Senate Bill S2181

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

                                 2181--A

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            February 13, 2009
                               ___________

Introduced  by  Sens.  DIAZ, THOMPSON -- read twice and ordered printed,
  and when printed to be committed to the Committee on Banks --  commit-
  tee  discharged, bill amended, ordered reprinted as amended and recom-
  mitted to said committee

AN ACT to amend the banking law, in relation  to  money  services  busi-
  nesses

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

  Section 1.  Legislative  intent.  The  legislature  hereby  finds  and
declares that money services businesses play a vital role in the economy
of New York state and that access by the public to efficient, economical
and  safe  money  services  businesses is a public good.  Money services
businesses recognize that protection of the financial system from  abuse
from  money  launderers  and  terrorist  financiers  is  a paramount and
compelling state interest and therefore  comply  with  standards  estab-
lished by federal and state statutes and regulations, including the Bank
Secrecy Act (Public Law 91-508 and 31 U.S.C. 5311 subchapter II) and the
"Interagency  Interpretative  Guidance  on Providing Banking Services to
Money Services Businesses Operating in the United States" issued by  the
Financial  Crimes  Enforcement  Network  (FinCEN)  of  the U.S. treasury
department. Furthermore, in ensuring that money services businesses  are
partners  in  our  state's  fight against money laundering and terrorist
financing, money services businesses are subject to strict licensing and
background  verification  requirements  and,  in  many  cases,   bonding
requirements  by  the superintendent of banks.  Moreover, money services
businesses are subject to constant supervision and  examination  by  the
superintendent  of banks for safety and soundness, as well as compliance
with the bank secrecy act and other anti-money laundering and  anti-ter-
rorist  financing  laws and regulations.   Nevertheless, the legislature
finds that banks in the state have closed accounts and refused  to  open

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00088-02-9

              

