERINTENDENT MAY AT ANY TIME,
AND AS OFTEN AS HE OR SHE MAY  DETERMINE,  EITHER  PERSONALLY  OR  BY  A
PERSON DULY DESIGNATED BY HIM OR HER, INVESTIGATE THE BUSINESS AND EXAM-
INE THE BOOKS, ACCOUNTS, RECORDS, AND FILES USED THEREIN OF EVERY LICEN-
SEE  HEREUNDER.  FOR THAT PURPOSE THE SUPERINTENDENT AND HIS OR HER DULY
DESIGNATED REPRESENTATIVE SHALL HAVE FREE  ACCESS  TO  THE  OFFICES  AND
PLACE  OF  BUSINESS,  BOOKS, ACCOUNTS, PAPERS, RECORDS, FILES, SAFES AND
VAULTS OF ALL SUCH LICENSEES. THE SUPERINTENDENT  AND  ANY  PERSON  DULY
DESIGNATED  BY HIM OR HER SHALL HAVE AUTHORITY TO REQUIRE THE ATTENDANCE
OF AND TO EXAMINE UNDER OATH ALL PERSONS WHOSE TESTIMONY HE OR  SHE  MAY
REQUIRE  RELATIVE  TO SUCH BUSINESS. THE EXPENSES INCURRED IN MAKING ANY
EXAMINATION PURSUANT TO THIS SECTION SHALL BE ASSESSED AGAINST AND  PAID
BY  THE  LICENSEE  SO  EXAMINED,  EXCEPT  THAT TRAVELING AND SUBSISTENCE
EXPENSES SO INCURRED SHALL BE CHARGED AGAINST AND PAID BY  LICENSEES  IN
SUCH  PROPORTIONS  AS THE SUPERINTENDENT SHALL DEEM JUST AND REASONABLE,
AND SUCH PROPORTIONATE CHARGES SHALL BE ADDED TO THE ASSESSMENT  OF  THE
OTHER  EXPENSES  INCURRED  UPON EACH EXAMINATION. UPON WRITTEN NOTICE BY
THE SUPERINTENDENT OF THE TOTAL AMOUNT OF SUCH ASSESSMENT, THE  LICENSEE
SHALL BECOME LIABLE FOR AND SHALL PAY SUCH ASSESSMENT TO THE SUPERINTEN-
DENT.  IF, UPON REVIEW, THE SUPERINTENDENT SHALL DETERMINE THAT THE FEES
OR SERVICE CHARGES SET BY THE LICENSEE ARE UNREASONABLE, HE OR SHE SHALL
DIRECT THE LICENSEE TO MAKE ADJUSTMENTS IN SAID FEES AND SERVICE CHARGES
IN ACCORDANCE WITH HIS OR HER FINDINGS, WHICH SHALL SET FORTH A DETAILED
FACTUAL BASIS AND REASONING SUPPORTING SUCH FINDING.
  S 588-P. LICENSEE'S BOOKS AND RECORDS; REPORTS. 1. THE LICENSEE  SHALL
KEEP  AND  USE IN ITS BUSINESS SUCH BOOKS, ACCOUNTS, AND RECORDS AS WILL
ENABLE THE SUPERINTENDENT TO DETERMINE WHETHER SUCH LICENSEE IS  COMPLY-
ING  WITH  THE  PROVISIONS  OF THIS ARTICLE AND WITH THE RULES AND REGU-
LATIONS LAWFULLY MADE BY THE SUPERINTENDENT  HEREUNDER.  EVERY  LICENSEE
SHALL  PRESERVE  SUCH  BOOKS,  ACCOUNTS, AND RECORDS, FOR AT LEAST THREE
YEARS; PROVIDED, HOWEVER, THAT PRESERVATION BY PHOTOGRAPHIC REPRODUCTION
THEREOF OR RECORDS IN PHOTOGRAPHIC FORM SHALL CONSTITUTE COMPLIANCE WITH
THE REQUIREMENTS OF THIS SECTION.
  2. EACH LICENSEE SHALL ANNUALLY, ON OR BEFORE THE FIRST DAY OF  FEBRU-
ARY,  FILE  A  REPORT WITH THE SUPERINTENDENT GIVING SUCH INFORMATION AS
THE SUPERINTENDENT MAY REQUIRE CONCERNING THE  BUSINESS  AND  OPERATIONS
DURING  THE  PRECEDING CALENDAR YEAR OF SUCH LICENSEE UNDER AUTHORITY OF
THIS ARTICLE. SUCH REPORT SHALL BE SUBSCRIBED AND AFFIRMED  AS  TRUE  BY
THE  LICENSEE  UNDER  THE  PENALTIES OF PERJURY AND SHALL BE IN THE FORM
PRESCRIBED BY THE SUPERINTENDENT. IN ADDITION  TO  ANNUAL  REPORTS,  THE
SUPERINTENDENT  MAY  REQUIRE,  UNDER  OATH AND IN THE FORM PRESCRIBED BY

A. 7268--A                         17

HIM, SUCH ADDITIONAL REGULAR OR SPECIAL REPORTS AS HE MAY DEEM NECESSARY
TO THE PROPER SUPERVISION OF LICENSEES UNDER THIS  ARTICLE.  SUCH  ADDI-
TIONAL REPORTS SHALL BE IN THE FORM PRESCRIBED BY THE SUPERINTENDENT AND
SHALL BE SUBSCRIBED AND AFFIRMED AS TRUE UNDER THE PENALTIES OF PERJURY.
  S  588-Q.  AUTHORITY  OF  SUPERINTENDENT. THE SUPERINTENDENT IS HEREBY
AUTHORIZED AND EMPOWERED TO MAKE, IN ADDITION HERETO AND NOT  INCONSIST-
ENT  HEREWITH,  SUCH  GENERAL  RULES  AND REGULATIONS, AND SUCH SPECIFIC
RULINGS, DEMANDS, AND FINDINGS AS HE OR SHE MAY DEEM NECESSARY  FOR  THE
PROPER CONDUCT OF THE BUSINESS AUTHORIZED AND LICENSED HEREUNDER AND FOR
THE ENFORCEMENT OF THIS ARTICLE.
  S  588-R.  PRIVATE  ENFORCEMENT.  1. IF AN INDIVIDUAL VOIDS A CONTRACT
PURSUANT TO THIS ARTICLE, THE INDIVIDUAL MAY RECOVER IN A  CIVIL  ACTION
ALL  MONEY  PAID OR DEPOSITED BY OR ON BEHALF OF THE INDIVIDUAL PURSUANT
TO THE CONTRACT, EXCEPT AMOUNTS PAID TO THE CREDITORS,  IN  ADDITION  TO
THE  RECOVERY  UNDER PARAGRAPHS (C) AND (D) OF SUBDIVISION THREE OF THIS
SECTION.
  2. AN INDIVIDUAL MAY VOID A CONTRACT FOR DEBT SETTLEMENT  SERVICES  IF
THE  PERSON  OR  ENTITY IS NOT LICENSED PURSUANT TO SECTION FIVE HUNDRED
EIGHTY-EIGHT-A OF THIS ARTICLE WHEN AN INDIVIDUAL ASSENTS TO  AN  AGREE-
MENT.  IF  AN  INDIVIDUAL VOIDS A CONTRACT PURSUANT TO THIS SUBDIVISION,
THE INDIVIDUAL MAY RECOVER IN A  CIVIL  ACTION  THREE  TIMES  THE  TOTAL
AMOUNT  OF THE FEES, CHARGES, MONEY, AND PAYMENTS MADE BY THE INDIVIDUAL
TO THE LICENSEE, IN ADDITION TO THE  RECOVERY  UNDER  PARAGRAPH  (D)  OF
SUBDIVISION THREE OF THIS SECTION.
  3.  SUBJECT  TO  SUBDIVISION  FOUR OF THIS SECTION, AN INDIVIDUAL WITH
RESPECT TO WHOM A LICENSEE VIOLATES THIS ARTICLE MAY RECOVER IN A  CIVIL
ACTION FROM THE LICENSEE AND ANY PERSON THAT CAUSED THE VIOLATION:
  (A)  ACTUAL, INCIDENTAL, AND CONSEQUENTIAL DAMAGES FOR INJURY, INCLUD-
ING NON-ECONOMIC INJURY, CAUSED BY THE VIOLATION;
  (B) EXCEPT AS OTHERWISE PROVIDED IN SUBDIVISION FOUR OF THIS  SECTION,
WITH RESPECT TO A VIOLATION OF SECTION FIVE HUNDRED EIGHTY-EIGHT-B, FIVE
HUNDRED  EIGHTY-EIGHT-I  OR FIVE HUNDRED EIGHTY-EIGHT-N OF THIS ARTICLE,
THE GREATER OF THE AMOUNT RECOVERABLE UNDER PARAGRAPH (A) OF THIS SUBDI-
VISION OR FIVE THOUSAND DOLLARS;
  (C) PUNITIVE DAMAGES; AND
  (D) REASONABLE ATTORNEY'S FEES AND COSTS.
  4. IN ADDITION TO THE REMEDY AVAILABLE UNDER SUBDIVISION THREE OF THIS
SECTION, IF A LICENSEE VIOLATES AN  INDIVIDUAL'S  RIGHTS  UNDER  SECTION
FIVE  HUNDRED EIGHTY-EIGHT-M OF THIS ARTICLE, THE INDIVIDUAL MAY RECOVER
IN A CIVIL ACTION ALL MONEY PAID OR DEPOSITED BY OR  ON  BEHALF  OF  THE
INDIVIDUAL  PURSUANT  TO THE CONTRACT, EXCEPT FOR AMOUNTS PAID TO CREDI-
TORS.
  5. A LICENSEE IS NOT LIABLE UNDER THIS SECTION FOR A VIOLATION OF THIS
ARTICLE IF THE LICENSEE PROVES THAT THE VIOLATION  WAS  NOT  INTENTIONAL
AND  RESULTED FROM A GOOD-FAITH ERROR NOTWITHSTANDING THE MAINTENANCE OF
PROCEDURES REASONABLY ADAPTED TO AVOID THE  ERROR.  AN  ERROR  OF  LEGAL
JUDGMENT  WITH RESPECT TO A LICENSEE'S OBLIGATIONS UNDER THIS ARTICLE IS
NOT A GOOD-FAITH ERROR. IF, IN CONNECTION WITH A VIOLATION, THE LICENSEE
HAS RECEIVED MORE MONEY THAN AUTHORIZED BY A CONTRACT OR  THIS  ARTICLE,
THE  DEFENSE  PROVIDED  BY  THIS SUBDIVISION IS NOT AVAILABLE UNLESS THE
LICENSEE REFUNDS THE EXCESS WITHIN THREE BUSINESS DAYS  OF  LEARNING  OF
THE VIOLATION.
  6.  THE SUPERINTENDENT SHALL ASSIST AN INDIVIDUAL IN ENFORCING A JUDG-
MENT AGAINST THE SURETY BOND OR OTHER SECURITY  PROVIDED  UNDER  SECTION
FIVE HUNDRED EIGHTY-EIGHT-B OF THIS ARTICLE.

A. 7268--A                         18

  S  10.  Severability.  If  any clause, sentence, paragraph, section or
part of this act shall be adjudged by any court of  competent  jurisdic-
tion  to be invalid and after exhaustion of all further judicial review,
the judgment shall not affect, impair or invalidate the remainder there-
of,  but  shall  be  confined  in its operation to the clause, sentence,
paragraph, section or part of this act directly involved in the  contro-
versy in which the judgment shall have been rendered.
  S  11.  This  act  shall  take effect on the one hundred eightieth day
after it shall have become a  law  and  shall  apply  to  all  contracts
entered  into  or offered on or after such date; provided, however, that
effective immediately, the addition, amendment and/or repeal of any rule
or regulation necessary for implementation of this act on its  effective
date  are  authorized and directed to be made and completed on or before
such effective date.

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

                                 7268--B

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                             March 27, 2009
                               ___________

Introduced  by  M.  of  A.  PHEFFER,  BENJAMIN,  TOWNS  -- read once and
  referred to the Committee on Consumer Affairs and Protection -- recom-
  mitted to the Committee on Consumer Affairs and Protection in  accord-
  ance  with  Assembly  Rule  3,  sec. 2 -- reported and referred to the
  Committee on Codes --  committee  discharged,  bill  amended,  ordered
  reprinted  as  amended  and  recommitted  to  said  committee -- again
  reported from said committee with  amendments,  ordered  reprinted  as
  amended and recommitted to said committee

AN  ACT  to  amend  the  general  business  law  and the banking law, in
  relation to providing for budget planning and debt settlement services

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

  Section  1.  Section  455  of  the general business law, as amended by
chapter 629 of the laws of 2002, subdivisions 1  and  4  as  amended  by
chapter 456 of the laws of 2006, is amended to read as follows:
  S 455. Definitions. 1. Budget planning, as used in this article, means
the making of a contract between a person or entity engaged in the busi-
ness of budget planning with a particular debtor whereby:
  (i)  the  debtor agrees to pay a sum or sums of money in any manner or
form and the person or entity engaged in the business of budget planning
distributes, or supervises, coordinates or controls the distribution of,
or has a contractual relationship with another  person  or  entity  that
distributes,  or  supervises,  coordinates or controls such distribution
of, the same among certain specified  creditors  in  accordance  with  a
PERIODIC PAYMENT plan agreed upon; and
  (ii)  the debtor agrees to pay to such person or entity, or such other
person  or  entity  that  distributes,  or  supervises,  coordinates  or
controls  such  distribution  of,  a  sum or sums of money, any valuable
consideration for such services or for any other  services  rendered  in
connection therewith; PROVIDED, HOWEVER, THAT "BUDGET PLANNING" DOES NOT
INCLUDE  "DEBT  SETTLEMENT  SERVICES" AS DEFINED IN SECTION FIVE HUNDRED

