Senate Bill S3727B

2009-2010 Legislative Session

Relates to licensed lenders, licensed cashers of checks, sales finance companies, premium finance companies, budget planners, and transmitters of money; repealer

download bill text pdf

Archive: Last Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 22, 2010	referred to codes delivered to assembly passed senate
Jun 14, 2010	advanced to third reading
Jun 10, 2010	2nd report cal.
Jun 09, 2010	print number 3727b
Jun 09, 2010	1st report with amendments cal.894
Jan 06, 2010	referred to banks
Jun 21, 2009	print number 3727a
Jun 21, 2009	amend and recommit to banks
Mar 30, 2009	referred to banks

Votes

- Jun 22, 2010 - Floor Vote
  S3727B
  
  Aye
  
  61
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  1
  
  Abstained
  
  0
  - - Floor Vote: Jun 22, 2010
      
      aye (61)
      
      Adams
      
      Addabbo Jr.
      
      Alesi
      
      Aubertine
      
      Bonacic
      
      Breslin
      
      DeFrancisco
      
      Diaz
      
      Dilan
      
      Duane
      
      Espada
      
      Farley
      
      Flanagan
      
      Foley
      
      Fuschillo
      
      Golden
      
      Griffo
      
      Hannon
      
      Hassell-Thompson
      
      Huntley
      
      Johnson
      
      Johnson
      
      Klein
      
      Krueger
      
      Kruger
      
      LaValle
      
      Lanza
      
      Larkin
      
      Leibell
      
      Libous
      
      Little
      
      Marcellino
      
      Maziarz
      
      McDonald
      
      Montgomery
      
      Nozzolio
      
      Onorato
      
      Oppenheimer
      
      Padavan
      
      Parker
      
      Peralta
      
      Perkins
      
      Ranzenhofer
      
      Robach
      
      Saland
      
      Sampson
      
      Savino
      
      Schneiderman
      
      Serrano
      
      Seward
      
      Skelos
      
      Smith
      
      Squadron
      
      Stachowski
      
      Stavisky
      
      Stewart-Cousins
      
      Thompson
      
      Valesky
      
      Volker
      
      Winner
      
      Young
      
      excused (1)
      
      Morahan
  Jun 9, 2010 - Banks Committee Vote
  S3727B
  
  Aye
  
  17
  
  Nay
  
  1
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  1
  
  Abstained
  
  0
  - - Banks Committee Vote: Jun 9, 2010
      
      aye (17)
      
      Adams
      
      Bonacic
      
      Breslin
      
      DeFrancisco
      
      Diaz
      
      Farley
      
      Foley
      
      Golden
      
      Johnson
      
      Klein
      
      Krueger
      
      Kruger
      
      Marcellino
      
      Onorato
      
      Peralta
      
      Savino
      
      Stewart-Cousins
      
      nay (1)
      
      Ranzenhofer
      
      excused (1)
      
      Morahan

Bill Amendments

2009-S3727 - Details

See Assembly Version of this Bill:: A11325
Current Committee:: Assembly Codes
Law Section:: Banking Law
Laws Affected:: Rpld §493 sub 7, §495 sub 7 & sub 1 ¶(e), §497 subs 3 & 4, §554 subs 2 & 5, §556 sub 5, §560 subs 3 & 4, §562 & §646 sub 4, amd Bank L, generally

2009-S3727 - Summary

Relates to licensed lenders, licensed cashers of checks, sales finance companies, premium finance companies, budget planners, and transmitters of money.

2009-S3727 - Sponsor Memo

                                 BILL NUMBER:  S3727

 TITLE OF BILL :

An act to amend the banking law, in relation to licensed lenders,
licensed cashers of checks, sales finance companies, premium finance
companies, budget planners and transmitters of money; and to repeal
certain provisions of such law relating thereto


 PURPOSE :

This bill would modernize the articles of the Banking Law ("BL")
covering "licensed financial services" providers, including licensed
lenders, licensed cashers of checks, sales finance companies, premium
finance agencies, budget planners and money transmitters.

 SUMMARY OF PROVISIONS :

Section 1 of the bill amends BL § 340 to increase the size of loans
that require registration of the lender as a licensed lender, while
eliminating the exemptions for entities that lend at interest rates
below the general State rates. An exemption is added for lenders
making no more than five loans at any time outstanding, as long as the
aggregate amount does not exceed $100,000. A definition regarding when
loans are made in this State also is added.

Section 2 of the bill adds a new definition section to make use of the
article easier.  In particular, it adds definitions of "person" and
"control."

Section 3 of the bill amends BL § 341(3) to change the reference to
the annual license fee to a reference to the appropriate section of
the law. BL § 341(5) is amended to change the capital requirement from
one that is calculated on a per branch basis to one calculated on a
company-wide basis (although the number of branches may still be
relevant) and clarifies that the Superintendent has discretion to
require a higher amount.

Section 4 of the bill makes various technical changes throughout BL §
342 to include limited liability companies as applicants and to
clarify when an application is deemed complete. It also clarifies that
the capital requirement is calculated under BL § 341(5), rather than
on a branch-by-branch basis.

Section 5 of the bill makes conforming changes (recognizing the
existence of LLCs) to BL § 343(1).

Section 6 of the bill amends BL § 345 to conform it to the changes
made in BL § 340-a (i.e. it deletes the definitions of "person" and
"control", which were moved to a new definition section).

Section 7 of the bill makes changes to conform BL § 347 to the changes
being made to other provisions of the BL related to grounds of
suspension and termination of licenses. In particular, it moves to BL
§ 347(1) some language that applies to both suspensions and
revocations that previously appeared in § 347(2) (which applies only
to suspensions). The bill adds to BL § 347(2), which deals with good
cause suspensions, a definition of "good cause" that appears in the
other BL articles dealing with licensed financial services firms.
Also, the period during which a licensed lender may be suspended is
expanded to 90 days from 30 days.

Section 7 of the bill also amends BL § 347(2) to provide that the
Superintendent may suspend a firm without a hearing for failure to
make payments required by the BL (which would include assessments,
fees or penalties or restitution ordered in accordance with the BL).
Finally, it states that the Superintendent may suspend a firm without
a hearing for other failures where there can be no factual question
that should be tried by a hearing examiner, including failure to file
any report required by the BL, filing a petition in bankruptcy, or
having an involuntary bankruptcy petition filed against the firm (and
not dismissed in 30 days).

Section 7 of the bill also amends BL § 347(3) to provide that, if the
licensee has cured all deficiencies set forth in the suspension order
within 90 days after the date of the suspension, the licensee's
license may be reinstated; however, if the licensee has not cured the
deficiencies, the license will be deemed to be automatically
terminated. BL § 347(4) deals with voluntary surrenders of licenses,
and makes clear that surrender of a license becomes effective only
upon the written approval of the Superintendent and that such
surrender does not affect the licensee's obligations to the
Superintendent for assessments, fees or administrative actions with
respect to any period before the surrender. The changes in BL §§
347(5) and 347(6) are conforming changes that recognize the new
termination provisions. Section 347(7) makes clear that an Article 78
review does not apply to suspensions for cause under § 347(2).
Finally, BL § 347(8) makes clear that, when a license has been
terminated by operation of law, the Superintendent must notify the
licensee that the license has terminated and that the licensee may not
engage in the licensed business.

Section 8 of the bill repeals the first two unnumbered paragraphs ofBL
§ 356, which are no longer needed because BL § 340, as amended,
requires all persons making qualifying loans in New York to be
registered.

Section 9 of the bill begins the amendments to Article IX-A of the BL
(check cashers). A definition of "person" is added to BL § 366(1) and
technical changes are made to other definitions to use this new
definition.

Section 10 of the bill makes technical changes to BL § 367 to
incorporate the new definition of "person" and to recognize the
existence of licensees that are limited liability companies. BL §
367(2) is amended to recognize the use of limited liability companies.
In BL § 367(4), the Superintendent is given flexibility to modify the
amount of liquid assets required for a check cashing location that is
a "limited station."

Section 11 of the bill amends BL § 369(1) to clarify the meaning of
the existing section, and are not intended to create new requirements
or delete old requirements. The principal substantive change is to
eliminate the requirement that a check casher engage only in financial
services at its operating locations. A new § 369( 1-a) contains
language taken from elsewhere in BL § 369 concerning the "3/10 of a
mile" protected area around a check casher office.

Section 12 of the bill repeals BL § 369(7), which prohibited the
Superintendent from issuing a license for a check casher location if,
within the 12 months preceding the application, a license to engage in
business at that place had been revoked.

Section 13 of the bill amends BL § 370-a to provide the Superintendent
with flexibility in processing of applications under this article by
measuring the approval time from the date the application became
complete.

Section 14 of the bill amends the suspension, revocation and surrender
provisions with respect to check cashers, and makes them consistent
with the similar provisions for other types of licensed financial
services firms. The amendment includes provisions with respect to
suspensions "for cause" for failure to pay assessments and other
amounts due, failure to file reports, and the filing of a petition in
bankruptcy. The bill also makes the section gender-neutral.
Consistent with changes made throughout the BL in this bill, BL §
373(4) is amended to increase criminal penalties for violations of the
article. They would now become a Class E felony.

Section 15 of the bill amends BL § 374(1) (the exemption from
registration as a check casher) to allow firms who cash checks as an
incident to the conduct of other lawful business to charge a fee of up
to $5 for cashing a check (the maximum fee amount is currently $1).

Section 16 of the bill begins the amendments to Article 11-B (sales
finance companies). It amends certain definitions in BL § 491 to
conform them to each other.  The section also makes clear that the
term "retail installment obligation" includes an agreement no matter
where entered into if it is executed by the buyer in this State and if
solicited in person by a salesperson or other person acting on his or
her own behalf or that of the seller. Similarly, the definition of
"sales finance company" is amended to make clear that the article
applies to agreements wherever entered into if they are executed by
the buyer in New York and if they are solicited in person by a
salesperson or other person acting on his or her own behalf or on
behalf of the seller. Also, the types of transactions to which this
article applies is clarified, and the existence of a safe harbor for
secondary transactions is clarified.

Section 17 of the bill amends BL §§ 492(1) and 492(2) to clarify when
banking institutions are exempt from coverage of the law and to
clarify the procedure for an application for a sales finance company
license.

Section 18 of the bill makes changes to BL § 492-a(2) to clarify when
a change of control application must be approved.

Section 19 repeals BL § 493(7) and amends BL § 493(4) to clarify the
circumstances when a license terminates.

Section 20 of the bill amends the suspension, revocation and surrender
provisions with respect to sales finance companies, and makes them
consistent with the similar provisions for other types of licensed
financial services firms. This includes provisions with respect to
suspensions "for cause" for failure to pay assessments and other
amount due, failure to file reports, and the filing of a petition in
bankruptcy. It also extends from 30 to 90 days the amount of time for
which the Superintendent may suspend a license while conducting an
investigation. Technical changes also are made to the provisions of BL
§ 495 regarding termination of a license by the Superintendent and
when a licensee may surrender its license.

Section 21 of the bill repeals BL §§ 497(3) and 497(4), which are
outdated provisions.

Section 22 of the bill amends BL § 499 to increase the criminal
penalty for violations of the article consistent with the changes
discussed above.

Section 23 of the bill begins the amendments of Article XII-B of the
BL (Insurance Premium Finance Agencies). It amends the definition of a
bank contained in § 554 to cover all banking institutions.

Section 24 of the bill amends BL § 555 to conform to the newly defined
"banking institutions" in BL § 554 without changing the institutions
to which the section applies. A definition regarding when loans are
made in this State also is added.
Section 25 of the bill repeals BL § 556(5), a transition provision
dating from 1961, as outdated.

Section 26 of the bill amends BL § 558 to clarify when relocation fees
are required.

Section 27 of the bill amends BL § 559, the suspension, revocation and
surrender provisions with respect to premium finance agencies, and
makes them consistent with the similar provisions for other types of
licensed financial services firms. This includes provisions with
respect to suspensions "for good cause" for failure to pay assessments
and other amount due, failure to file reports, and the filing of a
petition in bankruptcy. It also extends from 30 to 90 days the amount
of time for which the Superintendent may suspend a license while
conducting an investigation.

Section 28 of the bill repeals BL §§ 560(3) and 560(4). The substance
of these provisions has previously been moved to BL §§ 17 and §
36(10), respectively.

Section 29 of the bill repeals BL § 562, since the subject matter
(hearings and investigations) is already covered in Article II.

Section 30 of the bill amends BL § 563 to increase the criminal
penalty for violations of the article consistent with the changes
discussed above.

Section 31 of the bill amends BL § 576 to clarify the ability of the
Superintendent to provide notice by electronic means.

Section 32 of the bill amends BL § 577 to eliminate outdated language.

Section 33 of the bill amends BL § 580 to eliminate outdated language
and to clarify when fees for branch offices are required.

Section 34 of the bill amends BL § 581 to clarify that the time period
for approving an application runs from the time the application is
deemed complete.

Section 35 of the bill amends BL § 583-a to clarify when the
Superintendent must act on an application.

Section 36 of the bill amends BL § 584, the suspension, revocation and
surrender provisions with respect to budget planners, and makes them
consistent with the similar provisions for other types of licensed
financial services firms. This includes provisions with respect to
suspensions "for good cause" for failure to pay assessments and other
amounts due, failure to file reports, the filing of a petition in
bankruptcy, and failure to maintain the bond required under BL § 580.
It also extends from 30 to 90 days the amount of time for which the
Superintendent may suspend a license while conducting an
investigation. The effect of the revocation, surrender or termination
of a license also is clarified.

Section 37 of the bill amends BL § 586 to clarify that electronic
storage of records is permissible.

Section 38 of the bill begins the amendments to Article XIII-B (Money
Transmitters). It amends BL § 641 to clarify when banking institutions
are exempt from coverage of the article and when New York persons are
subject to the protections of this article.

Section 39 of the bill amends BL § 642, the suspension, revocation and
surrender provisions with respect to money transmitters, and makes
them consistent with the similar provisions for other types of
licensed financial services firms. This includes provisions with
respect to suspensions "for good cause" for failure to. pay
assessments and other amounts due, failure to file reports, the filing
of a petition in bankruptcy, and failure to maintain the bond or
securities required under BL § 643 or the investments required by BL §
651. It also extends from 30 to 90 days the amount of time for which
the Superintendent may suspend a license while conducting an
investigation.

Section 40 of the bill repeals outdated language in the bond
provisions of BL § 643

Section 41 of the bill repeals BL § 646(4), because the matter is
covered by § 36(10).

Section 42 of the bill repeals BL § 647, which is outdated, since it
applies to applicants which, prior to January 1, 1963, were engaged in
money transmission.

Section 43 of the bill repeals BL § 650(2). The criminal penalty for
violations of this Article is increased by this section of the bill.

Section 44 of the bill amends BL § 651 to increase the amount of the
required bond for money transmitters from 80% to 90% of the net
carrying value of outstanding instruments.

Section 45 of the bill amends BL § 657 to clarify when and how
required payments into the money transmitter insurance fund are
calculated.

Section 46 of the bill provides the effective date.

 EXISTING LAW :

BL § 340 requires registration as a licensed lender where a person is
engaged in the business of making loans in the principal amount of
$25,000 or less for loans to an individual for personal, family,
household or investment purposes and in a principal amount of $50,000
or less for business and commercial purposes. The amendment changes
these thresholds to $50,000 and $100,000. In addition, the current law
requires registration if a person solicits loans "within tins state."
The amendment makes clear that registration is required if a person
solicits loans "to individuals within this state" and, and in case of
loans for business or commercial purposes, to individuals having a
place of business within this state. The current law exempted persons
from registration if their loans were isolated, incidental or
occasional. The amendment replaces that standard with a numerical
threshold - i.e. the number of loans made in anyone year is not more
than five loans and the aggregate amount of loans outstanding at
anyone time does not exceed $100,000.

Article IX did not previously have a definition section. The
definitions in BL § 340-a are moved from BL § 345(1).

BL § 341(3) provides that licensed lenders will pay not only the
investigation fee but also the annual license fees provided for in BL
§ 17. The words "and annual license fee" would be deleted, since
Section 17 provides for several fees.

Current BL § 341(5) requires "liquid assets" of at least $50,000 at
each location specified in the application for a license. The
amendment would require total net worth of at least $50,000, or such
other amount as may be determined by the Superintendent.

BL §342 does not provide for licensed lenders organized as limited
liability companies. The amendment would recognize that licensed
lenders may be organized in that form. Like BL §341 (5), this section
required an applicant to have liquid assets of at least $50,000 in
each location and is being amended to require total net worth of at
least $50,000 or such other amount as may be determined by the
Superintendent. This section did not previously refer to termination
of licenses. Previously, this section provided that, if an application
was denied or withdrawn the Superintendent would return the license
fee and retain only the investigation fee. Finally, this section
requires the Superintendent to approve or deny an application for a
master license within 90 days of filing.

BL § 343 does not provide for licensed lenders organized as limited
liability companies.

BL § 345 contains definitions of "person" and "control." Those
definitions are now moved to new BL § 340-a.

BL § 347 did not previously have subdivisions. Although the section
allowed the Superintendent to suspend a license for good cause shown
there was no definition of "good cause." The section currently allows
the Superintendent to suspend a license for good cause for 30 days.
The amendment would extend the suspension for 90 days, unless the
licensee cures the violation before that time. The amendment also adds
to the list of good cause suspensions any failure to make required
payments to the Department 30 days after the due date, failure to file
any required report by the 30th day after the due date, the filing of
a voluntary petition in bankruptcy and the filing of an involuntary
petition in bankruptcy that is not dismissed within 30 days. In
addition, if the cause of such suspension has not been cured within 90
days after the date of the suspension order (including making overdue
payments or filings), then the license is deemed automatically
terminated. Article IX does not currently provide for licenses to
terminate other than by revocation after a hearing.

BL § 356 currently limits the amount that a person not licensed as a
licensed lender may charge or receive as interest on a loan to a
person in the state. These provisions would be eliminated, since the
amendments to BL § 340 would make out-of-state lenders that make
covered loans to New York residents subject to Article IX, unless they
met the de minimis test.

BL §§ 497(3) and 497(4) currently cover examination expenses and the
confidentiality of examination reports. However, those provisions are
also founds in BL §§ 17 and 36(10). Consequently, they are being
deleted here.

BL § 499 currently makes a violation of the provisions of Article XI-B
a misdemeanor punishable by a fine of not more than $500 or
imprisonment of not more than 6 months, or both. The amendment
increases the penalty to a class E felony, consistent with other
penalty provisions in the BL.

BL § 554(2) currently defines a bank, trust company, private banker,
investment company, or national bank with a principal office in New
York as a "bank." The amendment would expand on the included
institutions and change the term to "banking institution," which is
the tern used for such a group of institutions elsewhere in the BL.

BL § 555(1) previously referred to "lending institutions." The section
would be amended to use the defined term "banking institution."

BL §556(5) previously contained transition provisions for licensing as
a premium finance agency that dated from 1960. The amendment
eliminates them.

BL §558 concerns change of address notices for premium finance
agencies. It previously required only a notice to the Superintendent
without a fee. Under the amendment, a change of address requires a
written application and involves a fee prescribed in BL § 18-a.

BL § 559 covers grounds for suspension or revocation of a license. It
currently authorizes suspension or revocation for failure to pay the
annual license fee. The amendment broadens the grounds to failure to
pay any sum of money lawfully demanded by the Superintendent. In
addition, the amendment adds the "good cause" bases for 90 day
suspensions found in other Articles covering licensed financial
service providers, along with the same definition of "good cause".
The causes include any failure to make required payments to the
Department by the 30th day after the due date, failure to file any
required report by the 30th day after the due date, the filing of a
voluntary petition in bankruptcy and the filing of an involuntary
petition in bankruptcy that is not dismissed within 30 days. In
addition, if the cause of such suspension has not been cured within 90
days after the date of the suspension order (including making overdue
payments or filings), then the license is deemed automatically
terminated. Article XII-B does not currently provide for licenses to
terminate other than by revocation after a hearing.

BL §§ 560(3) and 560(4) address examination expenses and the
confidentiality of examination reports. However, those provisions are
also founds in BL §§ 17 and 36(10).  Consequently, they are being
deleted here.

BL § 563(1) currently makes a violation of the provisions of Article
XI-B a misdemeanor punishable by a fine of not more than $500 or
imprisonment of not more than 6 months, or both. The amendment
increases the penalty to a class E felony, consistent with other
penalty provisions in the BL.

BL § 576 provides for 10 days' written notice of the cancellation of
the insurance policy to be mailed to certain persons. New § 576(4)
would allow notice to be delivered by other means, including
electronic means, as long as the delivery method includes evidence of
receipt, including a receipt created and maintained in electronic
form.

BL § 577(a) refers to a rate of interest prescribed by the banking
board under BL §14-a, or, if no such rate has been prescribed, 6% per
annum. However, a fixed rate of 16% has been set forth in that
section, and the amendment reflects this change.

BL § 580(3) does not require payment of a fee for the opening of a
branch by a Budget Planner. The amendment authorizes the charging of
such a fee. The last sentence of BL § 580(4) is a transition provision
that applied in 1975 when the provisions regarding surety bonds took
effect. It is now outdated and is being deleted.

BL § 581 provides that the Superintendent must approve or deny an
application for a Budget Planner license within 90 days of the filing
of the application. The amendment would have the 90 days begin to run
from the date the application is deemed complete by the
Superintendent.

BL § 583-a provides that the Superintendent must approve or deny an
application for a change of control of a Budget Planner within 90 days
after the date the application is filed with the Superintendent.  The
amendment would have the 90 days begin to run from the date the
application is deemed complete by the Superintendent.

BL § 584 covers the procedures for suspensions and revocations of
licenses of Budget Planners. Although the section allows the
Superintendent to suspend a license for good cause shown there is no
definition of "good cause." The amendment supplies a definition, which
is based in part on the definition in § 495. The section currently
allows the Superintendent to suspend a license for good cause for 30
days. The amendment would extend the suspension for 90 days, unless
the licensee cures the violation before that time. The amendment also
adds to the list of good cause suspensions any failure to make
required payments to the Department 30 days after the due date,
failure to file any required report by the 30th day after the due
date, the filing of a voluntary petition in bankruptcy and the filing
of an involuntary petition in bankruptcy that is not dismissed within
30 days. In addition, if the cause of such suspension has not been
cured within 90 days after the date of the suspension order (including
making overdue payments or filings), then the license is deemed
automatically terminated. Article XII-C does not currently provide for
licenses to terminate other than by revocation after a hearing.

BL § 584(5) currently provides that a Budget Planner may surrender a
license by delivering written notice to the Superintendent, but that
surrender does not affect the licensee's civil or criminal liability
for acts committed prior to the surrender. The amendment adds that
surrender of a license does not affect the licensee's obligations to
the superintendent for assessments, fees or administrative actions
with respect to the period before such surrender. It also makes clear
that a surrender of a license does not become effective until approved
in writing by the Superintendent.

BL § 586 currently permits books and records to be maintained in
photographic reproductions as well as in paper form. The amendment
would authorize records to be maintained in electronic reproductions,
as well.

BL § 641(1) requires registration as a Money Transmitter if a person
is in the business of selling or issuing checks or receiving money for
transmission. It has routinely been interpreted as not requiring
out-of-state money transmitters to register unless they had a place or
business or agents in New York. The amendment makes clear that an
out-of-state money transmitter must register if it engages in business
in this state, and that the definition of engaging in such business
occurs when the money transmitter induces a person who is a resident
or is located in New York to enter into a transaction by any means,
including the Internet.

BL § 643 contains an outdated transitional provision.

BL § 646(4) contains the same confidentiality provision that is being
deleted from section 560(4) in favor of the provision in § 36(10).

BL § 647 contains a transitional provision that is outdated.

BL § 650(2) increases the criminal penalties for violations of Article
XIII-B, along the same lines as section 373(4),499 and 563(1).

BL § 651 provides that a money transmitter must have a surety bond in
the amount of 80% of the net carrying value of outstanding
instruments. The amendment would raise the required amount to 90% of
net carrying value.

BL § 657 prohibits the amount assessed against any uninsured money
transmitter from exceeding two per cent of the New York instruments
insured. The amendment decreases the fee to one percent of the annual
volume of New York instruments for the preceding calendar year or
$125,000, whichever is less.

 LEGISLATIVE HISTORY

This is a new proposal.

 STATEMENT IN SUPPORT :

The amendments made in this proposal are largely technical in nature.
Substantive amendments are, however, made in the check casher article
through the elimination of the requirement that each location be
primarily engaged in financial services. This amendment will authorize
merchants to become licensed check cashers (subject to all of the
requirements of BL Article IX-A), thus potentially making these
important services more generally available, particularly in upstate
areas.

The bill also increases the permissible fee for exempt transactions to
$5 under the Department's interpretation. Such flat fees must be fully
disclosed prior to the transaction, which allows the consumer to make
a fully informed decision about whether to proceed. The amount that
may be charged by a person who cashes checks as an incident to another
lawful business has not been changed since 1999.  The administrative
costs of check cashing have increased considerably since that time, as
a result of fraud.  This amendment will also allow potential new
licensees with another business, such as money transmission, to
initiate business cashing checks, thereby servicing the community,
while an application for a check casher license is pending. Also,
various penalty provisions are increased in various sections to a
Class E felony.

In addition, the reach of Article XIII-B is expanded to cover all
situations where money transmission services are extended to persons
located in New York, even though the vendor is located in another
state. Where out-of-state money transmitters without a physical
presence or agents in New York are soliciting and doing business with
persons located in New York, this state has an interest in consumer
protection that will be addressed if such out-of-state money
transmitter must be registered here.

All these substantive amendments are needed in the Department's view
because of the evolution in financial services and the risks that
these services pose for consumers.

 BUDGET IMPLICATIONS :

This bill would not have an impact on state finances.

 EFFECTIVE DATE :
This bill would take effect immediately.

2009-S3727 - Bill Text download pdf

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

                                  3727

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             March 30, 2009
                               ___________

Introduced  by  Sen.  FOLEY -- (at request of the Banking Department) --
  read twice and ordered printed, and when printed to  be  committed  to
  the Committee on Banks

AN  ACT  to  amend  the  banking  law,  in relation to licensed lenders,
  licensed cashers of checks, sales finance companies,  premium  finance
  companies,  budget  planners  and transmitters of money; and to repeal
  certain provisions of such law relating thereto

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

  Section 1. Section 340 of the banking law, as amended by chapter 22 of
the laws of 1990, is amended to read as follows:
  S 340.  Doing business without license prohibited. No person [or other
entity] shall engage in the business of making loans IN NEW YORK in  the
principal amount of [twenty-five] FIFTY thousand dollars or less for any
loan  to  an  individual  for personal, family, household, or investment
purposes and in a principal  amount  of  [fifty]  ONE  HUNDRED  thousand
dollars or less for business and commercial [loans, and charge, contract
for,  or  receive  a  greater  rate of interest than the lender would be
permitted by law to charge if he were not a licensee hereunder except as
authorized by this article  and]  PURPOSES  without  first  obtaining  a
license from the superintendent.
  For  the  purposes  of  this  section,  a  person [or entity] shall be
considered as engaging in the business of making loans in New York,  and
subject  to  the licensing and other requirements of this article, if it
solicits loans in the amounts prescribed by this section TO  INDIVIDUALS
WHO  ARE  RESIDENTS  OF, OR LOCATED within this state and, in connection
with such solicitation, makes loans to individuals then resident in this
state OR, IN THE CASE OF LOANS  FOR  BUSINESS  OR  COMMERCIAL  PURPOSES,
HAVING  A PLACE OF BUSINESS WITHIN THIS STATE, except that no person [or
entity] shall be considered as engaging in the business of making  loans
in this state on the basis of [isolated, incidental or occasional] tran-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09629-03-9

S. 3727                             2

sactions  which  otherwise  meet the requirements of this section IF THE
NUMBER OF LOANS MADE IN ANY ONE YEAR BY ANY SUCH PERSON IS NOT MORE THAN
FIVE LOANS AND THE AGGREGATE AMOUNT OF LOANS OUTSTANDING AT ANY ONE TIME
DOES NOT EXCEED ONE HUNDRED THOUSAND DOLLARS.
  Nothing  in  this  article  shall  apply  to  licensed collateral loan
brokers.
  S 2. The banking law is amended by adding a new section 340-a to  read
as follows:
  S  340-A. DEFINITIONS. WHEN USED IN THIS ARTICLE: 1. THE TERM "PERSON"
MEANS ANY INDIVIDUAL OR LEGAL ENTITY, INCLUDING ANY  CORPORATION,  PART-
NERSHIP, ASSOCIATION OR LIMITED LIABILITY COMPANY.
  2. THE TERM "CONTROL" MEANS THE POSSESSION, DIRECTLY OR INDIRECTLY, OF
THE  POWER  TO DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT AND POLI-
CIES OF A PERSON, WHETHER BY MEANS OF THE OWNERSHIP OF THE VOTING  STOCK
OR EQUITY INTERESTS OF SUCH PERSON OR OF ONE OR MORE PERSONS CONTROLLING
SUCH  PERSON,  BY  MEANS  OF  A  CONTRACTUAL  ARRANGEMENT, OR OTHERWISE.
CONTROL SHALL BE PRESUMED TO EXIST IF ANY PERSON DIRECTLY OR  INDIRECTLY
OWNS,  CONTROLS  OR  HOLDS WITH THE POWER TO VOTE TEN PERCENT OR MORE OF
THE VOTING STOCK OR EQUITY INTERESTS OF A LICENSEE OR OF ANY OTHER ENTI-
TY THAT DIRECTLY OR INDIRECTLY CONTROLS SUCH PERSON.
  S 3. Subdivisions 3 and 5 of  section  341  of  the  banking  law,  as
amended  by  chapter  494  of  the  laws of 1998, are amended to read as
follows:
  3. In addition to the investigation fee [and annual license fee] every
licensee hereunder shall pay to the superintendent the sums provided  to
be  paid  under the provisions of section seventeen of [the banking law]
THIS CHAPTER.
  5. The applicant shall also prove, in form satisfactory to the  super-
intendent,  that  the  applicant has available for the operation of such
business [at the location or  locations  specified  in  the  application
liquid  assets]  NET  WORTH  of  at least fifty thousand dollars OR SUCH
AMOUNT AS MAY BE DETERMINED BY THE SUPERINTENDENT. This amount shall  be
maintained  for  the period within which the licensee makes loans in the
amounts prescribed in section three hundred forty of  this  article  [at
such location].
  S  4. Section 342 of the banking law, as amended by chapter 494 of the
laws of 1998, is amended to read as follows:
  S 342. Conditions precedent to issuing license; procedure where appli-
cation denied. Upon the filing of such application and  the  payment  of
such fees, if the superintendent shall find that the financial responsi-
bility, experience, character, and general fitness of the applicant, and
of  the  members thereof if the applicant be a partnership [or], associ-
ation OR LIMITED LIABILITY COMPANY, and of the  officers  and  directors
thereof  if  the  applicant be a corporation, 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,  and  if the superintendent shall find that the applicant
has available for the operation of  such  business  [at  each  specified
location  liquid  assets of at least fifty thousand dollars] SUCH AMOUNT
AS CALCULATED IN ACCORDANCE  WITH  SUBDIVISION  FIVE  OF  SECTION  THREE
HUNDRED  FORTY-ONE  OF  THIS ARTICLE, the superintendent shall thereupon
execute a master license, and if applicable  one  or  more  supplemental
licenses,  to make loans in accordance with the provisions of this arti-
cle at the location or locations specified in the said application.  The
superintendent  shall  transmit  one copy of such license or licenses to
the applicant and file the same in the office of  the  department.  Each

S. 3727                             3

such  license  shall remain in full force and effect until it is surren-
dered by the licensee or [revoked or] suspended, REVOKED  OR  TERMINATED
as  [hereinafter]  HEREIN  provided;  if the superintendent shall not so
find,  a master license shall not be issued and the superintendent shall
notify the applicant of the denial. If an application is denied or with-
drawn the superintendent shall [return to the applicant the sum paid  by
the  applicant as a license fee, retaining] RETAIN the investigation fee
to cover the costs of investigating the application. The  superintendent
shall  approve  or deny every application for a master license hereunder
within ninety days from the [filing thereof with the said fees] DATE THE
APPLICATION IS DEEMED COMPLETE BY THE SUPERINTENDENT.
  S 5. Subdivision 1 of section 343 of the banking law,  as  amended  by
chapter 494 of the laws of 1998, is amended to read as follows:
  1.  A  license  shall state the address at which the business is to be
conducted and shall state fully the name of the  licensee,  and  if  the
licensee  is  a  partnership  [or],  association  OR  LIMITED  LIABILITY
COMPANY, the names of the members thereof, and  if  a  corporation,  the
date  and  place  of  its  incorporation. A master license shall be kept
conspicuously posted in the principal place of business of the  licensee
and a supplemental license shall be conspicuously posted at the location
identified  in  the  license. No master or supplemental license shall be
transferable or assignable.
  S 6. The second undesignated paragraph of subdivision 1 of section 345
of the banking law, as amended by chapter 22 of the  laws  of  1990,  is
amended to read as follows:
  [As  used in this subdivision, (a) the term "person" includes an indi-
vidual, partnership, corporation, 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 person, whether by means of the ownership  of  the  voting
stock  or  equity  interests  of  such  person or of one or more persons
controlling such person, by  means  of  a  contractual  arrangement,  or
otherwise.  Control shall be presumed to exist if any person directly or
indirectly owns, controls or holds with the power to vote ten per centum
or more of the voting stock or equity interests of the  person  desirous
of  continuing to maintain and operate a licensee's place of business or
of any entity which directly or indirectly controls  such  person.]  The
superintendent  may,  upon  the  application of a licensee or any [such]
person [or entity], determine whether or not the ownership,  control  or
holding  of  such  voting stock or equity interests constitutes or would
constitute control for purposes of this subdivision.
  S 7. Section 347 of the banking law, as amended by chapter 22  of  the
laws of 1990, is amended to read as follows:
  S 347.  Grounds  for  [revocation or] suspension, REVOCATION OR TERMI-
NATION of license; procedure.   1. The  superintendent  may  suspend  or
revoke  any  license  issued  hereunder if the superintendent shall find
that:
  (a) The licensee has failed to pay any sum of money lawfully  demanded
by  the superintendent or to comply with any demand, ruling, or require-
ment of the superintendent;
  (b) The licensee has violated any provisions of this article, the  act
of  congress  entitled "Truth in Lending Act" and the regulations there-
under, as such act and regulations may from time to time be amended,  or
of any rule or regulation lawfully made by the superintendent;
  (c)  Any fact or condition exists which, if it had existed at the time
of the original application  for  such  license,  [clearly]  would  have

S. 3727                             4

warranted  the  superintendent  in  refusing  originally  to  issue such
license;
  (d) The licensee has engaged in the business of a sales finance compa-
ny  and  has done or failed to do any act, except the failure to pay the
fees required, which would be grounds for the suspension  or  revocation
of  its  license  pursuant  to  section four hundred ninety-five of this
chapter were it required to obtain such a license.
  THE SUPERINTENDENT MAY REVOKE OR SUSPEND ONLY THE  PARTICULAR  LICENSE
WITH  RESPECT TO WHICH GROUNDS FOR REVOCATION OR SUSPENSION MAY OCCUR OR
EXIST, OR, IF THE SUPERINTENDENT SHALL FIND THAT SUCH GROUNDS FOR  REVO-
CATION  OR  SUSPENSION  ARE OF GENERAL APPLICATION TO ALL OFFICES, OR TO
MORE THAN ONE OFFICE, OPERATED  BY  SUCH  LICENSEE,  THE  SUPERINTENDENT
SHALL  REVOKE  OR SUSPEND ALL OF THE LICENSES ISSUED TO SUCH LICENSEE OR
SUCH NUMBER OF LICENSES AS SUCH GROUNDS APPLY TO, AS THE CASE MAY BE.
  2. (A) The superintendent may [on] FOR  good  cause  [shown],  without
notice  or  hearing, suspend any license ISSUED PURSUANT TO THIS ARTICLE
for a period not exceeding [thirty] NINETY days, pending investigation.
  [The superintendent may revoke or suspend only the particular  license
with  respect to which grounds for revocation or suspension may occur or
exist, or, if the superintendent shall find that such grounds for  revo-
cation  or  suspension  are of general application to all offices, or to
more than one office, operated  by  such  licensee,  the  superintendent
shall  revoke  or suspend all of the licenses issued to such licensee or
such number of licenses as such grounds apply to, as the case  may  be.]
"GOOD CAUSE", AS USED IN THIS SUBDIVISION, SHALL EXIST WHEN THE LICENSEE
HAS  DEFAULTED  OR  IS  LIKELY  TO  DEFAULT  IN PERFORMING ITS FINANCIAL
ENGAGEMENTS OR ENGAGES IN DISHONEST OR INEQUITABLE PRACTICES  WHICH  MAY
CAUSE  SUBSTANTIAL  HARM  TO THE PERSONS AFFORDED THE PROTECTION OF THIS
ARTICLE OR THE CIRCUMSTANCES COVERED BY PARAGRAPHS (B) AND (C)  OF  THIS
SUBDIVISION.
  (B) THE SUPERINTENDENT MAY, IN HIS OR HER SOLE DISCRETION, UPON NOTICE
BUT WITHOUT A HEARING, SUSPEND ANY LICENSE ISSUED PURSUANT TO THIS ARTI-
CLE  THIRTY  DAYS AFTER THE DATE THE LICENSEE FAILS TO MAKE ANY PAYMENTS
AS REQUIRED BY THIS CHAPTER.
  (C) THE SUPERINTENDENT MAY, IN HIS OR HER SOLE DISCRETION, UPON NOTICE
BUT WITHOUT A HEARING, SUSPEND ANY LICENSE ISSUED PURSUANT TO THIS ARTI-
CLE:
  (I) THIRTY DAYS AFTER THE DATE THE LICENSEE FAILS TO FILE  ANY  REPORT
REQUIRED  TO  BE  FILED  BY  IT  WITH THE SUPERINTENDENT PURSUANT TO THE
AUTHORITY PROVIDED BY THIS ARTICLE; OR
  (II) IMMEDIATELY UPON NOTICE TO THE SUPERINTENDENT THAT A LICENSEE HAS
FILED A PETITION IN BANKRUPTCY; OR
  (III) UPON NOTICE AT LEAST THIRTY DAYS  AFTER  THE  LICENSEE  HAS  HAD
FILED AGAINST IT A PETITION IN BANKRUPTCY.
  3.  IF  THE  SUPERINTENDENT  HAS  ISSUED AN ORDER SUSPENDING A LICENSE
ISSUED PURSUANT TO THIS ARTICLE FOR GOOD CAUSE PURSUANT TO PARAGRAPH (B)
OR (C) OF SUBDIVISION TWO OF THIS SECTION, SUCH  LICENSE  MAY  BE  REIN-
STATED, IF THE SUPERINTENDENT DETERMINES, 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  LIMITATION,  MAKING  ANY OVERDUE PAYMENT OR
HAVING ANY SUCH BANKRUPTCY PETITION  DISMISSED.  OTHERWISE,  UNLESS  THE
SUPERINTENDENT HAS, IN HIS OR HER SOLE DISCRETION, EXTENDED SUCH SUSPEN-
SION,  THE  LICENSE OF SUCH LICENSEE SHALL BE DEEMED TO BE AUTOMATICALLY
TERMINATED BY OPERATION OF LAW AT THE CLOSE OF BUSINESS ON SUCH DATE.