S. 2181--A                          2

accounts  for  money services businesses citing requirements of the bank
secrecy act.
  Therefore,  the legislature finds and declares that the systematic and
unchecked closing of money services businesses runs counter to the goals
of protecting the state and its financial system.
  S 2. The banking law is amended by adding a new section 9-v to read as
follows:
  S 9-V. NEW YORK STATE LICENSED MONEY TRANSMITTER  OR  NEW  YORK  STATE
LICENSED  CHECK  CASHER  ACCOUNTS.   1. (A) A STATE CHARTERED DEPOSITORY
INSTITUTION SHALL HAVE NO OBLIGATION TO CONDUCT  ANY  DUE  DILIGENCE  OR
REVIEW  OF THE COMPLIANCE BY A NEW YORK STATE LICENSED MONEY TRANSMITTER
OR NEW YORK STATE LICENSED CHECK CASHER WITH SUCH BUSINESS'S OBLIGATIONS
UNDER CHAPTER 53 OF TITLE 31 OF THE UNITED STATES CODE, PROVIDED:
  (I) THE NEW YORK STATE LICENSED MONEY TRANSMITTER OR  NEW  YORK  STATE
LICENSED  CHECK CASHER IS LICENSED OR APPROVED TO ENGAGE IN MONEY TRANS-
MISSION OR CHECK CASHING UNDER THIS CHAPTER  BY  THE  SUPERINTENDENT  OF
BANKS; AND
  (II)  THE  NEW YORK STATE LICENSED MONEY TRANSMITTER OR NEW YORK STATE
LICENSED CHECK CASHER CERTIFIES TO THE STATE CHARTERED DEPOSITORY INSTI-
TUTION  THAT  IT  HAS  A  PROGRAM  THAT  FULFILLS  THE  REQUIREMENTS  OF
SUBSECTION  (H)(1)  OF 31 U.S.C. SECTION 5318 AND ITS IMPLEMENTING REGU-
LATIONS.
  (B) A NEW YORK STATE LICENSED MONEY  TRANSMITTER  OR  NEW  YORK  STATE
LICENSED  CHECK  CASHER MAKING A MATERIAL MISREPRESENTATION IN A CERTIF-
ICATION REQUIRED BY THIS SECTION SHALL BE SUBJECT TO THE CIVIL PENALTIES
PRESCRIBED UNDER LAW. A PERSON WHO KNOWINGLY  MAKES  ANY  SUCH  MATERIAL
MISREPRESENTATION  OR  OMISSION SHALL BE SUBJECT TO CRIMINAL PROSECUTION
AND ALL PENALTIES AS OTHERWISE PROVIDED BY LAW.
  (C)  NOTHING  IN  THIS  SECTION  SHALL  BE  CONSTRUED  TO  REQUIRE   A
STATE-CHARTERED  DEPOSITORY INSTITUTION TO ESTABLISH, MAINTAIN, ADMINIS-
TER OR MANAGE AN ACCOUNT FOR A NEW YORK STATE LICENSED MONEY TRANSMITTER
OR NEW YORK STATE LICENSED CHECK CASHER.
  (D) A STATE CHARTERED DEPOSITORY INSTITUTION SHALL HAVE  NO  LIABILITY
FOR  THE FAILURE OF ANY NEW YORK STATE LICENSED MONEY TRANSMITTER OR NEW
YORK STATE LICENSED CHECK CASHER TO FULFILL ITS OBLIGATIONS UNDER  CHAP-
TER 53 OF TITLE 31 OF THE UNITED STATES CODE.
  2.  NOTWITHSTANDING  ANY  PROVISION OF LAW TO THE CONTRARY, NO BANKING
INSTITUTION IN THE STATE  SHALL  DENY  BANKING  SERVICES  TO  ANY  MONEY
SERVICES  BUSINESS  ON  THE BASIS OF COMPLIANCE WITH THE BANKING SECRECY
ACT (PL 91-508 AND 31 USC 5311 SUBCHAPTER II) WITHOUT  THE  APPROVAL  OF
THE SUPERINTENDENT.
  3.  NOTWITHSTANDING  ANY  PROVISION OF LAW TO THE CONTRARY, NO BANKING
INSTITUTION SHALL DENY BANKING SERVICES TO ANY MONEY  SERVICES  BUSINESS
WITHOUT  PROVIDING  SUCH  MONEY SERVICES BUSINESS AN OPPORTUNITY TO MEET
ANY REASONABLE REQUIREMENTS SET BY THE BANKING INSTITUTION  FOR  OPENING
AND MAINTAINING SUCH SERVICES.
  4. THE BANKING INSTITUTION SHALL PROVIDE TO THE SUPERINTENDENT A WRIT-
TEN  STATEMENT  SETTING  FORTH  IN  REASONABLE DETAIL THE REASON FOR THE
DENIAL OF SUCH BANKING SERVICES TO ANY MONEY  SERVICE  BUSINESS.    SUCH
WRITTEN  STATEMENT  SHALL  BE  REVIEWED BY THE SUPERINTENDENT WHO, AFTER
SUCH REVIEW, MAY DIRECT THE BANKING INSTITUTION TO OFFER SERVICES IF THE
SUPERINTENDENT FINDS:
  (A) THE MONEY SERVICES BUSINESS POSSESSES  ADEQUATE  COMPLIANCE  SAFE-
GUARDS AS DETERMINED BY ITS MOST RECENT STATE AUDIT;
  (B)  THE  BANKING  INSTITUTION  MEETS THE REQUIREMENTS OUTLINED IN THE
"INTERAGENCY INTERPRETATIVE GUIDANCE ON PROVIDING  BANKING  SERVICES  TO

S. 2181--A                          3

MONEY  SERVICES BUSINESSES OPERATING IN THE UNITED STATES" BY THE FINAN-
CIAL CRIMES ENFORCEMENT NETWORK (FINCEN) OF THE UNITED  STATES  TREASURY
DEPARTMENT; AND
  (C) THE BANKING INSTITUTION, AT THE TIME OF THE REVIEW, DID NOT HOLD A
DISPROPORTIONATE AMOUNT OF MONEY SERVICES BUSINESS ACCOUNTS.
  S 3. This act shall take effect immediately.