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10740-14-0
              

A. 7268--B                          2

EIGHTY-EIGHT-A OF THE BANKING LAW. For the purposes of this  article,  a
person or entity shall be considered as engaged in the business of budg-
et  planning  in New York, and subject to this article and the licensing
and  other  requirements of article twelve-C of the banking law, if such
person or entity solicits budget planning  business  within  this  state
and,  in  connection  with such solicitation, enters into a contract for
budget planning with an individual then resident in this state.
  2. Person, as used in this article, shall not include a person  admit-
ted to practice law in this state.
  3. Entity, as used in this article, shall not include a firm, partner-
ship,  professional  corporation,  or  other  organization,  all  of the
members or principals of which are admitted  to  practice  law  in  this
state.
  4.  [Person or entity as used in this article shall not include a type
B not-for-profit corporation as defined in section two  hundred  one  of
the  not-for-profit corporation law of this state, or an entity incorpo-
rated in another state  and  having  a  similar  not-for-profit  status,
licensed  by  the  superintendent,  to  engage in the business of budget
planning as defined in this section.
  5.] Any attorney licensed to practice law in this state who is engaged
in budget planning shall:
  (a) negotiate directly with creditors on behalf of the client;
  (b) ensure that all moneys received from the client are  deposited  in
the attorney's account maintained for client funds;
  (c) pay creditors from such account; and
  (d)  offer budget planning services through the same legal entity that
the attorney uses to practice law.
  S 2. Section 457 of the general business law, as  amended  by  chapter
629 of the laws of 2002, is amended to read as follows:
  S 457. [Penalty] PENALTIES FOR VIOLATION OF THIS ARTICLE; CRIMINAL AND
CIVIL.    (A)  Whoever  either  individually  or as officer, director or
employee of any person, firm, association or corporation,  violates  any
of  the provisions of the preceding section shall be guilty of a CLASS A
misdemeanor [for each such violation] PUNISHABLE AS PROVIDED IN ARTICLES
SEVENTY AND EIGHTY OF THE PENAL LAW.
  (B) WHENEVER THERE SHALL BE A VIOLATION OF THIS  ARTICLE,  APPLICATION
MAY  BE  MADE  BY  THE ATTORNEY GENERAL IN THE NAME OF THE PEOPLE OF THE
STATE OF NEW YORK TO A COURT OR JUSTICE HAVING JURISDICTION BY A SPECIAL
PROCEEDING TO ISSUE AN INJUNCTION, AND UPON NOTICE TO THE  DEFENDANT  OF
NOT  LESS THAN FIVE DAYS, TO ENJOIN AND RESTRAIN THE CONTINUANCE OF SUCH
VIOLATIONS; AND IF IT SHALL APPEAR TO THE SATISFACTION OF THE  COURT  OR
JUSTICE  THAT  THE  DEFENDANT  HAS,  IN  FACT, VIOLATED THIS ARTICLE, AN
INJUNCTION MAY BE  ISSUED  BY  SUCH  COURT  OR  JUSTICE,  ENJOINING  AND
RESTRAINING  ANY  FURTHER  VIOLATION,  WITHOUT  REQUIRING PROOF THAT ANY
PERSON HAS, IN FACT, BEEN INJURED OR DAMAGED THEREBY. IN CONNECTION WITH
ANY SUCH PROPOSED APPLICATION, THE ATTORNEY  GENERAL  IS  AUTHORIZED  TO
TAKE  PROOF  AND MAKE A DETERMINATION OF THE RELEVANT FACTS AND TO ISSUE
SUBPOENAS IN ACCORDANCE WITH THE CIVIL PRACTICE LAW AND RULES.  WHENEVER
THE  COURT  SHALL  DETERMINE  THAT  A  VIOLATION OF SECTION FOUR HUNDRED
FIFTY-SIX OF THIS ARTICLE HAS OCCURRED, THE COURT  MAY  IMPOSE  A  CIVIL
PENALTY  OF  NOT  MORE  THAN  FIVE  HUNDRED DOLLARS PER CONTRACT MADE IN
VIOLATION OF SUCH SECTION, NOT TO EXCEED ONE HUNDRED THOUSAND DOLLARS.
  S 3. Section 579 of the banking law, as amended by chapter 629 of  the
laws of 2002, is amended to read as follows:
  S  579. Doing business without license prohibited. [Only a type B not-
for-profit corporation as defined in section  two  hundred  one  of  the

A. 7268--B                          3

not-for-profit  corporation law of this state, or an entity incorporated
in another state and having a similar not-for-profit status,] NO  PERSON
OR  ENTITY shall engage in the business of budget planning as defined in
subdivision  one of section four hundred fifty-five of the general busi-
ness law [of this state] except as authorized by this article and  with-
out first obtaining a license from the superintendent.
  S  4.  Subdivision  2 of section 584-a of the banking law, as added by
chapter 629 of the laws of 2002, is amended to read as follows:
  2. the total fees agreed to for such services, including  any  adjust-
ments  for  estimated  available  rebates  from creditors, provided that
nothing in this subdivision shall require a licensee  to  share  rebates
with  its  clients AND PROVIDED THAT ANY FEES OR CHARGES IMPOSED MUST BE
FAIR, REASONABLE AND EASILY UNDERSTOOD;
  S 5. Subdivisions 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 of section 584-b
of the banking law are renumbered subdivisions 5, 6, 7, 8,  9,  10,  11,
12, 13 and 14 and a new subdivision 4 is added to read as follows:
  4.  NO  LICENSEE SHALL IMPOSE ANY FEE OR CHARGE WHATSOEVER THAT IS NOT
FAIR, REASONABLE AND ABLE TO BE EASILY UNDERSTOOD.
  S 6. Section 585 of the banking law, as amended by chapter 629 of  the
laws of 2002, is amended to read as follows:
  S  585.  Superintendent  authorized  to  examine.  For  the purpose of
discovering violations of this article or securing information  lawfully
required  by  him  or her hereunder, the superintendent may at any time,
and as often as he or she may  determine,  either  personally  or  by  a
person duly designated by him or her, investigate the business and exam-
ine the books, accounts, records, and files used therein of every licen-
see  hereunder.  For that purpose the superintendent and his or her duly
designated representative shall have free  access  to  the  offices  and
place  of  business,  books, accounts, papers, records, files, safes and
vaults of all such licensees. The superintendent  and  any  person  duly
designated  by him or her shall have authority to require the attendance
of and to examine under oath all persons whose testimony he or  she  may
require  relative  to such business. The expenses incurred in making any
examination pursuant to this section shall be assessed against and  paid
by  the  licensee  so  examined,  except  that traveling and subsistence
expenses so incurred shall be charged against and paid by  licensees  in
such  proportions  as the superintendent shall deem just and reasonable,
and such proportionate charges shall be added to the assessment  of  the
other  expenses  incurred  upon each examination. Upon written notice by
the superintendent of the total amount of such assessment, the  licensee
shall become liable for and shall pay such assessment to the superinten-
dent.  If, upon review, the superintendent shall determine that the fees
or service charges set by  the  licensee  are  UNFAIR,  unreasonable  OR
UNCLEAR, he or she shall direct the licensee to make adjustments in said
fees  and  service charges in accordance with his or her findings, which
shall set forth a detailed factual basis and reasoning  supporting  such
finding.
  S  7.  Subdivision  10 of section 36 of the banking law, as amended by
chapter 472 of the laws of 2008, is amended to read as follows:
  10. All reports of examinations and investigations, correspondence and
memoranda concerning or arising out of  such  examination  and  investi-
gations,  including any duly authenticated copy or copies thereof in the
possession of any banking organization,  bank  holding  company  or  any
subsidiary  thereof  (as  such terms "bank holding company" and "subsid-
iary" are defined in article three-A of this chapter),  any  corporation
or  any  other  entity affiliated with a banking organization within the

A. 7268--B                          4

meaning of subdivision six of this section and any  non-banking  subsid-
iary  of  a  corporation  or any other entity which is an affiliate of a
banking organization within the meaning of  subdivision  six-a  of  this
section,  foreign  banking corporation, licensed lender, licensed casher
of  checks,  licensed  mortgage  banker,  registered  mortgage   broker,
licensed  sales  finance  company,  registered  mortgage  loan servicer,
licensed insurance  premium  finance  agency,  licensed  transmitter  of
money, licensed budget planner, LICENSED DEBT SETTLEMENT COMPANY, or the
department,  shall  be confidential communications, shall not be subject
to subpoena and shall not be made public unless, in the judgment of  the
superintendent,  the  ends  of  justice and the public advantage will be
subserved by the publication thereof, in which event the  superintendent
may publish or authorize the publication of a copy of any such report or
any  part  thereof  in  such  manner  as  may  be deemed proper. For the
purposes of this subdivision,  "reports  of  examinations  and  investi-
gations,  and any correspondence and memoranda concerning or arising out
of such examinations and investigations", includes any such materials of
a bank, insurance or securities regulatory agency or  any  unit  of  the
federal  government or that of this state any other state or that of any
foreign government which are considered confidential by such  agency  or
unit  and  which  are  in  the possession of the department or which are
otherwise confidential materials that have been shared by the department
with any such agency or unit and are in the possession of such agency or
unit.
  S 8. Subdivisions 1, 2, 3 and 5 of section  39  of  the  banking  law,
subdivisions  1,  2  and 5 as amended by chapter 123 of the laws of 2009
and subdivision 3 as amended by section 1 of part FF of  chapter  59  of
the laws of 2004, are amended to read as follows:
  1.  To  appear  and  explain  an apparent violation. Whenever it shall
appear to the superintendent that any banking organization, bank holding
company, registered mortgage broker, licensed  mortgage  banker,  regis-
tered   mortgage  loan  servicer,  licensed  mortgage  loan  originator,
licensed lender, licensed  casher  of  checks,  licensed  sales  finance
company, licensed insurance premium finance agency, licensed transmitter
of  money,  licensed  budget  planner, LICENSED DEBT SETTLEMENT COMPANY,
out-of-state state bank that maintains a branch or branches or represen-
tative or other offices in this state, or  foreign  banking  corporation
licensed  by  the  superintendent to do business or maintain a represen-
tative office in this state has violated any law or  regulation,  he  or
she may, in his or her discretion, issue an order describing such appar-
ent  violation  and  requiring  such  banking organization, bank holding
company, registered mortgage broker, licensed mortgage banker,  licensed
mortgage  loan  originator,  licensed lender, licensed casher of checks,
licensed sales finance company, licensed insurance premium finance agen-
cy, licensed transmitter of money,  licensed  budget  planner,  LICENSED
DEBT SETTLEMENT COMPANY, out-of-state state bank that maintains a branch
or branches or representative or other offices in this state, or foreign
banking  corporation  to  appear  before him or her, at a time and place
fixed in  said  order,  to  present  an  explanation  of  such  apparent
violation.
  2.  To discontinue unauthorized or unsafe and unsound practices. When-
ever it shall appear to the superintendent that  any  banking  organiza-
tion,  bank  holding company, registered mortgage broker, licensed mort-
gage banker, registered mortgage loan servicer, licensed  mortgage  loan
originator,  licensed  lender, licensed casher of checks, licensed sales
finance company, licensed insurance  premium  finance  agency,  licensed

A. 7268--B                          5

transmitter  of money, licensed budget planner, LICENSED DEBT SETTLEMENT
COMPANY, out-of-state state bank that maintains a branch or branches  or
representative or other offices in this state, or foreign banking corpo-
ration  licensed  by  the superintendent to do business in this state is
conducting business in an unauthorized or unsafe and unsound manner,  he
or  she  may,  in  his  or  her discretion, issue an order directing the
discontinuance of such unauthorized or unsafe and unsound practices, and
fixing a time and place at which such banking organization, bank holding
company, registered mortgage broker, licensed  mortgage  banker,  regis-
tered   mortgage  loan  servicer,  licensed  mortgage  loan  originator,
licensed lender, licensed  casher  of  checks,  licensed  sales  finance
company, licensed insurance premium finance agency, licensed transmitter
of  money,  licensed  budget  planner, LICENSED DEBT SETTLEMENT COMPANY,
out-of-state state bank that maintains a branch or branches or represen-
tative or other offices in this state, or  foreign  banking  corporation
may  voluntarily  appear before him or her to present any explanation in
defense of the practices directed in said order to be discontinued.
  3. To make good impairment of capital or  to  ensure  compliance  with
financial  requirements.  Whenever it shall appear to the superintendent
that the capital or capital stock  of  any  banking  organization,  bank
holding  company  or any subsidiary thereof which is organized, licensed
or registered pursuant to this chapter, is impaired,  or  the  financial
requirements  imposed by subdivision one of section two hundred two-b of
this chapter or any regulation of  the  superintendent  or  the  banking
board  on  any  branch or agency of a foreign banking corporation or the
financial requirements imposed by this chapter or any regulation of  the
superintendent or banking board on any licensed lender, registered mort-
gage  broker,  licensed  mortgage  banker,  licensed  casher  of checks,
licensed sales finance company, licensed insurance premium finance agen-
cy, licensed transmitter of money,  licensed  budget  planner,  LICENSED
DEBT  SETTLEMENT  COMPANY or private banker are not satisfied, he or she
may, in his or her discretion, issue an order directing that such  bank-
ing  organization,  bank  holding company, branch or agency of a foreign
banking corporation, registered mortgage broker, licensed mortgage bank-
er, licensed lender, licensed casher of checks, licensed  sales  finance
company, licensed insurance premium finance agency, licensed transmitter
of  money,  licensed budget planner, LICENSED DEBT SETTLEMENT COMPANY or
private banker make good such deficiency  forthwith  or  within  a  time
specified in such order.
  5.  To keep books and accounts as prescribed. Whenever it shall appear
to the superintendent that any banking organization, bank holding compa-
ny, registered mortgage broker,  licensed  mortgage  banker,  registered
mortgage  loan  servicer,  licensed  mortgage  loan originator, licensed
lender, licensed casher  of  checks,  licensed  sales  finance  company,
licensed  insurance  premium  finance  agency,  licensed  transmitter of
money, licensed budget planner, LICENSED DEBT SETTLEMENT COMPANY, agency
or branch of a foreign banking corporation licensed by  the  superinten-
dent  to do business in this state, does not keep its books and accounts
in such manner as to enable him or her to  readily  ascertain  its  true
condition,  he  or  she  may,  in  his or her discretion, issue an order
requiring such banking organization, bank  holding  company,  registered
mortgage  broker,  licensed  mortgage  banker,  registered mortgage loan
servicer, licensed mortgage loan originator, licensed  lender,  licensed
casher  of  checks,  licensed  sales finance company, licensed insurance
premium finance agency, licensed transmitter of money,  licensed  budget
planner,  LICENSED  DEBT  SETTLEMENT  COMPANY, or foreign banking corpo-

A. 7268--B                          6

ration, or the officers or agents thereof, or any of them, to  open  and
keep  such books or accounts as he or she may, in his or her discretion,
determine and prescribe for the purpose of keeping accurate and  conven-
ient records of its transactions and accounts.
  S  9. Paragraph (a) of subdivision 1 of section 44 of the banking law,
as amended by chapter 123 of the laws of 2009, is  amended  to  read  as
follows:
  (a) Without limiting any power granted to the superintendent under any
other provision of this chapter, the superintendent may, in a proceeding
after  notice  and a hearing, require any safe deposit company, licensed
lender, licensed casher  of  checks,  licensed  sales  finance  company,
licensed  insurance  premium  finance  agency,  licensed  transmitter of
money, licensed mortgage banker, registered  mortgage  broker,  licensed
mortgage  loan  originator,  registered  mortgage  loan  servicer  [or],
licensed budget planner OR LICENSED DEBT SETTLEMENT COMPANY  to  pay  to
the  people  of  this state a penalty for any violation of this chapter,
any regulation promulgated thereunder,  any  final  or  temporary  order
issued  pursuant  to  section thirty-nine of this article, any condition
imposed in writing by the superintendent or banking board in  connection
with  the  grant of any application or request, or any written agreement
entered into with the superintendent.
  S 10. The banking law is amended by adding a new article 12-CC to read
as follows:
                             ARTICLE XII-CC.
                        DEBT SETTLEMENT COMPANIES
SECTION 588-A. DEFINITIONS.
        588-B. DOING BUSINESS WITHOUT LICENSE PROHIBITED.
        588-C. APPLICATION FOR LICENSE.
        588-D. CONDITIONS FOR ISSUANCE OF  A  LICENSE;  PROCEDURE  WHERE
                 APPLICATION DENIED.
        588-E. LICENSE PROVISIONS.
        588-F. CHANGES IN OFFICERS OR DIRECTORS OF LICENSEE.
        588-G. CHANGES IN CONTROL.
        588-H. GROUNDS  FOR  SUSPENSION,  REVOCATION,  OR TERMINATION OF
                 LICENSE; PROCEDURE.
        588-I. ADVERTISING AND MARKETING PRACTICES.
        588-J. INDIVIDUALIZED FINANCIAL ANALYSIS; STATEMENT.
        588-K. REQUIRED PRE-AGREEMENT DISCLOSURES AND WARNINGS.
        588-L. DEBT SETTLEMENT SERVICES AGREEMENTS.
        588-M. FEES.
        588-N. DEBTOR SETTLEMENT ACCOUNTS; MONTHLY ACCOUNTING.
        588-O. CANCELLATION OF DEBT SETTLEMENT SERVICES AGREEMENT; RIGHT
                 TO REFUNDS.
        588-P. OBLIGATION OF GOOD FAITH.
        588-Q. PROHIBITED ACTIVITIES.
        588-R. SUPERINTENDENT AUTHORIZED TO EXAMINE.
        588-S. LICENSEE'S BOOKS AND RECORDS; REPORTS.
        588-T. PENALTIES; NONCOMPLIANCE.
        588-U. AUTHORITY OF SUPERINTENDENT.
        588-V. SEVERABILITY.
  S 588-A. DEFINITIONS. AS USED IN THIS ARTICLE:  1.  "AFFILIATE"  MEANS
ANY PERSON THAT DIRECTLY OR INDIRECTLY CONTROLS, IS CONTROLLED BY, OR IS
UNDER COMMON CONTROL WITH ANOTHER PERSON.
  2. "CLEARLY AND CONSPICUOUSLY" MEANS THAT A STATEMENT, REPRESENTATION,
TERM, OR DISCLOSURE IS SO PRESENTED AS TO BE READILY APPARENT AND UNDER-
STOOD BY THE PERSON TO WHOM IT IS BEING ADDRESSED. FACTORS TO BE CONSID-