S. 3727                             5

  4. Any licensee may surrender any license by delivering to the  super-
intendent  written  notice  that  the  licensee  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 ADMINISTRA-
TIVE ACTIONS WITH RESPECT TO ANY PERIOD BEFORE SURRENDER.  SUCH  SURREN-
DER SHALL BECOME EFFECTIVE UPON WRITTEN  APPROVAL BY THE SUPERINTENDENT.
  5.  No  revocation  [or],  suspension, TERMINATION or surrender of any
license shall impair or affect the obligation of any pre-existing lawful
contract between the licensee and any borrower.
  6. Every license issued hereunder shall remain  in  force  and  effect
until  it shall have been surrendered, revoked, TERMINATED, or suspended
in accordance with the provisions of this article, but  the  superinten-
dent  shall  have  authority to reinstate suspended licenses or to issue
new licenses to a licensee whose license or  licenses  shall  have  been
revoked  OR TERMINATED if no fact or condition then exists which clearly
would have warranted the superintendent in refusing originally to  issue
such license under this article.
  7.  Whenever  the  superintendent  shall  revoke  or suspend a license
issued pursuant to this article,  the  superintendent  shall  execute  a
written  order to that effect. The superintendent shall file one copy of
such order in the office of the department and serve  a  copy  upon  the
licensee,  which order may be reviewed in the manner provided by article
seventy-eight of the civil practice law and rules. Such special proceed-
ing for review as authorized by this section must  be  commenced  within
thirty days from the date of such order of suspension or revocation.
  8.    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
LICENSED LENDER IN THIS STATE.
  S  8.  Section 356 of the banking law, as amended by chapter 22 of the
laws of 1990, is amended to read as follows:
  S 356. [Restrictions on certain  loans  by  non-licensees,  interests,
other charges; loans] LOANS made outside this state. [No person or other
entity,  other  than  a  licensee  under this article, shall directly or
indirectly charge, contract for, or receive any interest,  discount,  or
consideration greater than the person or other entity would be permitted
by  law  to  charge  if it were not a licensee hereunder upon a loan not
exceeding the maximum amounts prescribed in section three hundred  forty
of this article.
  The  foregoing  prohibition  shall apply to any person or other entity
who or which, by any device, subterfuge, or  pretense  whatsoever  shall
charge,  contract  for,  or  receive greater interest, consideration, or
charges than is authorized by the laws of this state for any such  loan,
use, or forbearance of money, goods, or things in action or for any such
loan, use, or sale of credit.]
  Any  loan in an amount not exceeding the maximum amounts prescribed in
section three hundred forty of this article for which a greater rate  of
interest,  consideration,  or  charges  than is permitted by the laws of
this state has been charged, contracted for, or received, wherever made,
shall not be enforced in this state and every  person  or  other  entity
participating  therein  in this state shall be subject to the provisions
of this article.  An action to enforce any such loan made in  any  other
state to a person then a resident of that state, who now resides in this
state  may  be  maintained  in  this  state  if  the amount of interest,
discount, consideration or other charge for such loan,  demanded  to  be

S. 3727                             6

paid  in  such  action,  does not exceed that permitted to a licensee by
section three hundred fifty-one of this article for a loan of  the  same
amount repayable in the same manner.
  S  9.  Subdivision  1 of section 366 of the banking law, as amended by
chapter 849 of the laws of 1964, is amended and a new subdivision  4  is
added to read as follows:
  1.  The  term "licensed casher of checks" means any [individual, part-
nership, unincorporated association or corporation] PERSON duly licensed
by the superintendent of banks to engage in  business  pursuant  to  the
provisions of this article.
  4.  THE  TERM  "PERSON"  MEANS  ANY  INDIVIDUAL OR OTHER LEGAL ENTITY,
INCLUDING ANY CORPORATION, PARTNERSHIP, ASSOCIATION OR LIMITED LIABILITY
COMPANY.
  S 10. Subdivisions 1, 2 and 4 of  section  367  of  the  banking  law,
subdivisions  1 and 2 as amended by chapter 151 of the laws of 1945, and
subdivision 4 as amended by chapter 96 of the laws of 1981, are  amended
to read as follows:
  1.  No  person[, partnership, association or corporation] shall engage
in the business of cashing checks, drafts or money orders for a  consid-
eration without first obtaining a license from the superintendent.
  2.  Application  for such license shall be in writing, under oath, and
in the form prescribed by the  superintendent,  and  shall  contain  the
name,  and  the  address both of the residence and place of business, of
the applicant, and if the applicant is a  co-partnership  [or],  associ-
ation,  OR  LIMITED  LIABILITY COMPANY of every member thereof, and if a
corporation, of each officer and director thereof; also, if the business
is to be conducted at a specific address, the address at which the busi-
ness is to be conducted, and if the business is to be conducted  from  a
mobile unit, the New York state registration number or other identifica-
tion of such mobile unit and the area in which the applicant proposes to
operate  such  mobile  unit;  and  also  such further information as the
superintendent may require.
  4. Every applicant shall prove, in form  satisfactory  to  the  super-
intendent  that  he,  SHE  or it has available for the operation of such
business, for each location and for each mobile unit  specified  in  the
application,  liquid  assets of at least ten thousand dollars, and every
licensee shall continuously maintain for the operation of such  business
for each location and for each mobile unit liquid assets of at least ten
thousand  dollars.  Notwithstanding  the  foregoing  provisions  of this
subdivision, the superintendent, upon application by  an  applicant  and
for  good  cause shown, may permit a reduction from ten thousand dollars
to not less than five thousand dollars of minimum liquid assets required
for each location AND SUCH AMOUNT AS HE OR SHE  SHALL  DEEM  APPROPRIATE
FOR EACH LIMITED STATION.
  S  11.  Subdivision 1 of section 369 of the banking law, as amended by
chapter 233 of the laws of 2005, is amended to read as follows:
  1. If the superintendent shall find that:
  (I) the financial responsibility, experience, character,  and  general
fitness of the applicant, and of the members thereof if the applicant be
a  co-partnership [or], association OR LIMITED LIABILITY COMPANY, and of
the officers and directors thereof if the applicant  be  a  corporation,
are  such  as  to command the confidence of the community and to warrant
belief that the business will be operated honestly,  fairly,  and  effi-
ciently  within the purposes of this article, and [if the superintendent
shall find that]

S. 3727                             7

  (II) the granting of such application will promote the convenience and
advantage of the area in which such business is to be conducted, and [if
the superintendent shall find that]
  (III)  the  applicant has available for the operation of such business
for each location and for each mobile unit specified in the  application
liquid  assets  of  at  least  ten  thousand dollars, PROVIDED THAT, THE
SUPERINTENDENT, UPON APPLICATION BY AN  APPLICANT  AND  FOR  GOOD  CAUSE
SHOWN, MAY PERMIT A REDUCTION FROM TEN THOUSAND DOLLARS TO NOT LESS THAN
FIVE  THOUSAND  DOLLARS  OF  MINIMUM  LIQUID  ASSETS  REQUIRED  FOR EACH
LOCATION AND A REDUCTION TO SUCH AMOUNT AS THE SUPERINTENDENT SHALL DEEM
APPROPRIATE FOR EACH LIMITED STATION, AND
  (IV) THE APPLICANT'S PROPOSED OFFICES COMPLY WITH SUBDIVISION ONE-A OF
THIS SECTION, the superintendent shall thereupon execute  a  license  in
duplicate  to  permit  the cashing of checks, drafts and money orders in
accordance with the provisions of this article at the location or in the
area specified in such application. In finding whether  the  application
will  promote  the  convenience  and advantage to the public, the super-
intendent shall determine whether there is a community need  for  a  new
licensee  in  the  proposed  area to be served. THE SUPERINTENDENT SHALL
TRANSMIT ONE COPY OF SUCH LICENSE TO THE APPLICANT AND FILE  ANOTHER  IN
THE OFFICE OF THE DEPARTMENT.
  1-A.  No  license  shall be issued to an applicant for a license, at a
location to be licensed which is closer than one thousand  five  hundred
eighty-four  feet  (three-tenths  of  a mile) from an existing licensee,
MEASURED ON A STRAIGHT LINE ALONG THE STREET BETWEEN THE  NEAREST  POINT
OF THE STORE FRONTS OF THE CHECK CASHING FACILITIES, except:
  (I) with the written consent of such existing licensee [or],
  (II) pursuant to subdivision three of section three hundred seventy of
this article, subject to any restriction or condition as the superinten-
dent may promulgate by regulation[; provided, however],
  (iii)  the superintendent may permit a location to be licensed that is
closer than three-tenths of a mile from an  existing  licensee  provided
THAT  (A)  such  applicant  engages  in the cashing of checks, drafts or
money orders only for payees of such checks, drafts or money orders that
are other than natural persons at the location to be  licensed  and  (B)
such  applicant  was  engaged  in  the cashing of such checks, drafts or
money orders for payees that are other  than  natural  persons  at  such
location on or before the fourteenth day of July, two thousand four, and
[provided  further]  (C)  SUCH  LICENSE SHALL BEAR A LEGEND STATING THAT
SUCH LOCATION IS RESTRICTED TO THE CASHING OF CHECKS,  DRAFTS  OR  MONEY
ORDERS ONLY FOR PAYEES THAT ARE OTHER THAN NATURAL PERSONS, AND (D) that
[upon  licensing  any  such  location  by the superintendent,] AFTER THE
SUPERINTENDENT LICENSES SUCH LOCATION, such license as it pertains sole-
ly to such location shall not be affected thereafter by  any  change  of
control  of  such license pursuant to section three hundred seventy-a of
this article, [provided that] AS LONG AS the licensee  continues  there-
after  to  engage  at  that location in the cashing of checks, drafts or
money orders only for payees that are other than  natural  persons  [and
provided further that such license shall bear a legend stating that such
location  is restricted to the cashing of checks, drafts or money orders
only for payees that are other than natural persons].  The  three-tenths
of  a  mile distance requirement as set forth in this [section] SUBDIVI-
SION shall  not  apply  in  cases  where  the  existing  licensee  is  a
restricted  location  as authorized in the preceding sentence, or is any
other licensed location that engages solely in the  cashing  of  checks,
drafts  or  money  orders  only  for  payees that are other than natural

S. 3727                             8

persons. [For purposes of this section, such distance shall be  measured
on  a  straight  line  along the street between the nearest point of the
store fronts of the check cashing facilities. The  primary  business  of
the  licensee,  at  the  location  to  be  licensed,  shall be financial
services. The superintendent shall transmit one copy of such license  to
the applicant and file another in the office of the department. Notwith-
standing  the  foregoing provisions of this subdivision, the superinten-
dent, upon application by an applicant and for  good  cause  shown,  may
permit a reduction from ten thousand dollars to not less than five thou-
sand dollars of minimum liquid assets required for each location.]
  S 12. Subdivision 7 of section 369 of the banking law is REPEALED.
  S  13.  Subdivision 2 of section 370-a of the banking law, as added by
chapter 142 of the laws of 1992, is amended to read as follows:
  2. The superintendent shall approve or disapprove the proposed  change
of  control  of a licensee in accordance with the provisions of subdivi-
sions one and six of section three hundred sixty-nine of  this  article.
The  superintendent shall approve or disapprove the application in writ-
ing within ninety days [after the date the application is filed with the
superintendent] FROM THE DATE THE APPLICATION IS DEEMED COMPLETE BY  THE
SUPERINTENDENT.
  S  14.    Section 373 of the banking law, as amended by chapter 485 of
the laws of 1947, subdivision 1 as amended by chapter 432 of the laws of
2004, subdivision 2 as amended by chapter  132  of  the  laws  of  1969,
subdivision  3 as amended by chapter 310 of the laws of 1962, and subdi-
vision 5 as added by chapter 235 of the laws of 2008, is amended to read
as follows:
  S 373. Acts prohibited; suspension or revocation  of  license;  penal-
ties.    1.  No licensee shall engage in the business of making loans of
money, credit, goods  or  things  or  discounting  of  notes,  bills  of
exchange,  checks, or other evidences of debt pursuant to the provisions
of article nine of this chapter, nor shall a loan business or the  nego-
tiation  of loans or the discounting of notes, bills of exchange, checks
or other evidences of debt be conducted on the same premises  where  the
licensee is conducting business pursuant to the provisions of this arti-
cle.   Except as otherwise provided by regulation of the superintendent,
all checks, drafts and money orders shall be deposited in the licensee's
bank account not later than the first business day following the day  on
which  they  were  cashed. No licensee shall at any time cash or advance
any moneys on a post-dated check or draft or engage in the  business  of
transmitting money or receiving money for transmission; provided, howev-
er,  that a licensee may cash a check payable on the first banking busi-
ness day following the date of cashing (a) if such check is drawn by the
United States, the state of New York, or any  political  subdivision  of
the  state of New York, or by any department, bureau, agency, authority,
instrumentality or officer, acting in  his  official  capacity,  of  the
United  States  or of the state of New York or of any political subdivi-
sion of the state of New York, or (b) if such check is a  payroll  check
drawn  by  an  employer  to  the  order  of  its employee in payment for
services performed by such employee. No licensee shall cash  any  check,
draft  or  money  order  if  the face amount for which it is drawn is in
excess  of  fifteen  thousand  dollars;  provided,  however,  that  this
restriction  shall  not  apply to the cashing of checks, drafts or money
orders drawn by the United States, any state thereof  or  any  political
subdivision  of  any  such  state, or by any department, bureau, agency,
authority, instrumentality or officer, acting in his official  capacity,
of  the United States, any state thereof or any political subdivision of

S. 3727                             9

any such state, or any banking institution, or to  any  check  or  draft
drawn by any insurance company, any broker or dealer registered with the
securities  and  exchange commission, or any attorney for the settlement
of  claims,  or  to  any  check  which has been certified by the banking
institution on which it has been drawn; provided further, however,  that
any  such restriction upon the maximum face amount that may be cashed by
a licensee shall not apply to the cashing of  checks,  drafts  or  money
orders  by  licensees  for payees of such checks, drafts or money orders
that are other than natural persons. For purposes of  this  subdivision,
"banking  institution"  means  any  bank,  trust  company, savings bank,
savings and loan association or  credit  union  which  is  incorporated,
chartered  or  organized under the laws of this state or any other state
or the United States.
  2. [The] IN ADDITION TO THE AUTHORITY SET FORTH IN  SUBDIVISION  THREE
OF THIS SECTION, THE superintendent may suspend or revoke any license or
licenses issued pursuant to this article if, after notice and a hearing,
he  OR  SHE  shall  find  that the licensee (a) has committed any fraud,
engaged in any dishonest activities or made  any  misrepresentation;  or
(b) has violated any provisions of [the banking law] THIS CHAPTER or any
regulation issued pursuant thereto, or has violated any other law in the
course  of  [its or his] THE LICENSEE'S dealings as a licensed casher of
checks; or (c) has made a false statement in the  application  for  such
license  or  failed  to give a true reply to a question in such applica-
tion; or (d) has demonstrated his, HER or its incompetency  or  untrust-
worthiness  to  act  as a licensed casher of checks; or (e) is not doing
sufficient business pursuant to this article to justify the  continuance
of  the  license,  or if he OR SHE shall find that any ground or grounds
exist which would require or warrant the refusal of an  application  for
the  issuance  of  the  license  if such an application were then before
[him] THE SUPERINTENDENT.  Such a hearing shall be held  in  the  manner
and  upon such notice as may be prescribed by the superintendent. [Pend-
ing an investigation or a hearing for the suspension  or  revocation  of
any license or licenses issued pursuant to this article, the superinten-
dent  may  temporarily suspend such license or licenses for a period not
to exceed ninety days, provided the superintendent shall find that  such
a temporary suspension is in the public interest.]
  3.  (A) THE SUPERINTENDENT MAY FOR GOOD CAUSE, WITHOUT NOTICE OR HEAR-
ING, SUSPEND 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 WHEN THE LICENSEE HAS DEFAULTED  OR  IS
LIKELY  TO DEFAULT IN PERFORMING ITS FINANCIAL ENGAGEMENTS OR ENGAGES IN
DISHONEST OR INEQUITABLE PRACTICES WHICH MAY CAUSE SUBSTANTIAL  HARM  TO
THE PERSONS AFFORDED THE PROTECTION OF THIS ARTICLE OR THE CIRCUMSTANCES
COVERED BY PARAGRAPHS (B) AND (C) OF THIS SUBDIVISION.
  (B) THE SUPERINTENDENT MAY, IN HIS OR HER SOLE DISCRETION, UPON NOTICE
BUT WITHOUT A HEARING, SUSPEND ANY LICENSE ISSUED PURSUANT TO THIS ARTI-
CLE  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, UPON NOTICE
BUT WITHOUT A HEARING, SUSPEND ANY LICENSE ISSUED PURSUANT TO THIS ARTI-
CLE: (I) THIRTY DAYS AFTER THE DATE  THE  LICENSEE  FAILS  TO  FILE  ANY
REPORT  REQUIRED  TO  BE FILED BY IT WITH THE SUPERINTENDENT PURSUANT TO
THE AUTHORITY PROVIDED BY THIS ARTICLE; (II) IMMEDIATELY UPON NOTICE  TO
THE  SUPERINTENDENT  THAT A LICENSEE HAS FILED A PETITION IN BANKRUPTCY;
(III) AT LEAST THIRTY DAYS AFTER THE LICENSEE HAS HAD FILED AGAINST IT A

S. 3727                            10

PETITION IN BANKRUPTCY; OR (IV) AT LEAST THIRTY DAYS AFTER THE  LICENSEE
HAS FAILED TO MAINTAIN THE REQUISITE CAPITAL LEVEL.
  4.  IF  THE  SUPERINTENDENT  HAS  ISSUED AN ORDER SUSPENDING A LICENSE
ISSUED PURSUANT TO THIS ARTICLE FOR GOOD CAUSE PURSUANT TO PARAGRAPH (B)
OR (C) OF SUBDIVISION THREE OF THIS SECTION, SUCH LICENSE MAY  BE  REIN-
STATED, IF THE SUPERINTENDENT DETERMINES, 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  LIMITATION,  MAKING  ANY OVERDUE PAYMENT OR
HAVING ANY SUCH BANKRUPTCY PETITION  DISMISSED.  OTHERWISE,  UNLESS  THE
SUPERINTENDENT HAS, IN HIS OR HER SOLE DISCRETION, EXTENDED SUCH SUSPEN-
SION,  THE  LICENSE OF SUCH LICENSEE SHALL BE DEEMED TO BE AUTOMATICALLY
TERMINATED BY OPERATION OF LAW AT THE CLOSE OF BUSINESS ON SUCH DATE.
  5. Whenever the superintendent  shall  suspend  or  revoke  a  license
issued  pursuant  to  this  article, he OR SHE shall forthwith execute a
written order to that effect. The superintendent shall on the date  such
order  is executed file one copy thereof in the office of the department
and serve a second copy thereof on the licensee either personally or  by
mailing  the  same  to  the  last known address of such licensee. [Such]
EXCEPT FOR ANY ORDERS ISSUED  PURSUANT  TO  SUBDIVISION  THREE  OF  THIS
SECTION,  SUCH  order shall be subject to review by the supreme court in
the manner provided in article seventy-eight of the civil  practice  law
and  rules;  provided,  however, that a special proceeding for review of
such order must be commenced within thirty days from the  date  of  such
order  of  suspension  or revocation and, provided further, that no stay
shall be granted pending the  determination  of  the  matter  except  on
notice to the superintendent and for a period not exceeding thirty days.
  6.  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
LICENSED CHECK CASHER IN THIS STATE.
  [4.]  7. Any person[, partnership, association or corporation] and the
several members, officers, directors, agents and employees thereof,  who
shall  violate any of the provisions of this article, shall be guilty of
a [misdemeanor, and shall be punishable by  imprisonment  for  not  more
than  one year or by a fine of not more than five hundred dollars, or by
both such fine and imprisonment] CLASS E FELONY.
  [5.] 8. Notwithstanding the provisions of subdivision [four] SEVEN  of
this  section, any person[, partnership, association or corporation] and
the several members, officers, directors, agents and  employees  thereof
who  shall  violate  the  provisions of subdivision one of section three
hundred sixty-seven of this article shall be guilty of a class A  misde-
meanor.
  S  15.  Subdivision 1 of section 374 of the banking law, as amended by
chapter 582 of the laws of 2000, is amended to read as follows:
  1. The provisions of this article shall not apply when checks,  drafts
or  money orders are cashed, other than by a licensee, without a consid-
eration or charge; nor when checks, drafts or money orders  are  cashed,
other  than  by  a  licensee, as an incident to the conduct of any other
lawful business where not more than [one dollar  is]  FIVE  DOLLARS  ARE
charged  for  cashing  each  check,  draft or money order; nor shall the
provisions of this article apply to any national bank,  federal  reserve
bank,  or to any person[, partnership, association, corporation or other
organization] doing business under or pursuant to the provisions of this
chapter, except a licensee under this article.

S. 3727                            11

  S 16. Subdivisions 6-a, 6-b and 7 of section 491 of the  banking  law,
subdivision  6-a as amended by chapter 289 of the laws of 1962, subdivi-
sion 6-b as added by chapter 358 of the laws of 1958, and subdivision  7
as  amended  by  chapter 837 of the laws of 1966, are amended to read as
follows:
  6-a.  "Retail  instalment  obligation" or "obligation" means an agree-
ment, entered into in this state, pursuant to which the  buyer  promises
to  pay,  in  instalments, the time sale price or prices of goods and/or
services, or any part thereof. The term does not include [(a)] a  retail
instalment  contract[,  (b)] OR a retail instalment credit agreement [or
(c) an obligation which is intended to be and is ultimately  insured  or
guaranteed  under  title three of the act of Congress entitled "Service-
men's Readjustment Act of 1944"].  THE TERM INCLUDES SUCH  AN  AGREEMENT
WHEREVER  ENTERED  INTO  IF  EXECUTED  BY THE BUYER IN THIS STATE AND IF
SOLICITED IN PERSON BY A SALESMAN OR OTHER PERSON ACTING ON HIS  OR  HER
OWN BEHALF OR THAT OF THE SELLER.
  6-b.  "Retail instalment credit agreement" or "credit agreement" means
an agreement entered into in this state, pursuant  to  which  the  buyer
promises  to  pay,  in  instalments, his OR HER outstanding indebtedness
from time to time to a retail seller, not evidenced by a retail  instal-
ment contract or obligation, for one or more items of goods or services,
whenever  purchased or obtained, which provides for a service charge and
under which instalment payments apply to his OR HER outstanding  indebt-
edness  from time to time.  THE TERM INCLUDES SUCH AN AGREEMENT WHEREVER
ENTERED INTO IF EXECUTED BY THE BUYER IN THIS STATE AND IF SOLICITED  IN
PERSON  BY A SALESMAN OR OTHER PERSON ACTING ON HIS OR HER OWN BEHALF OR
THAT OF THE SELLER.
  7. "Sales finance company" means a person  engaged,  in  whole  or  in
part, directly or indirectly, in the business of purchasing or otherwise
acquiring  retail instalment contracts, obligations or credit agreements
made by and between other parties, or any  interest  therein.  The  term
includes a retail seller of motor vehicles engaged, in whole or in part,
in  the  business  of  holding retail instalment contracts acquired from
retail buyers, [which have] IF THE NUMBER OF RETAIL INSTALMENT CONTRACTS
ACQUIRED IN ANY ONE YEAR EXCEEDS FIVE SUCH CONTRACTS, OR IF  THE  aggre-
gate  unpaid time balances [of twenty-five] ON SUCH CONTRACTS EXCEED ONE
HUNDRED thousand dollars or more at any one time, exclusive of contracts
repurchased from a sales finance company or financing agency,  under  an
agreement  to  repurchase in case of default entered into as an incident
to the bona fide sale thereof to a sales finance  company  or  financing
agency.  The term does not include the pledgee of an aggregate number of
contracts to secure a bona fide loan thereon, OR A SECONDARY  HOLDER  OF
SUCH  CONTRACTS.    The  term  includes a person engaged, in whole or in
part, directly or indirectly, in the business of  entering  into  retail
instalment  credit agreements with retail buyers pursuant to subdivision
eleven of section four hundred thirteen of the  personal  property  law.
FOR PURPOSES OF THIS ARTICLE, THE TERM "SECONDARY HOLDER" MEANS A PERSON
THAT (I) ACQUIRES INSTALMENT SALES CONTRACTS, OR INTERESTS THEREIN, FROM
PERSONS  WHO ARE NOT RETAIL SELLERS WITH RESPECT TO SUCH CONTRACTS; (II)
IS NOT ITSELF A RETAIL SELLER WITH RESPECT TO SUCH CONTRACTS; AND  (III)
DOES  NOT  SERVICE  SUCH  CONTRACTS,  OR IN THE ORDINARY COURSE HAVE ANY
CONTACT WITH THE OBLIGATORS UNDER  SUCH  CONTRACTS;  PROVIDED,  HOWEVER,
THAT  ANY  CONTACT  BETWEEN  A  SECONDARY HOLDER AND AN OBLIGOR SHALL BE
INITIATED SOLELY BY THE OBLIGOR.
  S 17. Subdivisions 1 and 2 of section 492 of the banking law, subdivi-
sion 1 as amended by chapter 547 of the laws of 2008, and subdivision  2

S. 3727                            12

as  added  by  chapter  635  of the laws of 1956, are amended to read as
follows:
  1.  No  person,  except a bank, savings bank, savings and loan associ-
ation, trust company, private banker, credit union, OR investment compa-
ny, organized under [article twelve of] this chapter [and authorized  to
accept  deposits,  national  bank,  federal savings association, federal
credit union, or out-of-state state bank, as such  term  is  defined  in
subdivision  two  of  section two hundred twenty-two of this chapter], A
BRANCH OR AGENCY OF A FOREIGN BANKING CORPORATION LICENSED BY THE SUPER-
INTENDENT OR COMPTROLLER OF THE CURRENCY TO TRANSACT  BUSINESS  IN  THIS
STATE,  ANY BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, INDUSTRIAL
LOAN COMPANY, BANK OR CREDIT UNION ORGANIZED UNDER THE LAWS OF ANY OTHER
STATE OR THE UNITED STATES,  or  lender  licensed  TO  CONDUCT  BUSINESS
pursuant to THE PROVISIONS OF article nine of this chapter, shall engage
in  the  business  of  a  sales  finance company in this state without a
license therefor obtained from the superintendent, as provided  in  this
article.
  2.  [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  of  the applicant and date of incorporation, if
incorporated;
  (b) The complete address where the business is to be conducted,  show-
ing  the street and number, if any, the office building and room number,
if any, and the municipality and county;
  (c) 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
  (d) The name and resident address of the  owner  or  partners  of  the
applicant  or,  if a corporation or association, of the directors, trus-
tees and principal officers, and of any stockholder  owning  twenty  per
centum or more of its stock; and
  (e)  Such  other  pertinent  information  as  the  superintendent  may
require.]
  THE APPLICATION FOR A LICENSE TO BE A SALES FINANCE COMPANY  SHALL  BE
IN  WRITING,  UNDER  OATH, AND IN THE FORM PRESCRIBED BY THE SUPERINTEN-
DENT. THE APPLICATION SHALL CONTAIN THE NAME AND COMPLETE  BUSINESS  AND
RESIDENTIAL ADDRESS OR ADDRESSES OF THE APPLICANT. IF THE APPLICANT IS A
PARTNERSHIP,  ASSOCIATION,  CORPORATION OR OTHER FORM OF BUSINESS ORGAN-
IZATION, THE APPLICATION SHALL CONTAIN THE NAMES AND  COMPLETE  BUSINESS
AND RESIDENTIAL ADDRESSES OF EACH MEMBER, DIRECTOR AND PRINCIPAL OFFICER
THEREOF. SUCH APPLICATION SHALL ALSO INCLUDE A DESCRIPTION OF THE ACTIV-
ITIES  OF  THE  APPLICANT,  IN  SUCH DETAIL AND FOR SUCH PERIODS, AS THE
SUPERINTENDENT MAY REQUIRE; INCLUDING:
  (A) AN AFFIRMATION OF FINANCIAL SOLVENCY  NOTING  SUCH  CAPITALIZATION
REQUIREMENTS  AS  MAY  BE  REQUIRED BY THE SUPERINTENDENT, AND ACCESS TO
SUCH CREDIT AS MAY BE REQUIRED BY THE SUPERINTENDENT;
  (B) THE FINGERPRINTS OF THE APPLICANT AND EACH  MEMBER,  DIRECTOR  AND
PRINCIPAL  OFFICER OF THE APPLICANT AS THE SUPERINTENDENT MAY DETERMINE,
WHICH MAY BE SUBMITTED TO THE DIVISION OF CRIMINAL JUSTICE SERVICES  AND
THE  FEDERAL  BUREAU  OF  INVESTIGATION  FOR STATE AND NATIONAL CRIMINAL
HISTORY RECORD CHECKS;
  (C) AN AFFIRMATION THAT THE APPLICANT, OR ITS  MEMBERS,  DIRECTORS  OR
PRINCIPALS AS MAY BE APPROPRIATE, ARE AT LEAST TWENTY-ONE YEARS OF AGE;
  (D)  INFORMATION  AS TO THE CHARACTER, FITNESS, FINANCIAL AND BUSINESS
RESPONSIBILITY,  BACKGROUND  AND  EXPERIENCES  OF  THE  APPLICANT,   ITS

S. 3727                            13

MEMBERS, DIRECTORS OR PRINCIPALS AND OF ANY PERSON OWNING TEN PER CENTUM
OR  MORE  OF  THE  APPLICANT AND IF SUCH PERSON IS A PARTNERSHIP, CORPO-
RATION, ASSOCIATION OR OTHER FORM OF BUSINESS ORGANIZATION,  SUCH  ENTI-
TY'S MEMBERS, DIRECTORS OR PRINCIPALS; AND
  (E)  SUCH  OTHER  PERTINENT  INFORMATION  AS  THE SUPERINTENDENT SHALL
REQUIRE.
  S 18. Subdivision 2 of section 492-a of the banking law, as  added  by
chapter 142 of the laws of 1992, is amended to read as follows:
  2.  The superintendent shall approve or disapprove the proposed change
of control of a licensee in accordance with the provisions  of  subdivi-
sion  one  of  section  four  hundred  ninety-three of this article. The
superintendent shall approve or disapprove the  application  in  writing
within ninety days after the date the application is [filed with] DEEMED
COMPLETE BY the superintendent.
  S  19. Subdivision 7 of section 493 of the banking law is REPEALED and
subdivision 4, as amended by chapter 132 of the laws of 1969, is amended
to read as follows:
  4. Each license issued hereunder shall remain in full force and effect
until it is surrendered by the licensee [or] revoked [or], TERMINATED OR
suspended as provided in this [article] CHAPTER.
  S 20. Paragraph (e) of subdivision 1 and subdivision 7 of section  495
of  the  banking  law  are  REPEALED, and subdivisions 2, 3, 4 and 5, as
added by chapter 635 of the laws of 1956, subdivision 5  as  amended  by
chapter 64 of the laws of 1958, are amended to read as follows:
  2.   [No] (A) EXCEPT AS PROVIDED FOR IN PARAGRAPHS (C) AND (D) OF THIS
SUBDIVISION, NO license UNDER THIS ARTICLE shall be suspended or revoked
except after a hearing thereon. [The] EXCEPT AS  OTHERWISE  PROVIDED  IN
THIS  SECTION,  THE  superintendent shall give the licensee at least ten
days' written notice of the time and place of such  hearing  by  [regis-
tered]  CERTIFIED mail, RETURN RECEIPT REQUESTED, addressed to the prin-
cipal place of business in this state of such licensee THEN APPEARING ON
THE RECORDS OF THE SUPERINTENDENT.   Any order  suspending  or  revoking
such  license shall recite the grounds upon which it is based [and shall
not be effective until ten days after written notice  thereof  has  been
sent by registered mail to the licensee at such principal place of busi-
ness].  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
SALES FINANCE COMPANY IN THIS STATE. THE SUPERINTENDENT IN  HIS  OR  HER
DISCRETION  MAY  REVOKE  OR  SUSPEND  ONLY  THE  PARTICULAR LICENSE WITH
RESPECT TO WHICH GROUNDS FOR  REVOCATION  OR  SUSPENSION  MAY  OCCUR  OR
EXIST;  BUT IF HE OR SHE FINDS THAT GROUNDS FOR REVOCATION OR SUSPENSION
ARE OF GENERAL APPLICATION TO ALL PLACES OF BUSINESS, OR  TO  MORE  THAN
ONE PLACE OF BUSINESS, OPERATED BY SUCH LICENSEE, HE OR SHE SHALL REVOKE
OR SUSPEND ALL OF THE LICENSES ISSUED TO SAID LICENSEE OR THOSE LICENSES
TO WHICH THE GROUNDS FOR REVOCATION OR SUSPENSION APPLY, AS THE CASE MAY
BE.
  (B)  THE  SUPERINTENDENT MAY FOR GOOD CAUSE, WITHOUT NOTICE OR A HEAR-
ING, SUSPEND 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 WHEN THE LICENSEE HAS DEFAULTED  OR  IS
LIKELY  TO DEFAULT IN PERFORMING ITS FINANCIAL ENGAGEMENTS OR ENGAGES IN
DISHONEST OR INEQUITABLE PRACTICES WHICH MAY CAUSE SUBSTANTIAL  HARM  TO
THE PERSONS AFFORDED THE PROTECTION OF THIS ARTICLE OR THE CIRCUMSTANCES
COVERED BY PARAGRAPHS (C) AND (D) OF THIS SUBDIVISION.