A. 7268--B                          7

ERED  FOR  THIS  PURPOSE INCLUDE BUT ARE NOT LIMITED TO SIZE, PLACEMENT,
COLOR CONTRAST, LENGTH, CRAWL TIME, AND AUDIBILITY.
  3. "DEBTOR" MEANS ANY INDIVIDUAL WHO HAS INCURRED INDEBTEDNESS OR OWES
A DEBT.
  4.  "DEBTOR  SETTLEMENT  ACCOUNT"  MEANS ANY ACCOUNT OR OTHER MEANS OR
DEVICE IN WHICH PAYMENTS, DEPOSITS, OR OTHER TRANSFERS FROM A DEBTOR ARE
ARRANGED, HELD, OR TRANSFERRED BY OR TO A DEBT  SETTLEMENT  COMPANY  FOR
THE  ACCUMULATION OF THE DEBTOR'S FUNDS IN ANTICIPATION OF PROFFERING AN
ADJUSTMENT OR SETTLEMENT OF A DEBT OR OBLIGATION OF THE DEBTOR.
  5. "DEBT SETTLEMENT COMPANY" MEANS ANY PERSON:
  (A) ENGAGING IN, OR HOLDING HIMSELF, HERSELF, OR ITSELF OUT AS  ENGAG-
ING  IN,  THE BUSINESS OF PROVIDING DEBT SETTLEMENT SERVICES IN EXCHANGE
FOR OR IN EXPECTATION OF ANY COMPENSATION OR GAIN; OR
  (B) SOLICITING FOR OR ACTING ON BEHALF OF ANY PERSON ENGAGING  IN,  OR
HOLDING  HIMSELF, HERSELF, OR ITSELF OUT AS ENGAGING IN, THE BUSINESS OF
PROVIDING DEBT SETTLEMENT SERVICES IN EXCHANGE FOR OR IN EXPECTATION  OF
ANY  COMPENSATION  OR  GAIN;  PROVIDED,  HOWEVER,  THAT "DEBT SETTLEMENT
COMPANY" SHALL NOT INCLUDE:
  (I) THE FOLLOWING EXEMPT PERSONS:
  (A) ANY ATTORNEY LICENSED TO PRACTICE LAW IN THIS STATE WHEN ACTING IN
THE ORDINARY PRACTICE OF LAW AND THROUGH THE ENTITY USED BY THE ATTORNEY
IN THE ORDINARY PRACTICE OF LAW, AND NOT HOLDING HIMSELF OR HERSELF  OUT
AS  A  DEBT  SETTLEMENT  COMPANY,  AND  NOT  PROVIDING  DEBT  SETTLEMENT
SERVICES, EXCEPT AS INCIDENTAL TO LEGAL REPRESENTATION;
  (B) ANY PUBLIC OFFICER WHILE ACTING IN AN OFFICIAL  CAPACITY  AND  ANY
PERSON ACTING UNDER COURT ORDER; OR
  (C)  ANY  PERSON  WHILE  PERFORMING SERVICES INCIDENTAL TO THE DISSOL-
UTION, WINDING UP, OR LIQUIDATION  OF  A  PARTNERSHIP,  CORPORATION,  OR
OTHER BUSINESS ENTERPRISE; OR
  (D)  ANY  BANK,  TRUST COMPANY, SAVINGS BANK, SAVINGS AND LOAN ASSOCI-
ATION, OR CREDIT UNION, WHETHER INCORPORATED,  CHARTERED,  OR  ORGANIZED
UNDER THE LAWS OF THIS STATE OR ANY OTHER STATE OR THE UNITED STATES, OR
ANY  OPERATING SUBSIDIARY OF ANY SUCH BANK, TRUST COMPANY, SAVINGS BANK,
SAVINGS AND LOAN ASSOCIATION, OR CREDIT UNION.
  (II) SUCH OTHER PERSONS AS MAY BE SPECIFICALLY EXEMPTED BY THE  SUPER-
INTENDENT IN HIS OR HER SOLE DISCRETION AND CONSISTENT WITH THE PURPOSES
OF THIS ARTICLE AND THE RULES AND REGULATIONS PROMULGATED HEREUNDER.
  6. "DEBT SETTLEMENT SERVICES" MEANS:
  (A)  OFFERING  TO PROVIDE OR PROVIDING ADVICE OR SERVICES, OR OFFERING
TO ACT OR ACTING AS AN INTERMEDIARY BETWEEN OR ON BEHALF OF A DEBTOR AND
ONE OR MORE OF THE DEBTOR'S CREDITORS, WHERE THE PRIMARY PURPOSE OF  THE
ADVICE,  SERVICE,  OR  ACTION  IS TO OBTAIN A SETTLEMENT, ADJUSTMENT, OR
SATISFACTION OF THE DEBTOR'S UNSECURED DEBT TO A CREDITOR IN  AN  AMOUNT
LESS THAN THE PRINCIPAL AMOUNT OF THE DEBT OR IN AN AMOUNT LESS THAN THE
CURRENT OUTSTANDING BALANCE OF THE DEBT; OR
  (B)  OFFERING  TO  PROVIDE  SERVICES  RELATED TO OR PROVIDING SERVICES
ADVISING, ENCOURAGING, ASSISTING, OR COUNSELING A DEBTOR  TO  ACCUMULATE
FUNDS  FOR  THE  PRIMARY  PURPOSE OF PROPOSING, OBTAINING, OR SEEKING TO
OBTAIN A SETTLEMENT, ADJUSTMENT, OR SATISFACTION OF THE  DEBTOR'S  UNSE-
CURED  DEBT TO A CREDITOR IN AN AMOUNT LESS THAN THE PRINCIPAL AMOUNT OF
THE DEBT OR IN AN AMOUNT LESS THAN THE CURRENT  OUTSTANDING  BALANCE  OF
THE  DEBT;  PROVIDED,  HOWEVER,  THAT DEBT SETTLEMENT SERVICES SHALL NOT
INCLUDE:
  (I) "BUDGET PLANNING" AS DEFINED IN SECTION FOUR HUNDRED FIFTY-FIVE OF
THE GENERAL BUSINESS LAW; OR

A. 7268--B                          8

  (II) THE SERVICES OF AN ATTORNEY IN PROVIDING INFORMATION, ADVICE,  OR
LEGAL  REPRESENTATION  WITH RESPECT TO FILING A CASE OR PROCEEDING UNDER
TITLE 11 OF THE UNITED STATES CODE.
  7.  "DEBT  SETTLEMENT  SERVICES  AGREEMENT"  MEANS A CONTRACT OR OTHER
AGREEMENT WITH A DEBTOR RELATED TO  THE  PROVISION  OF  DEBT  SETTLEMENT
SERVICES.
  8. "ENROLLMENT FEE" MEANS ANY FEE, OBLIGATION, OR COMPENSATION PAID OR
TO  BE  PAID BY THE DEBTOR TO A DEBT SETTLEMENT COMPANY IN CONSIDERATION
OF OR IN CONNECTION WITH ESTABLISHING A DEBT SETTLEMENT SERVICES  AGREE-
MENT.
  9.  "MAINTENANCE  FEE" MEANS ANY FEE, OBLIGATION, OR COMPENSATION PAID
OR TO BE PAID BY A DEBTOR TO A DEBT SETTLEMENT COMPANY IN  CONSIDERATION
OF  OR  IN  CONNECTION  WITH  MAINTAINING  THE RELATIONSHIP AND SERVICES
PROVIDED BY A DEBT SETTLEMENT COMPANY IN ACCORDANCE WITH A DEBT  SETTLE-
MENT SERVICES AGREEMENT.
  10.  "PERSON"  MEANS  AN  INDIVIDUAL,  PARTNERSHIP,  LIMITED LIABILITY
COMPANY, CORPORATION, ASSOCIATION, OR ANY OTHER LEGAL ENTITY.
  11. "PRINCIPAL AMOUNT OF THE DEBT" MEANS THE TOTAL AMOUNT  OWED  BY  A
DEBTOR  TO  ONE  OR MORE CREDITORS FOR A DEBT THAT IS INCLUDED IN A DEBT
SETTLEMENT SERVICES AGREEMENT AT THE TIME WHEN THE  DEBTOR  ENTERS  INTO
SUCH AGREEMENT.
  12.  "SETTLEMENT  FEE" MEANS ANY FEE, OBLIGATION, OR COMPENSATION PAID
OR TO BE PAID BY A DEBTOR TO A DEBT SETTLEMENT COMPANY IN  CONSIDERATION
OF  OR  IN CONNECTION WITH AN AGREEMENT OR OTHER ARRANGEMENT ON THE PART
OF A CREDITOR TO ACCEPT LESS THAN THE PRINCIPAL AMOUNT OF  THE  DEBT  AS
SATISFACTION OF THE CREDITOR'S CLAIM AGAINST THE DEBTOR.
  S  588-B.  DOING  BUSINESS  WITHOUT  LICENSE  PROHIBITED. 1. EXCEPT AS
PROVIDED IN SUBDIVISION THREE OF THIS SECTION, NO PERSON SHALL ENGAGE IN
THE BUSINESS OF A DEBT SETTLEMENT COMPANY IN THIS  STATE  WITHOUT  FIRST
OBTAINING  A  LICENSE  FROM  THE  SUPERINTENDENT  IN ACCORDANCE WITH THE
LICENSING PROCEDURE PROVIDED IN THIS ARTICLE AND SUCH  RULES  AND  REGU-
LATIONS AS MAY BE PROMULGATED HEREUNDER.
  2.  THE  BUSINESS  OF  A  DEBT SETTLEMENT COMPANY IS CONDUCTED IN THIS
STATE IF THE DEBT SETTLEMENT COMPANY, ITS EMPLOYEES, OR ITS  AGENTS  ARE
LOCATED  IN  THIS  STATE  OR  IF THE DEBT SETTLEMENT COMPANY ADVERTISES,
SOLICITS, OFFERS, OR CONTRACTS TO PROVIDE DEBT  SETTLEMENT  SERVICES  TO
DEBTORS THEN RESIDENT IN THIS STATE.
  3. IF A DEBT SETTLEMENT COMPANY IS LICENSED UNDER THIS ARTICLE, SUBDI-
VISION ONE OF THIS SECTION DOES NOT APPLY TO ANY EMPLOYEE OF SUCH LICEN-
SEE.
  S  588-C.  APPLICATION  FOR  LICENSE.  1.  APPLICATION  FOR  A LICENSE
REQUIRED UNDER THIS ARTICLE SHALL BE IN WRITING, UNDER OATH, AND IN  THE
FORM PRESCRIBED BY THE SUPERINTENDENT, AND SHALL CONTAIN THE FOLLOWING:
  (A)  THE  EXACT NAME AND COMPLETE STREET ADDRESS OF THE APPLICANT AND,
IF APPLICABLE, ITS DATE OF INCORPORATION OR ORGANIZATION;
  (B) THE NAME AND COMPLETE BUSINESS AND RESIDENTIAL ADDRESS AND OCCUPA-
TION OF EACH OFFICER AND DIRECTOR OF THE APPLICANT AND EACH PERSON  THAT
OWNS  AT LEAST TEN PERCENT OF THE SHARES OR OTHER OWNERSHIP INTERESTS OF
THE APPLICANT;
  (C) THE COMPLETE STREET ADDRESS OF THE PRINCIPAL OFFICE FROM WHICH THE
BUSINESS IS TO BE CONDUCTED;
  (D) IF THE APPLICANT HAS ONE OR MORE BRANCHES, SUBSIDIARIES, OR AFFIL-
IATES LOCATED IN THIS STATE, SOLICITING BUSINESS IN THIS STATE, OR DOING
BUSINESS WITH RESIDENTS OF THIS STATE, THE COMPLETE ADDRESS OF EACH SUCH
PLACE OF BUSINESS; AND