S. 3727                            14

  (C) THE SUPERINTENDENT MAY, IN HIS OR HER SOLE DISCRETION, UPON NOTICE
BUT WITHOUT A HEARING, SUSPEND ANY LICENSE ISSUED PURSUANT TO THIS ARTI-
CLE  UPON  THE FAILURE OF SUCH LICENSEE TO MAKE ANY PAYMENTS AS REQUIRED
BY THIS CHAPTER.
  (D) THE SUPERINTENDENT MAY, IN HIS OR HER SOLE DISCRETION, UPON NOTICE
BUT WITHOUT A HEARING, SUSPEND ANY LICENSE ISSUED PURSUANT TO THIS ARTI-
CLE:
  (I)  THIRTY  DAYS AFTER THE DATE THE LICENSEE FAILS TO FILE ANY REPORT
REQUIRED TO BE FILED BY IT WITH THE SUPERINTENDENT PURSUANT TO AUTHORITY
PROVIDED BY THIS ARTICLE; OR
  (II) IMMEDIATELY UPON NOTICE TO THE SUPERINTENDENT THAT A LICENSEE HAS
FILED A PETITION IN BANKRUPTCY; OR
  (III) AT LEAST THIRTY DAYS AFTER THE LICENSEE HAS HAD FILED AGAINST IT
A PETITION IN BANKRUPTCY.
  3. [The superintendent in his discretion may revoke  or  suspend  only
the  particular  license with respect to which grounds for revocation or
suspension may occur or exist; but if he finds that grounds for  revoca-
tion or suspension are of general application to all places of business,
or  to  more  than  one place of business, operated by such licensee, he
shall revoke or suspend all of the licenses issued to said  licensee  or
those  licenses to which the grounds for revocation or suspension apply,
as the case may be.] IF THE SUPERINTENDENT HAS ISSUED AN ORDER  SUSPEND-
ING  A  LICENSE  FOR GOOD CAUSE PURSUANT TO PARAGRAPH (B), (C) OR (D) OF
SUBDIVISION TWO OF THIS SECTION, SUCH LICENSE MAY BE REINSTATED, IF  THE
SUPERINTENDENT  DETERMINES,  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, INCLUD-
ING, WITHOUT LIMITATION, MAKING ANY OVERDUE PAYMENT OR HAVING  ANY  SUCH
BANKRUPTCY  PETITION  DISMISSED.    OTHERWISE, UNLESS THE SUPERINTENDENT
HAS, IN HIS OR  HER  SOLE  DISCRETION,  EXTENDED  SUCH  SUSPENSION,  THE
LICENSE  OF SUCH LICENSEE SHALL BE DEEMED TO BE AUTOMATICALLY TERMINATED
BY OPERATION OF LAW AT THE CLOSE OF BUSINESS ON SUCH DATE.
  4. Any licensee may surrender any license by delivering to the  super-
intendent  written  notice that such license is thereby surrendered, but
such surrender shall not affect the licensee's civil or criminal liabil-
ity for acts committed prior [thereto] TO SUCH SURRENDER  OR  ITS  OBLI-
GATIONS  TO  THE  SUPERINTENDENT FOR ASSESSMENTS, FEES OR ADMINISTRATIVE
ACTIONS WITH RESPECT TO ANY PERIOD BEFORE SUCH SURRENDER.  SUCH  SURREN-
DER SHALL BECOME EFFECTIVE UPON WRITTEN APPROVAL BY THE SUPERINTENDENT.
  5.  No suspension, revocation, TERMINATION or surrender of any license
shall impair or affect the obligation of any instalment contract,  obli-
gation  or  credit agreement lawfully acquired previously thereto by the
licensee.
  S 21. Subdivisions 3 and 4 of section  497  of  the  banking  law  are
REPEALED.
  S  22.  Section 499 of the banking law, as added by chapter 635 of the
laws of 1956, is amended to read as follows:
  S 499. Violations and penalties. Any person who  violates  or  partic-
ipates  in  the violation of any provision of this article, or who know-
ingly makes any incorrect statement of a material fact in  any  applica-
tion,  report  or  statement  filed  pursuant  to  this  article, or who
knowingly omits to state any material fact necessary to give the  super-
intendent  any information lawfully required by him OR HER or refuses to
permit any lawful investigation or examination, shall  be  guilty  of  a
[misdemeanor  and,  upon  conviction,  shall be fined not more than five

S. 3727                            15

hundred dollars or imprisoned for not more than six months or  both,  in
the discretion of the court] CLASS E FELONY.
  S  23. Subdivision 2 of section 554 of the banking law is REPEALED and
a new subdivision 2 is added to read as follows:
  2. "BANKING INSTITUTION" MEANS A BANK, SAVINGS BANK, SAVINGS AND  LOAN
ASSOCIATION,  TRUST COMPANY, PRIVATE  BANKER, CREDIT UNION OR INVESTMENT
COMPANY ORGANIZED UNDER THE BANKING LAW OF THIS STATE, A BRANCH OR AGEN-
CY OF A FOREIGN BANKING CORPORATION LICENSED BY  THE  SUPERINTENDENT  OR
THE  COMPTROLLER  OF THE CURRENCY TO TRANSACT BUSINESS IN THIS STATE, OR
ANY BANK, SAVINGS BANK, SAVINGS AND LOAN  ASSOCIATION,  INDUSTRIAL  LOAN
COMPANY  OR  CREDIT UNION ORGANIZED UNDER THE LAWS OF ANY OTHER STATE OR
THE UNITED STATES.
  S 24. Subdivision 1 of section 555 of the banking law, as  amended  by
chapter 547 of the laws of 2008, is amended to read as follows:
  1.  No  person except a [lending] BANKING institution [or], an author-
ized insurer OR A LENDER LICENSED PURSUANT TO ARTICLE NINE OF THIS CHAP-
TER shall engage in the business of a premium finance agency  without  a
license  therefor  obtained from the superintendent, as provided in this
article.
  S 25. Subdivision 5 of section 556 of the banking law is REPEALED.
  S 26. Section 558 of the banking law, as added by chapter 488  of  the
laws of 1960, is amended to read as follows:
  S 558.  Change of location. Before any licensee changes any office [of
his] to another location, [he] IT shall [give written notice thereof to]
FILE A WRITTEN APPLICATION WITH the superintendent, who  shall  [without
charge  issue an endorsement indicating the change and the date thereof,
which endorsement shall be attached to the license for such  office  and
be  authority  for  the  operation of the business under such license at
such new location] AFTER RECEIPT OF THE FEE PRESCRIBED IN SECTION  EIGH-
TEEN-A OF THIS CHAPTER ISSUE A NEW LICENSE FOR THE NEW OFFICE.
  S  27.  Section 559 of the banking law, as added by chapter 488 of the
laws of 1960, paragraph (a) of subdivision 1 as amended by  chapter  474
of  the laws of 1962, paragraph (b) of subdivision 1 as amended by chap-
ter 1141 of the laws of 1969, subdivision 6 as amended by chapter 310 of
the laws of 1962, and subdivision 7 as added by chapter 121 of the  laws
of 1993, is amended to read as follows:
  S 559. Grounds for revocation of license; procedure. 1. [The] IN ADDI-
TION  TO  THE AUTHORITY PROVIDED BY SUBDIVISION TWO OF THIS SECTION, THE
superintendent may forthwith revoke or suspend any license issued  here-
under if he OR SHE shall find that:
  (a) The licensee has failed to pay [the annual license fee or] any sum
of  money  lawfully  demanded,  or to comply with any demand, ruling, or
requirement of the superintendent lawfully made pursuant to  and  within
the authority of this article;
  (b)  The  licensee has violated any provision of this article, the act
of congress entitled "Truth in Lending Act" and the  regulations  there-
under,  as  such act and regulations may from time to time be amended or
any rule or regulation lawfully made by  the  superintendent  under  and
within the authority of this article;
  (c)  Any fact or condition exists which, if it had existed at the time
of the  original  application  for  such  license,  clearly  would  have
warranted  the  superintendent  in  refusing  originally  to  issue such
license.
  2. (A) THE SUPERINTENDENT MAY, FOR GOOD CAUSE, WITHOUT NOTICE OR HEAR-
ING, OR WHERE THERE IS A SUBSTANTIAL RISK OF PUBLIC  HARM,  SUSPEND  ANY
LICENSE ISSUED PURSUANT TO THIS ARTICLE FOR A PERIOD NOT EXCEEDING NINE-

S. 3727                            16

TY  DAYS,  PENDING INVESTIGATION. "GOOD CAUSE", AS USED IN THIS SUBDIVI-
SION, SHALL EXIST WHEN THE  LICENSEE  HAS  DEFAULTED  OR  IS  LIKELY  TO
DEFAULT  IN PERFORMING ITS FINANCIAL ENGAGEMENTS OR ENGAGES IN DISHONEST
OR INEQUITABLE PRACTICES WHICH MAY CAUSE SUBSTANTIAL HARM TO THE PERSONS
AFFORDED  THE PROTECTION OF THIS ARTICLE OR THE CIRCUMSTANCES COVERED BY
PARAGRAPHS (B) AND (C) OF THIS SUBDIVISION.
  (B) THE SUPERINTENDENT MAY, IN HIS OR HER SOLE DISCRETION, UPON NOTICE
BUT WITHOUT A HEARING, SUSPEND ANY LICENSE ISSUED PURSUANT TO THIS ARTI-
CLE 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, UPON NOTICE
BUT WITHOUT A HEARING, SUSPEND ANY LICENSE ISSUED PURSUANT TO THIS ARTI-
CLE:
  (I)  THIRTY  DAYS AFTER THE DATE THE LICENSEE FAILS TO FILE ANY REPORT
REQUIRED TO BE FILED BY IT WITH THE SUPERINTENDENT PURSUANT TO AUTHORITY
PROVIDED BY THIS ARTICLE;
  (II) IMMEDIATELY UPON NOTICE TO THE SUPERINTENDENT THAT A LICENSEE HAS
FILED A PETITION IN BANKRUPTCY; OR
  (III) UPON NOTICE AT LEAST THIRTY DAYS  AFTER  THE  LICENSEE  HAS  HAD
FILED AGAINST IT A PETITION IN BANKRUPTCY.
  3.  IF THE SUPERINTENDENT HAS ISSUED AN ORDER SUSPENDING A LICENSE FOR
GOOD CAUSE 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 OR HAVING ANY SUCH BANKRUPTCY  PETITION
DISMISSED.  OTHERWISE, UNLESS THE SUPERINTENDENT HAS, IN HIS OR HER SOLE
DISCRETION, EXTENDED SUCH SUSPENSION, THE LICENSE OF SUCH LICENSEE SHALL
BE DEEMED TO BE AUTOMATICALLY TERMINATED BY  OPERATION  OF  LAW  AT  THE
CLOSE OF BUSINESS ON SUCH DATE.
  4.  The  superintendent  may  revoke  or  suspend  only the particular
license with respect to which grounds for revocation or  suspension  may
occur  or exist, or, if he OR SHE shall find that such grounds for revo-
cation or suspension are of general application to all  offices,  or  to
more  than one office, operated by such licensee, he OR SHE shall revoke
or suspend all of the licenses issued to such licensee or such number of
licenses as such grounds apply to, as the case may be.
  [3.] 5. Any licensee may surrender any license by  delivering  to  the
superintendent  written  notice  that  he OR SHE 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  ADMINISTRA-
TIVE  ACTIONS  WITH  RESPECT  TO  ANY PERIOD BEFORE SUCH SURRENDER. SUCH
SURRENDER SHALL BECOME EFFECTIVE UPON WRITTEN  APPROVAL  BY  THE  SUPER-
INTENDENT.
  [4.]  6.  No revocation, TERMINATION or suspension or surrender of any
license shall impair or affect the obligation of an  insured  under  any
lawful  premium  finance  agreement  previously  acquired or held by the
licensee.
  [5.] 7. Every license issued  hereunder  shall  remain  in  force  and
effect  until  the  same  shall  have  been  surrendered,  revoked, [or]
suspended OR TERMINATED in accordance with the provisions of this  arti-
cle,  but the superintendent shall have authority to reinstate suspended
licenses or to issue  new  licenses  to  a  licensee  whose  license  or
licenses  shall  have been revoked OR TERMINATED if no fact or condition

S. 3727                            17

then exists which clearly would have  warranted  the  superintendent  in
refusing originally to issue such license under this article.
  [6.]  8. Whenever the superintendent shall revoke or suspend a license
issued pursuant to this article, he OR SHE shall  forthwith  execute  in
[triplicate]  DUPLICATE  a written order to that effect. The superinten-
dent shall file one copy of such order in the office of the  department,
[file  another  in  the  office  of  the clerk of the county in which is
located the place designated in such license] and  forthwith  serve  the
[third]  SECOND  copy  upon the licensee, which order may be reviewed in
the manner provided by article seventy-eight of the civil  practice  law
and  rules.  Such  special  proceeding  for review as authorized by this
section must be commenced within thirty days from the date of such order
of suspension or revocation.
  [7. The superintendent may, on good cause shown, or where there  is  a
substantial  risk of public harm, suspend any license issued pursuant to
this article for a period not exceeding thirty  days,  pending  investi-
gation. "Good cause", as used in this subdivision, shall exist only when
the  licensee  has  defaulted  or is likely to default in performing its
financial engagements or engages in dishonest or  inequitable  practices
which  may cause substantial harm to the persons afforded the protection
of this article.]
  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
PREMIUM FINANCE AGENCY IN THIS STATE.
  S 28. Subdivisions 3 and 4 of section  560  of  the  banking  law  are
REPEALED.
  S 29. Section 562 of the banking law is REPEALED.
  S  30.  Subdivision  1  of section 563 of the banking law, as added by
chapter 488 of the laws of 1960, is amended to read as follows:
  1. Any person, including any member, officer, director or employee  of
a  licensee,  who  violates  or  participates  in  the  violation of any
provision of this article, or who knowingly makes any  incorrect  state-
ment  of  a  material fact in any application, report or statement filed
pursuant to this article, or who knowingly omits to state  any  material
fact  necessary  to  give  the  superintendent  any information lawfully
required by him or HER OR refuses to permit any lawful investigation  or
examination,  shall  be  guilty  of a [misdemeanor and, upon conviction,
shall be fined not more than five hundred dollars or imprisoned for  not
more  than  six  months or both, in the discretion of the court] CLASS E
FELONY.
  S 31. Section 576 of the banking law is amended by adding a new subdi-
vision 4 to read as follows:
  4. IN ADDITION TO MAILING, NOTICES REQUIRED UNDER THIS SECTION MAY  BE
DELIVERED  BY OTHER MEANS, INCLUDING ELECTRONIC MEANS, PROVIDED THAT ANY
SUCH DELIVERY EVIDENCES RECEIPT OF THE NOTICE BY THE  ADDRESSEE.    SUCH
RECEIPT MAY BE CREATED AND MAINTAINED IN ELECTRONIC FORM.
  S 32. Subdivision (a) of section 577 of the banking law, as amended by
chapter 1 of the laws of 1994, is amended to read as follows:
  (a)  By  any  person  at  a rate of interest not greater than the rate
[prescribed by the banking board pursuant to] SET FORTH IN section four-
teen-a of this chapter[, or, if no rate has been so prescribed, six  per
centum per annum]; or
  S 33. Subdivisions 3 and 4 of section 580 of the banking law, subdivi-
sion  3  as amended by section 50 of part O of chapter 59 of the laws of

S. 3727                            18

2006, and subdivision 4 as added by chapter 629 of the laws of 2002, are
amended to read as follows:
  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; PROVIDED, HOWEVER, THAT AN APPLICATION TO ESTABLISH A
BRANCH OFFICE OF THE LICENSEE SHALL BE ACCOMPANIED BY THE FEE PRESCRIBED
IN SECTION EIGHTEEN-A OF THIS CHAPTER.
  4. As a condition for the issuance and retention of a  budget  planner
license,  and  subject  to  such regulations as the superintendent shall
prescribe, applicants for a license shall file with the superintendent a
surety bond in form satisfactory to the superintendent issued by a bond-
ing company or insurance company  authorized  to  do  business  in  this
state.  Except  as provided hereunder, the principal amount of such bond
shall be two hundred fifty  thousand  dollars.  The  superintendent  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  result-
ing  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
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. [With-
in ninety days after the effective date of this subdivision, each licen-
see shall comply with the requirements of this subdivision.]
  S  34.  Subdivision 1 of section 581 of the banking law, as amended by
chapter 456 of the laws of 2006, is amended to read as follows:
  1. Upon the filing of an application for a license, if the superinten-
dent shall find that the financial responsibility,  experience,  charac-
ter,  and  general  fitness  of  the  applicant, and of the 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, fair-
ly, and efficiently within the purposes of this article, he or she shall
thereupon issue a license in duplicate to engage in budget  planning  in
accordance with the provisions of this article. The superintendent shall
transmit  one  copy of such license to the applicant and file another in
the office of the banking department. Such license shall remain in  full

S. 3727                            19

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 superintendent shall approve or deny IN
WRITING every application for license hereunder within ninety days [from
the filing thereof] AFTER THE DATE THE APPLICATION IS DEEMED COMPLETE BY
THE SUPERINTENDENT.
  S  35.  Subdivision 2 of section 583-a of the banking law, as added by
chapter 142 of the laws of 1992, is amended to read as follows:
  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-one  of  this  article.  The  superintendent  shall
approve  or  disapprove  the  application  in writing within ninety days
after the date the application is [filed with] DEEMED  COMPLETE  BY  the
superintendent.
  S  36.  Section 584 of the banking law, as added by chapter 448 of the
laws of 1975, paragraph (b) of subdivision 1 as  amended  and  paragraph
(c)  of  subdivision  1  as added by chapter 629 of the laws of 2002, is
amended to read as follows:
  S 584. Grounds for suspension or revocation of license; procedure.  1.
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; or
  (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  judge-
ment  in  a  court  of  competent jurisdiction against the licensee in a
civil action arising from fraud, misrepresentation, or deceit.
  2. (A) The superintendent may, [on] FOR good  cause  [shown],  WITHOUT
NOTICE OR A HEARING, suspend any license ISSUED PURSUANT TO THIS ARTICLE
for  a period not exceeding [thirty] 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 IN DISHONEST OR INEQUITABLE PRACTICES  WHICH
MAY  CAUSE  SUBSTANTIAL  HARM  TO THE PERSONS AFFORDED THE PROTECTION OF
THIS ARTICLE OR THE CIRCUMSTANCES  COVERED  BY  PARAGRAPH  (C)  OF  THIS
SUBDIVISION.
  (B) THE SUPERINTENDENT MAY, IN HIS OR HER SOLE DISCRETION, UPON NOTICE
BUT  WITHOUT  A  HEARING,  SUSPEND  ANY  LICENSE  ISSUED PURSUANT 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, UPON NOTICE
BUT  WITHOUT  A  HEARING,  SUSPEND  ANY  LICENSE  ISSUED PURSUANT TO THE
AUTHORITY OF THIS ARTICLE: (I) THIRTY DAYS AFTER THE DATE  THE  LICENSEE
FAILS TO FILE ANY REPORT REQUIRED TO BE FILED BY IT WITH THE SUPERINTEN-
DENT  PURSUANT  TO THE AUTHORITY PROVIDED BY THIS ARTICLE; OR (II) IMME-
DIATELY UPON NOTICE TO THE SUPERINTENDENT THAT A LICENSEE  HAS  FILED  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 BOND REQUIRED

S. 3727                            20

PURSUANT TO SECTION FIVE HUNDRED EIGHTY OF THIS ARTICLE IS NO LONGER  IN
EFFECT.
  3. [No] IF THE SUPERINTENDENT HAS ISSUED AN ORDER SUSPENDING A LICENSE
ISSUED PURSUANT TO THE AUTHORITY OF THIS ARTICLE FOR GOOD CAUSE PURSUANT
TO PARAGRAPH (B) OR (C) OF SUBDIVISION TWO OF THIS SECTION, SUCH LICENSE
MAY  BE REINSTATED, IF THE SUPERINTENDENT DETERMINES, 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  LIMITATION,  MAKING  ANY  OVERDUE
PAYMENT,  HAVING  ANY  SUCH BANKRUPTCY PETITION DISMISSED OR HAVING SUCH
BOND REINSTATED. OTHERWISE, UNLESS THE SUPERINTENDENT HAS, IN HIS OR HER
SOLE DISCRETION, EXTENDED SUCH SUSPENSION, THE LICENSE OF SUCH  LICENSEE
SHALL  BE  DEEMED  TO BE AUTOMATICALLY TERMINATED BY OPERATION OF LAW AT
THE CLOSE OF BUSINESS ON SUCH DATE.
  4. (A) EXCEPT AS PROVIDED FOR IN SUBDIVISION TWO OF THIS  SECTION,  NO
license  shall be revoked or suspended except after notice and a hearing
thereon.
  [4.] 5. 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 ANY PERIOD BEFORE SUCH SURRENDER. SUCH SURRENDER SHALL
BECOME EFFECTIVE UPON WRITTEN APPROVAL BY THE SUPERINTENDENT.
  [5.] 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.
  [6.]  7.  Every  license  issued  hereunder  shall remain in force and
effect until  the  same  shall  have  been  surrendered,  revoked  [or],
suspended  OR TERMINATED in accordance with the provisions of this arti-
cle,  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.
  [7.] 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]  EXCEPT
FOR ANY ORDERS ISSUED PURSUANT TO SUBDIVISION THREE OF THIS SECTION, 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
BUDGET PLANNER IN THIS STATE.
  S 37. Subdivision 1 of section 586 of the banking  law,  as  added  by
chapter 448 of the laws of 1975, is amended to read as follows:
  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 complying with the provisions of this article
and with the rules and regulations lawfully made by  the  superintendent
hereunder.  Every  licensee  shall  preserve  such  books, accounts, and

S. 3727                            21

records, for at least three years; provided, however, that  preservation
by photographic OR ELECTRONIC reproduction thereof [or records in photo-
graphic  form] shall constitute compliance with the requirements of this
section.
  S  38.  Subdivision 1 of section 641 of the banking law, as amended by
chapter 677 of the laws of 2004, is amended to read as follows:
  1. No person shall engage  in  the  business  of  selling  or  issuing
checks, or engage in the business of receiving money for transmission or
transmitting  the  same ON BEHALF OF PERSONS THEN LOCATED OR RESIDENT IN
NEW YORK, without a license therefor obtained from the superintendent as
provided in this article, nor shall any person engage in  such  business
as  an  agent,  except as an agent of a licensee or as agent of a payee;
provided, however, that nothing in this article shall apply to  a  bank,
trust  company,  private  banker,  foreign  banking corporation licensed
pursuant to article two of  this  chapter  or  foreign  banking  company
authorized  to operate pursuant to the International Banking Act of 1978
(12 USC 3101 et seq.), as amended, savings bank, savings and loan  asso-
ciation,  an investment company, a national banking association, federal
reserve bank, corporation organized  under  the  provisions  of  section
twenty-five-a  of an act of congress entitled the "Federal Reserve Act",
federal savings bank, federal savings and loan association or  state  or
federal credit union OR OUT-OF-STATE STATE BANK.
  S  39.  Subdivisions  2, 5 and 6 of section 642 of the banking law, as
amended by chapter 455 of the laws of 1993, are  amended,  and  two  new
subdivisions 7 and 8 are added to read as follows:
  2.  The  superintendent  shall  approve  [conditionally] or deny every
application for a license hereunder IN WRITING within ninety days  [from
the  filing  thereof. Such period of ninety days may be extended, by the
written consent of the applicant, for such additional reasonable  period
of  time  as may be required to enable compliance with such requirements
and conditions as may be provided by this article and the rules or regu-
lations of the superintendent issued  thereunder]  AFTER  THE  DATE  THE
APPLICATION IS DEEMED COMPLETE BY THE SUPERINTENDENT.
  5.  [No]  EXCEPT  AS  PROVIDED  IN SUBDIVISION SIX OF THIS SECTION, NO
license shall be suspended or revoked except after  a  hearing  thereon.
The  superintendent  shall  give the licensee at least ten days' written
notice of the time and place of such hearing by registered or  certified
mail  addressed to the principal place of business of such licensee. Any
order of the superintendent suspending or revoking  such  license  shall
state  the  grounds  upon  which it is based [and shall not be effective
until ten days after written notice thereof has been sent by  registered
or  certified  mail to the licensee at such principal place of business,
except that revocation by reason of the licensee's bond not  being  kept
in  full  force  and effect as required by this article, or by reason of
failure to keep on deposit sufficient securities or funds as required by
this article, may take  effect  immediately  if  the  superintendent  so
orders].
  6.  (A)  The  superintendent may, [on] FOR good cause [shown, or where
there is a substantial risk of public harm] WITHOUT NOTICE OR A HEARING,
suspend any license issued pursuant to this article  for  a  period  not
exceeding  [thirty] 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 financial engage-
ments or engages in dishonest or inequitable practices which  may  cause
substantial  harm to the persons afforded the protection of this article

S. 3727                            22

OR THE CIRCUMSTANCES COVERED BY PARAGRAPHS (B) AND (C) OF THIS  SUBDIVI-
SION.
  (B) THE SUPERINTENDENT MAY, IN HIS OR HER SOLE DISCRETION, UPON NOTICE
BUT  WITHOUT  A  HEARING,  SUSPEND THE LICENSE ISSUED HEREUNDER UPON THE
FAILURE OF SUCH LICENSEE TO MAKE ANY PAYMENTS AS REQUIRED BY THIS  CHAP-
TER.
  (C) THE SUPERINTENDENT MAY, IN HIS OR HER SOLE DISCRETION, UPON NOTICE
BUT  WITHOUT A HEARING, SUSPEND ANY LICENSE ISSUED HEREUNDER: (I) THIRTY
DAYS AFTER THE DATE THE LICENSEE FAILS TO FILE ANY REPORT REQUIRED TO BE
FILED BY IT WITH THE SUPERINTENDENT PURSUANT TO THE  AUTHORITY  PROVIDED
BY THIS ARTICLE; (II) IMMEDIATELY UPON NOTICE TO THE SUPERINTENDENT THAT
A  LICENSEE  HAS  FILED  A PETITION IN BANKRUPTCY; (III) AT LEAST THIRTY
DAYS AFTER THE LICENSEE HAS HAD FILED AGAINST IT A PETITION IN BANKRUPT-
CY; OR (IV) IMMEDIATELY UPON RECEIPT  BY  THE  SUPERINTENDENT  THAT  THE
LICENSEE  HAS  FAILED  TO  MAINTAIN  THE  BOND OR SECURITIES REQUIRED BY
SECTION SIX HUNDRED FORTY-THREE OF THIS ARTICLE OR  FAILED  TO  MAINTAIN
THE  INVESTMENTS REQUIRED BY SECTION SIX HUNDRED FIFTY-ONE OF THIS ARTI-
CLE.
  7. IF THE SUPERINTENDENT HAS ISSUED AN ORDER SUSPENDING A LICENSE  FOR
GOOD  CAUSE  PURSUANT TO PARAGRAPH (B) OR (C) OF SUBDIVISION SIX 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 REINSTATING SUCH BOND  OR  INCREASING  THE  VALUE  OF  SUCH
INVESTMENTS.  OTHERWISE,  UNLESS  THE  SUPERINTENDENT HAS, IN HIS OR HER
SOLE DISCRETION, EXTENDED SUCH SUSPENSION, THE LICENSE OF SUCH  LICENSEE
SHALL  BE  DEEMED  TO BE AUTOMATICALLY TERMINATED BY OPERATION OF LAW AT
THE CLOSE OF BUSINESS ON SUCH DATE.
  8. 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
MONEY TRANSMITTER.
  S 40. Subdivision 1 of section 643 of the banking law, as  amended  by
chapter 625 of the laws of 2004, is amended to read as follows:
  1.  As  a  condition  for  the  issuance and retention of the license,
applicants for a license and other licensees shall, within  thirty  days
after  notice by the superintendent, or such longer or shorter period as
he or she shall prescribe, file with  the  superintendent  one  or  more
corporate  surety bond or bonds, as required below, in form satisfactory
to him or her and issued by  a  bonding  company  or  insurance  company
authorized  to do business in this state.  One bond shall be in favor of
the superintendent and in such principal  amount  as  he  or  she  shall
determine is necessary or desirable for the protection of the purchasers
and  holders of New York instruments sold or to be sold by the applicant
or licensee, provided, [however, that until June first, nineteen hundred
seventy-seven,] THAT the principal amount of such bond shall be no  less
than two hundred ten thousand dollars and on and after June first, nine-
teen  hundred  seventy-seven, the principal amount of such bond shall be
no less than five hundred thousand dollars. If the applicant or licensee
intends to engage or engages in the sale of New York traveler's  checks,
such applicant or licensee shall file with the superintendent a separate
bond.  Said  bond  shall  be  in favor of the superintendent and in such
principal amount as he or she shall determine is necessary or  desirable
for the protection of the purchasers and holders of the New York travel-

S. 3727                            23

er's  checks  sold or to be sold by the applicant or licensee; provided,
however, that the principal amount of such bond shall not be  less  than
seven  hundred  fifty  thousand  dollars, unless the superintendent, for
good  cause  shown,  shall  have  determined  that  a lesser amount will
adequately protect the purchasers and holders of the New York traveler's
checks sold or to be sold by such applicant or licensee.
  In making any determination under this subdivision, the superintendent
may take into account the  financial  condition  of  the  licensee,  the
number of locations in this state at which the licensee, either directly
or  through  agents,  transacts the business of selling New York instru-
ments or New York traveler's checks, the controls imposed on such agents
or, and the possible exposure of purchasers  and  holders  of  New  York
instruments  and  New York traveler's checks to loss in the event of the
insolvency, bankruptcy or other financial impairment  of  the  licensee.
The  proceeds  of each bond shall constitute a trust fund for the exclu-
sive benefit of the purchasers and holders of the New  York  instruments
[and]  OR  New  York  traveler's  checks,  as the case may be. Except as
otherwise provided in the following sentence, in the event of the insol-
vency or bankruptcy of any licensee, the proceeds of the bond  or  bonds
held for the exclusive benefit of the purchasers and holders of New York
instruments and the proceeds of the bond or bonds held for the exclusive
benefit  of  the  purchasers  and  holders of New York traveler's checks
shall be paid to the superintendent forthwith for disposition in accord-
ance with the provisions of this article. If any  New  York  instruments
have  been  assigned  to the fund, the proceeds of the bond held for the
exclusive benefit of the purchasers and holders of New York  instruments
shall  constitute  a trust fund for the benefit of, and shall be payable
to, the fund to the extent of such assignment. From time  to  time,  the
superintendent  may  require,  upon thirty days notice or such longer or
shorter period as he or she shall prescribe, that such bond or bonds  be
increased  if  he or she shall determine that such increase is necessary
or desirable for the protection of the purchasers  and  holders  of  New
York instruments and New York traveler's checks.
  S 41. Subdivision 4 of section 646 of the banking law is REPEALED.
  S 42. Section 647 of the banking law is REPEALED.
  S  43. Subdivision 2 of section 650 of the banking law is REPEALED and
subdivision 1, as amended by chapter 201 of the laws of 1969, is amended
to read as follows:
  1. Any person who violates or participates in  the  violation  of  any
provisions  of this article, or who knowingly makes any incorrect state-
ment of a material fact in any application,  report  or  statement  made
pursuant  to  this article, or who knowingly omits to state any material
fact necessary to  give  the  superintendent  any  information  lawfully
required  by him OR HER or refuses to permit any lawful investigation by
the  superintendent  shall  be  guilty  of  a  [misdemeanor  and,   upon
conviction,  shall be fined not more than five hundred dollars or impri-
soned for not more than six months or both, in  the  discretion  of  the
court] CLASS E FELONY.
  S 44. Section 651 of the banking law, as amended by chapter 677 of the
laws of 2004, is amended to read as follows:
  S 651. Investments. Every licensee shall at all times maintain permis-
sible investments having (i) a market value, computed in accordance with
generally  accepted  accounting principles, at least equal to the aggre-
gate of the amount of all its outstanding payment  instruments  and  all
its outstanding traveler's checks or (ii) a net carrying value, computed
in  accordance  with  generally accepted accounting principles, at least

S. 3727                            24

equal to the aggregate of the amount  of  all  its  outstanding  payment
instruments  and  all  its  outstanding traveler's checks so long as the
market value of such permissible investments is at least [eighty] NINETY
per  centum  of  the net carrying value.   Notwithstanding the foregoing
provisions of this section, the superintendent shall have the authority,
for good cause shown, to exempt from the requirements  of  this  section
any licensee.
  S  45. Section 657 of the banking law, as amended by chapter 78 of the
laws of 1977, is amended to read as follows:
  S 657. Payments to the fund. In the event the fund  has  borrowed  any
monies  from the property and liability insurance security fund pursuant
to the provisions of section six hundred fifty-eight of  this  [chapter]
ARTICLE,  and has any debt outstanding thereto, or in the event an unin-
sured transmitter of money is declared, or declares itself, insolvent or
defaults on its New York instruments, the fund shall levy an  assessment
upon  each uninsured transmitter of money. The amount of such assessment
shall be determined by the superintendent provided, however,  that  each
uninsured  transmitter of money shall be assessed ratably, in proportion
to the average of the dollar amounts of the New York instruments  issued
by  such  uninsured  transmitter of money outstanding at the end of each
calendar quarter for the calendar  year  preceding  that  in  which  the
assessment  is  made,  and  provided,  further, that no such assessments
shall be levied once the net value of the fund shall equal  such  amount
as  the  superintendent shall have determined to be necessary to protect
the interests of the purchasers and holders of New York instruments.  In
making  his  OR HER determination, the superintendent shall consider the
scope of the risk covered by the fund, the expenses incurred or expected
to be incurred by the fund, the amount of any loans and advances to  the
fund, and the interest thereon.
  In no event shall the total amount so assessed in any one year against
any  uninsured transmitter of money pursuant to this section exceed [two
per centum of the] ONE PERCENT OF THE ANNUAL VOLUME OF New York  instru-
ments  of such uninsured transmitter of money [which were outstanding at
the end of] FOR the calendar year preceding that in which  such  assess-
ments are made or one hundred twenty-five thousand dollars, whichever is
less.  The  net  value of the fund shall be determined by deducting from
the value of the assets of the fund the aggregate actual  and  estimated
liabilities of the fund as determined by the superintendent.
  S 46. This act shall take effect immediately.

2009-S3727A - Details

See Assembly Version of this Bill:: A11325
Current Committee:: Assembly Codes
Law Section:: Banking Law
Laws Affected:: Rpld §493 sub 7, §495 sub 7 & sub 1 ¶(e), §497 subs 3 & 4, §554 subs 2 & 5, §556 sub 5, §560 subs 3 & 4, §562 & §646 sub 4, amd Bank L, generally

2009-S3727A - Summary

Relates to licensed lenders, licensed cashers of checks, sales finance companies, premium finance companies, budget planners, and transmitters of money.

2009-S3727A - Sponsor Memo

                                 BILL NUMBER:  S3727A

 TITLE OF BILL :

An act to amend the banking law, in relation to licensed lenders,
licensed cashers of checks, sales finance companies, premium finance
companies, budget planners and transmitters of money; and to repeal
certain provisions of such law relating thereto


 PURPOSE :

This bill would modernize the articles of the Banking Law ("BL")
covering "licensed financial services" providers, including licensed
lenders, licensed cashers of checks, sales finance companies, premium
finance agencies, budget planners and money transmitters.

 SUMMARY OF PROVISIONS :

Section 1 of the bill amends BL § 340 to increase the size of loans
that require registration of the lender as a licensed lender, while
eliminating the exemptions for entities that lend at interest rates
below the general State rates. An exemption is added for lenders
making no more than five loans at any time outstanding, as long as the
aggregate amount does not exceed $100,000. A definition regarding when
loans are solicited in this State also is added.

Section 2 of the bill adds a new definition section to make use of the
article easier.  In particular, it adds definitions of "person" and
"control."

Section 3 of the bill amends BL § 341 (3) to change the reference to
the annual license fee to a reference to the appropriate section of
the law. BL § 341(5) is amended to change the capital requirement from
one that is calculated on a per branch basis to one calculated on a
company-wide basis (although the number of branches may still be
relevant) and clarifies that the Superintendent has discretion to
require a higher amount.

Section 4 of the bill makes various technical changes throughout BL §
342 to include limited liability companies as applicants and to
clarify when an application is deemed complete. It also clarifies that
the capital requirement is calculated under BL § 341 (5), rather than
on a branch-by-branch basis.

Section 5 of the bill makes conforming changes (recognizing the
existence of LLCs) to BL § 343(1).

Section 6 of the bill amends BL § 345 to conform it to the changes
made in BL § 340-a (i.e. it deletes the definitions of "person" and
"control", which were moved to a new definition section).

Section 7 of the bill makes changes to conform BL § 347 to the changes
being made to other provisions of the BL related to grounds of
suspension and termination of licenses. In particular, it moves to BL
§ 347(1) some language that applies to both suspensions and
revocations that previously appeared in § 347(2) (which applies only
to suspensions). The bill adds to BL § 347(2), which deals with good
cause suspensions, a definition of "good cause" that appears in the
other BL articles dealing with licensed financial services firms.
Also, the period during which a licensed lender may be suspended is
expanded to 90 days from 30 days.

Section 7 of the bill also amends BL § 347(2) to provide that the
Superintendent may suspend a firm without a hearing for failure to
make payments required by the BL (which would include assessments,
fees or penalties or restitution ordered in accordance with the BL).
Finally, it states that the Superintendent may suspend a firm without
a hearing for other failures where there can be no factual question
that should be tried by a hearing examiner, including failure to file
any report required by the BL, filing a petition in bankruptcy, or
having an involuntary bankruptcy petition filed against the firm (and
not dismissed in 30 days).

Section 7 of the bill also amends BL § 347(3) to provide that, if the
licensee has cured all deficiencies set forth in the suspension order
within 90 days after the date of the suspension, the licensee's
license may be reinstated; however, if the licensee has not cured the
deficiencies and the deficiencies are pursuant to paragraph (b) or (c)
of BL 347(2), the license will automatically terminate by operation of
law. BL § 347(4) deals with voluntary surrenders of licenses, and
makes clear that surrender of a license becomes effective only upon
the written approval of the Superintendent and that such surrender
does not affect the licensee's obligations to the Superintendent for
assessments, fees or administrative actions with respect to any period
before the surrender. The changes in BL §§ 347(5) and 347(6) are
conforming changes that recognize the new termination provisions.
Finally, BL § 347(8) makes clear that, when a license has been
terminated by operation of law, the Superintendent must notify the
licensee that the license has terminated and that the licensee may not
engage in the licensed business.

Section 8 of the bill repeals the first two unnumbered paragraphs of
BL § 356, which are no longer needed because BL § 340, as amended,
requires all persons making qualifying loans in New York to be
registered.

Section 9 of the bill begins the amendments to Article IX-A of the BL
(check cashers). A definition of "person" is added to BL § 366( 1) and
technical changes are made to other definitions to use this new
definition.

Section 10 of the bill makes technical changes to BL § 367 to
incorporate the new definition of "person" and to recognize the
existence of licensees that are limited liability companies. BL §
367(2) is amended to recognize the use of limited liability companies.
In BL § 367(4), the Superintendent is given flexibility to modify the
amount of liquid assets required for a check cashing location that is
a "limited station."

Section 11 of the bill amends BL § 369(1) to clarify the meaning of
the existing section, and is not intended to create new requirements
or delete old requirements. A new 369(1-a) contains language taken
from elsewhere in BL § 369 concerning the "3/10 of a mile" protected
area around a check casher office.

Section 12 of the bill amends BL § 3 70-a to provide the
Superintendent with flexibility in processing of applications under
this article by measuring the approval time from the date the
application became complete.

Section 13 of the bill amends the suspension, revocation and surrender
provisions with respect to check cashers, and makes them consistent
with the similar provisions for other types of licensed financial
services firms as discussed above with respect to § 347. The amendment
includes provisions with respect to suspensions "for cause", for
failure to pay assessments and other amounts due, failure to file
reports, and the filing of a petition in bankruptcy. The bill also
makes the section gender-neutral.

Section 14 of the bill amends BL § 374(1) (the exemption from
registration as a check casher) to make minor conforming changes.
Section 15 of the bill begins the amendments to Article 11-B (sales
finance companies). It amends certain definitions in BL § 491 to
conform them to each other.  The section also makes clear that the
term "retail installment obligation" includes an agreement no matter
where entered into if it is executed by the buyer in this State and if
solicited in person by a salesperson or other person acting on his or
her own behalf or that of the seller. Similarly, the definition of
"sales finance company" is amended to make clear that the article
applies to agreements wherever entered into if they are executed by
the buyer in New York and if they are solicited in person by a
salesperson or other person acting on his or her own behalf or on
behalf of the seller. Also, the types of transactions to which this
article applies is clarified, and the existence of a safe harbor for
secondary transactions is clarified. The bill also makes the section
gender neutral.

Section 16 of the bill amends BL §§ 492(1) and 492(2) to clarify when
banking institutions are exempt from coverage of the law and to
clarify the procedure for an application for a sales finance company
license.

Section 17 of the bill makes changes to BL § 492-a(2) to clarify when
a change of control application must be approved.

Section 18 repeals BL § 493(7) and amends BL § 493(4) to clarify the
circumstances when a license terminates.

Section 19 of the bill amends the suspension, revocation and surrender
provisions with respect to sales finance companies, and makes them
consistent with the similar provisions for other types of licensed
financial services firms as discussed above with respect to § 347.
This includes provisions with respect to suspensions "for cause", for
failure to pay assessments and other amount due, failure to file
reports, and the filing of a petition in bankruptcy. It also extends
from 30 to 90 days the amount of time for which the Superintendent may
suspend a license while conducting an investigation. Technical changes
also are made to the provisions of BL § 495 regarding termination of a
license by the Superintendent and when a licensee may surrender its
license.

Section 20 of the bill repeals BL §§ 497(3) and 497(4), which are
outdated provisions.

Section 21 of the bill amends BL § 499 to make the section gender
neutral.

Section 22 of the bill begins the amendments of Article XII-B of the
BL (Insurance Premium Finance Agencies). It amends the definition of a
bank contained in § 554 to cover all banking institutions.

Section 23 of the bill amends BL § 555 to conform to the newly defined
"banking institutions" in BL § 554 without changing the institutions
to which the section applies.

Section 24 of the bill repeals BL § 556(5), a transition provision
dating from 1961; as outdated.

Section 25 of the bill amends BL § 558 to clarify when relocation fees
are required.

Section 26 of the bill amends BL § 559, the suspension, revocation and
surrender provisions with respect to premium finance agencies, and
makes them consistent with the similar provisions for other types of
licensed financial services firms as discussed above with respect to §
347. This includes provisions with respect to suspensions "for good
cause", for failure to pay assessments and other amount due, failure
to file reports, and the filing of a petition in bankruptcy.  It also
extends from 30 to 90 days the amount of time for which the
Superintendent may suspend a license while conducting an
investigation.

Section 27 of the bill repeals BL §§ 560(3) and 560(4). The substance
of these provisions has previously been moved to BL §§   7 and §
36(10), respectively.

Section 28 of the bill repeals BL § 562, since the subject matter
(hearings and investigations) is already covered in Article II.

Section 29 of the bill amends BL § 563 to make the section gender
neutral.

Section 30 of the bill amends BL § 576 to clarify the ability of the
Superintendent to provide notice by electronic means.

Section 31 of the bill amends BL § 577 to eliminate outdated language.

Section 32 of the bill amends BL § 580 to eliminate outdated language
and to clarify when fees for branch offices are required.

Section 33 of the bill amends BL § 581 to clarify that the time period
for approving an application runs from the time the application is
deemed complete.

Section 34 of the bill amends BL § 583-a to clarify when the
Superintendent must act on an application.

Section 35 of the bill amends BL § 584, the suspension, revocation and
surrender provisions with respect to budget planners, and makes them
consistent with the similar provisions for other types of licensed
financial services firms as discussed above with respect to § 347.
This includes provisions with respect to suspensions "for good cause",
for failure to pay assessments and other amounts due, failure to file
reports, the filing of a petition in bankruptcy, and failure to
maintain the bond required under BL § 580. It also extends from 30 to
90 days the amount of time for which the Superintendent may suspend a
license while conducting an investigation. The effect of the
revocation, surrender or termination of a license also is clarified.

Section 36 of the bill amends BL § 586 to clarify that electronic
storage of records is permissible.

Section 37 of the bill begins the amendments to Article XIII-B (Money
Transmitters). It amends BL § 641 to clarify when banking institutions
are exempt from coverage of the article and when New York persons are
subject to the protections of this article.

Section 38 of the bill amends BL § 642, the suspension, revocation and
surrender provisions with respect to money transmitters, and makes
them consistent with the similar provisions for other types of
licensed financial services firms with respect to § 347. This includes
provisions with respect to suspensions "for good cause", for failure
to pay assessments and other amounts due, failure to file reports, the
filing of a petition in bankruptcy, and failure to maintain the bond
or securities required under BL § 643 or the investments required by
BL § 651. It also extends from 30 to 90 days the amount of time for
which the Superintendent may suspend a license while conducting an
investigation.

Section 39 of the bill repeals outdated language in the bond
provisions of BL §643.


Section 40 of the bill repeals BL § 647 to eliminate outdated
language.

Section 41 of the bill amends BL § 651 to increase the amount of the
required bond for money transmitters from 80% to 90% of the net
carrying value of outstanding instruments.

Section 42 of the bill amends BL § 657 to clarify when and how
required payments into the money transmitter insurance fund are
calculated.

Section 43 of the bill provides the effective date.

 EXISTING LAW :

BL § 340 requires registration as a licensed lender where a person is
engaged in the business of making loans in the principal amount of
$25,000 or less for loans to an individual for personal, family,
household or investment purposes and in a principal amount of $50,000
or less for business and commercial purposes. The amendment changes
these thresholds to $50,000 and $100,000. In addition, the current law
requires registration if a person solicits loans "within this state."
The amendment makes clear when solicitation occurs within this state.
The current law exempted persons from registration if their loans were
isolated, incidental or occasional. The amendment replaces that
standard with a numerical threshold - i.e. the number of loans made in
any one year is not more than five loans and the aggregate amount of
loans outstanding at any one time does not exceed $100,000.

Article IX did not previously have a definition section. The
definitions in BL § 340-a are moved from BL § 345(1).

BL § 341(3) provides that licensed lenders will pay not only the
investigation fee but also the annual license fees provided for in BL
§ 17. The words "and annual license fee" would be deleted, since
Section 17 provides for several fees.

Current BL § 341 (5) requires "liquid assets" of at least $50,000 at
each location specified in the application for a license. The
amendment would require total net worth of at least $50,000, or such
other amount as may be determined by the Superintendent.

BL §342 does not provide for licensed lenders organized as limited
liability companies. The amendment would recognize that licensed
lenders may be organized in that form. Like BL §341(5), this section
required an applicant to have liquid assets of at least $50,000 in
each location and is being amended to require total net worth of at
least $50,000 or such other amount as may be determined by the
Superintendent. This section did not previously refer to termination
of licenses. Previously, this section provided that, if an application
was denied or withdrawn the Superintendent would return the license
fee and retain only the investigation fee. Finally, this section
requires the Superintendent to approve or deny an application for a
master license within 90 days of filing.

BL § 343 does not provide for licensed lenders organized as limited
liability companies.

BL § 345 contains definitions of "person" and "control." Those
definitions are now moved to new BL § 340-a.

BL § 347 did not previously have subdivisions. Although the section
allowed the Superintendent to suspend a license for good cause shown
there was no definition of "good cause." The section currently allows
the Superintendent to suspend a license for good cause for 30 days.
The amendment would extend the suspension for 90 days, unless the
licensee cures the violation before that time. The amendment also adds
a list of grounds for suspensions, including any failure to make
required payments to the Department 30 days after the due date,
failure to file any required report by the 30th day after the due
date, the filing of a voluntary petition in bankruptcy and the filing
of an involuntary petition in bankruptcy that is not dismissed within
30 days. In addition, if the cause of such suspension has not been
cured within 90 days after the date of the suspension order (including
making overdue payments or filings), then the license is deemed
automatically terminated. Article IX does not currently provide for
licenses to terminate other than by revocation after a hearing.

BL § 356 currently limits the amount that a person not licensed as a
licensed lender may charge or receive as interest on a loan to a
person in the state. These provisions would be eliminated, since the
amendments to BL § 340 would make out-of-state lenders that make
covered loans to New York residents subject to Article IX, unless they
met the de minimis test.

BL §§ 497(3) and 497(4) currently cover examination expenses and the
confidentiality of examination reports. However, those provisions are
also founds in BL §§ 17 and 36(10). Consequently, they are being
deleted here.

BL § 554(2) currently defines a bank, trust company, private banker,
investment company, or national bank with a principal office in New
York as a "bank," The amendment would expand on the included
institutions and change the term to "banking institution," which is
the term used for such a group of institutions elsewhere in the BL.

BL § 555(1) previously referred to "lending institutions." The section
would be amended to use the defined term "banking institution."

BL §556(5) previously contained transition provisions for licensing as
a premium finance agency that dated from 1960. The amendment
eliminates them.

BL §558 concerns change of address notices for premium finance
agencies. It previously required only a notice to the Superintendent
without a fee. Under the amendment, a change of address requires a
written application and involves a fee prescribed in BL § 18-a.

BL § 559 covers grounds for suspension or revocation of a license. It
currently authorizes suspension or revocation for failure to pay the
annual license fee. The amendment broadens the grounds to failure to
pay any sum of money lawfully demanded by.the Superintendent. In
addition, the amendment adds the "good cause" bases for 90 day
suspensions found in other Articles covering licensed financial
service providers, along with the same definition of "good cause".
Additional grounds for suspension include any failure to make required
payments to the Department by the 30th day after the due date, failure
to file any required report by the 30th day after the due date, the
filing of a voluntary petition in bankruptcy and the filing of an
involuntary petition in bankruptcy that is not dismissed within 30
days. In addition, if the cause of such suspension has not been cured
within 90 days after the date of the suspension order (including
making overdue payments or filings), then the license is deemed
automatically terminated.  Article XII-B does not currently provide
for licenses to terminate other than by revocation after a hearing.

BL §§ 560(3) and 560(4) address examination expenses and the
confidentiality of examination reports. However, those provisions are
also founds in BL §§ 17 and 36(10).  Consequently, they are being
deleted here.


BL § 576 provides for 10 days' written notice of the cancellation of
the insurance policy to be mailed to certain persons. New § 576(4)
would allow notice to be delivered by other means, including
electronic means, as long as the delivery method includes evidence of
receipt, including a receipt created and maintained in electronic
form.

BL § 577(a) refers to a rate of interest prescribed by the banking
board under BL § 14-a, or, if no such rate has been prescribed, 6% per
annum. However, a fixed rate of 16% has been set forth in that
section, and the amendment reflects this change.

BL § 580(3) does not require payment of a fee for the opening of a
branch by a Budget Planner. The amendment authorizes the charging of
such a fee. The last sentence of BL . 580(4) is a transition provision
that applied in 1975 when the provisions regarding surety bonds took
effect. It is now outdated and is being deleted.

BL § 581 provides that the Superintendent must approve or deny an
application for a Budget Planner license within 90 days of the filing
of the application. The amendment would have the 90 days begin to run
from the date the application is deemed complete by the
Superintendent.

BL § 583-a provides that the Superintendent must approve or deny an
application for a change of control of a Budget Planner within 90 days
after the date the application is filed with the Superintendent.  The
amendment would have the 90 days begin to run from the date the
application is deemed complete by the Superintendent.

BL § 584 covers the procedures for suspensions and revocations of
licenses of Budget Planners. Although the section allows the
Superintendent to suspend a license for good cause shown there is no
definition of "good cause." The amendment supplies a definition, which
is based in part on the definition in § 495. The section currently
allows the Superintendent to suspend a license for good cause for 30
days. The amendment would extend the suspension for 90 days, unless
the licensee cures the violation before that time. The amendment also
adds a list of grounds for suspension, including any failure to make
required payments to the Department 30 days after the due date,
failure to file any required report by the 30th day after the due
date, the filing of a voluntary petition in bankruptcy and the filing
of an involuntary petition in bankruptcy that is not dismissed within
30 days. In addition, if the cause of such suspension has not been
cured within 90 days after the date of the suspension order (including
making overdue payments or filings), then the license is deemed
automatically terminated. Article XII-C does not currently provide for
licenses to terminate other than by revocation after a hearing.

BL § 584(5) currently provides that a Budget Planner may surrender a
license by delivering written notice to the Superintendent, but that
surrender does not affect the licensee's civil or criminal liability
for acts committed prior to the surrender. The amendment adds that
surrender of a license does not affect the licensee's obligations to
the superintendent for assessments, fees or administrative actions
with respect to the period before such surrender. It also makes clear
that a surrender of a license does not become effective until approved
in writing by the Superintendent.

BL § 586 currently permits books and records to be maintained in
photographic reproductions as well as in paper form. The amendment
would authorize records to be maintained in electronic reproductions,
as well.

BL § 641(1) requires registration as a Money Transmitter if a person
is in the business of selling or issuing checks or receiving money for
transmission. It has routinely been interpreted as not requiring
out-of-state money transmitters to register unless they had a place or
business or agents in New York. The amendment makes clear that an
out-of-state money transmitter must register if it engages in business
in this state, and that the definition of engaging in such business
occurs when the money transmitter induces a person who is a resident
or is located in New York to enter into a transaction by any means,
including the mail, electronic mail, telephone, radio, television, the
internet or any other electronic means.

BL § 643 contains an outdated transitional provision.

BL § 647 contains transitional language that is outdated.

BL § 651 provides that a money transmitter must have a surety bond in
the amount of 80% of the net carrying value of outstanding
instruments. The amendment would raise the required amount to 90% of
net carrying value.

BL § 657 prohibits the amount assessed against any uninsured money
transmitter from exceeding two per cent of the New York instruments
insured. The amendment decreases the fee to one percent of the annual
volume of New York instruments for the preceding calendar year or
$125,000, whichever is less.

 LEGISLATIVE HISTORY :

This is a new proposal.

 STATEMENT IN SUPPORT :

The amendments made in this proposal are largely technical in nature.

In addition, the reach of Article XIII-B is expanded to cover all
situations where money transmission services are extended to persons
located in New York, even though the vendor is located in another
state. Where out-of-state money transmitters without a physical
presence or agents in New York are soliciting and doing business with
persons located in New York, this state has an interest in consumer
protection that will be addressed if such out-of-state money
transmitter must be registered here.

These amendments are needed in the Department's view because of the
evolution in financial services and the risks that these services pose
for consumers.

 BUDGET IMPLICATIONS :

This bill would not have an impact on state finances.

 EFFECTIVE DATE :
This bill would take effect immediately.

2009-S3727A - Bill Text download pdf

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

                                 3727--A

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             March 30, 2009
                               ___________

Introduced  by  Sen.  FOLEY -- (at request of the Banking Department) --
  read twice and ordered printed, and when printed to  be  committed  to
  the  Committee on Banks -- committee discharged, bill amended, ordered
  reprinted as amended and recommitted to said committee

AN ACT to amend the  banking  law,  in  relation  to  licensed  lenders,
  licensed  cashers  of checks, sales finance companies, premium finance
  companies, budget planners and transmitters of money;  and  to  repeal
  certain provisions of such law relating thereto

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

  Section 1. Section 340 of the banking law, as amended by chapter 22 of
the laws of 1990, is amended to read as follows:
  S 340. Doing business without license prohibited. No person [or  other
entity]  shall engage in the business of making loans IN NEW YORK in the
principal amount of [twenty-five] FIFTY thousand dollars or less for any
loan to an individual for personal,  family,  household,  or  investment
purposes  and  in  a  principal  amount  of [fifty] ONE HUNDRED thousand
dollars or less for business and commercial [loans, and charge, contract
for, or receive a greater rate of interest  than  the  lender  would  be
permitted by law to charge if he were not a licensee hereunder except as
authorized  by  this  article  and]  PURPOSES  without first obtaining a
license from the superintendent.
  For the purposes of this  section,  a  person  [or  entity]  shall  be
considered  as engaging in the business of making loans in New York, and
subject to the licensing and other requirements of this article,  if  it
solicits  loans  in [the amounts prescribed by this section within] this
state BY ANY MEANS, INCLUDING BUT NOT LIMITED TO, MAIL, ELECTRONIC MAIL,
TELEPHONE, RADIO, TELEVISION,  THE  INTERNET  OR  ANY  OTHER  ELECTRONIC
MEANS,  and,  in connection with such solicitation, makes loans to indi-
viduals then resident OR LOCATED in this state OR, IN THE CASE OF  LOANS
FOR  BUSINESS  OR COMMERCIAL PURPOSES, HAVING A PLACE OF BUSINESS WITHIN

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09629-08-9

S. 3727--A                          2

THIS STATE, except that no person [or entity]  shall  be  considered  as
engaging  in  the business of making loans in this state on the basis of
[isolated, incidental or occasional] transactions which  otherwise  meet
the  requirements of this section IF THE NUMBER OF LOANS MADE IN ANY ONE
YEAR BY ANY SUCH PERSON IS NOT MORE THAN FIVE LOANS  AND  THE  AGGREGATE
AMOUNT  OF LOANS OUTSTANDING AT ANY ONE TIME DOES NOT EXCEED ONE HUNDRED
THOUSAND DOLLARS.
  Nothing in this  article  shall  apply  to  licensed  collateral  loan
brokers.
  S  2. The banking law is amended by adding a new section 340-a to read
as follows:
  S 340-A. DEFINITIONS. WHEN USED IN THIS ARTICLE: 1. THE TERM  "PERSON"
MEANS  ANY  INDIVIDUAL OR LEGAL ENTITY, INCLUDING ANY CORPORATION, PART-
NERSHIP, ASSOCIATION OR LIMITED LIABILITY COMPANY.
  2. THE TERM "CONTROL" MEANS THE POSSESSION, DIRECTLY OR INDIRECTLY, OF
THE POWER TO DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT  AND  POLI-
CIES  OF A PERSON, WHETHER BY MEANS OF THE OWNERSHIP OF THE VOTING STOCK
OR EQUITY INTERESTS OF SUCH PERSON OR OF ONE OR MORE PERSONS CONTROLLING
SUCH PERSON, BY  MEANS  OF  A  CONTRACTUAL  ARRANGEMENT,  OR  OTHERWISE.
CONTROL  SHALL BE PRESUMED TO EXIST IF ANY PERSON DIRECTLY OR INDIRECTLY
OWNS, CONTROLS OR HOLDS WITH THE POWER TO VOTE TEN PERCENT  OR  MORE  OF
THE VOTING STOCK OR EQUITY INTERESTS OF A LICENSEE OR OF ANY OTHER ENTI-
TY THAT DIRECTLY OR INDIRECTLY CONTROLS SUCH PERSON.
  S  3.  Subdivisions  3  and  5  of  section 341 of the banking law, as
amended by chapter 494 of the laws of  1998,  are  amended  to  read  as
follows:
  3. In addition to the investigation fee [and annual license fee] every
licensee  hereunder shall pay to the superintendent the sums provided to
be paid under the provisions of section seventeen of [the  banking  law]
THIS CHAPTER.
  5.  The applicant shall also prove, in form satisfactory to the super-
intendent, that the applicant has available for the  operation  of  such
business  [at  the  location  or  locations specified in the application
liquid assets] NET WORTH of at least  fifty  thousand  dollars  OR  SUCH
AMOUNT  AS MAY BE DETERMINED BY THE SUPERINTENDENT. This amount shall be
maintained for the period within which the licensee makes loans  in  the
amounts  prescribed  in  section three hundred forty of this article [at
such location].
  S 4. Section 342 of the banking law, as amended by chapter 494 of  the
laws of 1998, is amended to read as follows:
  S 342. Conditions precedent to issuing license; procedure where appli-
cation  denied.  Upon  the filing of such application and the payment of
such fees, if the superintendent shall find that the financial responsi-
bility, experience, character, and general fitness of the applicant, and
of the members thereof if the applicant be a partnership  [or],  associ-
ation  OR  LIMITED  LIABILITY COMPANY, and of the officers and directors
thereof if the applicant be a corporation, 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, and if the superintendent shall find  that  the  applicant
has  available  for  the  operation  of such business [at each specified
location liquid assets of at least fifty thousand dollars]  SUCH  AMOUNT
AS  CALCULATED  IN  ACCORDANCE  WITH  SUBDIVISION  FIVE OF SECTION THREE
HUNDRED FORTY-ONE OF THIS ARTICLE, the  superintendent  shall  thereupon
execute  a  master  license,  and if applicable one or more supplemental
licenses, to make loans in accordance with the provisions of this  arti-

S. 3727--A                          3

cle  at the location or locations specified in the said application. The
superintendent shall transmit one copy of such license  or  licenses  to
the  applicant  and  file the same in the office of the department. Each
such  license  shall remain in full force and effect until it is surren-
dered by the licensee or [revoked or] suspended, REVOKED  OR  TERMINATED
as  [hereinafter]  HEREIN  provided;  if the superintendent shall not so
find, a master license shall not be issued and the superintendent  shall
notify the applicant of the denial. If an application is denied or with-
drawn  the superintendent shall [return to the applicant the sum paid by
the applicant as a license fee, retaining] RETAIN the investigation  fee
to  cover the costs of investigating the application. The superintendent
shall approve or deny every application for a master  license  hereunder
within ninety days from the [filing thereof with the said fees] DATE THE
APPLICATION IS DEEMED COMPLETE BY THE SUPERINTENDENT.
  S  5.  Subdivision  1 of section 343 of the banking law, as amended by
chapter 494 of the laws of 1998, is amended to read as follows:
  1. A license shall state the address at which the business  is  to  be
conducted  and  shall  state  fully the name of the licensee, and if the
licensee  is  a  partnership  [or],  association  OR  LIMITED  LIABILITY
COMPANY,  the  names  of  the members thereof, and if a corporation, the
date and place of its incorporation. A  master  license  shall  be  kept
conspicuously  posted in the principal place of business of the licensee
and a supplemental license shall be conspicuously posted at the location
identified in the license. No master or supplemental  license  shall  be
transferable or assignable.
  S 6. The second undesignated paragraph of subdivision 1 of section 345
of  the  banking  law,  as amended by chapter 22 of the laws of 1990, is
amended to read as follows:
  [As used in this subdivision, (a) the term "person" includes an  indi-
vidual,  partnership, corporation, 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  person, whether by means of the ownership of the voting
stock or equity interests of such person  or  of  one  or  more  persons
controlling  such  person,  by  means  of  a contractual arrangement, or
otherwise. Control shall be presumed to exist if any person directly  or
indirectly owns, controls or holds with the power to vote ten per centum
or  more  of the voting stock or equity interests of the person desirous
of continuing to maintain and operate a licensee's place of business  or
of  any  entity  which directly or indirectly controls such person.] The
superintendent may, upon the application of a  licensee  or  any  [such]
person  [or  entity], determine whether or not the ownership, control or
holding of such voting stock or equity interests  constitutes  or  would
constitute control for purposes of this subdivision.
  S  7.  Section 347 of the banking law, as amended by chapter 22 of the
laws of 1990, is amended to read as follows:
  S 347. Grounds for [revocation or] suspension,  REVOCATION  OR  TERMI-
NATION of license; procedure.  [The] 1. IN ADDITION TO THE AUTHORITY SET
FORTH IN SUBDIVISION TWO OF THIS SECTION, THE superintendent may suspend
or  revoke  any  license issued [hereunder] UNDER THIS ARTICLE if, AFTER
NOTICE AND A HEARING the superintendent shall find that:
  (a) The licensee has failed to pay any sum of money lawfully  demanded
by  the superintendent or to comply with any demand, ruling, or require-
ment of the superintendent;
  (b) The licensee has violated any provisions of this article, the  act
of  congress  entitled "Truth in Lending Act" and the regulations there-

S. 3727--A                          4

under, as such act and regulations may from time to time be amended,  or
of any rule or regulation lawfully made by the superintendent;
  (c)  Any fact or condition exists which, if it had existed at the time
of the original application  for  such  license,  [clearly]  would  have
warranted  the  superintendent  in  refusing  originally  to  issue such
license;
  (d) The licensee has engaged in the business of a sales finance compa-
ny and has done or failed to do any act, except the failure to  pay  the
fees  required,  which would be grounds for the suspension or revocation
of its license pursuant to section  four  hundred  ninety-five  of  this
chapter were it required to obtain such a license.
  THE  SUPERINTENDENT  MAY REVOKE OR SUSPEND ONLY THE PARTICULAR LICENSE
WITH RESPECT TO WHICH GROUNDS FOR REVOCATION OR SUSPENSION MAY OCCUR  OR
EXIST,  OR, IF THE SUPERINTENDENT SHALL FIND THAT SUCH GROUNDS FOR REVO-
CATION OR SUSPENSION ARE OF GENERAL APPLICATION TO ALL  OFFICES,  OR  TO
MORE  THAN  ONE  OFFICE,  OPERATED  BY SUCH LICENSEE, THE SUPERINTENDENT
SHALL REVOKE OR SUSPEND ALL OF THE LICENSES ISSUED TO SUCH  LICENSEE  OR
SUCH NUMBER OF LICENSES AS SUCH GROUNDS APPLY TO, AS THE CASE MAY BE.
  2.  (A)  The  superintendent  may [on] FOR good cause [shown], without
notice or A hearing, [suspend] ISSUE AN  ORDER  SUSPENDING  any  license
ISSUED  PURSUANT  TO  THIS  ARTICLE  for a period not exceeding [thirty]
NINETY days, pending investigation.
  [The superintendent may revoke or suspend only the particular  license
with  respect to which grounds for revocation or suspension may occur or
exist, or, if the superintendent shall find that such grounds for  revo-
cation  or  suspension  are of general application to all offices, or to
more than one office, operated  by  such  licensee,  the  superintendent
shall  revoke  or suspend all of the licenses issued to such licensee or
such number of licenses as such grounds apply to, as the case  may  be.]
"GOOD CAUSE", AS USED IN THIS SUBDIVISION, SHALL EXIST WHEN THE LICENSEE
HAS  DEFAULTED  OR  IS  LIKELY  TO  DEFAULT  IN PERFORMING ITS FINANCIAL
ENGAGEMENTS OR ENGAGES 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  THIS  ARTICLE  THIRTY DAYS AFTER THE DATE THE LICENSEE FAILS 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 THIS ARTICLE:
  (I)  THIRTY  DAYS AFTER THE DATE THE LICENSEE FAILS TO FILE ANY REPORT
REQUIRED TO BE FILED BY IT  WITH  THE  SUPERINTENDENT  PURSUANT  TO  THE
AUTHORITY PROVIDED BY THIS ARTICLE; OR
  (II)  IMMEDIATELY  UPON NOTICE TO THE SUPERINTENDENT THAT THE LICENSEE
HAS FILED A PETITION IN BANKRUPTCY; OR
  (III) UPON NOTICE AT LEAST THIRTY DAYS  AFTER  THE  LICENSEE  HAS  HAD
FILED AGAINST IT A PETITION IN BANKRUPTCY.
  3.  IF  THE  SUPERINTENDENT  HAS  ISSUED AN ORDER SUSPENDING A LICENSE
ISSUED PURSUANT TO THIS ARTICLE PURSUANT TO PARAGRAPH (A) OF SUBDIVISION
TWO OF THIS SECTION, SUCH LICENSE MAY BE REINSTATED IF  THE  SUPERINTEN-
DENT DETERMINES, IN HIS OR HER SOLE DISCRETION AFTER INVESTIGATION, THAT
GOOD  CAUSE  THEREFOR  DID  NOT EXIST OR NO LONGER EXISTS. IF THE SUPER-
INTENDENT 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 DETERMINES, IN HIS OR HER  SOLE

S. 3727--A                          5

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  LIMITATION,  MAKING ANY OVERDUE
PAYMENT  OR HAVING ANY SUCH BANKRUPTCY PETITION DISMISSED. 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 SUSPENSION, THE LICENSE OF SUCH LICENSEE SHALL
BE  DEEMED  TO  BE  AUTOMATICALLY  TERMINATED BY OPERATION OF LAW AT THE
CLOSE OF BUSINESS ON SUCH NINETIETH DAY.
  4. Any licensee may surrender any license by delivering to the  super-
intendent  written  notice  that  the  licensee  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  ADMINISTRA-
TIVE  ACTIONS WITH RESPECT TO ANY PERIOD BEFORE SURRENDER.  SUCH SURREN-
DER SHALL BECOME EFFECTIVE UPON WRITTEN  APPROVAL BY THE SUPERINTENDENT.
  5. No revocation [or], suspension, TERMINATION  or  surrender  of  any
license shall impair or affect the obligation of any pre-existing lawful
contract between the licensee and any borrower.
  6.  Every  license  issued  hereunder shall remain in force and effect
until it shall have been surrendered, revoked, TERMINATED, or  suspended
in  accordance  with the provisions of this article, but the superinten-
dent shall have authority to reinstate suspended licenses  or  to  issue
new  licenses  to  a  licensee whose license or licenses shall have been
revoked OR TERMINATED if no fact or condition then exists which  clearly
would  have warranted the superintendent in refusing originally to issue
such license under this article.
  7. Whenever the superintendent  shall  revoke  or  suspend  a  license
issued  pursuant  to  this  article,  the superintendent shall execute a
written order to that effect. The superintendent shall file one copy  of
such  order  in  the  office of the department and serve a copy upon the
licensee, which order may be reviewed in the manner provided by  article
seventy-eight of the civil practice law and rules. Such special proceed-
ing  for  review  as authorized by this section must be commenced within
thirty days from the date of such order of suspension or revocation.
  8.  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
LICENSED LENDER IN THIS STATE.
  S 8. Section 356 of the banking law, as amended by chapter 22  of  the
laws of 1990, is amended to read as follows:
  S 356.  [Restrictions  on  certain  loans by non-licensees, interests,
other charges; loans] LOANS made outside this state. [No person or other
entity, other than a licensee under  this  article,  shall  directly  or
indirectly  charge,  contract for, or receive any interest, discount, or
consideration greater than the person or other entity would be permitted
by law to charge if it were not a licensee hereunder  upon  a  loan  not
exceeding  the maximum amounts prescribed in section three hundred forty
of this article.
  The foregoing prohibition shall apply to any person  or  other  entity
who  or  which,  by any device, subterfuge, or pretense whatsoever shall
charge, contract for, or receive  greater  interest,  consideration,  or
charges  than is authorized by the laws of this state for any such loan,
use, or forbearance of money, goods, or things in action or for any such
loan, use, or sale of credit.]

S. 3727--A                          6

  Any loan in an amount not exceeding the maximum amounts prescribed  in
section  three hundred forty of this article for which a greater rate of
interest, consideration, or charges than is permitted  by  the  laws  of
this state has been charged, contracted for, or received, wherever made,
shall  not  be  enforced  in this state and every person or other entity
participating therein in this state shall be subject to  the  provisions
of  this article.   An action to enforce any such loan made in any other
state to a person then a resident of that state, who now resides in this
state may be maintained  in  this  state  if  the  amount  of  interest,
discount,  consideration  or  other charge for such loan, demanded to be
paid in such action, does not exceed that permitted  to  a  licensee  by
section  three  hundred fifty-one of this article for a loan of the same
amount repayable in the same manner.
  S 9. Subdivision 1 of section 366 of the banking law,  as  amended  by
chapter  849  of the laws of 1964, is amended and a new subdivision 4 is
added to read as follows:
  1. The term "licensed casher of checks" means any  [individual,  part-
nership, unincorporated association or corporation] PERSON duly licensed
by  the  superintendent  of  banks to engage in business pursuant to the
provisions of this article.
  4. THE TERM "PERSON" MEANS  ANY  INDIVIDUAL  OR  OTHER  LEGAL  ENTITY,
INCLUDING ANY CORPORATION, PARTNERSHIP, ASSOCIATION OR LIMITED LIABILITY
COMPANY.
  S  10.  Subdivisions  1,  2  and  4 of section 367 of the banking law,
subdivisions 1 and 2 as amended by chapter 151 of the laws of  1945  and
subdivision  4 as amended by chapter 96 of the laws of 1981, are amended
to read as follows:
  1. No person[, partnership, association or corporation]  shall  engage
in  the business of cashing checks, drafts or money orders for a consid-
eration without first obtaining a license from the superintendent.
  2. Application for such license shall be in writing, under  oath,  and
in  the  form  prescribed  by  the superintendent, and shall contain the
name, and the address both of the residence and place  of  business,  of
the  applicant,  and  if the applicant is a co-partnership [or], associ-
ation, OR LIMITED LIABILITY COMPANY of every member thereof,  and  if  a
corporation, of each officer and director thereof; also, if the business
is to be conducted at a specific address, the address at which the busi-
ness  is  to be conducted, and if the business is to be conducted from a
mobile unit, the New York state registration number or other identifica-
tion of such mobile unit and the area in which the applicant proposes to
operate such mobile unit; and  also  such  further  information  as  the
superintendent may require.
  4.  Every  applicant  shall  prove, in form satisfactory to the super-
intendent that he, SHE or it has available for  the  operation  of  such
business,  for  each  location and for each mobile unit specified in the
application, liquid assets of at least ten thousand dollars,  and  every
licensee  shall continuously maintain for the operation of such business
for each location and for each mobile unit liquid assets of at least ten
thousand dollars.  Notwithstanding  the  foregoing  provisions  of  this
subdivision,  the  superintendent,  upon application by an applicant and
for good cause shown, may permit a reduction from ten  thousand  dollars
to not less than five thousand dollars of minimum liquid assets required
for  each  location  AND SUCH AMOUNT AS HE OR SHE SHALL DEEM APPROPRIATE
FOR EACH LIMITED STATION.
  S 11. Subdivision 1 of section 369 of the banking law, as  amended  by
chapter 233 of the laws of 2005, is amended to read as follows:

S. 3727--A                          7

  1. If the superintendent shall find that:
  (I)  the  financial responsibility, experience, character, and general
fitness of the applicant, and of the members thereof if the applicant be
a co-partnership [or], association OR LIMITED LIABILITY COMPANY, and  of
the  officers  and  directors thereof if the applicant be a corporation,
are such as to command the confidence of the community  and  to  warrant
belief  that  the  business will be operated honestly, fairly, and effi-
ciently within the purposes of this article, and [if the  superintendent
shall find that]
  (II) the granting of such application will promote the convenience and
advantage of the area in which such business is to be conducted, and [if
the superintendent shall find that]
  (III)  the  applicant has available for the operation of such business
for each location and for each mobile unit specified in the  application
liquid  assets  of  at  least  ten  thousand dollars, PROVIDED THAT, THE
SUPERINTENDENT, UPON APPLICATION BY AN  APPLICANT  AND  FOR  GOOD  CAUSE
SHOWN, MAY PERMIT A REDUCTION FROM TEN THOUSAND DOLLARS TO NOT LESS THAN
FIVE  THOUSAND  DOLLARS  OF  MINIMUM  LIQUID  ASSETS  REQUIRED  FOR EACH
LOCATION AND A REDUCTION TO SUCH AMOUNT AS THE SUPERINTENDENT SHALL DEEM
APPROPRIATE FOR EACH LIMITED STATION,
  (IV) THE PRIMARY BUSINESS OF THE  LICENSEE,  AT  THE  LOCATION  TO  BE
LICENSED, SHALL BE FINANCIAL SERVICES, AND
  (V)  THE APPLICANT'S PROPOSED OFFICES COMPLY WITH SUBDIVISION ONE-A OF
THIS SECTION,
the superintendent shall thereupon execute a  license  in  duplicate  to
permit the cashing of checks, drafts and money orders in accordance with
the  provisions of this article at the location or in the area specified
in such application. In finding whether the application will promote the
convenience and advantage to the public, the superintendent shall deter-
mine whether there is a  community  need  for  a  new  licensee  in  the
proposed  area  to be served. THE SUPERINTENDENT SHALL TRANSMIT ONE COPY
OF SUCH LICENSE TO THE APPLICANT AND FILE ANOTHER IN THE OFFICE  OF  THE
DEPARTMENT.
  1-A.  No  license  shall be issued to an applicant for a license, at a
location to be licensed which is closer than one thousand  five  hundred
eighty-four  feet  (three-tenths  of  a mile) from an existing licensee,
MEASURED ON A STRAIGHT LINE ALONG THE STREET BETWEEN THE  NEAREST  POINT
OF THE STORE FRONTS OF THE CHECK CASHING FACILITIES, except:
  (I) with the written consent of such existing licensee [or],
  (II) pursuant to subdivision three of section three hundred seventy of
this article, subject to any restriction or condition as the superinten-
dent may promulgate by regulation[; provided, however],
  (iii)  the superintendent may permit a location to be licensed that is
closer than three-tenths of a mile from an  existing  licensee  provided
THAT  (A)  such  applicant  engages  in the cashing of checks, drafts or
money orders only for payees of such checks, drafts or money orders that
are other than natural persons at the location to be  licensed  and  (B)
such  applicant  was  engaged  in  the cashing of such checks, drafts or
money orders for payees that are other  than  natural  persons  at  such
location on or before the fourteenth day of July, two thousand four, and
[provided  further  that  upon licensing any such location by the super-
intendent,] (C) SUCH LICENSE SHALL  BEAR  A  LEGEND  STATING  THAT  SUCH
LOCATION  IS RESTRICTED TO THE CASHING OF CHECKS, DRAFTS OR MONEY ORDERS
ONLY FOR PAYEES THAT ARE OTHER THAN NATURAL PERSONS, AND (D)  AFTER  THE
SUPERINTENDENT LICENSES SUCH LOCATION, such license as it pertains sole-
ly  to  such  location shall not be affected thereafter by any change of