A. 7268--B                          9

  (E)  SUCH  OTHER  PERTINENT  INFORMATION  AS  THE  SUPERINTENDENT  MAY
REQUIRE,  INCLUDING  BUT  NOT  LIMITED  TO  EVIDENCE INDICATING THAT THE
APPLICANT, OR AN OFFICER, DIRECTOR, OR MANAGER OF SUCH APPLICANT HAS  AT
LEAST  ONE  YEAR  OF  EXPERIENCE IN FINANCIAL SERVICES OR RELATED FIELDS
APPLICABLE TO DEBT SETTLEMENT SERVICES.
  2.  AN  APPLICANT  SHALL  FILE  A MASTER APPLICATION FOR ITS PRINCIPAL
OFFICE AND SUPPLEMENTAL APPLICATIONS FOR EACH BRANCH  OFFICE  THAT  WILL
CONDUCT THE BUSINESS OF A DEBT SETTLEMENT COMPANY IN THIS STATE.
  3.  UPON ORIGINAL APPLICATION FOR A LICENSE OR LICENSES, THE APPLICANT
SHALL PAY AN INVESTIGATION FEE IN  AN  AGGREGATE  AMOUNT  AS  PRESCRIBED
PURSUANT  TO  SECTION EIGHTEEN-A OF THIS CHAPTER. NO ADDITIONAL INVESTI-
GATION FEE SHALL BE  REQUIRED  FOR  ANY  SUBSEQUENT  APPLICATION  FOR  A
LICENSE  UNLESS  SUCH APPLICATION IS SUBSEQUENT TO A DENIAL OF A LICENSE
OR TO A REVOCATION, SUSPENSION, SURRENDER, OR TERMINATION OF A  LICENSE;
PROVIDED,  HOWEVER,  THAT AN APPLICATION TO ESTABLISH A BRANCH OFFICE OF
THE LICENSEE SHALL BE ACCOMPANIED BY THE FEE PRESCRIBED IN SECTION EIGH-
TEEN-A OF THIS CHAPTER.
  4. AS A CONDITION FOR THE ISSUANCE AND RETENTION  OF  A  LICENSE,  AND
SUBJECT  TO  SUCH  REGULATIONS  AS  THE  SUPERINTENDENT SHALL PRESCRIBE,
APPLICANTS FOR A LICENSE SHALL FILE WITH  THE  SUPERINTENDENT  A  SURETY
BOND  IN  FAVOR  OR  THE  SUPERINTENDENT, ISSUED BY A BONDING COMPANY OR
INSURANCE COMPANY AUTHORIZED TO DO BUSINESS IN THIS STATE, AND IN A FORM
SATISFACTORY TO THE SUPERINTENDENT.
  (A) IN LIEU OF THE SURETY BOND REQUIRED BY THIS SUBDIVISION, AN APPLI-
CANT MAY PLEDGE TO THE SUPERINTENDENT AND MAINTAIN IN A  PLEDGE  ACCOUNT
WITH  SUCH  BANKS,  SAVINGS  BANKS, SAVINGS AND LOAN ASSOCIATIONS, TRUST
COMPANIES, NATIONAL BANKS, FEDERAL SAVINGS BANKS, OR FEDERAL SAVINGS AND
LOAN ASSOCIATIONS IN THE STATE AS SUCH LICENSEE MAY  DESIGNATE  AND  THE
SUPERINTENDENT MAY APPROVE:
  (I)  INTEREST-BEARING  BILLS, NOTES, BONDS, DEBENTURES, OR OTHER OBLI-
GATIONS ISSUED OR GUARANTEED BY THE UNITED STATES OR ANY STATE OR  OTHER
LOCAL  GOVERNMENTAL  ENTITY  OR  ANY  INSTRUMENTALITY THEREOF, BEARING A
RATING OF ONE OF THE THREE HIGHEST GRADES  BY  A  NATIONALLY  RECOGNIZED
STATISTICAL  RATING  ORGANIZATION  THAT HAS BEEN ENGAGED IN RATING STATE
AND MUNICIPAL ISSUES FOR A PERIOD OF NOT LESS THAN FIVE YEARS;
  (II) DOLLAR DEPOSITS; OR
  (III) SUCH OTHER ASSETS OR LETTERS OF  CREDIT  AS  THE  SUPERINTENDENT
SHALL BY RULE OR REGULATION PERMIT.
  (B)  EXCEPT AS PROVIDED HEREUNDER, THE PRINCIPAL AMOUNT OF SUCH SURETY
BOND OR DEPOSIT SHALL BE TWO HUNDRED FIFTY THOUSAND DOLLARS. THE  SUPER-
INTENDENT MAY:
  (I)  REQUIRE  A LARGER BOND OR DEPOSIT IF HE OR SHE DETERMINES, IN HIS
OR HER SOLE DISCRETION, THAT A LICENSEE HAS  ENGAGED  IN  A  PATTERN  OF
CONDUCT  RESULTING IN BONA FIDE DEBTOR COMPLAINTS OF MISCONDUCT AND THAT
SUCH INCREASED BOND OR  DEPOSIT  IS  NECESSARY  FOR  THE  PROTECTION  OF
DEBTORS; OR
  (II)  INCREASE  OR  DECREASE  THE AMOUNT OF SUCH BOND OR DEPOSIT BASED
UPON THE APPLICANT'S OR LICENSEE'S FINANCIAL CONDITION,  BUSINESS  PLAN,
BUSINESS  EXPERIENCE,  OR  ANY OTHER FACTOR THE SUPERINTENDENT CONSIDERS
APPROPRIATE.
  (C) THE PROCEEDS OF SUCH SURETY BOND OR  DEPOSIT  SHALL  CONSTITUTE  A
TRUST FUND TO BE USED EXCLUSIVELY:
  (A)  TO  REIMBURSE  FEES  THAT  HAVE  BEEN  IMPROPERLY  CHARGED  TO OR
COLLECTED FROM DEBTORS WITH RESPECT TO THE BUSINESS OF A DEBT SETTLEMENT
COMPANY IN THIS STATE, AS SUCH BUSINESS IS  DESCRIBED  IN  SECTION  FIVE
HUNDRED EIGHTY-EIGHT-B OF THIS ARTICLE;

A. 7268--B                         10

  (B)  TO  REIMBURSE  AMOUNTS THAT HAVE NOT BEEN PROPERLY DISTRIBUTED TO
CREDITORS OR PROPERLY RETURNED TO DEBTORS WITH RESPECT TO  THE  BUSINESS
OF  A  DEBT  SETTLEMENT  COMPANY  IN  THIS  STATE,  AS  SUCH BUSINESS IS
DESCRIBED IN SECTION FIVE HUNDRED EIGHTY-EIGHT-B OF THIS ARTICLE; AND
  (C)  TO  PAY  OUTSTANDING  BANKING  DEPARTMENT  EXAMINATION  COSTS AND
ASSESSMENTS.
  S 588-D. CONDITIONS FOR ISSUANCE OF A LICENSE; PROCEDURE WHERE  APPLI-
CATION  DENIED.  UPON THE FILING OF AN APPLICATION FOR A LICENSE, IF THE
SUPERINTENDENT SHALL FIND THAT THE FINANCIAL RESPONSIBILITY, EXPERIENCE,
CHARACTER, AND GENERAL FITNESS OF THE  APPLICANT,  AND  OF  THE  CONTROL
PERSONS,  OFFICERS,  AND  DIRECTORS  THEREOF  ARE SUCH AS TO COMMAND THE
CONFIDENCE OF THE COMMUNITY AND TO WARRANT BELIEF THAT THE BUSINESS WILL
BE OPERATED HONESTLY, FAIRLY, AND EFFICIENTLY  WITHIN  THE  PURPOSES  OF
THIS  ARTICLE, HE OR SHE SHALL THEREUPON ISSUE A LICENSE IN DUPLICATE TO
ENGAGE IN DEBT SETTLEMENT SERVICES IN ACCORDANCE WITH THE PROVISIONS  OF
THIS  ARTICLE.    THE  SUPERINTENDENT  SHALL  TRANSMIT  ONE COPY OF SUCH
LICENSE TO THE APPLICANT AND FILE THE OTHER IN THE OFFICE OF THE BANKING
DEPARTMENT. SUCH LICENSE SHALL REMAIN IN FULL FORCE AND EFFECT UNTIL  IT
IS  SURRENDERED  BY THE LICENSEE OR REVOKED, SUSPENDED, OR TERMINATED AS
HEREINAFTER PROVIDED.  IF THE SUPERINTENDENT SHALL NOT SO  FIND,  HE  OR
SHE  SHALL  NOT ISSUE SUCH LICENSE AND HE OR SHE SHALL NOTIFY THE APPLI-
CANT OF THE DENIAL.
  S 588-E. LICENSE PROVISIONS. EACH LICENSE ISSUED  UNDER  THIS  ARTICLE
SHALL STATE THE PRINCIPAL OFFICE ADDRESS AND, IF APPLICABLE, THE ADDRESS
OF  THE  BRANCH OFFICE FOR WHICH IT WAS ISSUED. SUCH LICENSE SHALL STATE
FULLY THE NAME OF THE LICENSEE AND, IF APPLICABLE, THE DATE AND PLACE OF
ITS INCORPORATION OR ORGANIZATION. A COPY OF SUCH LICENSE SHALL BE PROM-
INENTLY POSTED IN THE PRINCIPAL OFFICE AND, IF APPLICABLE,  SUCH  BRANCH
OFFICE.    SUCH  LICENSE SHALL NOT BE TRANSFERABLE OR ASSIGNABLE. IN THE
EVENT THE LOCATION AT WHICH THE BUSINESS IS TO  BE  CONDUCTED  SHALL  BE
CHANGED,  THE  LICENSEE  SHALL  FORTHWITH  NOTIFY THE SUPERINTENDENT WHO
SHALL THEREUPON WITHOUT CHARGE ATTACH TO THE  LICENSE  A  RIDER  SETTING
FORTH SUCH CHANGED LOCATION.
  S  588-F.  CHANGES  IN OFFICERS OR DIRECTORS OF LICENSEE. IN THE EVENT
THAT THERE SHALL BE ANY CHANGE AMONG THE OFFICERS OR  DIRECTORS  OF  ANY
LICENSEE,  THE  LICENSEE SHALL PROMPTLY NOTIFY THE SUPERINTENDENT OF THE
NAME, ADDRESS, AND OCCUPATION  OF  EACH  NEW  OFFICER  OR  DIRECTOR  AND
PROVIDE SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  S  588-G.  CHANGES IN CONTROL. 1. IT SHALL BE UNLAWFUL EXCEPT WITH THE
PRIOR APPROVAL OF THE SUPERINTENDENT FOR ANY ACTION TO  BE  TAKEN  WHICH
RESULTS  IN  A CHANGE OF CONTROL OF THE BUSINESS OF A LICENSEE. PRIOR TO
ANY CHANGE OF CONTROL, THE PERSON DESIROUS OF ACQUIRING CONTROL  OF  THE
BUSINESS OF A LICENSEE SHALL MAKE WRITTEN APPLICATION TO THE SUPERINTEN-
DENT  AND  PAY  AN  INVESTIGATION  FEE AS PRESCRIBED PURSUANT TO SECTION
EIGHTEEN-A OF THIS CHAPTER TO THE SUPERINTENDENT.  THE APPLICATION SHALL
CONTAIN SUCH INFORMATION AS THE SUPERINTENDENT MAY PRESCRIBE  AS  NECES-
SARY OR APPROPRIATE FOR THE PURPOSE OF MAKING THE DETERMINATION REQUIRED
BY SUBDIVISION TWO OF THIS SECTION.
  2.  THE SUPERINTENDENT SHALL APPROVE OR DISAPPROVE THE PROPOSED CHANGE
OF CONTROL OF A LICENSEE IN ACCORDANCE WITH THE  PROVISIONS  OF  SECTION
FIVE HUNDRED EIGHTY-EIGHT-D OF THIS ARTICLE.
  3.  AS  USED IN THIS SECTION, THE TERM "CONTROL" MEANS THE POSSESSION,
DIRECTLY OR INDIRECTLY, OF THE POWER TO DIRECT OR CAUSE THE DIRECTION OF
THE MANAGEMENT AND POLICIES OF A LICENSEE, WHETHER THROUGH THE OWNERSHIP
OF VOTING STOCK OF SUCH LICENSEE, THE OWNERSHIP OF VOTING STOCK  OF  ANY
PERSON  WHICH  POSSESSES  SUCH  POWER  OR  OTHERWISE.  CONTROL  SHALL BE

A. 7268--B                         11

PRESUMED TO EXIST IF ANY PERSON, DIRECTLY OR INDIRECTLY, OWNS,  CONTROLS
OR  HOLDS  WITH POWER TO VOTE TEN PERCENT OR MORE OF THE VOTING STOCK OF
ANY LICENSEE OR OF ANY PERSON WHICH OWNS, CONTROLS OR HOLDS  WITH  POWER
TO  VOTE TEN PERCENT OR MORE OF THE VOTING STOCK OF ANY LICENSEE, BUT NO
PERSON SHALL BE DEEMED TO CONTROL A LICENSEE SOLELY BY REASON  OF  BEING
AN  OFFICER  OR  DIRECTOR OF SUCH LICENSEE OR PERSON. THE SUPERINTENDENT
MAY IN HIS OR HER DISCRETION, UPON THE APPLICATION OF A LICENSEE OR  ANY
PERSON  WHO,  DIRECTLY OR INDIRECTLY, OWNS, CONTROLS OR HOLDS WITH POWER
TO VOTE OR SEEKS TO OWN, CONTROL OR HOLD WITH POWER TO VOTE  ANY  VOTING
STOCK  OF SUCH LICENSEE, DETERMINE WHETHER OR NOT THE OWNERSHIP, CONTROL
OR HOLDING OF SUCH VOTING STOCK CONSTITUTES OR WOULD CONSTITUTE  CONTROL
OF SUCH LICENSEE FOR PURPOSES OF THIS SECTION.
  S  588-H.  GROUNDS  FOR  SUSPENSION,  REVOCATION,  OR  TERMINATION  OF
LICENSE; PROCEDURE. 1. IN ADDITION TO THE AUTHORITY SET FORTH IN  SUBDI-
VISION TWO OF THIS SECTION, THE SUPERINTENDENT MAY SUSPEND OR REVOKE ANY
LICENSE  ISSUED UNDER THIS ARTICLE IF, AFTER NOTICE AND A HEARING, HE OR
SHE SHALL FIND THAT:
  (A) THE LICENSEE HAS VIOLATED ANY PROVISIONS OF THIS  ARTICLE,  OR  OF
ANY  RULE  OR REGULATION MADE BY THE SUPERINTENDENT UNDER AND WITHIN THE
AUTHORITY OF THIS ARTICLE;
  (B) ANY FACT OR CONDITION EXISTS WHICH, IF IT HAD EXISTED AT THE  TIME
OF  THE  ORIGINAL APPLICATION FOR SUCH LICENSE, WOULD HAVE WARRANTED THE
SUPERINTENDENT IN REFUSING ORIGINALLY TO ISSUE SUCH LICENSE; OR
  (C) THE LICENSEE OR AN OFFICER, DIRECTOR, OR  CONTROL  PERSON  OF  THE
LICENSEE HAS BEEN CONVICTED OF A CRIME AGAINST THE LAWS OF THIS STATE OR
ANY  OTHER  STATE  OR  OF THE UNITED STATES INVOLVING MORAL TURPITUDE OR
FRAUDULENT OR DISHONEST ACTIONS, OR A  FINAL  JUDGMENT  IN  A  COURT  OF
COMPETENT JURISDICTION HAS BEEN ENTERED AGAINST THE LICENSEE OR AN OFFI-
CER, DIRECTOR, OR CONTROL PERSON OF THE LICENSEE IN A CIVIL ACTION ARIS-
ING FROM FRAUD, MISREPRESENTATION, OR DECEIT.
  2.  (A)  THE  SUPERINTENDENT  MAY, FOR GOOD CAUSE, WITHOUT NOTICE OR A
HEARING, ISSUE AN ORDER SUSPENDING ANY LICENSE ISSUED PURSUANT  TO  THIS
ARTICLE  FOR  A PERIOD NOT EXCEEDING NINETY DAYS, PENDING INVESTIGATION.
"GOOD CAUSE", AS USED IN THIS SUBDIVISION, SHALL  EXIST  ONLY  WHEN  THE
LICENSEE  HAS DEFAULTED OR IS LIKELY TO DEFAULT IN PERFORMING ITS FINAN-
CIAL ENGAGEMENTS OR ENGAGES OR HAS ENGAGED IN DISHONEST  OR  INEQUITABLE
PRACTICES  WHICH  MAY CAUSE SUBSTANTIAL HARM TO THE PERSONS AFFORDED THE
PROTECTION OF THIS ARTICLE.
  (B) THE SUPERINTENDENT MAY, IN HIS OR  HER  SOLE  DISCRETION,  WITHOUT
NOTICE OR A HEARING, ISSUE AN ORDER SUSPENDING ANY LICENSE ISSUED PURSU-
ANT  TO  THE AUTHORITY OF THIS ARTICLE UPON THE FAILURE OF SUCH LICENSEE
TO MAKE ANY PAYMENTS AS REQUIRED BY THIS CHAPTER.
  (C) THE SUPERINTENDENT MAY, IN HIS OR  HER  SOLE  DISCRETION,  WITHOUT
NOTICE OR A HEARING, ISSUE AN ORDER SUSPENDING ANY LICENSE ISSUED PURSU-
ANT TO THE AUTHORITY OF THIS ARTICLE:
  (I)  THIRTY  DAYS AFTER THE DATE THE LICENSEE FAILS TO FILE ANY REPORT
REQUIRED UNDER THIS ARTICLE TO BE FILED BY IT WITH THE SUPERINTENDENT;
  (II) IMMEDIATELY UPON THE LICENSEE FILING A PETITION IN BANKRUPTCY;
  (III) AT LEAST THIRTY DAYS AFTER THE LICENSEE HAS HAD FILED AGAINST IT
A PETITION IN BANKRUPTCY; OR
  (IV) IMMEDIATELY UPON THE RECEIPT BY THE SUPERINTENDENT OF NOTICE THAT
THE SURETY BOND REQUIRED PURSUANT TO SECTION FIVE HUNDRED EIGHTY-EIGHT-C
OF THIS ARTICLE IS NO LONGER IN EFFECT OR THAT THE VALUE  OF  ASSETS  IN
THE PLEDGE ACCOUNT IS LESS THAN THE REQUIRED AMOUNT.
  3.  IF  THE  SUPERINTENDENT  HAS  ISSUED AN ORDER SUSPENDING A LICENSE
ISSUED PURSUANT TO THE AUTHORITY OF THIS ARTICLE PURSUANT  TO  PARAGRAPH

A. 7268--B                         12

(A)  OF  SUBDIVISION TWO OF THIS SECTION, SUCH LICENSE MAY BE REINSTATED
IF THE SUPERINTENDENT DETERMINES, IN HIS OR HER  SOLE  DISCRETION  AFTER
INVESTIGATION,  THAT  GOOD  CAUSE  THEREFOR  DID  NOT EXIST OR NO LONGER
EXISTS.  IF  THE SUPERINTENDENT HAS ISSUED AN ORDER SUSPENDING A LICENSE
ISSUED PURSUANT TO PARAGRAPH (B) OR  (C)  OF  SUBDIVISION  TWO  OF  THIS
SECTION,  SUCH  LICENSE  MAY BE REINSTATED, IF THE SUPERINTENDENT DETER-
MINES, IN HIS OR HER SOLE DISCRETION, THAT THE LICENSEE  HAS  CURED  ALL
DEFICIENCIES  SET  FORTH  IN  SUCH ORDER BY THE CLOSE OF BUSINESS NINETY
DAYS AFTER THE DATE OF SUCH SUSPENSION ORDER, INCLUDING, WITHOUT LIMITA-
TION, MAKING ANY OVERDUE PAYMENT, HAVING ANY  SUCH  BANKRUPTCY  PETITION
DISMISSED,  OR  HAVING  SUCH  BOND REINSTATED OR DEPOSITING ALL REQUIRED
ADDITIONAL ASSETS. OTHERWISE, IN THE CASE OF A  SUSPENSION  PURSUANT  TO
PARAGRAPH  (B)  OR  (C)  OF  SUBDIVISION TWO OF THIS SECTION, UNLESS THE
SUPERINTENDENT HAS, IN HIS OR HER SOLE DISCRETION, EXTENDED SUCH SUSPEN-
SION, ALL LICENSES OF SUCH LICENSEE SHALL BE DEEMED TO BE  AUTOMATICALLY
TERMINATED  BY OPERATION OF LAW AT THE CLOSE OF BUSINESS ON SUCH NINETI-
ETH DAY.
  4. EXCEPT AS PROVIDED FOR IN  SUBDIVISION  TWO  OF  THIS  SECTION,  NO
LICENSE  SHALL BE REVOKED OR SUSPENDED EXCEPT AFTER NOTICE AND A HEARING
THEREON.
  5. WITH THE PRIOR CONSENT OF  THE  SUPERINTENDENT,  ANY  LICENSEE  MAY
SURRENDER ANY LICENSE BY DELIVERING TO THE SUPERINTENDENT WRITTEN NOTICE
THAT  IT  THEREBY  SURRENDERS SUCH LICENSE, BUT SUCH SURRENDER SHALL NOT
AFFECT SUCH LICENSEE'S CIVIL OR CRIMINAL LIABILITY  FOR  ACTS  COMMITTED
PRIOR  TO  SUCH  SURRENDER  OR ITS OBLIGATIONS TO THE SUPERINTENDENT FOR
ASSESSMENTS, FEES, OR ADMINISTRATIVE ACTIONS WITH RESPECT TO THE PERIODS
BEFORE SUCH SURRENDER.
  6. NO REVOCATION, SUSPENSION, TERMINATION, OR SURRENDER OF ANY LICENSE
SHALL IMPAIR  OR  AFFECT  THE  OBLIGATION  OF  ANY  PRE-EXISTING  LAWFUL
CONTRACT BETWEEN THE LICENSEE AND ANY PERSON.
  7.  EVERY  LICENSE  ISSUED  HEREUNDER SHALL REMAIN IN FORCE AND EFFECT
UNTIL THE SAME SHALL  HAVE  BEEN  SURRENDERED,  REVOKED,  SUSPENDED,  OR
TERMINATED  IN  ACCORDANCE  WITH THE PROVISIONS OF THIS ARTICLE, BUT THE
SUPERINTENDENT SHALL HAVE AUTHORITY TO REINSTATE A SUSPENDED LICENSE  OR
TO  ISSUE  A  NEW  LICENSE  TO  A LICENSEE WHOSE LICENSE SHALL HAVE BEEN
REVOKED IF NO FACT OR CONDITION THEN EXISTS WHICH WOULD  HAVE  WARRANTED
THE  SUPERINTENDENT  IN  REFUSING ORIGINALLY TO ISSUE SUCH LICENSE UNDER
THIS ARTICLE.
  8. WHENEVER THE SUPERINTENDENT  SHALL  REVOKE  OR  SUSPEND  A  LICENSE
ISSUED  PURSUANT  TO  THIS ARTICLE, HE OR SHE SHALL FORTHWITH EXECUTE IN
DUPLICATE A WRITTEN ORDER TO THAT EFFECT. THE SUPERINTENDENT SHALL  FILE
ONE COPY OF SUCH ORDER IN THE OFFICE OF THE BANKING DEPARTMENT AND SHALL
FORTHWITH  SERVE THE OTHER COPY UPON THE LICENSEE. ANY SUCH ORDER MAY BE
REVIEWED IN THE MANNER PROVIDED BY ARTICLE SEVENTY-EIGHT  OF  THE  CIVIL
PRACTICE  LAW  AND  RULES.  SUCH APPLICATION FOR REVIEW AS AUTHORIZED BY
THIS SECTION MUST BE MADE WITHIN THIRTY DAYS FROM THE DATE OF SUCH ORDER
OF SUSPENSION OR REVOCATION.
  9. WHENEVER A LICENSE SHALL HAVE TERMINATED IN  ACCORDANCE  WITH  THIS
ARTICLE,  THE  SUPERINTENDENT SHALL NOTIFY THE LICENSEE THAT THE LICENSE
HAS TERMINATED AND THAT THE LICENSEE MAY NOT ENGAGE IN THE BUSINESS OF A
DEBT SETTLEMENT COMPANY IN THIS STATE.
  S 588-I. ADVERTISING AND MARKETING PRACTICES.  1.  A  DEBT  SETTLEMENT
COMPANY  SHALL  NOT,  EXPRESSLY  OR  BY  IMPLICATION, MAKE ANY UNFAIR OR
DECEPTIVE REPRESENTATIONS, OR ANY OMISSIONS OF MATERIAL FACTS, IN ANY OF
ITS ADVERTISING OR MARKETING COMMUNICATIONS CONCERNING  DEBT  SETTLEMENT
SERVICES.

A. 7268--B                         13

  2.  ALL  ADVERTISING  AND  MARKETING  COMMUNICATIONS  CONCERNING  DEBT
SETTLEMENT SERVICES SHALL DISCLOSE THE FOLLOWING INFORMATION CLEARLY AND
CONSPICUOUSLY:  "DEBT SETTLEMENT SERVICES ARE NOT APPROPRIATE FOR EVERY-
ONE. FAILURE TO PAY YOUR MONTHLY BILLS IN A TIMELY MANNER WILL RESULT IN
INCREASED  BALANCES  AND WILL HARM YOUR CREDIT RATING. NOT ALL CREDITORS
WILL AGREE TO REDUCE THE AMOUNT YOU OWE, AND THEY MAY PURSUE COLLECTION,
INCLUDING LAWSUITS."
  3. ALL ADVERTISING AND MARKETING COMMUNICATIONS  OF  A  LICENSED  DEBT
SETTLEMENT  COMPANY  CONCERNING  DEBT SETTLEMENT SERVICES SHALL INDICATE
THAT THE DEBT SETTLEMENT COMPANY IS LICENSED BY THE  BANKING  DEPARTMENT
AND  SHALL  CONTAIN  THE NAME AND OFFICE ADDRESS OF SUCH DEBT SETTLEMENT
COMPANY, WHICH SHALL CONFORM TO A NAME AND ADDRESS ON  RECORD  WITH  THE
BANKING DEPARTMENT.
  S  588-J.  INDIVIDUALIZED  FINANCIAL  ANALYSIS; STATEMENT. 1. PRIOR TO
ENTERING INTO A DEBT SETTLEMENT SERVICES AGREEMENT,  A  DEBT  SETTLEMENT
COMPANY  SHALL PREPARE AND PROVIDE TO THE DEBTOR IN WRITING AND RETAIN A
COPY OF:
  (A) AN INDIVIDUALIZED FINANCIAL ANALYSIS, INCLUDING A LISTING  OF  THE
DEBTOR'S INCOME, EXPENSES, AND DEBTS; AND
  (B) A STATEMENT CONTAINING:
  (I)  A  DESCRIPTION  OF THE SERVICES TO BE PROVIDED UNDER THE PROPOSED
DEBT SETTLEMENT SERVICES AGREEMENT;
  (II) A GOOD FAITH ESTIMATE OF THE TIME IT WILL TAKE  TO  COMPLETE  ALL
STEPS  NECESSARY  FOR  A  SETTLEMENT  OF  EACH  DEBT  INCLUDED UNDER THE
PROPOSED DEBT SETTLEMENT SERVICES AGREEMENT;
  (III) THE TOTAL AMOUNT OF DEBT OWED TO EACH  CREDITOR  INCLUDED  UNDER
THE PROPOSED DEBT SETTLEMENT SERVICES AGREEMENT;
  (IV)  THE  TOTAL AMOUNT OF MONEY ESTIMATED TO BE NECESSARY TO COMPLETE
ALL STEPS NECESSARY FOR A SETTLEMENT OF EACH  DEBT  INCLUDED  UNDER  THE
PROPOSED DEBT SETTLEMENT SERVICES AGREEMENT; AND
  (V)  THE  MONTHLY  TARGETED  AMOUNT OF MONEY NECESSARY TO COMPLETE ALL
STEPS NECESSARY FOR  A  SETTLEMENT  OF  EACH  DEBT  INCLUDED  UNDER  THE
PROPOSED DEBT SETTLEMENT SERVICES AGREEMENT.
  2.  A  DEBT  SETTLEMENT COMPANY SHALL NOT ENTER INTO A DEBT SETTLEMENT
SERVICES AGREEMENT UNLESS IT MAKES WRITTEN DETERMINATIONS, SUPPORTED  BY
THE FINANCIAL ANALYSIS, THAT:
  (A)  THE  DEBTOR CAN REASONABLY MEET THE REQUIREMENTS OF SUCH PROPOSED
DEBT SETTLEMENT SERVICES AGREEMENT, INCLUDING THE FEES AND  THE  SAVINGS
GOALS; AND
  (B)  SUCH PROPOSED DEBT SETTLEMENT SERVICES AGREEMENT WILL BE SUITABLE
FOR THE DEBTOR AT THE TIME IT IS TO BE SIGNED.
  S 588-K. REQUIRED PRE-AGREEMENT DISCLOSURES AND  WARNINGS.  1.  BEFORE
THE  DEBTOR SIGNS A DEBT SETTLEMENT SERVICES AGREEMENT, THE DEBT SETTLE-
MENT COMPANY SHALL PROVIDE AN ORAL AND WRITTEN NOTICE TO THE DEBTOR THAT
CLEARLY AND CONSPICUOUSLY DISCLOSES ALL OF THE FOLLOWING:
  (A) DEBT SETTLEMENT SERVICES MAY NOT BE SUITABLE FOR ALL DEBTORS;
  (B) USING DEBT SETTLEMENT SERVICES LIKELY WILL HARM THE DEBTOR'S CRED-
IT HISTORY, CREDIT RATING, AND CREDIT SCORE;
  (C) USING DEBT SETTLEMENT SERVICES DOES NOT STOP  CREDITOR  COLLECTION
ACTIVITY, INCLUDING CREDITOR LAWSUITS AND GARNISHMENTS;
  (D) NOT ALL CREDITORS WILL ACCEPT A REDUCTION IN THE BALANCE, INTEREST
RATE, OR FEES A DEBTOR OWES;
  (E)  THE DEBTOR SHOULD INQUIRE ABOUT OTHER MEANS OF DEALING WITH DEBT,
INCLUDING BUT NOT LIMITED TO BUDGET PLANNING AND BANKRUPTCY;
  (F) THE  DEBTOR  REMAINS  OBLIGATED  TO  MAKE  PERIODIC  OR  SCHEDULED
PAYMENTS TO CREDITORS WHILE PARTICIPATING IN A DEBT SETTLEMENT PROGRAM;