S. 3727--A                          8

control of such license pursuant to section three hundred  seventy-a  of
this  article,  [provided that] AS LONG AS the licensee continues there-
after to engage at that location in the cashing  of  checks,  drafts  or
money  orders  only  for payees that are other than natural persons [and
provided further that such license shall bear a legend stating that such
location is restricted to the cashing of checks, drafts or money  orders
only  for  payees that are other than natural persons]. The three-tenths
of a mile distance requirement as set forth in this  [section]  SUBDIVI-
SION  shall  not  apply  in  cases  where  the  existing  licensee  is a
restricted location as authorized in the preceding sentence, or  is  any
other  licensed  location  that engages solely in the cashing of checks,
drafts or money orders only for  payees  that  are  other  than  natural
persons.  [For purposes of this section, such distance shall be measured
on a straight line along the street between the  nearest  point  of  the
store  fronts  of  the check cashing facilities. The primary business of
the licensee, at  the  location  to  be  licensed,  shall  be  financial
services.  The superintendent shall transmit one copy of such license to
the applicant and file another in the office of the department. Notwith-
standing the foregoing provisions of this subdivision,  the  superinten-
dent,  upon  application  by  an applicant and for good cause shown, may
permit a reduction from ten thousand dollars to not less than five thou-
sand dollars of minimum liquid assets required for each location.]
  S 12. Subdivision 2 of section 370-a of the banking law, as  added  by
chapter 142 of the laws of 1992, is amended to read as follows:
  2.  The superintendent shall approve or disapprove the proposed change
of control of a licensee in accordance with the provisions  of  subdivi-
sions  one  and six of section three hundred sixty-nine of this article.
The superintendent shall approve or disapprove the application in  writ-
ing within ninety days [after the date the application is filed with the
superintendent]  FROM THE DATE THE APPLICATION IS DEEMED COMPLETE BY THE
SUPERINTENDENT.
  S 13.  Section 373 of the banking law, as amended by  chapter  485  of
the laws of 1947, subdivision 1 as amended by chapter 432 of the laws of
2004,  subdivision  2  as  amended  by  chapter 132 of the laws of 1969,
subdivision 3 as amended by chapter 310 of the laws of 1962 and subdivi-
sion 5 as added by chapter 235 of the laws of 2008, is amended  to  read
as follows:
  S 373.  Acts  prohibited;  suspension or revocation of license; penal-
ties.  1.  (A) No licensee shall engage in the business of making  loans
of  money,  credit,  goods  or  things or discounting of notes, bills of
exchange, checks, or other evidences of debt pursuant to the  provisions
of  article nine of this chapter, nor shall a loan business or the nego-
tiation of loans or the discounting of notes, bills of exchange,  checks
or  other  evidences of debt be conducted on the same premises where the
licensee is conducting business pursuant to the provisions of this arti-
cle.
  (B) Except as otherwise provided by regulation of the  superintendent,
all checks, drafts and money orders shall be deposited in the licensee's
bank  account not later than the first business day following the day on
which they were cashed. No licensee shall at any time  cash  or  advance
any  moneys  on a post-dated check or draft or engage in the business of
transmitting money or receiving money for transmission; provided, howev-
er, that a licensee may cash a check payable on the first banking  busi-
ness  day following the date of cashing [(a)] (I) if such check is drawn
by the United States, the state of New York, or any  political  subdivi-
sion  of  the  state  of New York, or by any department, bureau, agency,

S. 3727--A                          9

authority, instrumentality or officer, acting in his official  capacity,
of  the  United  States  or of the state of New York or of any political
subdivision of the state of New York, or [(b)] (II) if such check  is  a
payroll  check  drawn  by  an  employer  to the order of its employee in
payment for services performed by such employee.
  (C) No licensee shall cash any check, draft or money order if the face
amount for which it is drawn is in excess of fifteen  thousand  dollars;
provided,  however, that this restriction shall not apply to the cashing
of checks, drafts or money orders drawn by the United States, any  state
thereof  or  any  political  subdivision  of  any  such state, or by any
department,  bureau,  agency,  authority,  instrumentality  or  officer,
acting in his official capacity, of the United States, any state thereof
or  any political subdivision of any such state, or any banking institu-
tion, or to any check or draft  drawn  by  any  insurance  company,  any
broker or dealer registered with the securities and exchange commission,
or  any attorney for the settlement of claims, or to any check which has
been certified by the banking institution on which it  has  been  drawn;
provided  further,  however,  that any such restriction upon the maximum
face amount that may be cashed by a licensee  shall  not  apply  to  the
cashing  of  checks,  drafts  or money orders by licensees for payees of
such checks, drafts or money orders that are other than natural persons.
For purposes of this subdivision, "banking institution" means any  bank,
trust  company,  savings  bank,  savings  and loan association or credit
union which is incorporated, chartered or organized under  the  laws  of
this state or any other state or the United States.
  2.  [The]  IN ADDITION TO THE AUTHORITY SET FORTH IN SUBDIVISION THREE
OF THIS SECTION, THE superintendent may suspend or revoke any license or
licenses issued pursuant to this article if, after notice and a hearing,
he OR SHE shall find that the licensee  (a)  has  committed  any  fraud,
engaged  in  any  dishonest activities or made any misrepresentation; or
(b) has violated any provisions of [the banking law] THIS CHAPTER or any
regulation issued pursuant thereto, or has violated any other law in the
course of [its or his] THE LICENSEE'S dealings as a licensed  casher  of
checks;  or  (c)  has made a false statement in the application for such
license or failed to give a true reply to a question  in  such  applica-
tion;  or  (d) has demonstrated his, HER or its incompetency or untrust-
worthiness to act as a licensed casher of checks; or (e)  is  not  doing
sufficient  business pursuant to this article to justify the continuance
of the license, or if he OR SHE shall find that any  ground  or  grounds
exist  which  would require or warrant the refusal of an application for
the issuance of the license if such  an  application  were  then  before
[him]  THE  SUPERINTENDENT.   Such a hearing shall be held in the manner
and upon such notice as may be prescribed by the superintendent.  [Pend-
ing  an  investigation  or a hearing for the suspension or revocation of
any license or licenses issued pursuant to this article, the superinten-
dent may temporarily suspend such license or licenses for a  period  not
to  exceed ninety days, provided the superintendent shall find that such
a temporary suspension is in the public interest.]
  3. (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 WHEN THE LICENSEE
HAS  DEFAULTED  OR  IS  LIKELY  TO  DEFAULT  IN PERFORMING ITS FINANCIAL
ENGAGEMENTS OR ENGAGES IN DISHONEST OR INEQUITABLE PRACTICES  WHICH  MAY
CAUSE  SUBSTANTIAL  HARM  TO THE PERSONS AFFORDED THE PROTECTION OF THIS
ARTICLE.

S. 3727--A                         10

  (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  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 THIS ARTICLE: (I) THIRTY DAYS AFTER THE DATE THE  LICENSEE  FAILS
TO  FILE  ANY  REPORT REQUIRED TO BE FILED BY IT WITH THE SUPERINTENDENT
PURSUANT TO THE AUTHORITY PROVIDED BY  THIS  ARTICLE;  (II)  IMMEDIATELY
UPON NOTICE TO THE SUPERINTENDENT THAT THE LICENSEE HAS FILED A PETITION
IN  BANKRUPTCY;  (III)  AT  LEAST THIRTY DAYS AFTER THE LICENSEE HAS HAD
FILED AGAINST IT A PETITION IN BANKRUPTCY; OR (IV) AT LEAST THIRTY  DAYS
AFTER THE LICENSEE HAS FAILED TO MAINTAIN THE REQUISITE CAPITAL LEVEL.
  4.  IF  THE  SUPERINTENDENT  HAS  ISSUED AN ORDER SUSPENDING A LICENSE
ISSUED PURSUANT TO PARAGRAPH (A) OF SUBDIVISION THREE 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 SUBDIVI-
SION THREE OF THIS SECTION, SUCH  LICENSE  MAY  BE  REINSTATED,  IF  THE
SUPERINTENDENT  DETERMINES,  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, INCLUD-
ING, WITHOUT LIMITATION, MAKING ANY OVERDUE PAYMENT OR HAVING  ANY  SUCH
BANKRUPTCY  PETITION  DISMISSED.  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 SUSPENSION, THE LICENSE OF SUCH LICENSEE  SHALL  BE  DEEMED  TO  BE
AUTOMATICALLY TERMINATED BY OPERATION OF LAW AT THE CLOSE OF BUSINESS ON
SUCH NINETIETH DAY.
  5.  Whenever  the  superintendent  shall  suspend  or revoke a license
issued pursuant to this article, he OR SHE  shall  forthwith  execute  a
written  order to that effect. The superintendent shall on the date such
order is executed file one copy thereof in the office of the  department
and  serve a second copy thereof on the licensee either personally or by
mailing the same to the last known address of such licensee. Such  order
shall  be  subject to review by the supreme court in the manner provided
in article seventy-eight of the civil practice law and rules;  provided,
however,  that  a  special  proceeding  for review of such order must be
commenced within thirty days from the date of such order  of  suspension
or revocation and, provided further, that no stay shall be granted pend-
ing  the determination of the matter except on notice to the superinten-
dent and for a period not exceeding thirty days.
  [4.] 6. 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 BUSI-
NESS OF A LICENSED CHECK CASHER IN THIS STATE.
  7. Any person[,  partnership,  association  or  corporation]  and  the
several  members, officers, directors, agents and employees thereof, who
shall violate any of the provisions of this article, shall be guilty  of
a misdemeanor, and shall be punishable by imprisonment for not more than
one  year or by a fine of not more than five hundred dollars, or by both
such fine and imprisonment.
  [5.] 8. Notwithstanding the provisions of subdivision [four] SEVEN  of
this  section, any person[, partnership, association or corporation] and
the several members, officers, directors, agents and  employees  thereof

S. 3727--A                         11

who  shall  violate  the  provisions of subdivision one of section three
hundred sixty-seven of this article shall be guilty of a class A  misde-
meanor.
  S  14.  Subdivision 1 of section 374 of the banking law, as amended by
chapter 582 of the laws of 2000, is amended to read as follows:
  1. The provisions of this article shall not apply when checks,  drafts
or  money orders are cashed, other than by a licensee, without a consid-
eration or charge; nor when checks, drafts or money orders  are  cashed,
other  than  by  a  licensee, as an incident to the conduct of any other
lawful business where not more than one dollar is  charged  for  cashing
each check, draft or money order; nor shall the provisions of this arti-
cle apply to any national bank, federal reserve bank, or to any person[,
partnership, association, corporation or other organization] doing busi-
ness  under  or  pursuant  to  the  provisions of this chapter, except a
licensee under this article.
  S 15. Subdivisions 6-a, 6-b and 7 of section 491 of the  banking  law,
subdivision  6-a as amended by chapter 289 of the laws of 1962, subdivi-
sion 6-b as added by chapter 358 of the laws of 1958 and  subdivision  7
as  amended  by  chapter 837 of the laws of 1966, are amended to read as
follows:
  6-a. "Retail instalment obligation" or "obligation"  means  an  agree-
ment,  entered  into in this state, pursuant to which the buyer promises
to pay, in instalments, the time sale price or prices  of  goods  and/or
services,  or any part thereof. The term does not include [(a)] a retail
instalment contract[, (b)] OR a retail instalment credit  agreement  [or
(c)  an  obligation which is intended to be and is ultimately insured or
guaranteed under title three of the act of Congress  entitled  "Service-
men's  Readjustment  Act of 1944"].  THE TERM INCLUDES SUCH AN AGREEMENT
WHEREVER ENTERED INTO IF EXECUTED BY THE BUYER  IN  THIS  STATE  AND  IF
SOLICITED  IN  PERSON  BY A SALESPERSON OR OTHER PERSON ACTING ON HIS OR
HER OWN BEHALF OR THAT OF THE SELLER.
  6-b. "Retail instalment credit agreement" or "credit agreement"  means
an  agreement  entered  into  in this state, pursuant to which the buyer
promises to pay, in instalments, his  OR  HER  outstanding  indebtedness
from  time to time to a retail seller, not evidenced by a retail instal-
ment contract or obligation, for one or more items of goods or services,
whenever purchased or obtained, which provides for a service charge  and
under  which instalment payments apply to his OR HER outstanding indebt-
edness from time to time.  THE TERM INCLUDES SUCH AN AGREEMENT  WHEREVER
ENTERED  INTO IF EXECUTED BY THE BUYER IN THIS STATE AND IF SOLICITED IN
PERSON BY A SALESPERSON OR OTHER PERSON ACTING ON HIS OR HER OWN  BEHALF
OR THAT OF THE SELLER.
  7.  "Sales  finance  company"  means  a person engaged, in whole or in
part, directly or indirectly, in the business of purchasing or otherwise
acquiring retail instalment contracts, obligations or credit  agreements
made  by  and  between  other parties, or any interest therein. The term
includes a retail seller of motor vehicles engaged, in whole or in part,
in the business of holding retail  instalment  contracts  acquired  from
retail buyers, [which have] IF THE NUMBER OF RETAIL INSTALMENT CONTRACTS
ACQUIRED  IN  ANY ONE YEAR EXCEEDS FIVE SUCH CONTRACTS, OR IF THE aggre-
gate unpaid time balances [of twenty-five] ON SUCH CONTRACTS EXCEED  ONE
HUNDRED thousand dollars or more at any one time, exclusive of contracts
repurchased  from  a sales finance company or financing agency, under an
agreement to repurchase in case of default entered into as  an  incident
to  the  bona  fide sale thereof to a sales finance company or financing
agency. The term does not include the pledgee of an aggregate number  of

S. 3727--A                         12

contracts  to  secure a bona fide loan thereon, OR A SECONDARY HOLDER OF
SUCH CONTRACTS.  The term includes a person  engaged,  in  whole  or  in
part,  directly  or  indirectly, in the business of entering into retail
instalment  credit agreements with retail buyers pursuant to subdivision
eleven of section four hundred thirteen of the  personal  property  law.
FOR PURPOSES OF THIS ARTICLE, THE TERM "SECONDARY HOLDER" MEANS A PERSON
THAT (I) ACQUIRES INSTALMENT SALES CONTRACTS, OR INTERESTS THEREIN, FROM
PERSONS  WHO ARE NOT RETAIL SELLERS WITH RESPECT TO SUCH CONTRACTS; (II)
IS NOT ITSELF A RETAIL SELLER WITH RESPECT TO SUCH CONTRACTS; AND  (III)
DOES  NOT  SERVICE  SUCH  CONTRACTS,  OR IN THE ORDINARY COURSE HAVE ANY
CONTACT WITH THE OBLIGORS UNDER SUCH CONTRACTS; PROVIDED, HOWEVER,  THAT
ANY CONTACT BETWEEN A SECONDARY HOLDER AND AN OBLIGOR SHALL BE INITIATED
SOLELY BY THE OBLIGOR.
  S 16. Subdivisions 1 and 2 of section 492 of the banking law, subdivi-
sion  1  as amended by chapter 547 of the laws of 2008 and subdivision 2
as added by chapter 635 of the laws of 1956,  are  amended  to  read  as
follows:
  1.  No  person,  except a bank, savings bank, savings and loan associ-
ation, trust company, private banker, credit union, OR investment compa-
ny, organized under [article twelve of] this chapter [and authorized  to
accept  deposits,  national  bank,  federal savings association, federal
credit union, or out-of-state state bank, as such  term  is  defined  in
subdivision  two  of  section two hundred twenty-two of this chapter], A
BRANCH OR AGENCY OF A FOREIGN BANKING CORPORATION LICENSED BY THE SUPER-
INTENDENT OR COMPTROLLER OF THE CURRENCY TO TRANSACT  BUSINESS  IN  THIS
STATE,  ANY BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, INDUSTRIAL
LOAN COMPANY, BANK OR CREDIT UNION ORGANIZED UNDER THE LAWS OF ANY OTHER
STATE OR THE UNITED STATES,  or  lender  licensed  TO  CONDUCT  BUSINESS
pursuant to THE PROVISIONS OF article nine of this chapter, shall engage
in  the  business  of  a  sales  finance company in this state without a
license therefor obtained from the superintendent, as provided  in  this
article.
  2.  [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  of  the applicant and date of incorporation, if
incorporated;
  (b) The complete address where the business is to be conducted,  show-
ing  the street and number, if any, the office building and room number,
if any, and the municipality and county;
  (c) 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
  (d) The name and resident address of the  owner  or  partners  of  the
applicant  or,  if a corporation or association, of the directors, trus-
tees and principal officers, and of any stockholder  owning  twenty  per
centum or more of its stock; and
  (e)  Such  other  pertinent  information  as  the  superintendent  may
require.]
  THE APPLICATION FOR A LICENSE TO BE A SALES FINANCE COMPANY  SHALL  BE
IN  WRITING,  UNDER  OATH, AND IN THE FORM PRESCRIBED BY THE SUPERINTEN-
DENT. THE APPLICATION SHALL CONTAIN THE NAME AND COMPLETE  BUSINESS  AND
RESIDENTIAL ADDRESS OR ADDRESSES OF THE APPLICANT. IF THE APPLICANT IS A
PARTNERSHIP,  ASSOCIATION,  CORPORATION OR OTHER FORM OF BUSINESS ORGAN-
IZATION, THE APPLICATION SHALL CONTAIN THE NAMES AND  COMPLETE  BUSINESS
AND RESIDENTIAL ADDRESSES OF EACH MEMBER, DIRECTOR AND PRINCIPAL OFFICER

S. 3727--A                         13

THEREOF. SUCH APPLICATION SHALL ALSO INCLUDE A DESCRIPTION OF THE ACTIV-
ITIES  OF  THE  APPLICANT,  IN  SUCH DETAIL AND FOR SUCH PERIODS, AS THE
SUPERINTENDENT MAY REQUIRE INCLUDING:
  (A)  AN  AFFIRMATION  OF FINANCIAL SOLVENCY NOTING SUCH CAPITALIZATION
REQUIREMENTS AS MAY BE PRESCRIBED BY THE SUPERINTENDENT, AND  ACCESS  TO
SUCH CREDIT AS MAY BE PRESCRIBED BY THE SUPERINTENDENT;
  (B)  AS  PROVIDED  IN  SECTION TWENTY-TWO OF THIS CHAPTER, THE FINGER-
PRINTS OF THE APPLICANT AND EACH MEMBER, DIRECTOR AND PRINCIPAL  OFFICER
OF THE APPLICANT AS THE SUPERINTENDENT MAY DETERMINE;
  (C)  AN  AFFIRMATION  THAT THE APPLICANT, OR ITS MEMBERS, DIRECTORS OR
PRINCIPALS AS MAY BE APPROPRIATE, ARE AT LEAST TWENTY-ONE YEARS OF AGE;
  (D) INFORMATION AS TO THE CHARACTER, FITNESS, FINANCIAL  AND  BUSINESS
RESPONSIBILITY,   BACKGROUND  AND  EXPERIENCES  OF  THE  APPLICANT,  ITS
MEMBERS, DIRECTORS OR PRINCIPALS AND OF ANY PERSON OWNING TEN PER CENTUM
OR MORE OF THE APPLICANT AND IF SUCH PERSON  IS  A  PARTNERSHIP,  CORPO-
RATION,  ASSOCIATION  OR OTHER FORM OF BUSINESS ORGANIZATION, SUCH ENTI-
TY'S MEMBERS, DIRECTORS OR PRINCIPALS; AND
  (E) SUCH OTHER  PERTINENT  INFORMATION  AS  THE  SUPERINTENDENT  SHALL
REQUIRE.
  S  17.  Subdivision 2 of section 492-a of the banking law, as added by
chapter 142 of the laws of 1992, is amended to read as follows:
  2. The superintendent shall approve or disapprove the proposed  change
of  control  of a licensee in accordance with the provisions of subdivi-
sion one of section four  hundred  ninety-three  of  this  article.  The
superintendent  shall  approve  or disapprove the application in writing
within ninety days after the date the application is [filed with] DEEMED
COMPLETE BY the superintendent.
  S 18. Subdivision 7 of section 493 of the banking law is REPEALED  and
subdivision 4, as amended by chapter 132 of the laws of 1969, is amended
to read as follows:
  4. Each license issued hereunder shall remain in full force and effect
until it is surrendered by the licensee [or] revoked [or], TERMINATED OR
suspended as provided in this [article] CHAPTER.
  S  19. Paragraph (e) of subdivision 1 and subdivision 7 of section 495
of the banking law are REPEALED, and subdivisions 2,  3,  4  and  5,  as
added  by  chapter  635 of the laws of 1956, subdivision 5 as amended by
chapter 64 of the laws of 1958, are amended to read as follows:
  2.  [No] (A) EXCEPT AS PROVIDED FOR IN PARAGRAPHS (B), (C) AND (D)  OF
THIS  SUBDIVISION,  NO  license UNDER THIS ARTICLE shall be suspended or
revoked except after  a  hearing  thereon.  [The]  WHERE  A  HEARING  IS
REQUIRED  UNDER THIS SECTION, THE superintendent shall give the licensee
at least ten days' written notice of the time and place of such  hearing
by  [registered]  CERTIFIED mail, RETURN RECEIPT REQUESTED, addressed to
the principal place of business in this  state  of  such  licensee  THEN
APPEARING ON THE RECORDS OF THE SUPERINTENDENT.  Any order suspending or
revoking  such  license  shall recite the grounds upon which it is based
[and shall not be effective until ten days after written notice  thereof
has been sent by registered mail to the licensee at such principal place
of  business].    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 BUSI-
NESS OF A SALES FINANCE COMPANY IN THIS STATE. THE SUPERINTENDENT IN HIS
OR HER DISCRETION MAY REVOKE OR SUSPEND ONLY THE PARTICULAR LICENSE WITH
RESPECT TO WHICH GROUNDS FOR  REVOCATION  OR  SUSPENSION  MAY  OCCUR  OR
EXIST;  BUT IF HE OR SHE FINDS THAT GROUNDS FOR REVOCATION OR SUSPENSION
ARE OF GENERAL APPLICATION TO ALL PLACES OF BUSINESS, OR  TO  MORE  THAN

S. 3727--A                         14

ONE PLACE OF BUSINESS, OPERATED BY SUCH LICENSEE, HE OR SHE SHALL REVOKE
OR SUSPEND ALL OF THE LICENSES ISSUED TO SAID LICENSEE OR THOSE LICENSES
TO WHICH THE GROUNDS FOR REVOCATION OR SUSPENSION APPLY, AS THE CASE MAY
BE.
  (B)  THE  SUPERINTENDENT MAY FOR GOOD CAUSE, WITHOUT NOTICE OR A HEAR-
ING, ISSUE AN ORDER SUSPENDING ANY LICENSE ISSUED PURSUANT TO THIS ARTI-
CLE FOR A PERIOD NOT EXCEEDING NINETY DAYS, PENDING INVESTIGATION. "GOOD
CAUSE", AS USED IN THIS SUBDIVISION, SHALL EXIST WHEN THE  LICENSEE  HAS
DEFAULTED  OR  IS  LIKELY TO DEFAULT IN PERFORMING ITS FINANCIAL ENGAGE-
MENTS OR ENGAGES IN DISHONEST OR INEQUITABLE PRACTICES WHICH  MAY  CAUSE
SUBSTANTIAL HARM TO THE PERSONS AFFORDED THE PROTECTION OF THIS ARTICLE.
  (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 THIS ARTICLE UPON THE  FAILURE  OF  SUCH  LICENSEE  TO  MAKE  ANY
PAYMENT AS REQUIRED BY THIS CHAPTER.
  (D)  THE  SUPERINTENDENT  MAY,  IN HIS OR HER SOLE DISCRETION, WITHOUT
NOTICE OR A HEARING, ISSUE AN ORDER SUSPENDING ANY LICENSE ISSUED PURSU-
ANT TO THIS ARTICLE:
  (I) THIRTY DAYS AFTER THE DATE THE LICENSEE FAILS TO FILE  ANY  REPORT
REQUIRED TO BE FILED BY IT WITH THE SUPERINTENDENT PURSUANT TO AUTHORITY
PROVIDED BY THIS ARTICLE; OR
  (II)  IMMEDIATELY  UPON NOTICE TO THE SUPERINTENDENT THAT THE LICENSEE
HAS FILED A PETITION IN BANKRUPTCY; OR
  (III) AT LEAST THIRTY DAYS AFTER THE LICENSEE HAS HAD FILED AGAINST IT
A PETITION IN BANKRUPTCY.
  3. [The superintendent in his discretion may revoke  or  suspend  only
the  particular  license with respect to which grounds for revocation or
suspension may occur or exist; but if he finds that grounds for  revoca-
tion or suspension are of general application to all places of business,
or  to  more  than  one place of business, operated by such licensee, he
shall revoke or suspend all of the licenses issued to said  licensee  or
those  licenses to which the grounds for revocation or suspension apply,
as the case may be.] IF THE SUPERINTENDENT HAS ISSUED AN ORDER  SUSPEND-
ING  A  LICENSE  PURSUANT  TO  PARAGRAPH  (B) OF SUBDIVISION TWO OF THIS
SECTION, SUCH LICENSE MAY BE REINSTATED  IF  THE  SUPERINTENDENT  DETER-
MINES,  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
(C) OR (D) OF SUBDIVISION TWO OF THIS SECTION, SUCH LICENSE MAY BE REIN-
STATED, IF THE SUPERINTENDENT DETERMINES, 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 LIMITATION,  MAKING  ANY  OVERDUE  PAYMENT  OR
HAVING  ANY  SUCH BANKRUPTCY PETITION DISMISSED.  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 SUSPENSION, THE LICENSE OF SUCH LICENSEE SHALL
BE DEEMED TO BE AUTOMATICALLY TERMINATED BY  OPERATION  OF  LAW  AT  THE
CLOSE OF BUSINESS ON SUCH NINETIETH DAY.
  4.  Any licensee may surrender any license by delivering to the super-
intendent written notice that such license is thereby  surrendered,  but
such surrender shall not affect the licensee's civil or criminal liabil-
ity  for  acts  committed prior [thereto] TO SUCH SURRENDER OR ITS OBLI-
GATIONS TO THE SUPERINTENDENT FOR ASSESSMENTS,  FEES  OR  ADMINISTRATIVE
ACTIONS  WITH RESPECT TO ANY PERIOD BEFORE SUCH SURRENDER.  SUCH SURREN-
DER SHALL BECOME EFFECTIVE UPON WRITTEN APPROVAL BY THE SUPERINTENDENT.

S. 3727--A                         15

  5. No suspension, revocation, TERMINATION or surrender of any  license
shall  impair or affect the obligation of any instalment contract, obli-
gation or credit agreement lawfully acquired previously thereto  by  the
licensee.
  S  20.  Subdivisions  3  and  4  of section 497 of the banking law are
REPEALED.
  S 21. Section 499 of the banking law, as added by chapter 635  of  the
laws of 1956, is amended to read as follows:
  S 499.  Violations  and  penalties. Any person who violates or partic-
ipates in the violation of any provision of this article, or  who  know-
ingly  makes  any incorrect statement of a material fact in any applica-
tion, report or  statement  filed  pursuant  to  this  article,  or  who
knowingly  omits to state any material fact necessary to give the super-
intendent any information lawfully required by him OR HER or refuses  to
permit  any  lawful  investigation  or examination, shall be guilty of a
misdemeanor and, upon conviction, shall be  fined  not  more  than  five
hundred  dollars  or imprisoned for not more than six months or both, in
the discretion of the court.
  S 22. Subdivision 2 of section 554 of the banking law is REPEALED  and
a new subdivision 2 is added to read as follows:
  2.  "BANKING INSTITUTION" MEANS A BANK, SAVINGS BANK, SAVINGS AND LOAN
ASSOCIATION, TRUST COMPANY, PRIVATE  BANKER, CREDIT UNION OR  INVESTMENT
COMPANY ORGANIZED UNDER THE BANKING LAW OF THIS STATE, A BRANCH OR AGEN-
CY  OF  A  FOREIGN BANKING CORPORATION LICENSED BY THE SUPERINTENDENT OR
THE COMPTROLLER OF THE CURRENCY TO TRANSACT BUSINESS IN THIS  STATE,  OR
ANY  BANK,  SAVINGS  BANK, SAVINGS AND LOAN ASSOCIATION, INDUSTRIAL LOAN
COMPANY OR CREDIT UNION ORGANIZED UNDER THE LAWS OF ANY OTHER  STATE  OR
THE UNITED STATES.
  S  23.  Subdivision 1 of section 555 of the banking law, as amended by
chapter 547 of the laws of 2008, is amended to read as follows:
  1. No person except a [lending] BANKING institution [or],  an  author-
ized insurer OR A LENDER LICENSED PURSUANT TO ARTICLE NINE OF THIS CHAP-
TER  shall  engage in the business of a premium finance agency without a
license therefor obtained from the superintendent, as provided  in  this
article.
  S 24. Subdivision 5 of section 556 of the banking law is REPEALED.
  S  25.  Section 558 of the banking law, as added by chapter 488 of the
laws of 1960, is amended to read as follows:
  S 558. Change of location. Before any licensee changes any office  [of
his] to another location, [he] IT shall [give written notice thereof to]
FILE  A  WRITTEN APPLICATION WITH the superintendent, who shall [without
charge issue an endorsement indicating the change and the date  thereof,
which  endorsement  shall be attached to the license for such office and
be authority for the operation of the business  under  such  license  at
such  new location] AFTER RECEIPT OF THE FEE PRESCRIBED IN SECTION EIGH-
TEEN-A OF THIS CHAPTER ISSUE A NEW LICENSE FOR THE NEW OFFICE.
  S 26. Section 559 of the banking law, as added by chapter 488  of  the
laws  of  1960, paragraph (a) of subdivision 1 as amended by chapter 474
of the laws of 1962, paragraph (b) of subdivision 1 as amended by  chap-
ter 1141 of the laws of 1969, subdivision 6 as amended by chapter 310 of
the  laws  of 1962 and subdivision 7 as added by chapter 121 of the laws
of 1993, is amended to read as follows:
  S 559. Grounds for revocation of license; procedure. 1. [The] IN ADDI-
TION TO THE AUTHORITY PROVIDED BY SUBDIVISION TWO OF THIS  SECTION,  THE
superintendent  may  [forthwith revoke or] suspend OR REVOKE any license

S. 3727--A                         16

issued [hereunder if] UNDER THIS ARTICLE IF, AFTER NOTICE AND A HEARING,
he OR SHE shall find that:
  (a) The licensee has failed to pay [the annual license fee or] any sum
of  money  lawfully  demanded,  or to comply with any demand, ruling, or
requirement of the superintendent lawfully made pursuant to  and  within
the authority of this article;
  (b)  The  licensee has violated any provision of this article, the act
of congress entitled "Truth in Lending Act" and the  regulations  there-
under,  as  such act and regulations may from time to time be amended or
any rule or regulation lawfully made by  the  superintendent  under  and
within the authority of this article;
  (c)  Any fact or condition exists which, if it had existed at the time
of the  original  application  for  such  license,  clearly  would  have
warranted  the  superintendent  in  refusing  originally  to  issue such
license.
  2. (A) THE SUPERINTENDENT MAY, FOR GOOD CAUSE,  WITHOUT  NOTICE  OR  A
HEARING,  OR  WHERE THERE IS A SUBSTANTIAL RISK OF PUBLIC HARM, ISSUE AN
ORDER SUSPENDING ANY LICENSE ISSUED PURSUANT TO THIS ARTICLE FOR A PERI-
OD NOT EXCEEDING NINETY DAYS, PENDING INVESTIGATION.  "GOOD  CAUSE",  AS
USED IN THIS SUBDIVISION, SHALL EXIST WHEN THE LICENSEE HAS DEFAULTED OR
IS  LIKELY TO DEFAULT IN PERFORMING ITS FINANCIAL ENGAGEMENTS OR ENGAGES
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 THIS ARTICLE UPON THE  FAILURE  OF  SUCH  LICENSEE  TO  MAKE  ANY
PAYMENT 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 THIS ARTICLE:
  (I) THIRTY DAYS AFTER THE DATE THE LICENSEE FAILS TO FILE  ANY  REPORT
REQUIRED TO BE FILED BY IT WITH THE SUPERINTENDENT PURSUANT TO AUTHORITY
PROVIDED BY THIS ARTICLE;
  (II)  IMMEDIATELY  UPON NOTICE TO THE SUPERINTENDENT THAT THE LICENSEE
HAS FILED A PETITION IN BANKRUPTCY; OR
  (III) UPON NOTICE AT LEAST THIRTY DAYS  AFTER  THE  LICENSEE  HAS  HAD
FILED AGAINST IT A PETITION IN BANKRUPTCY.
  3.  IF  THE  SUPERINTENDENT  HAS  ISSUED AN ORDER SUSPENDING A LICENSE
PURSUANT TO PARAGRAPH (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 SUBDIVI-
SION  TWO OF THIS SECTION, SUCH LICENSE MAY BE REINSTATED, IF THE SUPER-
INTENDENT DETERMINES, IN HIS OR HER SOLE DISCRETION, THAT  THE  LICENSEE
HAS CURED ALL DEFICIENCIES SET FORTH IN SUCH ORDER BY THE CLOSE OF BUSI-
NESS  NINETY  DAYS  AFTER  THE DATE OF SUCH SUSPENSION ORDER, INCLUDING,
WITHOUT LIMITATION, MAKING ANY OVERDUE PAYMENT OR HAVING ANY SUCH  BANK-
RUPTCY PETITION DISMISSED. OTHERWISE, IN THE CASE OF A SUSPENSION PURSU-
ANT  TO  PARAGRAPH (B) OR (C) OF SUBDIVISION TWO OF THIS SECTION, UNLESS
THE SUPERINTENDENT HAS, IN HIS OR HER  SOLE  DISCRETION,  EXTENDED  SUCH
SUSPENSION,  THE LICENSE OF SUCH LICENSEE SHALL BE DEEMED TO BE AUTOMAT-
ICALLY TERMINATED BY OPERATION OF LAW AT THE CLOSE OF BUSINESS  ON  SUCH
NINETIETH DAY.
  4.  The  superintendent  may  revoke  or  suspend  only the particular
license with respect to which grounds for revocation or  suspension  may

S. 3727--A                         17

occur  or exist, or, if he OR SHE shall find that such grounds for revo-
cation or suspension are of general application to all  offices,  or  to
more  than one office, operated by such licensee, he OR SHE shall revoke
or suspend all of the licenses issued to such licensee or such number of
licenses as such grounds apply to, as the case may be.
  [3.]  5.  Any  licensee may surrender any license by delivering to the
superintendent written notice that he OR  SHE  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 ADMINISTRA-
TIVE ACTIONS WITH RESPECT TO ANY  PERIOD  BEFORE  SUCH  SURRENDER.  SUCH
SURRENDER  SHALL  BECOME  EFFECTIVE  UPON WRITTEN APPROVAL BY THE SUPER-
INTENDENT.
  [4.] 6. No revocation, TERMINATION or suspension or surrender  of  any
license  shall  impair  or affect the obligation of an insured under any
lawful premium finance agreement previously  acquired  or  held  by  the
licensee.
  [5.]  7.  Every  license  issued  hereunder  shall remain in force and
effect until  the  same  shall  have  been  surrendered,  revoked,  [or]
suspended  OR TERMINATED in accordance with the provisions of this arti-
cle, but the superintendent shall have authority to reinstate  suspended
licenses  or  to  issue  new  licenses  to  a  licensee whose license or
licenses shall have been revoked OR TERMINATED if no fact  or  condition
then  exists  which  clearly  would have warranted the superintendent in
refusing originally to issue such license under this article.
  [6.] 8. Whenever the superintendent shall revoke or suspend a  license
issued  pursuant  to  this article, he OR SHE shall forthwith execute in
[triplicate] DUPLICATE a written order to that effect.  The  superinten-
dent  shall file one copy of such order in the office of the department,
[file another in the office of the clerk  of  the  county  in  which  is
located  the  place  designated in such license] and forthwith serve the
[third] SECOND copy upon the licensee, which order may  be  reviewed  in
the  manner  provided by article seventy-eight of the civil practice law
and rules. Such special proceeding for  review  as  authorized  by  this
section must be commenced within thirty days from the date of such order
of suspension or revocation.
  [7.  The  superintendent may, on good cause shown, or where there is a
substantial risk of public harm, suspend any license issued pursuant  to
this  article  for  a period not exceeding thirty days, pending investi-
gation. "Good cause", as used in this subdivision, shall exist only when
the licensee has defaulted or is likely to  default  in  performing  its
financial  engagements  or engages in dishonest or inequitable practices
which may cause substantial harm to the persons afforded the  protection
of this article.]
  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
PREMIUM FINANCE AGENCY IN THIS STATE.
  S  27.  Subdivisions  3  and  4  of section 560 of the banking law are
REPEALED.
  S 28. Section 562 of the banking law is REPEALED.
  S 29. Subdivision 1 of section 563 of the banking  law,  as  added  by
chapter 488 of the laws of 1960, is amended to read as follows:
  1.  Any person, including any member, officer, director or employee of
a licensee, who  violates  or  participates  in  the  violation  of  any
provision  of  this article, or who knowingly makes any incorrect state-

S. 3727--A                         18

ment of a material fact in any application, report  or  statement  filed
pursuant  to  this article, or who knowingly omits to state any material
fact necessary to  give  the  superintendent  any  information  lawfully
required  by him or HER OR refuses to permit any lawful investigation or
examination, shall be guilty of  a  misdemeanor  and,  upon  conviction,
shall  be fined not more than five hundred dollars or imprisoned for not
more than six months or both, in the discretion of the court.
  S 30. Section 576 of the banking law is amended by adding a new subdi-
vision 4 to read as follows:
  4. IN ADDITION TO MAILING, NOTICES REQUIRED UNDER THIS SECTION MAY  BE
DELIVERED  BY OTHER MEANS, INCLUDING ELECTRONIC MEANS, PROVIDED THAT ANY
SUCH DELIVERY EVIDENCES RECEIPT OF THE NOTICE BY THE  ADDRESSEE.    SUCH
RECEIPT MAY BE CREATED AND MAINTAINED IN ELECTRONIC FORM.
  S 31. Subdivision (a) of section 577 of the banking law, as amended by
chapter 1 of the laws of 1994, is amended to read as follows:
  (a)  By  any  person  at  a rate of interest not greater than the rate
[prescribed by the banking board pursuant to] SET FORTH IN section four-
teen-a of this chapter[, or, if no rate has been so prescribed, six  per
centum per annum]; or
  S 32. Subdivisions 3 and 4 of section 580 of the banking law, subdivi-
sion  3  as amended by section 50 of part O of chapter 59 of the laws of
2006 and subdivision 4 as added by chapter 629 of the laws of 2002,  are
amended to read as follows:
  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; PROVIDED, HOWEVER, THAT AN APPLICATION TO ESTABLISH A
BRANCH OFFICE OF THE LICENSEE SHALL BE ACCOMPANIED BY THE FEE PRESCRIBED
IN SECTION EIGHTEEN-A OF THIS CHAPTER.
  4. As a condition for the issuance and retention of a  budget  planner
license,  and  subject  to  such regulations as the superintendent shall
prescribe, applicants for a license shall file with the superintendent a
surety bond in form satisfactory to the superintendent issued by a bond-
ing company or insurance company  authorized  to  do  business  in  this
state.  Except  as provided hereunder, the principal amount of such bond
shall be two hundred fifty  thousand  dollars.  The  superintendent  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  result-
ing  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

S. 3727--A                         19

credit as the superintendent shall by rule  or  regulation  permit.  The
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. [With-
in ninety days after the effective date of this subdivision, each licen-
see shall comply with the requirements of this subdivision.]
  S  33.  Subdivision 1 of section 581 of the banking law, as amended by
chapter 456 of the laws of 2006, is amended to read as follows:
  1. Upon the filing of an application for a license, if the superinten-
dent shall find that the financial responsibility,  experience,  charac-
ter,  and  general  fitness  of  the  applicant, and of the 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, fair-
ly, and efficiently within the purposes of this article, he or she shall
thereupon issue a license in duplicate to engage in budget  planning  in
accordance with the provisions of this article. The superintendent shall
transmit  one  copy of such license to the applicant 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 superintendent shall approve or deny IN
WRITING every application for license hereunder within ninety days [from
the filing thereof] AFTER THE DATE THE APPLICATION IS DEEMED COMPLETE BY
THE SUPERINTENDENT.
  S 34. Subdivision 2 of section 583-a of the banking law, as  added  by
chapter 142 of the laws of 1992, is amended to read as follows:
  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-one  of  this  article.  The  superintendent shall
approve or disapprove the application  in  writing  within  ninety  days
after  the  date  the application is [filed with] DEEMED COMPLETE BY the
superintendent.
  S 35. Section 584 of the banking law, as added by chapter 448  of  the
laws  of 1975, paragraph (b) as amended and paragraph (c) of subdivision
1 as added by chapter 629 of the laws of 2002, is  amended  to  read  as
follows:
  S 584.  Grounds for suspension or revocation of license; procedure. 1.
[The] IN ADDITION TO THE AUTHORITY SET FORTH IN SUBDIVISION TWO OF  THIS
SECTION,  THE  superintendent  may  SUSPEND OR revoke any license issued
[hereunder if] 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 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 judge-
ment in a court of competent jurisdiction  against  the  licensee  in  a
civil action arising from fraud, misrepresentation, or deceit.