A. 7268--B                         14

  (G)  THE  FAILURE TO MAKE PERIODIC OR SCHEDULED PAYMENTS TO A CREDITOR
IS LIKELY TO:
  (I)  HARM  THE  DEBTOR'S  CREDIT HISTORY, CREDIT RATING, AND/OR CREDIT
SCORE;
  (II) LEAD THE CREDITOR TO INCREASE LAWFUL COLLECTION ACTIVITY, INCLUD-
ING LITIGATION, GARNISHMENT OF THE DEBTOR'S WAGES, AND JUDGMENT LIENS ON
THE DEBTOR'S PROPERTY; AND
  (III) LEAD TO THE IMPOSITION BY THE CREDITOR OF INTEREST CHARGES, LATE
FEES, AND OTHER PENALTY FEES, INCREASING THE AMOUNT OWED BY THE  DEBTOR;
AND
  (H) THE DEBTOR MAY BE REQUIRED TO PAY TAXES ON ANY AMOUNT OF DEBT THAT
IS FORGIVEN.
  2.  THE  WRITTEN  NOTICE  REQUIRED  BY SUBDIVISION ONE OF THIS SECTION
SHALL BE ENTITLED "DEBTOR NOTICE AND RIGHTS FORM".
  3. PRIOR TO SIGNING A DEBT SETTLEMENT SERVICES AGREEMENT,  THE  DEBTOR
SHALL  SIGN  AND  DATE  AN  ACKNOWLEDGMENT FORM AT THE END OF THE DEBTOR
NOTICE AND RIGHTS FORM.  THE ACKNOWLEDGMENT FORM SHALL  STATE:  "I,  THE
DEBTOR,  HAVE  RECEIVED  FROM  THE DEBT SETTLEMENT COMPANY A COPY OF THE
FORM ENTITLED DEBTOR NOTICE AND RIGHTS FORM." THE DEBT SETTLEMENT COMPA-
NY OR ITS REPRESENTATIVE SHALL ALSO SIGN  AND  DATE  THE  ACKNOWLEDGMENT
FORM,  WHICH  SHALL  INCLUDE THE NAME AND ADDRESS OF THE DEBT SETTLEMENT
COMPANY. THE ACKNOWLEDGMENT FORM SHALL BE IN DUPLICATE AND  INCORPORATED
INTO THE DEBTOR NOTICE AND RIGHTS FORM. THE ORIGINAL ACKNOWLEDGMENT FORM
SHALL BE RETAINED BY THE DEBT SETTLEMENT COMPANY, AND THE DUPLICATE COPY
SHALL BE GIVEN TO THE DEBTOR.
  4.  THE REQUIREMENTS OF THIS SECTION ARE SATISFIED IF THE DEBT SETTLE-
MENT COMPANY GIVES THE DEBTOR THE FOLLOWING WARNING VERBATIM, BOTH ORAL-
LY AND IN WRITING, WITH THE CAPTION "DEBTOR NOTICE AND RIGHTS  FORM"  IN
AT  LEAST  TWENTY-EIGHT-POINT FONT AND THE REMAINING PORTION IN AT LEAST
FOURTEEN-POINT FONT, BEFORE THE DEBTOR SIGNS A DEBT SETTLEMENT  SERVICES
AGREEMENT:

                     "DEBTOR NOTICE AND RIGHTS FORM
                                 CAUTION
  USING  DEBT  SETTLEMENT SERVICES WILL LIKELY HARM YOUR CREDIT HISTORY,
CREDIT RATING, AND CREDIT SCORE.
  WE CANNOT GUARANTEE THAT YOU WILL  SUCCESSFULLY  REDUCE  OR  ELIMINATE
YOUR DEBT.
  YOU  REMAIN OBLIGATED TO MAKE PAYMENTS TO YOUR CREDITORS.  IF YOU STOP
PAYING YOUR CREDITORS, THERE IS A STRONG LIKELIHOOD SOME OR ALL  OF  THE
FOLLOWING MAY HAPPEN:
  - CREDITORS MAY STILL CONTACT YOU AND TRY TO COLLECT.
  - CREDITORS MAY STILL SUE YOU FOR THE MONEY YOU OWE.
  - YOUR WAGES OR BANK ACCOUNT MAY STILL BE GARNISHED.
  - LIENS MAY STILL BE PLACED ON YOUR PROPERTY.
  -  YOUR CREDIT HISTORY, CREDIT RATING, AND/OR CREDIT SCORE LIKELY WILL
BE HARMED.
  - THE AMOUNT OF MONEY YOU OWE MAY INCREASE DUE TO CREDITOR  IMPOSITION
OF INTEREST CHARGES, LATE FEES, AND OTHER PENALTY FEES.
  - NOT ALL CREDITORS WILL AGREE TO ACCEPT A BALANCE REDUCTION.
  IF  WE  DO  SETTLE  YOUR DEBT, YOU MAY BE REQUIRED TO PAY TAXES ON THE
AMOUNT FORGIVEN.
  DEBT SETTLEMENT SERVICES  ARE  NOT  RIGHT  FOR  EVERYONE.  YOU  SHOULD
CONSIDER ALL YOUR OPTIONS FOR ADDRESSING YOUR DEBT, SUCH AS BUDGET PLAN-
NING OR A BANKRUPTCY FILING.
  YOUR RIGHT TO CANCEL

A. 7268--B                         15

  IF  YOU  SIGN A DEBT SETTLEMENT SERVICES AGREEMENT, YOU HAVE THE RIGHT
TO CANCEL AT ANY TIME AND RECEIVE A FULL REFUND OF ALL UNEARNED FEES YOU
HAVE PAID TO THE DEBT SETTLEMENT COMPANY AND ALL FUNDS  PLACED  IN  YOUR
DEBTOR  SETTLEMENT  ACCOUNT THAT HAVE NOT BEEN PAID TO ANY CREDITORS. IF
YOU  CANCEL  WITHIN  NINETY DAYS OF SIGNING THE DEBT SETTLEMENT SERVICES
AGREEMENT YOU ALSO HAVE THE RIGHT  TO  RECEIVE  A  FULL  REFUND  OF  ANY
ENROLLMENT FEES YOU HAVE PAID.
  ACKNOWLEDGMENT BY DEBTOR
  I,  THE  DEBTOR, HAVE RECEIVED FROM THE DEBT SETTLEMENT COMPANY A COPY
OF THE FORM ENTITLED DEBTOR NOTICE AND RIGHTS FORM."
  S 588-L. DEBT SETTLEMENT SERVICES AGREEMENTS.  1.  A  DEBT  SETTLEMENT
COMPANY SHALL NOT PROVIDE DEBT SETTLEMENT SERVICES TO A DEBTOR WITHOUT A
WRITTEN  DEBT SETTLEMENT SERVICES AGREEMENT SIGNED AND DATED BY BOTH THE
DEBTOR AND THE DEBT SETTLEMENT COMPANY.
  2. ANY DEBT SETTLEMENT SERVICES AGREEMENT ENTERED INTO IN VIOLATION OF
THE PROVISIONS OF THIS SECTION IS VOID.
  3. EACH DEBT SETTLEMENT COMPANY SHALL SUBMIT TO THE BANKING DEPARTMENT
ANY FORM OF DEBT SETTLEMENT SERVICES AGREEMENT IT INTENDS TO USE.
  4. A DEBT SETTLEMENT SERVICES AGREEMENT  SHALL  DISCLOSE  ALL  OF  THE
FOLLOWING CLEARLY AND CONSPICUOUSLY:
  (A) THE NAME AND ADDRESS OF THE DEBTOR;
  (B) THE DATE OF EXECUTION OF THE DEBT SETTLEMENT SERVICES AGREEMENT;
  (C) THE LEGAL NAME OF THE DEBT SETTLEMENT COMPANY, INCLUDING ANY OTHER
BUSINESS NAMES USED IN THIS STATE BY THE DEBT SETTLEMENT COMPANY;
  (D)  THE COMPLETE STREET ADDRESS OF THE DEBT SETTLEMENT COMPANY, WHICH
SHALL CONFORM TO AN ADDRESS ON RECORD WITH THE BANKING DEPARTMENT;
  (E) THE LICENSE NUMBER OF THE PRINCIPAL OFFICE AND, IF APPLICABLE,  OF
THE BRANCH OFFICE UNDER WHICH THE DEBT SETTLEMENT COMPANY IS LICENSED IN
THIS STATE;
  (F)  A TOLL-FREE TELEPHONE NUMBER AT WHICH THE DEBTOR MAY SPEAK WITH A
REPRESENTATIVE OF THE DEBT SETTLEMENT  COMPANY  DURING  NORMAL  BUSINESS
HOURS;
  (G)  A  COMPLETE LIST OF THE DEBTOR'S ACCOUNTS, DEBTS, AND OBLIGATIONS
COVERED BY THE DEBT SETTLEMENT SERVICES AGREEMENT, INCLUDING THE NAME OF
EACH CREDITOR AND THE PRINCIPAL AMOUNT OF EACH DEBT;
  (H) A DESCRIPTION OF THE SERVICES TO BE PROVIDED BY THE  DEBT  SETTLE-
MENT  COMPANY, INCLUDING THE EXPECTED TIME FRAME FOR SETTLEMENT FOR EACH
ACCOUNT, DEBT, OR OBLIGATION INCLUDED IN PARAGRAPH (G) OF THIS  SUBDIVI-
SION;
  (I)  AN  ITEMIZED  LIST  OF ALL FEES, INCLUDING ANY ENROLLMENT FEE AND
SETTLEMENT FEES TO BE PAID BY THE DEBTOR TO THE DEBT SETTLEMENT COMPANY,
AND THE DATE, APPROXIMATE DATE, OR CIRCUMSTANCES UNDER  WHICH  EACH  FEE
WILL BECOME DUE;
  (J)  A  GOOD  FAITH  ESTIMATE  OF  THE  TOTAL AMOUNT OF ALL FEES TO BE
COLLECTED BY THE  DEBT  SETTLEMENT  COMPANY  FROM  THE  DEBTOR  FOR  THE
PROVISION OF DEBT SETTLEMENT SERVICES UNDER THE DEBT SETTLEMENT SERVICES
AGREEMENT;
  (K) A STATEMENT OF THE PROPOSED SAVINGS GOALS FOR THE DEBTOR, STATING:
  (I) THE AMOUNT TO BE SAVED PER MONTH;
  (II) THE TIME PERIOD OVER WHICH THE SAVINGS GOALS EXTEND;
  (III)  THE  AMOUNT  OF  MONEY THE DEBTOR MUST SAVE BEFORE A SETTLEMENT
OFFER WILL BE MADE TO EACH OF THE DEBTOR'S CREDITORS; AND
  (IV) THE TOTAL AMOUNT OF THE SAVINGS EXPECTED TO BE PAID BY THE DEBTOR
PURSUANT TO THE TERMS OF THE DEBT SETTLEMENT SERVICES AGREEMENT;
  (L) THE WRITTEN INDIVIDUALIZED FINANCIAL ANALYSIS REQUIRED BY  SECTION
FIVE HUNDRED EIGHTY-EIGHT-J OF THIS ARTICLE;

A. 7268--B                         16

  (M) A WRITTEN NOTICE TO THE DEBTOR STATING:
  (I)  THAT THE DEBTOR MAY CANCEL THE DEBT SETTLEMENT SERVICES AGREEMENT
AT ANY TIME; AND
  (II) THAT UPON SUCH CANCELLATION:
  (A) ALL POWERS OF ATTORNEY GRANTED TO THE DEBT SETTLEMENT  COMPANY  BY
THE DEBTOR SHALL BE CONSIDERED REVOKED AND VOIDED; AND
  (B)  THE  DEBTOR MAY BE ENTITLED TO A REFUND. THE TERMS OF SUCH REFUND
SHALL ALSO BE STATED AND SHALL BE CONSISTENT WITH  THE  REQUIREMENTS  OF
SECTION FIVE HUNDRED EIGHTY-EIGHT-O OF THIS ARTICLE.
  (N)  A  FORM THE DEBTOR MAY USE TO CANCEL THE DEBT SETTLEMENT SERVICES
AGREEMENT  PURSUANT  TO  THE  PROVISIONS   OF   SECTION   FIVE   HUNDRED
EIGHTY-EIGHT-O  OF  THIS  ARTICLE.  THE  FORM SHALL DISCLOSE CLEARLY AND
CONSPICUOUSLY HOW THE DEBTOR CAN CANCEL  THE  DEBT  SETTLEMENT  SERVICES
AGREEMENT,  INCLUDING APPLICABLE ADDRESSES, TELEPHONE NUMBERS, FACSIMILE
NUMBERS, AND ELECTRONIC MAIL ADDRESSES THE DEBTOR CAN USE TO CANCEL  THE
DEBT SETTLEMENT SERVICES AGREEMENT;
  (O)  A  CLEAR AND CONSPICUOUS NOTICE TO THE DEBTOR THAT THE DEBTOR MAY
CONTACT THE DEPARTMENT WITH ANY QUESTIONS OR  COMPLAINTS  REGARDING  THE
DEBT  SETTLEMENT  COMPANY  ALONG  WITH THE ADDRESS, TELEPHONE NUMBER AND
INTERNET WEBSITE OF THE DEPARTMENT.
  5. (A) A DEBT SETTLEMENT SERVICES  AGREEMENT  MAY  CONFER  ON  A  DEBT
SETTLEMENT  COMPANY  A POWER OF ATTORNEY TO SETTLE THE DEBTOR'S DEBT FOR
NO MORE THAN FIFTY PERCENT OF THE  PRINCIPAL  AMOUNT  OF  THE  DEBT.  AN
AGREEMENT  MAY  NOT CONFER A POWER OF ATTORNEY TO SETTLE A DEBT FOR MORE
THAN FIFTY PERCENT OF THAT AMOUNT, BUT MAY CONFER A POWER OF ATTORNEY TO
NEGOTIATE WITH CREDITORS OF THE DEBTOR ON BEHALF OF THE DEBTOR.  A  DEBT
SETTLEMENT  SERVICES  AGREEMENT  MUST  PROVIDE  THAT THE DEBT SETTLEMENT
COMPANY WILL OBTAIN THE ASSENT  OF  THE  DEBTOR  AFTER  A  CREDITOR  HAS
ASSENTED  TO  A  SETTLEMENT FOR MORE THAN FIFTY PERCENT OF THE PRINCIPAL
AMOUNT OF THE DEBT.
  (B) A DEBT SETTLEMENT SERVICES AGREEMENT MAY NOT PROVIDE FOR  APPLICA-
TION  OF  THE  LAW  OF ANY JURISDICTION OTHER THAN THE UNITED STATES AND
THIS STATE.
  6. IF A DEBT SETTLEMENT COMPANY COMMUNICATES WITH A  DEBTOR  PRIMARILY
IN A LANGUAGE OTHER THAN ENGLISH, THEN THE DEBT SETTLEMENT COMPANY SHALL
FURNISH  TO  THE  DEBTOR A WRITTEN TRANSLATION IN THAT OTHER LANGUAGE OF
ALL THE DISCLOSURES AND DOCUMENTS REQUIRED BY THIS ARTICLE.
  S 588-M. FEES. 1. THE TYPES OF FEES THAT A DEBT SETTLEMENT COMPANY MAY
CHARGE A DEBTOR ARE THE FOLLOWING:
  (A) ENROLLMENT FEES; AND
  (B) SETTLEMENT FEES.
  2. ALL FEE TYPES NOT INCLUDED UNDER SUBDIVISION ONE  OF  THIS  SECTION
ARE PROHIBITED, INCLUDING MAINTENANCE FEES.
  3. THE AMOUNT OF AN ENROLLMENT FEE CHARGED BY A DEBT SETTLEMENT COMPA-
NY  SHALL  NOT  EXCEED  FIFTY DOLLARS OR SUCH OTHER AMOUNT AS SET BY THE
SUPERINTENDENT.
  4. THE AMOUNT OF THE SETTLEMENT  FEE  CHARGED  BY  A  DEBT  SETTLEMENT
COMPANY  WITH RESPECT TO EACH DEBT COVERED BY A DEBT SETTLEMENT SERVICES
AGREEMENT SHALL NOT EXCEED THE LESSER OF:
  (A) THE AMOUNT THAT IS REASONABLE AND COMMENSURATE TO THE DEBT SETTLE-
MENT SERVICES PROVIDED TO THE DEBTOR; AND
  (B) THE AMOUNT THAT IS TWENTY PERCENT OF THE DIFFERENCE BETWEEN:
  (I) THE PRINCIPAL AMOUNT OF THE DEBT; AND
  (II) THE AMOUNT:
  (A) PAID BY THE DEBT SETTLEMENT COMPANY TO THE  CREDITOR  PURSUANT  TO
THE  SETTLEMENT  NEGOTIATED  BY THE DEBT SETTLEMENT COMPANY ON BEHALF OF