S. 3727--A                         20

  2.  (A) The superintendent may, [on] FOR good cause [shown], [suspend]
WITHOUT NOTICE OR A HEARING,  ISSUE  AN  ORDER  SUSPENDING  any  license
ISSUED  PURSUANT  TO  THIS  ARTICLE  for a period not exceeding [thirty]
NINETY days, pending investigation. "GOOD CAUSE", AS USED IN THIS SUBDI-
VISION, SHALL EXIST ONLY WHEN THE LICENSEE HAS DEFAULTED OR IS LIKELY TO
DEFAULT  IN PERFORMING ITS FINANCIAL ENGAGEMENTS OR ENGAGES 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 TO BE FILED BY IT WITH THE
SUPERINTENDENT PURSUANT TO THE AUTHORITY PROVIDED BY  THIS  ARTICLE;  OR
(II) IMMEDIATELY UPON NOTICE TO THE SUPERINTENDENT THAT THE LICENSEE HAS
FILED  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
BOND REQUIRED PURSUANT TO SECTION FIVE HUNDRED EIGHTY OF THIS ARTICLE IS
NO LONGER IN EFFECT.
  3. [No] IF THE SUPERINTENDENT HAS ISSUED AN ORDER SUSPENDING A LICENSE
ISSUED PURSUANT TO THE AUTHORITY OF THIS ARTICLE PURSUANT  TO  PARAGRAPH
(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. 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  SUSPENSION, THE LICENSE OF SUCH LICENSEE SHALL BE DEEMED
TO BE AUTOMATICALLY TERMINATED BY OPERATION OF LAW AT THE CLOSE OF BUSI-
NESS ON SUCH NINETIETH DAY.
  4. (A) EXCEPT AS PROVIDED FOR IN SUBDIVISION TWO OF THIS  SECTION,  NO
license  shall be revoked or suspended except after notice and a hearing
thereon.
  [4.] 5. 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 ANY PERIOD BEFORE SUCH SURRENDER. SUCH SURRENDER SHALL
BECOME EFFECTIVE UPON WRITTEN APPROVAL BY THE SUPERINTENDENT.
  [5.] 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.
  [6.]  7.  Every  license  issued  hereunder  shall remain in force and
effect until  the  same  shall  have  been  surrendered,  revoked  [or],

S. 3727--A                         21

suspended  OR TERMINATED in accordance with the provisions of this arti-
cle,  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.
  [7.]  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.
  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
BUDGET PLANNER IN THIS STATE.
  S  36.  Subdivision  1  of section 586 of the banking law, as added by
chapter 448 of the laws of 1975, is amended to read as follows:
  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 complying with the provisions of  this  article
and  with  the rules and regulations 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 OR ELECTRONIC reproduction thereof [or records in photo-
graphic form] shall constitute compliance with the requirements of  this
section.
  S  37.  Subdivision 1 of section 641 of the banking law, as amended by
chapter 677 of the laws of 2004, is amended to read as follows:
  1. No person shall engage IN THIS STATE in the business of selling  or
issuing  checks, or engage in the business of receiving money for trans-
mission or transmitting the same, without a  license  therefor  obtained
from  the  superintendent  as  provided  in  this article, nor shall any
person engage in such business as an agent, except  as  an  agent  of  a
licensee or as agent of a payee; provided, however, that nothing in this
article  shall  apply  to a bank, trust company, private banker, foreign
banking corporation licensed pursuant to article two of this chapter  or
foreign  banking  company authorized to operate pursuant to the Interna-
tional Banking Act of 1978 (12 USC 3101 et seq.),  as  amended,  savings
bank,  savings  and  loan association, an investment company, a national
banking association, federal reserve bank, corporation  organized  under
the  provisions  of section twenty-five-a of an act of congress entitled
the "Federal Reserve Act", federal savings  bank,  federal  savings  and
loan  association or state or federal credit union OR OUT-OF-STATE STATE
BANK.  A PERSON ENGAGES IN THIS STATE IN  THE  BUSINESS  OF  SELLING  OR
ISSUING  CHECKS  OR RECEIVING MONEY FOR TRANSMISSION OR TRANSMITTING THE
SAME IF SUCH PERSON INDUCES ANOTHER PERSON WHO  IS  A  RESIDENT  OF,  OR
LOCATED IN, THIS STATE TO ENTER INTO A TRANSACTION BY SOLICITATION IN OR
INTO  THIS STATE BY ANY MEANS, INCLUDING BUT NOT LIMITED TO, MAIL, ELEC-
TRONIC MAIL, TELEPHONE, RADIO, TELEVISION, THE  INTERNET  OR  ANY  OTHER
ELECTRONIC MEANS.

S. 3727--A                         22

  S  38.  Subdivisions  2, 5 and 6 of section 642 of the banking law, as
amended by chapter 455 of the laws of 1993, are  amended,  and  two  new
subdivisions 7 and 8 are added to read as follows:
  2.  The  superintendent  shall  approve  [conditionally] or deny every
application for a license hereunder IN WRITING within ninety days  [from
the  filing  thereof. Such period of ninety days may be extended, by the
written consent of the applicant, for such additional reasonable  period
of  time  as may be required to enable compliance with such requirements
and conditions as may be provided by this article and the rules or regu-
lations of the superintendent issued  thereunder]  AFTER  THE  DATE  THE
APPLICATION IS DEEMED COMPLETE BY THE SUPERINTENDENT.
  5.  [No]  EXCEPT  AS  PROVIDED  IN SUBDIVISION SIX OF THIS SECTION, NO
license shall be suspended or revoked except after  a  hearing  thereon.
The  superintendent  shall  give the licensee at least ten days' written
notice of the time and place of such hearing by registered or  certified
mail  addressed to the principal place of business of such licensee. Any
order of the superintendent suspending or revoking  such  license  shall
state  the  grounds  upon  which it is based [and shall not be effective
until ten days after written notice thereof has been sent by  registered
or  certified  mail to the licensee at such principal place of business,
except that revocation by reason of the licensee's bond not  being  kept
in  full  force  and effect as required by this article, or by reason of
failure to keep on deposit sufficient securities or funds as required by
this article, may take  effect  immediately  if  the  superintendent  so
orders].
  6.  (A)  The  superintendent may, [on] FOR good cause [shown, or where
there is a substantial risk of public harm, suspend] WITHOUT NOTICE OR A
HEARING, ISSUE AN ORDER SUSPENDING any license issued pursuant  to  this
article  for a period not exceeding [thirty] NINETY days, pending inves-
tigation. "Good cause", as used in this subdivision,  shall  exist  only
when  the  licensee  has defaulted or is likely to default in performing
its financial engagements or engages in dishonest or  inequitable  prac-
tices  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 THE LICENSE ISSUED HERE-
UNDER UPON THE FAILURE OF SUCH LICENSEE TO MAKE ANY PAYMENT 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  HERE-
UNDER:  (I)  THIRTY  DAYS  AFTER THE DATE THE LICENSEE FAILS TO FILE ANY
REPORT REQUIRED TO BE FILED BY IT WITH THE  SUPERINTENDENT  PURSUANT  TO
THE  AUTHORITY PROVIDED BY THIS ARTICLE; (II) IMMEDIATELY UPON NOTICE TO
THE SUPERINTENDENT THAT A LICENSEE HAS FILED 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 RECEIPT BY THE SUPER-
INTENDENT OF NOTICE THAT THE LICENSEE HAS FAILED TO MAINTAIN THE BOND OR
SECURITIES REQUIRED BY SECTION SIX HUNDRED FORTY-THREE OF  THIS  ARTICLE
OR  FAILED  TO  MAINTAIN THE INVESTMENTS REQUIRED BY SECTION SIX HUNDRED
FIFTY-ONE OF THIS ARTICLE.
  7. IF THE SUPERINTENDENT HAS ISSUED  AN  ORDER  SUSPENDING  A  LICENSE
PURSUANT  TO  PARAGRAPH  (A)  OF  SUBDIVISION  SIX 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 SUBDIVI-

S. 3727--A                         23

SION SIX OF THIS SECTION, SUCH LICENSE MAY BE REINSTATED, IF THE  SUPER-
INTENDENT  DETERMINES,  IN HIS OR HER SOLE DISCRETION, THAT THE LICENSEE
HAS CURED ALL DEFICIENCIES SET FORTH IN SUCH ORDER BY THE CLOSE OF BUSI-
NESS  NINETY  DAYS  AFTER  THE DATE OF SUCH SUSPENSION ORDER, INCLUDING,
WITHOUT LIMITATION, MAKING ANY OVERDUE PAYMENT, HAVING  ANY  SUCH  BANK-
RUPTCY  PETITION  DISMISSED  OR  REINSTATING SUCH BOND OR INCREASING THE
VALUE OF SUCH INVESTMENTS. OTHERWISE, IN THE CASE OF A SUSPENSION PURSU-
ANT TO SUBDIVISION TWO OF THIS SECTION, UNLESS THE  SUPERINTENDENT  HAS,
IN  HIS OR HER DISCRETION, EXTENDED SUCH SUSPENSION, THE LICENSE OF SUCH
LICENSEE SHALL BE DEEMED TO BE AUTOMATICALLY TERMINATED BY OPERATION  OF
LAW AT THE CLOSE OF BUSINESS ON SUCH NINETIETH DAY.
  8.  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
MONEY TRANSMITTER.
  S  39.  Subdivision 1 of section 643 of the banking law, as amended by
chapter 625 of the laws of 2004, is amended to read as follows:
  1. As a condition for the  issuance  and  retention  of  the  license,
applicants  for  a license and other licensees shall, within thirty days
after notice by the superintendent, or such longer or shorter period  as
he  or  she  shall  prescribe,  file with the superintendent one or more
corporate surety bond or bonds, as required below, in form  satisfactory
to  him  or  her  and  issued  by a bonding company or insurance company
authorized to do business in this state.  One bond shall be in favor  of
the  superintendent  and  in  such  principal  amount as he or she shall
determine is necessary or desirable for the protection of the purchasers
and holders of New York instruments sold or to be sold by the  applicant
or licensee, provided, [however, that until June first, nineteen hundred
seventy-seven,  the  principal amount of such bond shall be no less than
two hundred ten thousand dollars and on and after June  first,  nineteen
hundred  seventy-seven,] THAT the principal amount of such bond shall be
no less than five hundred thousand dollars. If the applicant or licensee
intends to engage or engages in the sale of New York traveler's  checks,
such applicant or licensee shall file with the superintendent a separate
bond.  Said  bond  shall  be  in favor of the superintendent and in such
principal amount as he or she shall determine is necessary or  desirable
for the protection of the purchasers and holders of the New York travel-
er's  checks  sold or to be sold by the applicant or licensee; provided,
however, that the principal amount of such bond shall not be  less  than
seven  hundred  fifty  thousand  dollars, unless the superintendent, for
good cause shown, shall  have  determined  that  a  lesser  amount  will
adequately protect the purchasers and holders of the New York traveler's
checks sold or to be sold by such applicant or licensee.
  In making any determination under this subdivision, the superintendent
may  take  into  account  the  financial  condition of the licensee, the
number of locations in this state at which the licensee, either directly
or through agents, transacts the business of selling  New  York  instru-
ments or New York traveler's checks, the controls imposed on such agents
or,  and  the  possible  exposure  of purchasers and holders of New York
instruments and New York traveler's checks to loss in the event  of  the
insolvency,  bankruptcy  or  other financial impairment of the licensee.
The proceeds of each bond shall constitute a trust fund for  the  exclu-
sive  benefit  of the purchasers and holders of the New York instruments
[and] OR New York traveler's checks, as  the  case  may  be.  Except  as
otherwise provided in the following sentence, in the event of the insol-
vency  or  bankruptcy of any licensee, the proceeds of the bond or bonds

S. 3727--A                         24

held for the exclusive benefit of the purchasers and holders of New York
instruments and the proceeds of the bond or bonds held for the exclusive
benefit of the purchasers and holders  of  New  York  traveler's  checks
shall be paid to the superintendent forthwith for disposition in accord-
ance  with  the  provisions of this article. If any New York instruments
have been assigned to the fund, the proceeds of the bond  held  for  the
exclusive  benefit of the purchasers and holders of New York instruments
shall constitute a trust fund for the benefit of, and shall  be  payable
to,  the  fund  to the extent of such assignment. From time to time, the
superintendent may require, upon thirty days notice or  such  longer  or
shorter  period as he or she shall prescribe, that such bond or bonds be
increased if he or she shall determine that such increase  is  necessary
or  desirable  for  the  protection of the purchasers and holders of New
York instruments and New York traveler's checks.
  S 40. Section 647 of the banking law, as amended by chapter 455 of the
laws of 1993, is amended to read as follows:
  S 647. Judicial review. [The  refusal  by  the  superintendent  of  an
original  license,  in  the case of an applicant which, prior to January
first, nineteen hundred sixty-three, and upon the date  of  filing  such
application,  has lawfully been engaged in this state in the business of
selling or issuing checks or of  receiving  money  for  transmission  or
transmitting  the same, and in] IN all cases INVOLVING the suspension or
revocation of any license by  the  superintendent,  SUCH  SUSPENSION  OR
REVOCATION  shall  be  subject  to judicial review in the manner in such
cases made and provided by law.
  S 41. Section 651 of the banking law, as amended by chapter 677 of the
laws of 2004, is amended to read as follows:
  S 651. Investments. Every licensee shall at all times maintain permis-
sible investments having (i) a market value, computed in accordance with
generally accepted accounting principles, at least equal to  the  aggre-
gate  of  the  amount of all its outstanding payment instruments and all
its outstanding traveler's checks or (ii) a net carrying value, computed
in accordance with generally accepted accounting  principles,  at  least
equal  to  the  aggregate  of  the amount of all its outstanding payment
instruments and all its outstanding traveler's checks  so  long  as  the
market value of such permissible investments is at least [eighty] NINETY
per  centum  of  the net carrying value.   Notwithstanding the foregoing
provisions of this section, the superintendent shall have the authority,
for good cause shown, to exempt from the requirements  of  this  section
any licensee.
  S  42. Section 657 of the banking law, as amended by chapter 78 of the
laws of 1977, is amended to read as follows:
  S 657. Payments to the fund. In the event the fund  has  borrowed  any
monies  from the property and liability insurance security fund pursuant
to the provisions of section six hundred fifty-eight of  this  [chapter]
ARTICLE,  and has any debt outstanding thereto, or in the event an unin-
sured transmitter of money is declared, or declares itself, insolvent or
defaults on its New York instruments, the fund shall levy an  assessment
upon  each uninsured transmitter of money. The amount of such assessment
shall be determined by the superintendent provided, however,  that  each
uninsured  transmitter of money shall be assessed ratably, in proportion
to the average of the dollar amounts of the New York instruments  issued
by  such  uninsured  transmitter of money outstanding at the end of each
calendar quarter for the calendar  year  preceding  that  in  which  the
assessment  is  made,  and  provided,  further, that no such assessments
shall be levied once the net value of the fund shall equal  such  amount

S. 3727--A                         25

as  the  superintendent shall have determined to be necessary to protect
the interests of the purchasers and holders of New York instruments.  In
making  his  OR HER determination, the superintendent shall consider the
scope of the risk covered by the fund, the expenses incurred or expected
to  be incurred by the fund, the amount of any loans and advances to the
fund, and the interest thereon.
  In no event shall the total amount so assessed in any one year against
any uninsured transmitter of money pursuant to this section exceed  [two
per  centum of the] ONE PERCENT OF THE ANNUAL VOLUME OF New York instru-
ments of such uninsured transmitter of money [which were outstanding  at
the  end  of] FOR the calendar year preceding that in which such assess-
ments are made or one hundred twenty-five thousand dollars, whichever is
less. The net value of the fund shall be determined  by  deducting  from
the  value  of the assets of the fund the aggregate actual and estimated
liabilities of the fund as determined by the superintendent.
  S 43. This act shall take effect immediately.

2009-S3727B (ACTIVE) - Details

See Assembly Version of this Bill:: A11325
Current Committee:: Assembly Codes
Law Section:: Banking Law
Laws Affected:: Rpld §493 sub 7, §495 sub 7 & sub 1 ¶(e), §497 subs 3 & 4, §554 subs 2 & 5, §556 sub 5, §560 subs 3 & 4, §562 & §646 sub 4, amd Bank L, generally

2009-S3727B (ACTIVE) - Summary

Relates to licensed lenders, licensed cashers of checks, sales finance companies, premium finance companies, budget planners, and transmitters of money.

2009-S3727B (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S3727B

TITLE OF BILL:

An act
to amend the banking law, in relation to licensed lenders, licensed
cashers of checks, sales finance companies, premium finance companies,
budget planners and transmitters of money; and to repeal certain
provisions of such law relating thereto

PURPOSE:

This bill would modernize the articles of the Banking Law ("BL")
covering "licensed financial services" providers, including licensed
lenders, licensed cashers of checks, sales finance companies, premium
finance agencies, budget planners and money transmitters.

SUMMARY OF PROVISIONS:

Section 1 of the bill amends BL § 340 to increase the size of loans
that require registration of the lender as a licensed lender, while
eliminating the exemptions for entities that lend at interest rates
below the general State rates. An exemption is added for lenders
making no more than five loans at any time outstanding, as long as
the aggregate amount does not exceed $100,000. A definition regarding
when loans are solicited in this State also is added.

Section 2 of the bill adds a new definition section to make use of the
article easier.
In particular, it adds definitions of "person" and "control."

Section 3 of the bill amends BL § 341(3) to change the reference to
the annual license fee to a reference to the appropriate section of
the law. BL § 341(5) is amended to change the capital requirement
from one that is calculated on a per branch basis to one calculated
on a company-wide basis (although the number of branches may still be
relevant) and clarifies that the Superintendent has discretion to
require a higher amount.

Section 4 of the bill makes various technical changes throughout BL
342 to include limited liability companies as applicants and to
clarify when an application is deemed complete. It also clarifies
that the capital requirement is calculated under BL § 341 (5), rather
than on a branch-by-branch basis.

Section 5 of the bill makes conforming changes (recognizing the
existence of LLCs) to BL § 343(1).

Section 6 of the bill amends BL § 345 to conform it to the changes
made in BL § 340-a (i.e. it deletes the definitions of "person" and
"control", which were moved to a new definition section).

Section 7 of the bill makes changes to conform BL § 347 to the changes
being made to other provisions of the BL related to grounds of
suspension and termination of licenses. In particular, it moves to BL
§ 347(1) some language that applies to both suspensions and
revocations that previously appeared in § 347(2) (which applies only
to suspensions). The bill adds to BL § 347(2), which deals with good
cause suspensions, a definition of "good cause" that appears in the
other BL articles dealing with licensed financial services firms.
Also, the period during which a licensed lender may be suspended is
expanded to 90 days from 30 days.

Section 7 of the bill also amends BL § 347(2) to provide that the
Superintendent may suspend a firm without a hearing for failure to
make payments required by the BL (which would include assessments,
fees or penalties or restitution ordered in accordance with the BL).
Finally, it states that the Superintendent may suspend a firm without
a hearing for other failures where there can be no factual question
that should be tried by a hearing examiner, including failure to file
any report required by the BL, filing a petition in bankruptcy, or
having an involuntary bankruptcy petition filed against the firm (and
not dismissed in 30 days).

Section 7 of the bill also amends BL § 347(3) to provide that, if the
licensee has cured all deficiencies set forth in the suspension order
within 90 days after the date of the suspension, the licensee's
license may be reinstated; however, if the licensee has not cured the
deficiencies and the deficiencies are pursuant to paragraph (b) or (
c) of BL 347(2), the license will automatically terminate by
operation of law. BL . 347(4) deals with voluntary surrenders of
licenses, and makes clear that surrender of a license becomes
effective only upon the written approval of the Superintendent and
that such surrender does not affect the licensee's obligations to the
Superintendent for assessments, fees or administrative actions with
respect to any period before the surrender. The changes in BL
347(5) and 347(6) are conforming changes that recognize the new
termination provisions. Finally, BL § 347(8) makes clear that, when a
license has been terminated by operation of law, the Superintendent
must notify the licensee that the license has terminated and that the
licensee may not engage in the licensed business.

Section 8 of the bill repeals the first two unnumbered paragraphs of BL
§ 356, which are no longer needed because BL § 340, as amended,
requires all persons making qualifying loans in New York to be
registered.

Section 9 of the bill begins the amendments to Article IX-A of the BL
(check cashers). A definition of "person" is added to BL § 366(1) and
technical changes are made to other definitions to use this new
definition.

Section 10 of the bill makes technical changes to BL § 367 to
incorporate the new definition of "person" and to recognize the

existence of licensees that are limited liability
companies. BL § 367(2) is amended to recognize the use of limited
liability companies. In BL § 367(4), the Superintendent is given
flexibility to modify the amount of liquid assets required for a
check cashing location that is a "limited station."

Section 11 of the bill amends BL § 369(1) to clarify the meaning of
the existing section, and is not intended to create new requirements
or delete old requirements. A new 369(1-a) contains language taken
from elsewhere in BL § 369 concerning the "3/10 of a mile" protected
area around a check casher office.

Section 12 of the bill amends BL § 370-a to provide the Superintendent
with flexibility in processing of applications under this article by
measuring the approval time from the date the application became
complete.

Section 13 of the bill amends the suspension, revocation and surrender
provisions with respect to check cashers, and makes them consistent
with the similar provisions for other types of licensed financial
services firms as discussed above with respect to § 347. The
amendment includes provisions with respect to suspensions "for
cause", for failure to pay assessments and other amounts due, failure
to file reports, and the filing of a petition in bankruptcy. The bill
also makes the section gender-neutral.

Section 14 of the bill amends BL § 374(1) (the exemption from
registration as a check casher) to make minor conforming changes.

Section 15 of the bill begins the amendments to Article ll-B (sales
finance companies). It amends certain definitions in BL § 491 to
conform them to each other.
The section also makes clear that the term "retail installment
obligation" includes an agreement no matter where entered into if it
is executed by the buyer in this State and if solicited in person by
a salesperson or other person acting on his or her own behalf or that
of the seller. Similarly, the definition of "sales finance company"
is amended to make clear that the article applies to agreements
wherever entered into if they are executed by the buyer in New York
and if they are solicited in person by a salesperson or other person
acting on his or her own behalf or on behalf of the seller. Also, the
types of transactions to which this article applies is clarified, and
the existence of a safe harbor for secondary transactions is
clarified. The bill also makes the section gender neutral.

Section 16 of the bill amends BL §§ 492(1) and 492(2) to clarify when
banking institutions are exempt from coverage of the law and to
clarify the procedure for an application for a sales finance company
license.

Section 17 of the bill makes changes to BL § 492~a(2) to clarify when
a change of control application must be approved.

Section 18 repeals BL § 493(7) and amends BL § 493(4) to clarify the
circumstances when a license terminates.

Section 19 of the bill amends the suspension, revocation and surrender
provisions with respect to sales finance companies, and makes them
consistent with the similar provisions for other types of licensed
financial services firms as discussed above with respect to § 347.
This includes provisions with respect to suspensions "for cause", for
failure to pay assessments and other amount due, failure to file
reports, and the filing of a petition in bankruptcy. It also extends
from 30 to 90 days the amount of time for which the Superintendent
may suspend a license while conducting an investigation. Technical
changes also are made to the provisions of BL § 495 regarding
termination of a license by the Superintendent and when a licensee
may surrender its license.

Section 20 of the bill repeals BL §§ 497(3) and 497(4), which are
outdated provisions.

Section 21 of the bill amends BL § 499 to make the section gender
neutral.

Section 22 of the bill begins the amendments of Article XII-B of the
BL (Insurance Premium Finance Agencies). It amends the definition of
a bank contained in § 554 to cover all banking institutions.

Section 23 of the bill amends BL § 555 to conform to the newly defined
"banking institutions" in BL § 554 without changing the institutions
to which the section applies.

Section 24 of the bill repeals BL § 556(5), a transition provision
dating from 1961, as outdated.

Section 25 of the bill amends BL § 558 to clarify when relocation fees
are required.

Section 26 of the bill amends BL § 559, the suspension, revocation and
surrender provisions with respect to premium finance agencies, and
makes them consistent with the similar provisions for other types of
licensed financial services firms as discussed above with respect to
§ 347. This includes provisions with respect to suspensions "for good
cause", for failure to pay assessments and other amount due, failure
to file reports, and the filing of a petition in bankruptcy. It also
extends from 30 to 90 days the amount of time for which the
Superintendent may suspend a license while conducting an investigation.

Section 27 of the bill repeals BL §§ 560(3) and 560(4). The substance
of these provisions has previously been moved to BL §§ 17 and
36(10), respectively.

Section 28 of the bill repeals BL § 562, since the subject matter
(hearings and investigations) is already covered in Article II.

Section 29 of the bill amends BL § 563 to make the section gender
neutral.

Section 30 of the bill amends BL § 576 to clarify the ability of the
Superintendent to provide notice by electronic means.

Section 31 of the bill amends BL § 577 to eliminate outdated language.

Section 32 of the bill amends BL § 580 to eliminate outdated language
and to clarify when fees for branch offices are required.

Section 33 of the bill amends BL § 581 to clarify that the time period
for approving an application runs from the time the application is
deemed complete.

Section 34 of the bill amends BL § 583-a to clarify when the
Superintendent must act on an application.

Section 35 of the bill amends BL § 584, the suspension, revocation and
surrender provisions with respect to budget planners, and makes them
consistent with the similar provisions for other types of licensed
financial services firms as discussed above with respect to § 347.
This includes provisions with respect to suspensions "for good
cause", for failure to pay assessments and other amounts due, failure
to file reports, the filing of a petition in bankruptcy, and failure
to maintain the bond required under BL § 580. It also extends from 30
to 90 days the amount of time for which the Superintendent may
suspend a license while conducting an investigation. The effect of
the revocation, surrender or termination of a license also is
clarified.

Section 36 of the bill amends BL § 586 to clarify that electronic
storage of records is permissible.

Section 37 of the bill begins the amendments to Article XIII-B (Money
Transmitters). It amends BL § 641 to clarify when banking
institutions are exempt from coverage of the article and when New York
persons are subject to the protections of this article.

Section 38 of the bill amends BL § 642, the suspension, revocation and
surrender provisions with respect to money transmitters, and makes
them consistent with the similar provisions for other types of
licensed financial services firms with respect to § 347. This
includes provisions with respect to suspensions "for good cause",
for failure to pay assessments and other amounts due, failure to file
reports, the filing of a petition in bankruptcy, and failure to
maintain the bond or securities required under BL § 643 or the
investments required by BL § 651. It also extends from 30 to 90 days
the amount of time for which the Superintendent may suspend a license
while conducting an investigation.

Section 39 of the bill repeals outdated language in the bond
provisions of BL § 643.

Section 40 of the bill repeals BL § 647 to eliminate outdated language.

Section 41 of the bill amends BL § 651 to increase the amount of the
required bond for money transmitters from 80% to 90% of the net
carrying value of outstanding instruments.

Section 42 of the bill amends BL § 657 to clarify when and how
required payments into the money transmitter insurance fund are
calculated.

Section 43 of the bill provides the effective date.

EXISTING LAW

BL § 340 requires registration as a licensed lender where a person is
engaged in the business of making loans in the principal amount of
$25,000 or less for loans to an individual for personal, family,
household or investment purposes and in a principal amount of $50,000
or less for business and commercial purposes. The amendment changes
these thresholds to $50,000 and $100,000. In addition, the current
law requires registration if a person solicits loans "within this
state." The amendment makes clear when solicitation occurs within
this state. The current law exempted persons from registration if
their loans were isolated, incidental or occasional. The amendment
replaces that standard with a numerical threshold - i.e. the number
of loans made in any one year is not more than five loans and the
aggregate amount of loans outstanding at any one time does not exceed
$100,000.

Article IX did not previously have a definition section. The
definitions in BL § 340-a are moved from BL § 345(1).

BL § 341 (3) provides that licensed lenders will pay not only the
investigation fee but also the annual license fees provided for in BL
§ 17. The words "and annual license fee" would be deleted, since
Section 17 provides for several fees.

Current BL § 341(5) requires "liquid assets" of at least $50,000 at
each location specified in the application for a license. The
amendment would require total net worth of at least $50,000, or such
other amount as may be determined by the Superintendent.

BL §342 does not provide for licensed lenders organized as limited
liability companies. The amendment would recognize that licensed
lenders may be organized in that form. Like BL § 341 (5), this
section required an applicant to have liquid assets of at least
$50,000 in each location and is being amended to require total net
worth of at least $50,000 or such other amount as may be determined
by the Superintendent. This section did not previously refer to

termination of licenses. Previously, this section provided that, if
an application was denied or withdrawn the Superintendent would
return the license fee and retain only the investigation fee.
Finally, this section requires the Superintendent to approve or deny
an application for a master license within 90 days of filing.

BL § 343 does not provide for licensed lenders organized as limited
liability companies.

BL § 345 contains definitions of "person" and "control." Those
definitions are now moved to new BL § 340-a.

BL § 347 did not previously have subdivisions. Although the section
allowed the Superintendent to suspend a license for good cause shown
there was no definition of "good cause." The section currently allows
the Superintendent to suspend a license for good cause for 30 days.
The amendment would extend the suspension for 90 days, unless the
licensee cures the violation before that time. The amendment also
adds a list of grounds for suspensions, including any failure to make
required payments to the Department 30 days after the due date,
failure to file any required report by the 30th day after the due
date, the filing of a voluntary petition in bankruptcy and the filing
of an involuntary petition in bankruptcy that is not dismissed within
30 days. In addition, if the cause of such suspension has not been
cured within 90 days after the date of the suspension order
(including making overdue payments or filings), then the license is
deemed automatically terminated. Article IX does not currently provide
for licenses to terminate other than by revocation after a hearing.

BL § 356 currently limits the amount that a person not licensed as a
licensed lender may charge or receive as interest on a loan to a
person in the state. These provisions would be eliminated, since the
amendments to BL § 340 would make out-of-state lenders that make
covered loans to New York residents subject to Article IX, unless
they met the de minimis test.

BL §§ 497(3) and 497(4) currently cover examination expenses and the
confidentiality of examination reports. However, those provisions are
also founds in BL §§ 17 and 36(10). Consequently, they are being
deleted here.

BL § 554(2) currently defines a bank, trust company, private banker,
investment company, or national bank with a principal office in New
York as a "bank." The amendment would expand on the included
institutions and change the term to "banking institution," which is
the term used for such a group of institutions elsewhere in the BL.

BL § 555(1) previously referred to "lending institutions." The section
would be amended to use the defined term "banking institution."

BL §556(5) previously contained transition provisions for licensing as
a premium finance agency that dated from 1960. The amendment
eliminates them.

BL §558 concerns change of address notices for premium finance
agencies. It previously required only a notice to the Superintendent
without a fee. Under the amendment, a change of address requires a
written application and involves a fee prescribed in BL § 18-a.

BL § 559 covers grounds for suspension or revocation of a license. It
currently authorizes suspension or revocation for failure to pay the
annual license fee. The
amendment broadens the grounds to failure to pay any sum of money
lawfully demanded by the Superintendent. In addition, the amendment
adds the "good cause" bases for 90day suspensions found in other
Articles covering licensed financial service providers, along with
the same definition of "good cause". Additional grounds for suspension
include any failure to make required payments to the Department by
the 30 day after the due date, failure to file any required report by
the 30th day after the due date, the filing of a voluntary petition
in bankruptcy and the filing of an involuntary petition in bankruptcy
that is not dismissed within 30 days. In addition, if the cause of
such suspension has not been cured within 90 days after the date of
the suspension order (including making overdue payments or filings),
then the license is deemed automatically terminated..
Article XII-B does not currently provide for licenses to terminate
other than by revocation after a hearing.

BL §§ 560(3) and 560(4) address examination expenses and the
confidentiality of examination reports. However, those provisions are
also founds in BL §§ 17 and 36(10).
Consequently, they are being deleted here.

BL § 576 provides for 10 days' written notice of the cancellation of
the insurance policy to be mailed to certain persons. New § 576(4)
would allow notice to be delivered by other means, including
electronic means, as long as the delivery method includes evidence
of receipt, including a receipt created and maintained in electronic
form.

BL § 577(a) refers to a rate of interest prescribed by the banking
board under BL § 14-a, or, if no such rate has been prescribed, 6%
per annum. However, a fixed rate of 16% has been set forth in that
section, and the amendment reflects this change.

BL § 580(3) does not require payment of a fee for the opening of a
branch by a Budget Planner. The amendment authorizes the charging of
such a fee. The last sentence of BL § 5 80(4) is a transition
provision that applied in 1975 when the provisions regarding surety
bonds took effect. It is now outdated and is being deleted.

BL § 581 provides that the Superintendent must approve or deny an
application for a Budget Planner license within 90 days of the filing
of the application. The amendment would have the 90 days begin to run
from the date the application is deemed complete by the Superintendent.

BL § 583-a provides that the Superintendent must approve or deny an
application for a change of control of a Budget Planner within 90
days after the date the application is filed with the Superintendent.
The amendment would have the 90 days begin to run from the date the
application is deemed complete by the Superintendent.

BL § 584 covers the procedures for suspensions and revocations of
licenses of Budget Planners. Although the section allows the
Superintendent to suspend a license for good cause shown there is no
definition of "good cause." The amendment supplies a definition,
which is based in part on the definition in § 495. The section
currently allows the Superintendent to suspend a license for good
cause for 30 days. The amendment
would extend the suspension for 90 days, unless the licensee cures the
violation before that time. The amendment also adds a list of grounds
for suspension, including any failure to make required payments to
the Department 30 days after the due date, failure to file any
required report by the 30th day after the due date, the filing of a
voluntary petition in bankruptcy and the filing of an involuntary
petition in bankruptcy that is not dismissed within 30 days. In
addition, if the cause of such suspension has not been cured within
90 days after the date of the suspension order (including making
overdue payments or filings), then the license is deemed
automatically terminated. Article XII-C does not currently provide for
licenses to terminate other than by revocation after a hearing.

BL § 584(5) currently provides that a Budget Planner may surrender a
license by delivering written notice to the Superintendent, but that
surrender does not affect the licensee's civil or criminal liability
for acts committed prior to the surrender. The amendment adds that
surrender of a license does not affect the licensee's obligations to
the superintendent for assessments, fees or administrative actions
with respect to the period before such surrender. It also makes clear
that a surrender of a license does not become effective until approved
in writing by the Superintendent.

BL § 586 currently permits books and records to be maintained in
photographic reproductions as well as in paper form. The amendment
would authorize records to be maintained in electronic reproductions,
as well.

BL § 641(1) requires registration as a Money Transmitter if a person
is in the business of selling or issuing checks or receiving money
for transmission. It has routinely been interpreted as not requiting
out-of-state money transmitters to register unless they had a place
or business or agents in New York. The amendment makes clear that an
out-of-state money transmitter must register if it engages in

business in this state, and that the definition of engaging in such
business occurs when the money transmitter induces a person who is a
resident or is located in New York to enter into a transaction by any
means, including the mail, electronic mail, telephone, radio,
television, the internet or any other electronic means.

BL § 643 contains an outdated transitional provision.

BL § 647 contains transitional language that is outdated.

BL § 651 provides that a money transmitter must have a surety bond in
the amount of 80% of the net carrying value of outstanding
instruments. The amendment would raise the required amount to 90% of
net carrying value.

BL § 657 prohibits the amount assessed against any uninsured money
transmitter from exceeding two per cent of the New York instruments
insured. The amendment decreases the fee to one percent of the annual
volume of New York instruments for the preceding calendar year or $ I
25,000, whichever is less.

LEGISLATIVE HISTORY:

This is a new proposal.

STATEMENT IN SUPPORT:

The amendments made in this proposal are largely technical in nature,
and are needed to clarify the Banking Law. In addition, the reach of
Article XIII-B is expanded to cover all situations where money
transmission services are extended to persons located in New York,
even though the vendor is located in another state. Where
out-of-state money transmitters without a physical presence or agents
in New York are soliciting and doing business with persons located in
New York, this state has an interest in consumer protection that will
be addressed if such out-of-state money transmitter must be
registered here.

BUDGET IMPLICATIONS:

This bill would not have an impact on state finances.

EFFECTIVE DATE:

This bill would take effect immediately.

2009-S3727B (ACTIVE) - Bill Text download pdf

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

                                 3727--B
    Cal. No. 894

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             March 30, 2009
                               ___________

Introduced  by  Sen.  FOLEY -- (at request of the Banking Department) --
  read twice and ordered printed, and when printed to  be  committed  to
  the  Committee on Banks -- committee discharged, bill amended, ordered
  reprinted as amended and recommitted to said committee --  recommitted
  to  the Committee on Banks in accordance with Senate Rule 6, sec. 8 --
  reported favorably from said committee  with  amendments  and  ordered
  reprinted  as  amended and when reprinted to be committed to the order
  of first report

AN ACT to amend the  banking  law,  in  relation  to  licensed  lenders,
  licensed  cashers  of checks, sales finance companies, premium finance
  companies, budget planners and transmitters of money;  and  to  repeal
  certain provisions of such law relating thereto

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

  Section 1. Section 340 of the banking law, as amended by chapter 22 of
the laws of 1990, is amended to read as follows:
  S 340. Doing business without license prohibited. No person [or  other
entity]  shall engage in the business of making loans IN NEW YORK in the
principal amount of [twenty-five] FIFTY thousand dollars or less for any
loan to an individual for personal,  family,  household,  or  investment
purposes  and  in  a  principal  amount  of [fifty] ONE HUNDRED thousand
dollars or less for business and commercial [loans, and charge, contract
for, or receive a greater rate of interest  than  the  lender  would  be
permitted by law to charge if he were not a licensee hereunder except as
authorized  by  this  article  and]  PURPOSES  without first obtaining a
license from the superintendent.
  For the purposes of this  section,  a  person  [or  entity]  shall  be
considered  as engaging in the business of making loans in New York, and
subject to the licensing and other requirements of this article,  if  it
solicits  loans  in [the amounts prescribed by this section within] this
state BY ANY MEANS, INCLUDING BUT NOT LIMITED TO, MAIL, ELECTRONIC MAIL,

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

                                                           LBD09629-11-0

S. 3727--B                          2

TELEPHONE, RADIO, TELEVISION,  THE  INTERNET  OR  ANY  OTHER  ELECTRONIC
MEANS,  and,  in connection with such solicitation, makes loans to indi-
viduals then resident OR LOCATED in this state OR, IN THE CASE OF  LOANS
FOR  BUSINESS  OR COMMERCIAL PURPOSES, HAVING A PLACE OF BUSINESS WITHIN
THIS STATE, except that no person [or entity]  shall  be  considered  as
engaging  in  the business of making loans in this state on the basis of
[isolated, incidental or occasional] transactions which  otherwise  meet
the  requirements of this section IF THE NUMBER OF LOANS MADE IN ANY ONE
YEAR BY ANY SUCH PERSON IS NOT MORE THAN FIVE LOANS  AND  THE  AGGREGATE
AMOUNT  OF LOANS OUTSTANDING AT ANY ONE TIME DOES NOT EXCEED ONE HUNDRED
THOUSAND DOLLARS.  THE SUPERINTENDENT MAY EXEMPT FROM THE LICENSING  AND
OTHER  REQUIREMENTS  OF  THIS  ARTICLE, ON SUCH TERMS AS HE OR SHE SHALL
DEEM CONSISTENT WITH THE PURPOSES OF SECTION TEN AND THIS  ARTICLE,  ANY
PERSON  HE  OR  SHE  DETERMINES IS NOT ENGAGED IN THE BUSINESS OF MAKING
LOANS IN THIS STATE, OTHER THAN AS AN INCIDENT TO ANOTHER LEGAL BUSINESS
ACTIVITY.
  Nothing in this  article  shall  apply  to  licensed  collateral  loan
brokers.
  S  2. The banking law is amended by adding a new section 340-a to read
as follows:
  S 340-A. DEFINITIONS. WHEN USED IN THIS ARTICLE: 1. THE TERM  "PERSON"
MEANS  ANY  INDIVIDUAL OR LEGAL ENTITY, INCLUDING ANY CORPORATION, PART-
NERSHIP, ASSOCIATION OR LIMITED LIABILITY COMPANY.
  2. THE TERM "CONTROL" MEANS THE POSSESSION, DIRECTLY OR INDIRECTLY, OF
THE POWER TO DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT  AND  POLI-
CIES  OF A PERSON, WHETHER BY MEANS OF THE OWNERSHIP OF THE VOTING STOCK
OR EQUITY INTERESTS OF SUCH PERSON OR OF ONE OR MORE PERSONS CONTROLLING
SUCH PERSON, BY  MEANS  OF  A  CONTRACTUAL  ARRANGEMENT,  OR  OTHERWISE.
CONTROL  SHALL BE PRESUMED TO EXIST IF ANY PERSON DIRECTLY OR INDIRECTLY
OWNS, CONTROLS OR HOLDS WITH THE POWER TO VOTE TEN PERCENT  OR  MORE  OF
THE VOTING STOCK OR EQUITY INTERESTS OF A LICENSEE OR OF ANY OTHER ENTI-
TY THAT DIRECTLY OR INDIRECTLY CONTROLS SUCH PERSON.
  S  3.  Subdivisions  3  and  5  of  section 341 of the banking law, as
amended by chapter 494 of the laws of  1998,  are  amended  to  read  as
follows:
  3. In addition to the investigation fee [and annual license fee] every
licensee  hereunder shall pay to the superintendent the sums provided to
be paid under the provisions of section seventeen of [the  banking  law]
THIS CHAPTER.
  5.  The applicant shall also prove, in form satisfactory to the super-
intendent, that the applicant has available for the  operation  of  such
business  [at  the  location  or  locations specified in the application
liquid assets] NET WORTH of at least  fifty  thousand  dollars  OR  SUCH
AMOUNT  AS MAY BE DETERMINED BY THE SUPERINTENDENT. This amount shall be
maintained for the period within which the licensee makes loans  in  the
amounts  prescribed  in  section three hundred forty of this article [at
such location].
  S 4. Section 342 of the banking law, as amended by chapter 494 of  the
laws of 1998, is amended to read as follows:
  S 342. Conditions precedent to issuing license; procedure where appli-
cation  denied.  Upon  the filing of such application and the payment of
such fees, if the superintendent shall find that the financial responsi-
bility, experience, character, and general fitness of the applicant, and
of the members thereof if the applicant be a partnership  [or],  associ-
ation  OR  LIMITED  LIABILITY COMPANY, and of the officers and directors
thereof if the applicant be a corporation, are such as  to  command  the

S. 3727--B                          3

confidence of the community and to warrant belief that the business will
be  operated  honestly,  fairly,  and efficiently within the purposes of
this article, and if the superintendent shall find  that  the  applicant
has  available  for  the  operation  of such business [at each specified
location liquid assets of at least fifty thousand dollars]  SUCH  AMOUNT
AS  CALCULATED  IN  ACCORDANCE  WITH  SUBDIVISION  FIVE OF SECTION THREE
HUNDRED FORTY-ONE OF THIS ARTICLE, the  superintendent  shall  thereupon
execute  a  master  license,  and if applicable one or more supplemental
licenses, to make loans in accordance with the provisions of this  arti-
cle  at the location or locations specified in the said application. The
superintendent shall transmit one copy of such license  or  licenses  to
the  applicant  and  file the same in the office of the department. Each
such license shall remain in full force and effect until it  is  surren-
dered  by  the licensee or [revoked or] suspended, REVOKED OR TERMINATED
as [hereinafter] HEREIN provided; if the  superintendent  shall  not  so
find,  a master license shall not be issued and the superintendent shall
notify the applicant of the denial. If an application is denied or with-
drawn the superintendent shall [return to the applicant the sum paid  by
the  applicant as a license fee, retaining] RETAIN the investigation fee
to cover the costs of investigating the application. The  superintendent
shall  approve  or deny every application for a master license hereunder
within ninety days from the [filing thereof with the said fees] DATE THE
APPLICATION IS DEEMED COMPLETE BY THE SUPERINTENDENT.
  S 5. Subdivision 1 of section 343 of the banking law,  as  amended  by
chapter 494 of the laws of 1998, is amended to read as follows:
  1.  A  license  shall state the address at which the business is to be
conducted and shall state fully the name of the  licensee,  and  if  the
licensee  is  a  partnership  [or],  association  OR  LIMITED  LIABILITY
COMPANY, the names of the members thereof, and  if  a  corporation,  the
date  and  place  of  its  incorporation. A master license shall be kept
conspicuously posted in the principal place of business of the  licensee
and a supplemental license shall be conspicuously posted at the location
identified  in  the  license. No master or supplemental license shall be
transferable or assignable.
  S 6. The second undesignated paragraph of subdivision 1 of section 345
of the banking law, as amended by chapter 22 of the  laws  of  1990,  is
amended to read as follows:
  [As  used in this subdivision, (a) the term "person" includes an indi-
vidual, partnership, corporation, 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 person, whether by means of the ownership  of  the  voting
stock  or  equity  interests  of  such  person or of one or more persons
controlling such person, by  means  of  a  contractual  arrangement,  or
otherwise.  Control shall be presumed to exist if any person directly or
indirectly owns, controls or holds with the power to vote ten per centum
or more of the voting stock or equity interests of the  person  desirous
of  continuing to maintain and operate a licensee's place of business or
of any entity which directly or indirectly controls  such  person.]  The
superintendent  may,  upon  the  application of a licensee or any [such]
person [or entity], determine whether or not the ownership,  control  or
holding  of  such  voting stock or equity interests constitutes or would
constitute control for purposes of this subdivision.
  S 7. Section 347 of the banking law, as amended by chapter 22  of  the
laws of 1990, is amended to read as follows:

S. 3727--B                          4

  S 347.  Grounds  for  [revocation or] suspension, REVOCATION OR TERMI-
NATION of license; procedure.  [The] 1. IN ADDITION TO THE AUTHORITY SET
FORTH IN SUBDIVISION TWO OF THIS SECTION, THE superintendent may suspend
or revoke any license issued [hereunder] UNDER THIS  ARTICLE  if,  AFTER
NOTICE AND A HEARING the superintendent shall find that:
  (a)  The licensee has failed to pay any sum of money lawfully demanded
by the superintendent or to comply with any demand, ruling, or  require-
ment of the superintendent;
  (b)  The licensee has violated any provisions of this article, the act
of congress entitled "Truth in Lending Act" and the  regulations  there-
under,  as such act and regulations may from time to time be amended, or
of any rule or regulation lawfully made by the superintendent;
  (c) Any fact or condition exists which, if it had existed at the  time
of  the  original  application  for  such  license, [clearly] would have
warranted the  superintendent  in  refusing  originally  to  issue  such
license;
  (d) The licensee has engaged in the business of a sales finance compa-
ny  and  has done or failed to do any act, except the failure to pay the
fees required, which would be grounds for the suspension  or  revocation
of  its  license  pursuant  to  section four hundred ninety-five of this
chapter were it required to obtain such a license.
  THE SUPERINTENDENT MAY REVOKE OR SUSPEND ONLY THE  PARTICULAR  LICENSE
WITH  RESPECT TO WHICH GROUNDS FOR REVOCATION OR SUSPENSION MAY OCCUR OR
EXIST, OR, IF THE SUPERINTENDENT SHALL FIND THAT SUCH GROUNDS FOR  REVO-
CATION  OR  SUSPENSION  ARE OF GENERAL APPLICATION TO ALL OFFICES, OR TO
MORE THAN ONE OFFICE, OPERATED  BY  SUCH  LICENSEE,  THE  SUPERINTENDENT
SHALL  REVOKE  OR SUSPEND ALL OF THE LICENSES ISSUED TO SUCH LICENSEE OR
SUCH NUMBER OF LICENSES AS SUCH GROUNDS APPLY TO, AS THE CASE MAY BE.
  2. (A) The superintendent may [on] FOR  good  cause  [shown],  without
notice  or  A  hearing,  [suspend] ISSUE AN ORDER SUSPENDING any license
ISSUED PURSUANT TO THIS ARTICLE for  a  period  not  exceeding  [thirty]
NINETY days, pending investigation.
  [The  superintendent may revoke or suspend only the particular license
with respect to which grounds for revocation or suspension may occur  or
exist,  or, if the superintendent shall find that such grounds for revo-
cation or suspension are of general application to all  offices,  or  to
more  than  one  office,  operated  by such licensee, the superintendent
shall revoke or suspend all of the licenses issued to such  licensee  or
such  number  of licenses as such grounds apply to, as the case may be.]
"GOOD CAUSE", AS USED IN THIS SUBDIVISION, SHALL EXIST WHEN THE LICENSEE
HAS DEFAULTED OR IS  LIKELY  TO  DEFAULT  IN  PERFORMING  ITS  FINANCIAL
ENGAGEMENTS  OR  ENGAGES 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 THIS ARTICLE THIRTY DAYS AFTER THE DATE  THE  LICENSEE  FAILS  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 THIS ARTICLE:
  (I) THIRTY DAYS AFTER THE DATE THE LICENSEE FAILS TO FILE  ANY  REPORT
REQUIRED  TO  BE  FILED  BY  IT  WITH THE SUPERINTENDENT PURSUANT TO THE
AUTHORITY PROVIDED BY THIS ARTICLE; OR
  (II) IMMEDIATELY UPON NOTICE TO THE SUPERINTENDENT THAT  THE  LICENSEE
HAS FILED A PETITION IN BANKRUPTCY; OR

S. 3727--B                          5

  (III)  UPON  NOTICE  AT  LEAST  THIRTY DAYS AFTER THE LICENSEE HAS HAD
FILED AGAINST IT A PETITION IN BANKRUPTCY.
  3.  IF  THE  SUPERINTENDENT  HAS  ISSUED AN ORDER SUSPENDING A LICENSE
ISSUED PURSUANT TO THIS ARTICLE PURSUANT TO PARAGRAPH (A) OF SUBDIVISION
TWO OF THIS SECTION, SUCH LICENSE MAY BE REINSTATED IF  THE  SUPERINTEN-
DENT DETERMINES, IN HIS OR HER SOLE DISCRETION AFTER INVESTIGATION, THAT
GOOD  CAUSE  THEREFOR  DID  NOT EXIST OR NO LONGER EXISTS. IF THE SUPER-
INTENDENT 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 DETERMINES, 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  LIMITATION,  MAKING ANY OVERDUE
PAYMENT OR HAVING ANY SUCH BANKRUPTCY PETITION DISMISSED. 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 SUSPENSION, THE LICENSE OF SUCH LICENSEE SHALL
BE DEEMED TO BE AUTOMATICALLY TERMINATED BY  OPERATION  OF  LAW  AT  THE
CLOSE OF BUSINESS ON SUCH NINETIETH DAY.
  4.  Any licensee may surrender any license by delivering to the super-
intendent written notice  that  the  licensee  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 ADMINISTRA-
TIVE ACTIONS WITH RESPECT TO ANY PERIOD BEFORE SURRENDER.  SUCH  SURREN-
DER SHALL BECOME EFFECTIVE UPON WRITTEN  APPROVAL BY THE SUPERINTENDENT.
  5.  No  revocation  [or],  suspension, TERMINATION or surrender of any
license shall impair or affect the obligation of any pre-existing lawful
contract between the licensee and any borrower.
  6. Every license issued hereunder shall remain  in  force  and  effect
until  it shall have been surrendered, revoked, TERMINATED, or suspended
in accordance with the provisions of this article, but  the  superinten-
dent  shall  have  authority to reinstate suspended licenses or to issue
new licenses to a licensee whose license or  licenses  shall  have  been
revoked  OR TERMINATED if no fact or condition then exists which clearly
would have warranted the superintendent in refusing originally to  issue
such license under this article.
  7.  Whenever  the  superintendent  shall  revoke  or suspend a license
issued pursuant to this article,  the  superintendent  shall  execute  a
written  order to that effect. The superintendent shall file one copy of
such order in the office of the department and serve  a  copy  upon  the
licensee,  which order may be reviewed in the manner provided by article
seventy-eight of the civil practice law and rules. Such special proceed-
ing for review as authorized by this section must  be  commenced  within
thirty days from the date of such order of suspension or revocation.
  8.    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
LICENSED LENDER IN THIS STATE.
  S  8.  Section 356 of the banking law, as amended by chapter 22 of the
laws of 1990, is amended to read as follows:
  S 356. [Restrictions on certain  loans  by  non-licensees,  interests,
other charges; loans] LOANS made outside this state. [No person or other
entity,  other  than  a  licensee  under this article, shall directly or
indirectly charge, contract for, or receive any interest,  discount,  or
consideration greater than the person or other entity would be permitted

S. 3727--B                          6

by  law  to  charge  if it were not a licensee hereunder upon a loan not
exceeding the maximum amounts prescribed in section three hundred  forty
of this article.
  The  foregoing  prohibition  shall apply to any person or other entity
who or which, by any device, subterfuge, or  pretense  whatsoever  shall
charge,  contract  for,  or  receive greater interest, consideration, or
charges than is authorized by the laws of this state for any such  loan,
use, or forbearance of money, goods, or things in action or for any such
loan, use, or sale of credit.]
  Any  loan in an amount not exceeding the maximum amounts prescribed in
section three hundred forty of this article for which a greater rate  of
interest,  consideration,  or  charges  than is permitted by the laws of
this state has been charged, contracted for, or received, wherever made,
shall not be enforced in this state and every  person  or  other  entity
participating  therein  in this state shall be subject to the provisions
of this article.  An action to enforce any such loan made in  any  other
state to a person then a resident of that state, who now resides in this
state  may  be  maintained  in  this  state  if  the amount of interest,
discount, consideration or other charge for such loan,  demanded  to  be
paid  in  such  action,  does not exceed that permitted to a licensee by
section three hundred fifty-one of this article for a loan of  the  same
amount repayable in the same manner.
  S  9.  Subdivision  1 of section 366 of the banking law, as amended by
chapter 849 of the laws of 1964, is amended and a new subdivision  4  is
added to read as follows:
  1.  The  term "licensed casher of checks" means any [individual, part-
nership, unincorporated association or corporation] PERSON duly licensed
by the superintendent of banks to engage in  business  pursuant  to  the
provisions of this article.
  4.  THE  TERM "PERSON" MEANS ANY INDIVIDUAL OR LEGAL ENTITY, INCLUDING
ANY CORPORATION, PARTNERSHIP, ASSOCIATION OR LIMITED LIABILITY COMPANY.
  S 10. Subdivisions 1, 2 and 4 of  section  367  of  the  banking  law,
subdivisions  1  and 2 as amended by chapter 151 of the laws of 1945 and
subdivision 4 as amended by chapter 96 of the laws of 1981, are  amended
to read as follows:
  1.  No  person[, partnership, association or corporation] shall engage
in the business of cashing checks, drafts or money orders for a  consid-
eration without first obtaining a license from the superintendent.
  2.  Application  for such license shall be in writing, under oath, and
in the form prescribed by the  superintendent,  and  shall  contain  the
name,  and  the  address both of the residence and place of business, of
the applicant, and if the applicant is a  co-partnership  [or],  associ-
ation,  OR  LIMITED  LIABILITY COMPANY of every member thereof, and if a
corporation, of each officer and director thereof; also, if the business
is to be conducted at a specific address, the address at which the busi-
ness is to be conducted, and if the business is to be conducted  from  a
mobile unit, the New York state registration number or other identifica-
tion of such mobile unit and the area in which the applicant proposes to
operate  such  mobile  unit;  and  also  such further information as the
superintendent may require.
  4. Every applicant shall prove, in form  satisfactory  to  the  super-
intendent  that  he,  SHE  or it has available for the operation of such
business, for each location and for each mobile unit  specified  in  the
application,  liquid  assets of at least ten thousand dollars, and every
licensee shall continuously maintain for the operation of such  business
for each location and for each mobile unit liquid assets of at least ten

S. 3727--B                          7

thousand  dollars.  Notwithstanding  the  foregoing  provisions  of this
subdivision, the superintendent, upon application by  an  applicant  and
for  good  cause shown, may permit a reduction from ten thousand dollars
to not less than five thousand dollars of minimum liquid assets required
for  each  location  AND SUCH AMOUNT AS HE OR SHE SHALL DEEM APPROPRIATE
FOR EACH LIMITED STATION.
  S 11. Subdivision 1 of section 369 of the banking law, as  amended  by
chapter 233 of the laws of 2005, is amended to read as follows:
  1. If the superintendent shall find that:
  (I)  the  financial responsibility, experience, character, and general
fitness of the applicant, and of the members thereof if the applicant be
a co-partnership [or], association OR LIMITED LIABILITY COMPANY, and  of
the  officers  and  directors thereof if the applicant be a corporation,
are such as to command the confidence of the community  and  to  warrant
belief  that  the  business will be operated honestly, fairly, and effi-
ciently within the purposes of this article, and [if the  superintendent
shall find that]
  (II) the granting of such application will promote the convenience and
advantage of the area in which such business is to be conducted, and [if
the superintendent shall find that]
  (III)  the  applicant has available for the operation of such business
for each location and for each mobile unit specified in the  application
liquid  assets  of  at  least  ten  thousand dollars, PROVIDED THAT, THE
SUPERINTENDENT, UPON APPLICATION BY AN  APPLICANT  AND  FOR  GOOD  CAUSE
SHOWN, MAY PERMIT A REDUCTION FROM TEN THOUSAND DOLLARS TO NOT LESS THAN
FIVE  THOUSAND  DOLLARS  OF  MINIMUM  LIQUID  ASSETS  REQUIRED  FOR EACH
LOCATION AND A REDUCTION TO SUCH AMOUNT AS THE SUPERINTENDENT SHALL DEEM
APPROPRIATE FOR EACH LIMITED STATION,
  (IV) THE PRIMARY BUSINESS OF THE  LICENSEE,  AT  THE  LOCATION  TO  BE
LICENSED, SHALL BE FINANCIAL SERVICES, AND
  (V)  THE APPLICANT'S PROPOSED OFFICES COMPLY WITH SUBDIVISION ONE-A OF
THIS SECTION,
the superintendent shall thereupon execute a  license  in  duplicate  to
permit the cashing of checks, drafts and money orders in accordance with
the  provisions of this article at the location or in the area specified
in such application. In finding whether the application will promote the
convenience and advantage to the public, the superintendent shall deter-
mine whether there is a  community  need  for  a  new  licensee  in  the
proposed  area  to be served. THE SUPERINTENDENT SHALL TRANSMIT ONE COPY
OF SUCH LICENSE TO THE APPLICANT AND FILE ANOTHER IN THE OFFICE  OF  THE
DEPARTMENT.
  1-A.  No  license  shall be issued to an applicant for a license, at a
location to be licensed which is closer than one thousand  five  hundred
eighty-four  feet  (three-tenths  of  a mile) from an existing licensee,
MEASURED ON A STRAIGHT LINE ALONG THE STREET BETWEEN THE  NEAREST  POINT
OF THE STORE FRONTS OF THE CHECK CASHING FACILITIES, except:
  (I) with the written consent of such existing licensee [or],
  (II) pursuant to subdivision three of section three hundred seventy of
this article, subject to any restriction or condition as the superinten-
dent may promulgate by regulation[; provided, however],
  (iii)  the superintendent may permit a location to be licensed that is
closer than three-tenths of a mile from an  existing  licensee  provided
THAT  (A)  such  applicant  engages  in the cashing of checks, drafts or
money orders only for payees of such checks, drafts or money orders that
are other than natural persons at the location to be  licensed  and  (B)
such  applicant  was  engaged  in  the cashing of such checks, drafts or

S. 3727--B                          8

money orders for payees that are other  than  natural  persons  at  such
location on or before the fourteenth day of July, two thousand four, and
[provided  further  that  upon licensing any such location by the super-
intendent,]  (C)  SUCH  LICENSE  SHALL  BEAR  A LEGEND STATING THAT SUCH
LOCATION IS RESTRICTED TO THE CASHING OF CHECKS, DRAFTS OR MONEY  ORDERS
ONLY  FOR  PAYEES THAT ARE OTHER THAN NATURAL PERSONS, AND (D) AFTER THE
SUPERINTENDENT LICENSES SUCH LOCATION, such license as it pertains sole-
ly to such location shall not be affected thereafter by  any  change  of
control  of  such license pursuant to section three hundred seventy-a of
this article, [provided that] AS LONG AS the licensee  continues  there-
after  to  engage  at  that location in the cashing of checks, drafts or
money orders only for payees that are other than  natural  persons  [and
provided further that such license shall bear a legend stating that such
location  is restricted to the cashing of checks, drafts or money orders
only for payees that are other than natural persons].  The  three-tenths
of  a  mile distance requirement as set forth in this [section] SUBDIVI-
SION shall  not  apply  in  cases  where  the  existing  licensee  is  a
restricted  location  as authorized in the preceding sentence, or is any
other licensed location that engages solely in the  cashing  of  checks,
drafts  or  money  orders  only  for  payees that are other than natural
persons. [For purposes of this section, such distance shall be  measured
on  a  straight  line  along the street between the nearest point of the
store fronts of the check cashing facilities. The  primary  business  of
the  licensee,  at  the  location  to  be  licensed,  shall be financial
services. The superintendent shall transmit one copy of such license  to
the applicant and file another in the office of the department. Notwith-
standing  the  foregoing provisions of this subdivision, the superinten-
dent, upon application by an applicant and for  good  cause  shown,  may
permit a reduction from ten thousand dollars to not less than five thou-
sand dollars of minimum liquid assets required for each location.]
  S  12.  Subdivision 2 of section 370-a of the banking law, as added by
chapter 142 of the laws of 1992, is amended to read as follows:
  2. The superintendent shall approve or disapprove the proposed  change
of  control  of a licensee in accordance with the provisions of subdivi-
sions one and six of section three hundred sixty-nine of  this  article.
The  superintendent shall approve or disapprove the application in writ-
ing within ninety days [after the date the application is filed with the
superintendent] FROM THE DATE THE APPLICATION IS DEEMED COMPLETE BY  THE
SUPERINTENDENT.
  S  13.    Section 373 of the banking law, as amended by chapter 485 of
the laws of 1947, subdivision 1 as amended by chapter 432 of the laws of
2004, subdivision 2 as amended by chapter  132  of  the  laws  of  1969,
subdivision 3 as amended by chapter 310 of the laws of 1962 and subdivi-
sion  5  as added by chapter 235 of the laws of 2008, is amended to read
as follows:
  S 373. Acts prohibited; suspension [or], revocation OR TERMINATION  of
license; penalties.  1.  (A) No licensee shall engage in the business of
making  loans of money, credit, goods or things or discounting of notes,
bills of exchange, checks, or other evidences of debt  pursuant  to  the
provisions of article nine of this chapter, nor shall a loan business or
the negotiation of loans or the discounting of notes, bills of exchange,
checks  or  other  evidences  of  debt be conducted on the same premises
where the licensee is conducting business pursuant to the provisions  of
this article.
  (B)  Except as otherwise provided by regulation of the superintendent,
all checks, drafts and money orders shall be deposited in the licensee's

S. 3727--B                          9

bank account not later than the first business day following the day  on
which  they  were  cashed. No licensee shall at any time cash or advance
any moneys on a post-dated check or draft or engage in the  business  of
transmitting money or receiving money for transmission; provided, howev-
er,  that a licensee may cash a check payable on the first banking busi-
ness day following the date of cashing [(a)] (I) if such check is  drawn
by  the  United States, the state of New York, or any political subdivi-
sion of the state of New York, or by  any  department,  bureau,  agency,
authority,  instrumentality or officer, acting in his official capacity,
of the United States or of the state of New York  or  of  any  political
subdivision  of  the state of New York, or [(b)] (II) if such check is a
payroll check drawn by an employer to  the  order  of  its  employee  in
payment for services performed by such employee.
  (C) No licensee shall cash any check, draft or money order if the face
amount  for  which it is drawn is in excess of fifteen thousand dollars;
provided, however, that this restriction shall not apply to the  cashing
of  checks, drafts or money orders drawn by the United States, any state
thereof or any political subdivision  of  any  such  state,  or  by  any
department,  bureau,  agency,  authority,  instrumentality  or  officer,
acting in his official capacity, of the United States, any state thereof
or any political subdivision of any such state, or any banking  institu-
tion,  or  to  any  check  or  draft drawn by any insurance company, any
broker or dealer registered with the securities and exchange commission,
or any attorney for the settlement of claims, or to any check which  has
been  certified  by  the banking institution on which it has been drawn;
provided further, however, that any such restriction  upon  the  maximum
face  amount  that  may  be  cashed by a licensee shall not apply to the
cashing of checks, drafts or money orders by  licensees  for  payees  of
such checks, drafts or money orders that are other than natural persons.
For  purposes of this subdivision, "banking institution" means any bank,
trust company, savings bank, savings  and  loan  association  or  credit
union  which  is  incorporated, chartered or organized under the laws of
this state or any other state or the United States.
  2. [The] IN ADDITION TO THE AUTHORITY SET FORTH IN  SUBDIVISION  THREE
OF THIS SECTION, THE superintendent may suspend or revoke any license or
licenses issued pursuant to this article if, after notice and a hearing,
he  OR  SHE  shall  find  that the licensee (a) has committed any fraud,
engaged in any dishonest activities or made  any  misrepresentation;  or
(b) has violated any provisions of [the banking law] THIS CHAPTER or any
regulation issued pursuant thereto, or has violated any other law in the
course  of  [its or his] THE LICENSEE'S dealings as a licensed casher of
checks; or (c) has made a false statement in the  application  for  such
license  or  failed  to give a true reply to a question in such applica-
tion; or (d) has demonstrated his, HER or its incompetency  or  untrust-
worthiness  to  act  as a licensed casher of checks; or (e) is not doing
sufficient business pursuant to this article to justify the  continuance
of  the  license,  or if he OR SHE shall find that any ground or grounds
exist which would require or warrant the refusal of an  application  for
the  issuance  of  the  license  if such an application were then before
[him] THE SUPERINTENDENT.  Such a hearing shall be held  in  the  manner
and  upon such notice as may be prescribed by the superintendent. [Pend-
ing an investigation or a hearing for the suspension  or  revocation  of
any license or licenses issued pursuant to this article, the superinten-
dent  may  temporarily suspend such license or licenses for a period not
to exceed ninety days, provided the superintendent shall find that  such
a temporary suspension is in the public interest.]

S. 3727--B                         10

  3.  (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 WHEN THE LICENSEE
HAS  DEFAULTED  OR  IS  LIKELY  TO  DEFAULT  IN PERFORMING ITS FINANCIAL
ENGAGEMENTS OR ENGAGES 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  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  THIS ARTICLE: (I) THIRTY DAYS AFTER THE DATE THE LICENSEE FAILS
TO FILE ANY REPORT REQUIRED TO BE FILED BY IT  WITH  THE  SUPERINTENDENT
PURSUANT  TO  THE  AUTHORITY  PROVIDED BY THIS ARTICLE; (II) IMMEDIATELY
UPON NOTICE TO THE SUPERINTENDENT THAT THE LICENSEE HAS FILED A PETITION
IN BANKRUPTCY; (III) AT LEAST THIRTY DAYS AFTER  THE  LICENSEE  HAS  HAD
FILED  AGAINST IT A PETITION IN BANKRUPTCY; OR (IV) AT LEAST THIRTY DAYS
AFTER THE LICENSEE HAS FAILED TO MAINTAIN THE REQUISITE CAPITAL LEVEL.
  4. IF THE SUPERINTENDENT HAS ISSUED  AN  ORDER  SUSPENDING  A  LICENSE
ISSUED  PURSUANT  TO PARAGRAPH (A) OF SUBDIVISION THREE 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 SUBDIVI-
SION  THREE  OF  THIS  SECTION,  SUCH  LICENSE MAY BE REINSTATED, IF THE
SUPERINTENDENT DETERMINES, 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, INCLUD-
ING,  WITHOUT  LIMITATION, MAKING ANY OVERDUE PAYMENT OR HAVING ANY SUCH
BANKRUPTCY PETITION DISMISSED. OTHERWISE, IN THE CASE  OF  A  SUSPENSION
PURSUANT  TO  PARAGRAPH (B) OR (C) OF SUBDIVISION THREE OF THIS SECTION,
UNLESS THE SUPERINTENDENT HAS, IN HIS OR HER SOLE  DISCRETION,  EXTENDED
SUCH  SUSPENSION,  THE  LICENSE  OF  SUCH LICENSEE SHALL BE DEEMED TO BE
AUTOMATICALLY TERMINATED BY OPERATION OF LAW AT THE CLOSE OF BUSINESS ON
SUCH NINETIETH DAY.
  5. Whenever the superintendent  shall  suspend  or  revoke  a  license
issued  pursuant  to  this  article, he OR SHE shall forthwith execute a
written order to that effect. The superintendent shall on the date  such
order  is executed file one copy thereof in the office of the department
and serve a second copy thereof on the licensee either personally or  by
mailing  the same to the last known address of such licensee. Such order
shall be subject to review by the supreme court in the  manner  provided
in  article seventy-eight of the civil practice law and rules; provided,
however, that a special proceeding for review  of  such  order  must  be
commenced  within  thirty days from the date of such order of suspension
or revocation and, provided further, that no stay shall be granted pend-
ing the determination of the matter except on notice to the  superinten-
dent and for a period not exceeding thirty days.
  [4.]  6.  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 BUSI-
NESS OF A LICENSED CHECK CASHER IN THIS STATE.