A. 7268--B                         17

THE DEBTOR AS FULL AND COMPLETE SATISFACTION  OF  THE  CREDITOR'S  CLAIM
WITH REGARD TO THAT DEBT; OR
  (B)  NEGOTIATED  BY THE DEBT SETTLEMENT COMPANY AND PAID BY THE DEBTOR
TO THE CREDITOR PURSUANT TO A SETTLEMENT NEGOTIATED BY THE DEBT  SETTLE-
MENT  COMPANY  ON BEHALF OF THE DEBTOR AS FULL AND COMPLETE SATISFACTION
OF THE CREDITOR'S CLAIM WITH REGARD TO THAT DEBT.
  5. A DEBT SETTLEMENT COMPANY SHALL NOT COLLECT ANY SETTLEMENT FEE FROM
A DEBTOR UNTIL:
  (A) THE CREDITOR ENTERS INTO A LEGALLY ENFORCEABLE AGREEMENT WITH  THE
DEBTOR  TO ACCEPT FUNDS IN A SPECIFIC DOLLAR AMOUNT AS FULL AND COMPLETE
SATISFACTION OF THE CREDITOR'S CLAIM WITH REGARD TO THAT DEBT; AND
  (B) THOSE FUNDS ARE PROVIDED TO THE CREDITOR:
  (I) BY THE DEBT SETTLEMENT COMPANY ON BEHALF OF THE DEBTOR; OR
  (II) DIRECTLY BY THE DEBTOR PURSUANT TO A SETTLEMENT NEGOTIATED BY THE
DEBT SETTLEMENT COMPANY.
  6. IT SHALL BE UNLAWFUL TO SPLIT  OR  DIVIDE  THE  PROVISION  OF  DEBT
SETTLEMENT  SERVICES  TO A DEBTOR INTO SEPARATE DEBT SETTLEMENT SERVICES
AGREEMENTS FOR THE PURPOSE  OF  COLLECTING  ADDITIONAL  FEES  FROM  SUCH
DEBTOR.
  S  588-N.  DEBTOR  SETTLEMENT  ACCOUNTS; MONTHLY ACCOUNTING. 1. A DEBT
SETTLEMENT COMPANY THAT RECEIVES FUNDS FROM  A  DEBTOR  SHALL  HOLD  ALL
FUNDS  RECEIVED FOR A DEBTOR SETTLEMENT ACCOUNT IN A PROPERLY DESIGNATED
BANK ACCOUNT IN A FEDERALLY INSURED DEPOSITORY INSTITUTION.
  (A) SUCH FUNDS SHALL:
  (I) CONSTITUTE TRUST FUNDS OWNED BY THE DEBTOR  FROM  WHOM  THEY  WERE
RECEIVED;
  (II)  REMAIN  THE  PROPERTY  OF  SUCH DEBTOR UNTIL THE DEBT SETTLEMENT
COMPANY DISBURSES THE FUNDS TO A CREDITOR ON BEHALF OF SUCH DEBTOR;
  (III) BE KEPT SEPARATE AND APART AT ALL TIMES FROM FUNDS BELONGING  TO
THE  DEBT  SETTLEMENT  COMPANY  OR  ANY  OF  ITS OFFICERS, EMPLOYEES, OR
AGENTS; AND
  (IV) BE DEPOSITED IN SUCH BANK ACCOUNT NOT LATER THAN THE END  OF  THE
BUSINESS  DAY  FOLLOWING  RECEIPT  BY THE DEBT SETTLEMENT COMPANY OR ITS
AGENT.
  (B) A DEBT SETTLEMENT COMPANY OR ITS AGENT THAT MAINTAINS ONE OR  MORE
DEBTOR SETTLEMENT ACCOUNTS SHALL OBTAIN AND PRESERVE A WRITTEN AGREEMENT
FROM  EACH  BANK  IN  WHICH ANY SUCH ACCOUNT IS MAINTAINED. SUCH WRITTEN
AGREEMENT SHALL EXPRESSLY PROVIDE THAT THE FUNDS IN SUCH DEBTOR  SETTLE-
MENT  ACCOUNT  SHALL  BE SUBJECT TO NO RIGHT, CHARGE, SECURITY INTEREST,
LIEN, OR CLAIM OF ANY KIND IN FAVOR OF SUCH BANK OR ANY PERSON  CLAIMING
THROUGH SUCH BANK.
  (C)  ANY INTEREST EARNED ON A DEBTOR SETTLEMENT ACCOUNT SHALL BE CRED-
ITED TO THE DEBTOR. IF THE FUNDS OF  MULTIPLE  DEBTORS  ARE  KEPT  IN  A
SINGLE  INTEREST EARNING BANK ACCOUNT, THEN THE INTEREST EARNED SHALL BE
DEPOSITED PRO RATA AMONG THE DEBTORS WHOSE FUNDS ARE IN THE ACCOUNT.
  (D) A DEBT SETTLEMENT COMPANY MAY NOT HOLD FUNDS RECEIVED FOR A DEBTOR
SETTLEMENT ACCOUNT IN AN ACCOUNT ADMINISTERED BY A PERSON THAT GIVES  OR
ACCEPTS  ANY  MONEY  OR  OTHER COMPENSATION IN EXCHANGE FOR REFERRALS OF
BUSINESS INVOLVING THE DEBT SETTLEMENT COMPANY.
  2. A DEBT SETTLEMENT COMPANY SHALL, NO LESS THAN MONTHLY, PROVIDE EACH
DEBTOR WITH WHICH IT HAS A DEBT SETTLEMENT SERVICES AGREEMENT  A  STATE-
MENT  OF FEES PAID, SETTLEMENTS COMPLETED, REMAINING DEBTS AND, IF FUNDS
ARE HELD IN A BANK ACCOUNT PURSUANT TO SUBDIVISION ONE OF THIS  SECTION,
ACCOUNT BALANCES.
  3.  NOTHING  IN  THIS  ARTICLE  REQUIRES THE ESTABLISHMENT OF A DEBTOR
SETTLEMENT ACCOUNT IF NO DEBTOR FUNDS  OTHER  THAN  ENROLLMENT  FEES  OR

A. 7268--B                         18

EARNED  SETTLEMENT  FEES  ARE  HELD  OR  CONTROLLED BY A DEBT SETTLEMENT
COMPANY.
  S  588-O. CANCELLATION OF DEBT SETTLEMENT SERVICES AGREEMENT; RIGHT TO
REFUNDS. 1.  A DEBTOR MAY CANCEL A DEBT SETTLEMENT SERVICES AGREEMENT AT
ANY TIME UNTIL AFTER THE DEBT SETTLEMENT  COMPANY  HAS  FULLY  PERFORMED
EACH  SERVICE  THE  DEBT  SETTLEMENT  COMPANY  CONTRACTED  TO PERFORM OR
REPRESENTED THAT IT WOULD PERFORM.
  2. IF A DEBTOR CANCELS A DEBT SETTLEMENT SERVICES AGREEMENT NOT  LATER
THAN  NINETY DAYS AFTER THE DATE OF THE EXECUTION OF THE DEBT SETTLEMENT
SERVICES AGREEMENT OR AT ANY TIME UPON A VIOLATION  OF  A  PROVISION  OF
THIS ARTICLE BY THE DEBT SETTLEMENT COMPANY, THE DEBT SETTLEMENT COMPANY
SHALL REFUND TO THE DEBTOR:
  (A)  ALL  FEES PAID TO THE DEBT SETTLEMENT COMPANY BY THE DEBTOR, WITH
THE EXCEPTION OF ANY EARNED SETTLEMENT FEE; AND
  (B) ALL FUNDS PROVIDED BY THE DEBTOR TO THE  DEBT  SETTLEMENT  COMPANY
THAT:
  (I) HAVE ACCUMULATED IN A DEBTOR SETTLEMENT ACCOUNT; AND
  (II) THE DEBT SETTLEMENT COMPANY HAS NOT DISBURSED TO CREDITORS.
  3. IF A DEBTOR CANCELS A DEBT SETTLEMENT SERVICES AGREEMENT LATER THAN
NINETY  DAYS  AFTER  THE  DATE  OF  THE EXECUTION OF THE DEBT SETTLEMENT
SERVICES AGREEMENT AND FOR ANY REASON OTHER THAN FOR A  VIOLATION  OF  A
PROVISION  OF  THIS  ARTICLE  BY  THE  DEBT SETTLEMENT COMPANY, THE DEBT
SETTLEMENT COMPANY SHALL REFUND TO THE DEBTOR:
  (A) ALL FEES PAID TO THE DEBT SETTLEMENT COMPANY BY THE  DEBTOR,  WITH
THE EXCEPTION OF ANY EARNED SETTLEMENT FEE AND ANY ENROLLMENT FEE; AND
  (B)  ALL  FUNDS  PROVIDED BY THE DEBTOR TO THE DEBT SETTLEMENT COMPANY
THAT:
  (I) HAVE ACCUMULATED IN A DEBTOR SETTLEMENT ACCOUNT; AND
  (II) THE DEBT SETTLEMENT COMPANY HAS NOT DISBURSED TO CREDITORS.
  4. A DEBT SETTLEMENT COMPANY SHALL MAKE ANY REFUND REQUIRED UNDER THIS
SECTION WITHIN FIVE BUSINESS DAYS AFTER RECEIPT  OF  WRITTEN  NOTICE  OF
CANCELLATION,  AND  SHALL  INCLUDE  WITH SUCH REFUND A FULL STATEMENT OF
ACCOUNT SHOWING:
  (A) THE FEES RECEIVED BY THE DEBT SETTLEMENT COMPANY FROM THE DEBTOR;
  (B) THE FEES REFUNDED TO THE DEBTOR BY THE DEBT SETTLEMENT COMPANY;
  (C) THE PAYMENTS MADE BY THE DEBT SETTLEMENT COMPANY TO  CREDITORS  ON
BEHALF OF THE DEBTOR;
  (D) THE SETTLEMENT FEES EARNED, IF ANY, BY THE DEBT SETTLEMENT COMPANY
BY SETTLING DEBT ON BEHALF OF THE DEBTOR;
  (E)  THE  SAVINGS  OF  THE  DEBTOR HELD BY THE DEBT SETTLEMENT COMPANY
IMMEDIATELY PRIOR TO SUCH REFUND; AND
  (F) THE SAVINGS OF THE DEBTOR REFUNDED  TO  THE  DEBTOR  BY  THE  DEBT
SETTLEMENT COMPANY.
  5.  UPON  CANCELLATION  OF A DEBT SETTLEMENT SERVICES AGREEMENT BY THE
DEBTOR:
  (A) ALL POWERS OF ATTORNEY AND DIRECT DEBIT AUTHORIZATIONS GRANTED  TO
THE  DEBT  SETTLEMENT  COMPANY BY THE DEBTOR SHALL BE CONSIDERED REVOKED
AND VOIDED; AND
  (B) THE DEBT SETTLEMENT COMPANY  SHALL  IMMEDIATELY  TAKE  ANY  ACTION
NECESSARY TO REFLECT CANCELLATION OF THE DEBT SETTLEMENT SERVICES AGREE-
MENT, INCLUDING BUT NOT LIMITED TO NOTIFYING THE RECIPIENT OF ANY DIRECT
DEBIT AUTHORIZATION.
  6.  UPON THE CANCELLATION OF A DEBT SETTLEMENT SERVICES AGREEMENT, THE
DEBT SETTLEMENT COMPANY SHALL  PROVIDE  TIMELY  WRITTEN  NOTICE  OF  THE
CANCELLATION  OF  SUCH  AGREEMENT TO EACH OF THE CREDITORS WITH WHOM THE

A. 7268--B                         19

DEBT SETTLEMENT COMPANY HAS HAD ANY PRIOR COMMUNICATION ON BEHALF OF THE
DEBTOR IN CONNECTION WITH THE PROVISION OF ANY DEBT SETTLEMENT SERVICES.
  S 588-P. OBLIGATION OF GOOD FAITH. A DEBT SETTLEMENT COMPANY SHALL ACT
IN GOOD FAITH IN ALL MATTERS UNDER THIS ARTICLE.
  S  588-Q.  PROHIBITED ACTIVITIES. 1. NO PERSON, EXCEPT A LICENSEE, MAY
MAKE ANY REPRESENTATION, DIRECTLY OR INDIRECTLY, ORALLY  OR  IN  WRITING
THAT HE, SHE, OR IT IS LICENSED UNDER THIS ARTICLE.
  2.  NO  PERSON,  OTHER  THAN  A  LICENSEE  OR A PERSON EXEMPT FROM THE
LICENSING REQUIREMENTS OF  THIS  ARTICLE,  SHALL  USE  THE  TITLE  "DEBT
SETTLEMENT  COMPANY"  OR THE TERMS "DEBT SETTLEMENT" OR "DEBT SETTLEMENT
SERVICES" IN ANY ADVERTISING, MARKETING COMMUNICATION, BUSINESS CARD, OR
LETTERHEAD.
  3. A DEBT SETTLEMENT COMPANY SHALL NOT DO ANY OF THE FOLLOWING:
  (A) CHARGE OR COLLECT FROM A DEBTOR ANY FEE NOT PERMITTED  BY,  IN  AN
AMOUNT IN EXCESS OF THE MAXIMUM AMOUNT PERMITTED BY, OR AT A TIME EARLI-
ER  THAN  PERMITTED BY SECTION FIVE HUNDRED EIGHTY-EIGHT-M OF THIS ARTI-
CLE;
  (B) INCLUDE IN A DEBT SETTLEMENT SERVICES AGREEMENT ANY SECURED DEBT;
  (C) ADVISE OR REPRESENT, EXPRESSLY OR  BY  IMPLICATION,  THAT  DEBTORS
SHOULD STOP MAKING PAYMENTS TO THEIR CREDITORS;
  (D)  ADVISE  OR  REPRESENT,  EXPRESSLY OR BY IMPLICATION, THAT DEBTORS
SHOULD STOP COMMUNICATING WITH THEIR CREDITORS;
  (E) ENGAGE IN ANY PRACTICE THAT PROHIBITS OR LIMITS THE DEBTOR OR  ANY
CREDITOR FROM COMMUNICATION DIRECTLY WITH ONE ANOTHER;
  (F)  CHANGE THE MAILING ADDRESS ON ANY OF A DEBTOR'S STATEMENTS FROM A
CREDITOR;
  (G) MAKE LOANS OR OFFER CREDIT OR SOLICIT OR ACCEPT  ANY  NOTE,  MORT-
GAGE,  OR  NEGOTIABLE INSTRUMENT OTHER THAN A CHECK SIGNED BY THE DEBTOR
AND DATED NO LATER THAN THE DATE OF SIGNATURE;
  (H) TAKE ANY CONFESSION OF JUDGMENT OR POWER OF  ATTORNEY  TO  CONFESS
JUDGMENT  AGAINST THE DEBTOR OR APPEAR AS THE DEBTOR OR ON BEHALF OF THE
DEBTOR IN ANY JUDICIAL, ADMINISTRATIVE, OR OTHER ACTION OR PROCEEDING;
  (I) TAKE ANY RELEASE OR WAIVER OF ANY OBLIGATION TO  BE  PERFORMED  ON
THE PART OF THE DEBT SETTLEMENT COMPANY OR ANY RIGHT OF THE DEBTOR;
  (J) ADVERTISE, DISPLAY, DISTRIBUTE, BROADCAST, OR TELEVISE SERVICES OR
PERMIT  SERVICES  TO BE ADVERTISED, DISPLAYED, DISTRIBUTED, BROADCASTED,
OR TELEVISED,  IN  ANY  MANNER  WHATSOEVER,  THAT  CONTAINS  ANY  FALSE,
MISLEADING,  OR  DECEPTIVE  STATEMENTS OR REPRESENTATIONS WITH REGARD TO
ANY MATTER INVOLVING THE BUSINESS OF DEBT SETTLEMENT SERVICES, INCLUDING
BUT NOT LIMITED TO THE FEES TO BE CHARGED, THE SERVICES TO BE PERFORMED,
THE RESULTS OR OUTCOMES OF THOSE SERVICES, OR THE EFFECT THOSE  SERVICES
WILL HAVE ON A DEBTOR'S CREDIT RATING OR ON CREDITOR COLLECTION EFFORTS;
  (K)  RECEIVE  ANY  CASH,  FEE,  GIFT, BONUS, PREMIUM, REWARD, OR OTHER
COMPENSATION FROM ANY PERSON OTHER THAN THE DEBTOR  EXPLICITLY  FOR  THE
PROVISION OF DEBT SETTLEMENT SERVICES TO THAT DEBTOR;
  (L)  OFFER  OR  PROVIDE GIFTS OR BONUSES TO DEBTORS FOR SIGNING A DEBT
SETTLEMENT SERVICES AGREEMENT OR FOR REFERRING ANOTHER POTENTIAL CUSTOM-
ER OR CUSTOMER;
  (M) EXCEPT WITH THE PRIOR CONSENT OF THE DEBTOR,  DISCLOSE  TO  ANYONE
THE  NAME  OR  ANY  PERSONAL  INFORMATION  OF A DEBTOR FOR WHOM THE DEBT
SETTLEMENT COMPANY HAS PROVIDED OR IS PROVIDING DEBT SETTLEMENT SERVICES
OTHER THAN TO A DEBTOR'S OWN CREDITORS OR THE DEBT SETTLEMENT  COMPANY'S
AGENTS  OR  AFFILIATES  FOR  THE  PURPOSE  OF  PROVIDING DEBT SETTLEMENT
SERVICES. "PERSONAL INFORMATION  OF  A  DEBTOR"  AS  USED  HEREIN  SHALL
INCLUDE  BUT  NOT  BE  LIMITED  TO A DEBTOR'S NAME, PHOTOGRAPH, ADDRESS,
TELEPHONE NUMBER, SOCIAL SECURITY NUMBER, DATE OF BIRTH, DRIVER'S  IDEN-

A. 7268--B                         20

TIFICATION  NUMBER,  CREDIT  CARD  NUMBER, BANK ACCOUNT NUMBER, MOTHER'S
MAIDEN NAME, MEDICAL OR DISABILITY INFORMATION, IF ANY, AS WELL  AS  ANY
OTHER IDENTIFICATION NUMBER WHICH A LICENSEE MAY POSSESS;
  (N)  ENTER  INTO  A  DEBT  SETTLEMENT SERVICES AGREEMENT WITH A DEBTOR
WITHOUT FIRST PROVIDING  THE  DISCLOSURES  AND  FINANCIAL  ANALYSIS  AND
MAKING THE DETERMINATIONS REQUIRED BY THIS ARTICLE;
  (O)  MISREPRESENT ANY MATERIAL FACT, MAKE A MATERIAL OMISSION, OR MAKE
A FALSE PROMISE DIRECTED TO ONE OR MORE DEBTORS IN CONNECTION  WITH  THE
SOLICITATION,  OFFERING,  CONTRACTING,  OR  PROVISION OF DEBT SETTLEMENT
SERVICES;
  (P) VIOLATE THE PROVISIONS OF APPLICABLE DO-NOT-CALL STATUTES;
  (Q) PURCHASE DEBTS OR ENGAGE IN  THE  PRACTICE  OR  BUSINESS  OF  DEBT
COLLECTION;
  (R)  REPRESENT  OR  IMPLY  TO A PERSON PARTICIPATING IN OR CONSIDERING
DEBT SETTLEMENT SERVICES THAT THE PURCHASE OF  ANY  ANCILLARY  GOODS  OR
SERVICES IS REQUIRED;
  (S) USE A COMMUNICATION WHICH SIMULATES IN ANY MANNER A LEGAL OR JUDI-
CIAL  PROCESS,  OR WHICH GIVES THE FALSE APPEARANCE OF BEING AUTHORIZED,
ISSUED,  OR  APPROVED  BY  A   GOVERNMENT,   GOVERNMENTAL   AGENCY,   OR
ATTORNEY-AT-LAW; OR
  (T)  MAKE  A  REPRESENTATION  THAT  THE  DEBT  SETTLEMENT COMPANY WILL
FURNISH MONEY TO PAY BILLS OR PREVENT ATTACHMENT.
  S 588-R. SUPERINTENDENT AUTHORIZED TO EXAMINE. 1. FOR THE  PURPOSE  OF
DISCOVERING  VIOLATIONS OF THIS ARTICLE OR SECURING INFORMATION LAWFULLY
REQUIRED BY HIM OR HER HEREUNDER, THE SUPERINTENDENT MAY  AT  ANY  TIME,
AND  AS  OFTEN  AS  HE  OR  SHE MAY DETERMINE, EITHER PERSONALLY OR BY A
PERSON DULY DESIGNATED BY HIM OR HER, INVESTIGATE THE BUSINESS AND EXAM-
INE THE BOOKS, ACCOUNTS, RECORDS, AND FILES USED THEREIN OF EVERY LICEN-
SEE HEREUNDER. FOR THAT PURPOSE THE SUPERINTENDENT AND HIS OR  HER  DULY
DESIGNATED  REPRESENTATIVE  SHALL  HAVE  FREE  ACCESS TO THE OFFICES AND
PLACE OF BUSINESS, BOOKS, ACCOUNTS, PAPERS, RECORDS,  FILES,  SAFES  AND
VAULTS  OF  ALL  SUCH  LICENSEES. THE SUPERINTENDENT AND ANY PERSON DULY
DESIGNATED BY HIM OR HER SHALL HAVE AUTHORITY TO REQUIRE THE  ATTENDANCE
OF  AND  TO EXAMINE UNDER OATH ALL PERSONS WHOSE TESTIMONY HE OR SHE MAY
REQUIRE RELATIVE TO SUCH BUSINESS. THE EXPENSES INCURRED IN  MAKING  ANY
EXAMINATION  PURSUANT TO THIS SECTION SHALL BE ASSESSED AGAINST AND PAID
BY THE LICENSEE SO  EXAMINED,  EXCEPT  THAT  TRAVELING  AND  SUBSISTENCE
EXPENSES  SO  INCURRED SHALL BE CHARGED AGAINST AND PAID BY LICENSEES IN
SUCH PROPORTIONS AS THE SUPERINTENDENT SHALL DEEM JUST  AND  REASONABLE,
AND  SUCH  PROPORTIONATE CHARGES SHALL BE ADDED TO THE ASSESSMENT OF THE
OTHER EXPENSES INCURRED UPON EACH EXAMINATION. UPON  WRITTEN  NOTICE  BY
THE  SUPERINTENDENT OF THE TOTAL AMOUNT OF SUCH ASSESSMENT, THE LICENSEE
SHALL BECOME LIABLE FOR AND SHALL PAY SUCH ASSESSMENT TO THE SUPERINTEN-
DENT.
  S 588-S. LICENSEE'S BOOKS AND RECORDS; REPORTS. 1. THE LICENSEE  SHALL
CREATE AND USE IN ITS BUSINESS SUCH BOOKS, ACCOUNTS, AND RECORDS AS WILL
ENABLE  THE SUPERINTENDENT TO DETERMINE WHETHER SUCH LICENSEE IS COMPLY-
ING WITH THE PROVISIONS OF THIS ARTICLE AND WITH  THE  RULES  AND  REGU-
LATIONS  LAWFULLY  MADE  BY THE SUPERINTENDENT HEREUNDER. EVERY LICENSEE
SHALL PRESERVE SUCH BOOKS, ACCOUNTS, AND RECORDS FOR AT LEAST SIX  YEARS
BY ANY MANNER PERMITTED BY THIS CHAPTER.
  2.  EACH LICENSEE SHALL ANNUALLY, ON OR BEFORE THE FIRST DAY OF FEBRU-
ARY, FILE A REPORT WITH THE SUPERINTENDENT GIVING  SUCH  INFORMATION  AS
THE  SUPERINTENDENT  MAY  REQUIRE CONCERNING THE BUSINESS AND OPERATIONS
DURING THE PRECEDING CALENDAR YEAR OF SUCH LICENSEE UNDER  AUTHORITY  OF
THIS  ARTICLE.  SUCH  REPORT SHALL BE SUBSCRIBED AND AFFIRMED AS TRUE BY

A. 7268--B                         21

THE LICENSEE UNDER THE PENALTIES OF PERJURY AND SHALL  BE  IN  THE  FORM
PRESCRIBED  BY  THE  SUPERINTENDENT.  IN ADDITION TO ANNUAL REPORTS, THE
SUPERINTENDENT MAY REQUIRE SUCH ADDITIONAL REGULAR OR SPECIAL REPORTS AS
HE  OR  SHE  MAY  DEEM  NECESSARY TO THE PROPER SUPERVISION OF LICENSEES
UNDER THIS ARTICLE.  SUCH  ADDITIONAL  REPORTS  SHALL  BE  IN  THE  FORM
PRESCRIBED BY THE SUPERINTENDENT AND SHALL BE SUBSCRIBED AND AFFIRMED AS
TRUE UNDER THE PENALTIES OF PERJURY.
  3.  EACH  LICENSEE, WITHIN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF THE
LICENSEE'S FISCAL YEAR, SHALL SUBMIT AN INDEPENDENTLY AUDITED  FINANCIAL
STATEMENT TO THE SUPERINTENDENT.
  S  588-T.  PENALTIES;  NONCOMPLIANCE.  1.  ANY PERSON WHO VIOLATES ANY
PROVISION OF THE LICENSING REQUIREMENTS OF SECTION FIVE HUNDRED  EIGHTY-
EIGHT-B  OF  THIS  ARTICLE  SHALL  BE  GUILTY  OF A CLASS A MISDEMEANOR,
PUNISHABLE AS PROVIDED IN ARTICLES SEVENTY AND EIGHTY OF THE PENAL LAW.
  2. ANY DEBT SETTLEMENT SERVICES AGREEMENT THAT DOES  NOT  COMPLY  WITH
THE PROVISIONS OF THIS ARTICLE IS VOID.
  3.  ANY  WAIVER BY A DEBTOR OF ANY PROTECTION PROVIDED BY OR ANY RIGHT
OF THE DEBTOR UNDER THIS ARTICLE IS VOID.
  4. ANY ATTEMPT BY ANY PERSON TO OBTAIN A WAIVER FROM ANY DEBTOR OF ANY
PROTECTION PROVIDED BY OR ANY RIGHT OR PROTECTION OF THE DEBTOR  OR  ANY
OBLIGATION  OR  REQUIREMENT  OF  THE  DEBT SETTLEMENT COMPANY UNDER THIS
ARTICLE SHALL BE A VIOLATION OF THIS ARTICLE.
  5. UPON PROPER NOTICE OF A VOID DEBT  SETTLEMENT  SERVICES  AGREEMENT,
THE  DEBT SETTLEMENT COMPANY SHALL MAKE A REFUND TO THE DEBTOR AS IF THE
DEBT SETTLEMENT SERVICES AGREEMENT HAD BEEN  CANCELLED  AS  PROVIDED  IN
SUBDIVISION TWO OF SECTION FIVE HUNDRED EIGHTY-EIGHT-O OF THIS ARTICLE.
  6.  IN  ADDITION  TO  SUCH PENALTIES AS MAY OTHERWISE BE APPLICABLE BY
LAW, THE SUPERINTENDENT MAY, AFTER NOTICE AND HEARING AS PROVIDED  ELSE-
WHERE IN THIS ARTICLE, REQUIRE ANY PERSON FOUND VIOLATING THE PROVISIONS
OF THIS ARTICLE OR THE RULES OR REGULATIONS PROMULGATED HEREUNDER TO PAY
TO  THE PEOPLE OF THIS STATE AN ADDITIONAL PENALTY FOR EACH VIOLATION OF
THE ARTICLE OR ANY REGULATION OR POLICY PROMULGATED HEREUNDER A SUM  NOT
TO EXCEED AN AMOUNT AS DETERMINED PURSUANT TO SECTION FORTY-FOUR OF THIS
CHAPTER FOR EACH SUCH VIOLATION.
  7.  NOTHING  IN THIS ARTICLE SHALL CREATE A PRIVATE RIGHT OF ACTION ON
BEHALF OF A DEBTOR AGAINST A DEBT SETTLEMENT COMPANY FOR  VIOLATIONS  OF
THIS ARTICLE.
  8.  NOTHING  IN  THIS  ARTICLE SHALL LIMIT ANY STATUTORY OR COMMON-LAW
RIGHT OF ANY PERSON TO BRING ANY ACTION IN ANY COURT FOR ANY ACT, OR THE
RIGHT OF THE STATE TO PUNISH ANY PERSON FOR ANY VIOLATION OF ANY LAW.
  S 588-U. AUTHORITY OF SUPERINTENDENT.  THE  SUPERINTENDENT  IS  HEREBY
AUTHORIZED  AND EMPOWERED TO MAKE, IN ADDITION HERETO AND NOT INCONSIST-
ENT HEREWITH, SUCH GENERAL RULES  AND  REGULATIONS,  AND  SUCH  SPECIFIC
RULINGS,  DEMANDS,  AND FINDINGS AS HE OR SHE MAY DEEM NECESSARY FOR THE
PROPER CONDUCT OF THE BUSINESS AUTHORIZED AND LICENSED HEREUNDER AND FOR
THE ENFORCEMENT OF THIS ARTICLE.
  S 588-V. SEVERABILITY. IF ANY WORD, PHRASE,  CLAUSE,  SENTENCE,  PARA-
GRAPH,  SUBDIVISION,  SECTION, OR PART OF THIS ARTICLE SHALL BE ADJUDGED
BY ANY COURT OF COMPETENT JURISDICTION  TO  BE  INVALID,  SUCH  JUDGMENT
SHALL  NOT AFFECT, IMPAIR, OR INVALIDATE THE REMAINDER THEREOF WHICH CAN
BE GIVEN EFFECT WITHOUT THE INVALID PROVISION, BUT SHALL BE CONFINED  IN
ITS OPERATION TO THE WORD, PHRASE, CLAUSE, SENTENCE, PARAGRAPH, SUBDIVI-
SION,  SECTION, OR PART OF THIS ARTICLE DIRECTLY INVOLVED IN THE CONTRO-
VERSY IN WHICH THE JUDGMENT SHALL HAVE BEEN RENDERED.
  S 11. This act shall take effect on  the  one  hundred  eightieth  day
after  it shall have become a law and shall apply to all debt settlement

A. 7268--B                         22

services agreements entered into or  offered  on  or  after  such  date;
provided,  however,  that  effective  immediately, the superintendent of
banks shall add, amend, and/or repeal any rule or regulation he  or  she
deems necessary or desirable for implementation of this act.