S. 3727--B                         11

  7.  Any  person[,  partnership,  association  or  corporation] and the
several members, officers, directors, agents and employees thereof,  who
shall  violate any of the provisions of this article, shall be guilty of
a misdemeanor, and shall be punishable by imprisonment for not more than
one  year or by a fine of not more than five hundred dollars, or by both
such fine and imprisonment.
  [5.] 8. Notwithstanding the provisions of subdivision [four] SEVEN  of
this  section, any person[, partnership, association or corporation] and
the several members, officers, directors, agents and  employees  thereof
who  shall  violate  the  provisions of subdivision one of section three
hundred sixty-seven of this article shall be guilty of a class A  misde-
meanor.
  S  14.  Subdivision 1 of section 374 of the banking law, as amended by
chapter 582 of the laws of 2000, is amended to read as follows:
  1. The provisions of this article shall not apply when checks,  drafts
or  money orders are cashed, other than by a licensee, without a consid-
eration or charge; nor when checks, drafts or money orders  are  cashed,
other  than  by  a  licensee, as an incident to the conduct of any other
lawful business where not more than one dollar is  charged  for  cashing
each check, draft or money order; nor shall the provisions of this arti-
cle apply to any national bank, federal reserve bank, or to any person[,
partnership, association, corporation or other organization] doing busi-
ness  under  or  pursuant  to  the  provisions of this chapter, except a
licensee under this article.
  S 15. Subdivisions 6-a, 6-b and 7 of section 491 of the  banking  law,
subdivision  6-a as amended by chapter 289 of the laws of 1962, subdivi-
sion 6-b as added by chapter 358 of the laws of 1958 and  subdivision  7
as  amended  by  chapter 837 of the laws of 1966, are amended to read as
follows:
  6-a. "Retail instalment obligation" or "obligation"  means  an  agree-
ment,  entered  into in this state, pursuant to which the buyer promises
to pay, in instalments, the time sale price or prices  of  goods  and/or
services,  or any part thereof. The term does not include [(a)] a retail
instalment contract[, (b)] OR a retail instalment credit  agreement  [or
(c)  an  obligation which is intended to be and is ultimately insured or
guaranteed under title three of the act of Congress  entitled  "Service-
men's  Readjustment  Act of 1944"].  THE TERM INCLUDES SUCH AN AGREEMENT
WHEREVER ENTERED INTO IF EXECUTED BY THE BUYER  IN  THIS  STATE  AND  IF
SOLICITED  IN  PERSON  BY A SALESPERSON OR OTHER PERSON ACTING ON HIS OR
HER OWN BEHALF OR THAT OF THE SELLER.
  6-b. "Retail instalment credit agreement" or "credit agreement"  means
an  agreement  entered  into  in this state, pursuant to which the buyer
promises to pay, in instalments, his  OR  HER  outstanding  indebtedness
from  time to time to a retail seller, not evidenced by a retail instal-
ment contract or obligation, for one or more items of goods or services,
whenever purchased or obtained, which provides for a service charge  and
under  which instalment payments apply to his OR HER outstanding indebt-
edness from time to time.  THE TERM INCLUDES SUCH AN AGREEMENT  WHEREVER
ENTERED  INTO IF EXECUTED BY THE BUYER IN THIS STATE AND IF SOLICITED IN
PERSON BY A SALESPERSON OR OTHER PERSON ACTING ON HIS OR HER OWN  BEHALF
OR THAT OF THE SELLER.
  7.  "Sales  finance  company"  means  a person engaged, in whole or in
part, directly or indirectly, in the business of purchasing or otherwise
acquiring retail instalment contracts, obligations or credit  agreements
made  by  and  between  other parties, or any interest therein. The term
includes a retail seller of motor vehicles engaged, in whole or in part,

S. 3727--B                         12

in the business of holding retail  instalment  contracts  acquired  from
retail buyers, [which have] IF THE NUMBER OF RETAIL INSTALMENT CONTRACTS
ACQUIRED  IN  ANY ONE YEAR EXCEEDS FIVE SUCH CONTRACTS, OR IF THE aggre-
gate  unpaid time balances [of twenty-five] ON SUCH CONTRACTS EXCEED ONE
HUNDRED thousand dollars or more at any one time, exclusive of contracts
repurchased from a sales finance company or financing agency,  under  an
agreement  to  repurchase in case of default entered into as an incident
to the bona fide sale thereof to a sales finance  company  or  financing
agency.  The term does not include the pledgee of an aggregate number of
contracts to secure a bona fide loan thereon, OR A SECONDARY  HOLDER  OF
SUCH  CONTRACTS.    The  term  includes a person engaged, in whole or in
part, directly or indirectly, in the business of  entering  into  retail
instalment  credit agreements with retail buyers pursuant to subdivision
eleven of section four hundred thirteen of the  personal  property  law.
FOR PURPOSES OF THIS ARTICLE, THE TERM "SECONDARY HOLDER" MEANS A PERSON
THAT (I) PURCHASES OR OTHERWISE ACQUIRES A SALES FINANCE CONTRACT, OR AN
INTEREST  THEREIN,  THAT  WAS  ORIGINATED BY A PERSON LICENSED OR EXEMPT
FROM LICENSING UNDER THIS ARTICLE AND  THAT  IS  SERVICED  BY  A  PERSON
LICENSED  OR  EXEMPT  FROM LICENSING UNDER THIS ARTICLE, AND (II) HAS NO
CONTACT WITH THE OBLIGOR UNDER SUCH CONTRACT.
  S 16. Subdivisions 1 and 2 of section 492 of the banking law, subdivi-
sion 1 as amended by chapter 547 of the laws of 2008 and  subdivision  2
as  added  by  chapter  635  of the laws of 1956, are amended to read as
follows:
  1. No person, except a bank, savings bank, savings  and  loan  associ-
ation, trust company, private banker, credit union, OR investment compa-
ny,  organized under [article twelve of] this chapter [and authorized to
accept deposits, national bank,  federal  savings  association,  federal
credit  union,  or  out-of-state  state bank, as such term is defined in
subdivision two of section two hundred twenty-two of  this  chapter],  A
BRANCH OR AGENCY OF A FOREIGN BANKING CORPORATION LICENSED BY THE SUPER-
INTENDENT  OR  COMPTROLLER  OF THE CURRENCY TO TRANSACT BUSINESS IN THIS
STATE, ANY BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION,  INDUSTRIAL
LOAN COMPANY, BANK OR CREDIT UNION ORGANIZED UNDER THE LAWS OF ANY OTHER
STATE  OR  THE  UNITED  STATES,  or  lender licensed TO CONDUCT BUSINESS
pursuant to THE PROVISIONS OF article nine of this chapter, shall engage
in the business of a sales finance  company  in  this  state  without  a
license  therefor  obtained from the superintendent, as provided in this
article.
  2. [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 of the applicant  and  date  of  incorporation,  if
incorporated;
  (b)  The complete address where the business is to be conducted, show-
ing the street and number, if any, the office building and room  number,
if any, and the municipality and county;
  (c)  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
  (d)  The  name  and  resident  address of the owner or partners of the
applicant or, if a corporation or association, of the  directors,  trus-
tees  and  principal  officers, and of any stockholder owning twenty per
centum or more of its stock; and
  (e)  Such  other  pertinent  information  as  the  superintendent  may
require.]

S. 3727--B                         13

  THE  APPLICATION  FOR A LICENSE TO BE A SALES FINANCE COMPANY SHALL BE
IN WRITING, UNDER OATH, AND IN THE FORM PRESCRIBED  BY  THE  SUPERINTEN-
DENT.  THE  APPLICATION SHALL CONTAIN THE NAME AND COMPLETE BUSINESS AND
RESIDENTIAL ADDRESS OR ADDRESSES OF THE APPLICANT. IF THE APPLICANT IS A
PARTNERSHIP,  ASSOCIATION,  CORPORATION OR OTHER FORM OF BUSINESS ORGAN-
IZATION, THE APPLICATION SHALL CONTAIN THE NAMES AND  COMPLETE  BUSINESS
AND RESIDENTIAL ADDRESSES OF EACH MEMBER, DIRECTOR AND PRINCIPAL OFFICER
THEREOF. SUCH APPLICATION SHALL ALSO INCLUDE A DESCRIPTION OF THE ACTIV-
ITIES  OF  THE  APPLICANT,  IN  SUCH DETAIL AND FOR SUCH PERIODS, AS THE
SUPERINTENDENT MAY REQUIRE INCLUDING:
  (A) AN AFFIRMATION OF FINANCIAL SOLVENCY  NOTING  SUCH  CAPITALIZATION
REQUIREMENTS  AS  MAY BE PRESCRIBED BY THE SUPERINTENDENT, AND ACCESS TO
SUCH CREDIT AS MAY BE PRESCRIBED BY THE SUPERINTENDENT;
  (B) AS PROVIDED IN SECTION TWENTY-TWO OF  THIS  CHAPTER,  THE  FINGER-
PRINTS  OF THE APPLICANT AND EACH MEMBER, DIRECTOR AND PRINCIPAL OFFICER
OF THE APPLICANT AS THE SUPERINTENDENT MAY DETERMINE;
  (C) AN AFFIRMATION THAT THE APPLICANT, OR ITS  MEMBERS,  DIRECTORS  OR
PRINCIPALS AS MAY BE APPROPRIATE, ARE AT LEAST TWENTY-ONE YEARS OF AGE;
  (D)  INFORMATION  AS TO THE CHARACTER, FITNESS, FINANCIAL AND BUSINESS
RESPONSIBILITY,  BACKGROUND  AND  EXPERIENCES  OF  THE  APPLICANT,   ITS
MEMBERS, DIRECTORS OR PRINCIPALS AND OF ANY PERSON OWNING TEN PER CENTUM
OR  MORE  OF  THE  APPLICANT AND IF SUCH PERSON IS A PARTNERSHIP, CORPO-
RATION, ASSOCIATION OR OTHER FORM OF BUSINESS ORGANIZATION,  SUCH  ENTI-
TY'S MEMBERS, DIRECTORS OR PRINCIPALS; AND
  (E)  SUCH  OTHER  PERTINENT  INFORMATION  AS  THE SUPERINTENDENT SHALL
REQUIRE.
  S 17. Subdivision 2 of section 492-a of the banking law, as  added  by
chapter 142 of the laws of 1992, is amended to read as follows:
  2.  The superintendent shall approve or disapprove the proposed change
of control of a licensee in accordance with the provisions  of  subdivi-
sion  one  of  section  four  hundred  ninety-three of this article. The
superintendent shall approve or disapprove the  application  in  writing
within ninety days after the date the application is [filed with] DEEMED
COMPLETE BY the superintendent.
  S  18. Subdivision 7 of section 493 of the banking law is REPEALED and
subdivision 4, as amended by chapter 132 of the laws of 1969, is amended
to read as follows:
  4. Each license issued hereunder shall remain in full force and effect
until it is surrendered by the licensee [or], revoked  [or],  TERMINATED
OR suspended as provided in this [article] CHAPTER.
  S  19. Paragraph (e) of subdivision 1 and subdivision 7 of section 495
of the banking law are REPEALED, and the section  heading  and  subdivi-
sions 2, 3 and 4 as added by chapter 635 of the laws of 1956, and subdi-
vision  5,  as amended by chapter 64 of the laws of 1958, are amended to
read as follows:
  Revocation, suspension [or], TERMINATION OR surrender of licenses
  2.  [No] (A) EXCEPT AS PROVIDED FOR IN PARAGRAPHS (B), (C) AND (D)  OF
THIS  SUBDIVISION,  NO  license UNDER THIS ARTICLE shall be suspended or
revoked except after  a  hearing  thereon.  [The]  WHERE  A  HEARING  IS
REQUIRED  UNDER THIS SECTION, THE superintendent shall give the licensee
at least ten days' written notice of the time and place of such  hearing
by  [registered]  CERTIFIED mail, RETURN RECEIPT REQUESTED, addressed to
the principal place of business in this  state  of  such  licensee  THEN
APPEARING ON THE RECORDS OF THE SUPERINTENDENT.  Any order suspending or
revoking  such  license  shall recite the grounds upon which it is based
[and shall not be effective until ten days after written notice  thereof

S. 3727--B                         14

has been sent by registered mail to the licensee at such principal place
of  business].    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 BUSI-
NESS OF A SALES FINANCE COMPANY IN THIS STATE. THE SUPERINTENDENT IN HIS
OR HER DISCRETION MAY REVOKE OR SUSPEND ONLY THE PARTICULAR LICENSE WITH
RESPECT  TO  WHICH  GROUNDS  FOR  REVOCATION  OR SUSPENSION MAY OCCUR OR
EXIST; BUT IF HE OR SHE FINDS THAT GROUNDS FOR REVOCATION OR  SUSPENSION
ARE  OF  GENERAL  APPLICATION TO ALL PLACES OF BUSINESS, OR TO MORE THAN
ONE PLACE OF BUSINESS, OPERATED BY SUCH LICENSEE, HE OR SHE SHALL REVOKE
OR SUSPEND ALL OF THE LICENSES ISSUED TO SAID LICENSEE OR THOSE LICENSES
TO WHICH THE GROUNDS FOR REVOCATION OR SUSPENSION APPLY, AS THE CASE MAY
BE.
  (B) THE SUPERINTENDENT MAY FOR GOOD CAUSE, WITHOUT NOTICE OR  A  HEAR-
ING, ISSUE AN ORDER SUSPENDING ANY LICENSE ISSUED PURSUANT TO THIS ARTI-
CLE FOR A PERIOD NOT EXCEEDING NINETY DAYS, PENDING INVESTIGATION. "GOOD
CAUSE",  AS  USED IN THIS SUBDIVISION, SHALL EXIST WHEN THE LICENSEE HAS
DEFAULTED OR IS LIKELY TO DEFAULT IN PERFORMING  ITS  FINANCIAL  ENGAGE-
MENTS  OR  ENGAGES IN DISHONEST OR INEQUITABLE PRACTICES WHICH MAY CAUSE
SUBSTANTIAL HARM TO THE PERSONS AFFORDED THE PROTECTION OF THIS ARTICLE.
  (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  THIS  ARTICLE  UPON  THE  FAILURE  OF SUCH LICENSEE TO MAKE ANY
PAYMENT AS REQUIRED BY THIS CHAPTER.
  (D) THE SUPERINTENDENT MAY, IN HIS OR  HER  SOLE  DISCRETION,  WITHOUT
NOTICE OR A HEARING, ISSUE AN ORDER SUSPENDING ANY LICENSE ISSUED PURSU-
ANT TO THIS ARTICLE:
  (I)  THIRTY  DAYS AFTER THE DATE THE LICENSEE FAILS TO FILE ANY REPORT
REQUIRED TO BE FILED BY IT WITH THE SUPERINTENDENT PURSUANT TO AUTHORITY
PROVIDED BY THIS ARTICLE; OR
  (II) IMMEDIATELY UPON NOTICE TO THE SUPERINTENDENT THAT  THE  LICENSEE
HAS FILED A PETITION IN BANKRUPTCY; OR
  (III) AT LEAST THIRTY DAYS AFTER THE LICENSEE HAS HAD FILED AGAINST IT
A PETITION IN BANKRUPTCY.
  3.  [The  superintendent  in his discretion may revoke or suspend only
the particular license with respect to which grounds for  revocation  or
suspension  may occur or exist; but if he finds that grounds for revoca-
tion or suspension are of general application to all places of business,
or to more than one place of business, operated  by  such  licensee,  he
shall  revoke  or suspend all of the licenses issued to said licensee or
those licenses to which the grounds for revocation or suspension  apply,
as  the case may be.] IF THE SUPERINTENDENT HAS ISSUED AN ORDER SUSPEND-
ING A LICENSE PURSUANT TO PARAGRAPH  (B)  OF  SUBDIVISION  TWO  OF  THIS
SECTION,  SUCH  LICENSE  MAY  BE REINSTATED IF THE SUPERINTENDENT DETER-
MINES, 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
(C) OR (D) OF SUBDIVISION TWO OF THIS SECTION, SUCH LICENSE MAY BE REIN-
STATED, IF THE SUPERINTENDENT DETERMINES, 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  LIMITATION,  MAKING  ANY OVERDUE PAYMENT OR
HAVING ANY SUCH BANKRUPTCY PETITION DISMISSED.  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 SUSPENSION, THE LICENSE OF SUCH LICENSEE SHALL

S. 3727--B                         15

BE  DEEMED  TO  BE  AUTOMATICALLY  TERMINATED BY OPERATION OF LAW AT THE
CLOSE OF BUSINESS ON SUCH NINETIETH DAY.
  4.  Any licensee may surrender any license by delivering to the super-
intendent written notice that such license is thereby  surrendered,  but
such surrender shall not affect the licensee's civil or criminal liabil-
ity  for  acts  committed prior [thereto] TO SUCH SURRENDER OR ITS OBLI-
GATIONS TO THE SUPERINTENDENT FOR ASSESSMENTS,  FEES  OR  ADMINISTRATIVE
ACTIONS  WITH RESPECT TO ANY PERIOD BEFORE SUCH SURRENDER.  SUCH SURREN-
DER SHALL BECOME EFFECTIVE UPON WRITTEN APPROVAL BY THE SUPERINTENDENT.
  5. No suspension, revocation, TERMINATION or surrender of any  license
shall  impair or affect the obligation of any instalment contract, obli-
gation or credit agreement lawfully acquired previously thereto  by  the
licensee.
  S  20.  Subdivisions  3  and  4  of section 497 of the banking law are
REPEALED.
  S 21. Section 499 of the banking law, as added by chapter 635  of  the
laws of 1956, is amended to read as follows:
  S 499.  Violations  and  penalties. Any person who violates or partic-
ipates in the violation of any provision of this article, or  who  know-
ingly  makes  any incorrect statement of a material fact in any applica-
tion, report or  statement  filed  pursuant  to  this  article,  or  who
knowingly  omits to state any material fact necessary to give the super-
intendent any information lawfully required by him OR HER or refuses  to
permit  any  lawful  investigation  or examination, shall be guilty of a
misdemeanor and, upon conviction, shall be  fined  not  more  than  five
hundred  dollars  or imprisoned for not more than six months or both, in
the discretion of the court.
  S 22. Subdivisions 2 and 5 of section  554  of  the  banking  law  are
REPEALED and a new subdivision 2 is added to read as follows:
  2.  "BANKING INSTITUTION" MEANS A BANK, SAVINGS BANK, SAVINGS AND LOAN
ASSOCIATION, TRUST COMPANY, PRIVATE  BANKER, CREDIT UNION OR  INVESTMENT
COMPANY ORGANIZED UNDER THE BANKING LAW OF THIS STATE, A BRANCH OR AGEN-
CY  OF  A  FOREIGN BANKING CORPORATION LICENSED BY THE SUPERINTENDENT OR
THE COMPTROLLER OF THE CURRENCY TO TRANSACT BUSINESS IN THIS  STATE,  OR
ANY  BANK,  SAVINGS  BANK,  SAVINGS AND LOAN ASSOCIATION OR CREDIT UNION
ORGANIZED UNDER THE LAWS OF ANY OTHER STATE OR THE UNITED STATES.
  S 23. Subdivision 1 of section 555 of the banking law, as  amended  by
chapter 547 of the laws of 2008, is amended to read as follows:
  1.  No  person except a [lending] BANKING institution [or], an author-
ized insurer OR A LENDER LICENSED PURSUANT TO ARTICLE NINE OF THIS CHAP-
TER shall engage in the business of a premium finance agency  without  a
license  therefor  obtained from the superintendent, as provided in this
article. THE TERM "PREMIUM FINANCE AGENCY" DOES NOT INCLUDE A  SECONDARY
HOLDER OF A PREMIUM FINANCE AGREEMENT. FOR PURPOSES OF THIS ARTICLE, THE
TERM  "SECONDARY  HOLDER" MEANS A PERSON THAT (I) PURCHASES OR OTHERWISE
ACQUIRES A PREMIUM FINANCE AGREEMENT, OR AN INTEREST THEREIN,  THAT  WAS
ORIGINATED  BY  A  PERSON  LICENSED  OR EXEMPT FROM LICENSING UNDER THIS
ARTICLE AND THAT IS SERVICED BY A PERSON LICENSED OR EXEMPT FROM LICENS-
ING UNDER THIS ARTICLE, AND (II) HAS NO CONTACT WITH THE  OBLIGOR  UNDER
SUCH AGREEMENT.
  S 24. Subdivision 5 of section 556 of the banking law is REPEALED.
  S  25.  Section 558 of the banking law, as added by chapter 488 of the
laws of 1960, is amended to read as follows:
  S 558. Change of location. Before any licensee changes any office  [of
his] to another location, [he] IT shall [give written notice thereof to]
FILE  A  WRITTEN APPLICATION WITH the superintendent, who shall [without

S. 3727--B                         16

charge issue an endorsement indicating the change and the date  thereof,
which  endorsement  shall be attached to the license for such office and
be authority for the operation of the business  under  such  license  at
such  new location] AFTER RECEIPT OF THE FEE PRESCRIBED IN SECTION EIGH-
TEEN-A OF THIS CHAPTER ISSUE A NEW LICENSE FOR THE NEW OFFICE.
  S 26. Section 559 of the banking law, as added by chapter 488  of  the
laws  of  1960, paragraph (a) of subdivision 1 as amended by chapter 474
of the laws of 1962, paragraph (b) of subdivision 1 as amended by  chap-
ter 1141 of the laws of 1969, subdivision 6 as amended by chapter 310 of
the  laws  of 1962 and subdivision 7 as added by chapter 121 of the laws
of 1993, is amended to read as follows:
  S 559. Grounds for [revocation] SUSPENSION, REVOCATION OR  TERMINATION
of license; procedure. 1. [The] IN ADDITION TO THE AUTHORITY PROVIDED BY
SUBDIVISION  TWO  OF  THIS  SECTION,  THE  superintendent may [forthwith
revoke or] suspend OR REVOKE any license  issued  [hereunder  if]  UNDER
THIS ARTICLE IF, AFTER NOTICE AND A HEARING, he OR SHE shall find that:
  (a) The licensee has failed to pay [the annual license fee or] any sum
of  money  lawfully  demanded,  or to comply with any demand, ruling, or
requirement of the superintendent lawfully made pursuant to  and  within
the authority of this article;
  (b)  The  licensee has violated any provision of this article, the act
of congress entitled "Truth in Lending Act" and the  regulations  there-
under,  as  such act and regulations may from time to time be amended or
any rule or regulation lawfully made by  the  superintendent  under  and
within the authority of this article;
  (c)  Any fact or condition exists which, if it had existed at the time
of the  original  application  for  such  license,  clearly  would  have
warranted  the  superintendent  in  refusing  originally  to  issue such
license.
  2. (A) THE SUPERINTENDENT MAY, FOR GOOD CAUSE,  WITHOUT  NOTICE  OR  A
HEARING,  OR  WHERE THERE IS A SUBSTANTIAL RISK OF PUBLIC HARM, ISSUE AN
ORDER SUSPENDING ANY LICENSE ISSUED PURSUANT TO THIS ARTICLE FOR A PERI-
OD NOT EXCEEDING NINETY DAYS, PENDING INVESTIGATION.  "GOOD  CAUSE",  AS
USED IN THIS SUBDIVISION, SHALL EXIST WHEN THE LICENSEE HAS DEFAULTED OR
IS  LIKELY TO DEFAULT IN PERFORMING ITS FINANCIAL ENGAGEMENTS OR ENGAGES
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 THIS ARTICLE UPON THE  FAILURE  OF  SUCH  LICENSEE  TO  MAKE  ANY
PAYMENT 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 THIS ARTICLE:
  (I) THIRTY DAYS AFTER THE DATE THE LICENSEE FAILS TO FILE  ANY  REPORT
REQUIRED TO BE FILED BY IT WITH THE SUPERINTENDENT PURSUANT TO AUTHORITY
PROVIDED BY THIS ARTICLE;
  (II)  IMMEDIATELY  UPON NOTICE TO THE SUPERINTENDENT THAT THE LICENSEE
HAS FILED A PETITION IN BANKRUPTCY; OR
  (III) UPON NOTICE AT LEAST THIRTY DAYS  AFTER  THE  LICENSEE  HAS  HAD
FILED AGAINST IT A PETITION IN BANKRUPTCY.
  3.  IF  THE  SUPERINTENDENT  HAS  ISSUED AN ORDER SUSPENDING A LICENSE
PURSUANT TO PARAGRAPH (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

S. 3727--B                         17

SUSPENDING A LICENSE ISSUED PURSUANT TO PARAGRAPH (B) OR (C) OF SUBDIVI-
SION  TWO OF THIS SECTION, SUCH LICENSE MAY BE REINSTATED, IF THE SUPER-
INTENDENT DETERMINES, IN HIS OR HER SOLE DISCRETION, THAT  THE  LICENSEE
HAS CURED ALL DEFICIENCIES SET FORTH IN SUCH ORDER BY THE CLOSE OF BUSI-
NESS  NINETY  DAYS  AFTER  THE DATE OF SUCH SUSPENSION ORDER, INCLUDING,
WITHOUT LIMITATION, MAKING ANY OVERDUE PAYMENT OR HAVING ANY SUCH  BANK-
RUPTCY PETITION DISMISSED. OTHERWISE, IN THE CASE OF A SUSPENSION PURSU-
ANT  TO  PARAGRAPH (B) OR (C) OF SUBDIVISION TWO OF THIS SECTION, UNLESS
THE SUPERINTENDENT HAS, IN HIS OR HER  SOLE  DISCRETION,  EXTENDED  SUCH
SUSPENSION,  THE LICENSE OF SUCH LICENSEE SHALL BE DEEMED TO BE AUTOMAT-
ICALLY TERMINATED BY OPERATION OF LAW AT THE CLOSE OF BUSINESS  ON  SUCH
NINETIETH DAY.
  4.  The  superintendent  may  revoke  or  suspend  only the particular
license with respect to which grounds for revocation or  suspension  may
occur  or exist, or, if he OR SHE shall find that such grounds for revo-
cation or suspension are of general application to all  offices,  or  to
more  than one office, operated by such licensee, he OR SHE shall revoke
or suspend all of the licenses issued to such licensee or such number of
licenses as such grounds apply to, as the case may be.
  [3.] 5. Any licensee may surrender any license by  delivering  to  the
superintendent  written  notice  that  he OR SHE 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  ADMINISTRA-
TIVE  ACTIONS  WITH  RESPECT  TO  ANY PERIOD BEFORE SUCH SURRENDER. SUCH
SURRENDER SHALL BECOME EFFECTIVE UPON WRITTEN  APPROVAL  BY  THE  SUPER-
INTENDENT.
  [4.]  6.  No revocation, TERMINATION or suspension or surrender of any
license shall impair or affect the obligation of an  insured  under  any
lawful  premium  finance  agreement  previously  acquired or held by the
licensee.
  [5.] 7. Every license issued  hereunder  shall  remain  in  force  and
effect  until  the  same  shall  have  been  surrendered,  revoked, [or]
suspended OR TERMINATED in accordance with the provisions of this  arti-
cle,  but the superintendent shall have authority to reinstate suspended
licenses or to issue  new  licenses  to  a  licensee  whose  license  or
licenses  shall  have been revoked OR TERMINATED if no fact or condition
then exists which clearly would have  warranted  the  superintendent  in
refusing originally to issue such license under this article.
  [6.]  8. Whenever the superintendent shall revoke or suspend a license
issued pursuant to this article, he OR SHE shall  forthwith  execute  in
[triplicate]  DUPLICATE  a written order to that effect. The superinten-
dent shall file one copy of such order in the office of the  department,
[file  another  in  the  office  of  the clerk of the county in which is
located the place designated in such license] and  forthwith  serve  the
[third]  SECOND  copy  upon the licensee, which order may be reviewed in
the manner provided by article seventy-eight of the civil  practice  law
and  rules.  Such  special  proceeding  for review as authorized by this
section must be commenced within thirty days from the date of such order
of suspension or revocation.
  [7. The superintendent may, on good cause shown, or where there  is  a
substantial  risk of public harm, suspend any license issued pursuant to
this article for a period not exceeding thirty  days,  pending  investi-
gation. "Good cause", as used in this subdivision, shall exist only when
the  licensee  has  defaulted  or is likely to default in performing its
financial engagements or engages in dishonest or  inequitable  practices

S. 3727--B                         18

which  may cause substantial harm to the persons afforded the protection
of this article.]
  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
PREMIUM FINANCE AGENCY IN THIS STATE.
  S  27.  Subdivisions  3  and  4  of section 560 of the banking law are
REPEALED.
  S 28. Section 562 of the banking law is REPEALED.
  S 29. Subdivision 1 of section 563 of the banking  law,  as  added  by
chapter 488 of the laws of 1960, is amended to read as follows:
  1.  Any person, including any member, officer, director or employee of
a licensee, who  violates  or  participates  in  the  violation  of  any
provision  of  this article, or who knowingly makes any incorrect state-
ment of a material fact in any application, report  or  statement  filed
pursuant  to  this article, or who knowingly omits to state any material
fact necessary to  give  the  superintendent  any  information  lawfully
required  by him or HER OR refuses to permit any lawful investigation or
examination, shall be guilty of  a  misdemeanor  and,  upon  conviction,
shall  be fined not more than five hundred dollars or imprisoned for not
more than six months or both, in the discretion of the court.
  S 30. Section 576 of the banking law is amended by adding a new subdi-
vision 4 to read as follows:
  4. IN ADDITION TO MAILING, NOTICES REQUIRED UNDER THIS SECTION MAY  BE
DELIVERED  BY OTHER MEANS, INCLUDING ELECTRONIC MEANS, PROVIDED THAT ANY
SUCH DELIVERY EVIDENCES RECEIPT OF THE NOTICE BY THE  ADDRESSEE.    SUCH
RECEIPT MAY BE CREATED AND MAINTAINED IN ELECTRONIC FORM.
  S 31. Subdivision (a) of section 577 of the banking law, as amended by
chapter 1 of the laws of 1994, is amended to read as follows:
  (a)  By  any  person  at  a rate of interest not greater than the rate
[prescribed by the banking board pursuant to] SET FORTH IN section four-
teen-a of this chapter[, or, if no rate has been so prescribed, six  per
centum per annum]; or
  S 32. Subdivisions 3 and 4 of section 580 of the banking law, subdivi-
sion  3  as amended by section 50 of part O of chapter 59 of the laws of
2006 and subdivision 4 as added by chapter 629 of the laws of 2002,  are
amended to read as follows:
  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; PROVIDED, HOWEVER, THAT AN APPLICATION TO ESTABLISH A
BRANCH OFFICE OF THE LICENSEE SHALL BE ACCOMPANIED BY THE FEE PRESCRIBED
IN SECTION EIGHTEEN-A OF THIS CHAPTER.
  4. As a condition for the issuance and retention of a  budget  planner
license,  and  subject  to  such regulations as the superintendent shall
prescribe, applicants for a license shall file with the superintendent a
surety bond in form satisfactory to the superintendent issued by a bond-
ing company or insurance company  authorized  to  do  business  in  this
state.  Except  as provided hereunder, the principal amount of such bond
shall be two hundred fifty  thousand  dollars.  The  superintendent  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  result-
ing  in  bona  fide  consumer  complaints  of  misconduct  and that such

S. 3727--B                         19

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
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. [With-
in ninety days after the effective date of this subdivision, each licen-
see shall comply with the requirements of this subdivision.]
  S  33.  Subdivision 1 of section 581 of the banking law, as amended by
chapter 456 of the laws of 2006, is amended to read as follows:
  1. Upon the filing of an application for a license, if the superinten-
dent shall find that the financial responsibility,  experience,  charac-
ter,  and  general  fitness  of  the  applicant, and of the 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, fair-
ly, and efficiently within the purposes of this article, he or she shall
thereupon issue a license in duplicate to engage in budget  planning  in
accordance with the provisions of this article. The superintendent shall
transmit  one  copy of such license to the applicant 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 superintendent shall approve or deny IN
WRITING every application for license hereunder within ninety days [from
the filing thereof] AFTER THE DATE THE APPLICATION IS DEEMED COMPLETE BY
THE SUPERINTENDENT.
  S 34. Subdivision 2 of section 583-a of the banking law, as  added  by
chapter 142 of the laws of 1992, is amended to read as follows:
  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-one  of  this  article.  The  superintendent shall
approve or disapprove the application  in  writing  within  ninety  days
after  the  date  the application is [filed with] DEEMED COMPLETE BY the
superintendent.
  S 35. Section 584 of the banking law, as added by chapter 448  of  the
laws  of  1975,  paragraph  (b) as amended by chapter 629 of the laws of
2002, and paragraph (c) of subdivision 1 as added by chapter 629 of  the
laws of 2002, is amended to read as follows:
  S 584.  Grounds  for  suspension  [or],  revocation  OR TERMINATION of
license; procedure. 1.  [The] IN ADDITION TO THE AUTHORITY SET FORTH  IN

S. 3727--B                         20

SUBDIVISION  TWO  OF  THIS  SECTION,  THE  superintendent may SUSPEND OR
revoke any license issued [hereunder if] 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 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 judge-
ment in a court of competent jurisdiction  against  the  licensee  in  a
civil action arising from fraud, misrepresentation, or deceit.
  2.  (A) The superintendent may, [on] FOR good cause [shown], [suspend]
WITHOUT NOTICE OR A HEARING,  ISSUE  AN  ORDER  SUSPENDING  any  license
ISSUED  PURSUANT  TO  THIS  ARTICLE  for a period not exceeding [thirty]
NINETY days, pending investigation. "GOOD CAUSE", AS USED IN THIS SUBDI-
VISION, SHALL EXIST ONLY WHEN THE LICENSEE HAS DEFAULTED OR IS LIKELY TO
DEFAULT IN PERFORMING ITS FINANCIAL ENGAGEMENTS OR ENGAGES 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 TO BE FILED BY  IT  WITH  THE
SUPERINTENDENT  PURSUANT TO THE AUTHORITY PROVIDED BY THIS ARTICLE; (II)
IMMEDIATELY UPON NOTICE TO THE  SUPERINTENDENT  THAT  THE  LICENSEE  HAS
FILED  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
BOND REQUIRED PURSUANT TO SECTION FIVE HUNDRED EIGHTY OF THIS ARTICLE IS
NO LONGER IN EFFECT.
  3. [No] IF THE SUPERINTENDENT HAS ISSUED AN ORDER SUSPENDING A LICENSE
ISSUED PURSUANT TO THE AUTHORITY OF THIS ARTICLE PURSUANT  TO  PARAGRAPH
(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. 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  SUSPENSION, THE LICENSE OF SUCH LICENSEE SHALL BE DEEMED
TO BE AUTOMATICALLY TERMINATED BY OPERATION OF LAW AT THE CLOSE OF BUSI-
NESS ON SUCH NINETIETH DAY.

S. 3727--B                         21

  4. (A) EXCEPT AS PROVIDED FOR IN SUBDIVISION TWO OF THIS  SECTION,  NO
license  shall be revoked or suspended except after notice and a hearing
thereon.
  [4.]  5.  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 ANY PERIOD BEFORE SUCH SURRENDER. SUCH  SURRENDER  SHALL
BECOME EFFECTIVE UPON WRITTEN APPROVAL BY THE SUPERINTENDENT.
  [5.]  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.
  [6.] 7. Every license issued  hereunder  shall  remain  in  force  and
effect  until  the  same  shall  have  been  surrendered,  revoked [or],
suspended OR TERMINATED in accordance with the provisions of this  arti-
cle,  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.
  [7.]  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.
  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
BUDGET PLANNER IN THIS STATE.
  S 36. Intentionally omitted.
  S  37.  Subdivision 1 of section 641 of the banking law, as amended by
chapter 677 of the laws of 2004, is amended to read as follows:
  1. No person shall engage IN THIS STATE in the business of selling  or
issuing  checks, or engage in the business of receiving money for trans-
mission or transmitting the same, without a  license  therefor  obtained
from  the  superintendent  as  provided  in  this article, nor shall any
person engage in such business as an agent, except  as  an  agent  of  a
licensee or as agent of a payee; provided, however, that nothing in this
article  shall  apply  to a bank, trust company, private banker, foreign
banking corporation licensed pursuant to article two of this chapter  or
foreign  banking  company authorized to operate pursuant to the Interna-
tional Banking Act of 1978 (12 USC 3101 et seq.),  as  amended,  savings
bank,  savings  and  loan association, an investment company, a national
banking association, federal reserve bank, corporation  organized  under
the  provisions  of section twenty-five-a of an act of congress entitled
the "Federal Reserve Act", federal savings  bank,  federal  savings  and
loan  association or state or federal credit union OR OUT-OF-STATE STATE
BANK.  A PERSON ENGAGES IN THIS STATE IN  THE  BUSINESS  OF  SELLING  OR
ISSUING  CHECKS  OR RECEIVING MONEY FOR TRANSMISSION OR TRANSMITTING THE
SAME IF SUCH PERSON INDUCES ANOTHER PERSON WHO  IS  A  RESIDENT  OF,  OR
LOCATED IN, THIS STATE TO ENTER INTO A TRANSACTION BY SOLICITATION IN OR

S. 3727--B                         22

INTO  THIS STATE BY ANY MEANS, INCLUDING BUT NOT LIMITED TO, MAIL, ELEC-
TRONIC MAIL, TELEPHONE, RADIO, TELEVISION, THE  INTERNET  OR  ANY  OTHER
ELECTRONIC MEANS.
  S  38.  Subdivisions  2, 5 and 6 of section 642 of the banking law, as
amended by chapter 455 of the laws of 1993, are  amended,  and  two  new
subdivisions 7 and 8 are added to read as follows:
  2.  The  superintendent  shall  approve  [conditionally] or deny every
application for a license hereunder IN WRITING within ninety days  [from
the  filing  thereof. Such period of ninety days may be extended, by the
written consent of the applicant, for such additional reasonable  period
of  time  as may be required to enable compliance with such requirements
and conditions as may be provided by this article and the rules or regu-
lations of the superintendent issued  thereunder]  AFTER  THE  DATE  THE
APPLICATION IS DEEMED COMPLETE BY THE SUPERINTENDENT.
  5.  [No]  EXCEPT  AS  PROVIDED  IN SUBDIVISION SIX OF THIS SECTION, NO
license shall be suspended or revoked except after  a  hearing  thereon.
The  superintendent  shall  give the licensee at least ten days' written
notice of the time and place of such hearing by registered or  certified
mail  addressed to the principal place of business of such licensee. Any
order of the superintendent suspending or revoking  such  license  shall
state  the  grounds  upon  which it is based [and shall not be effective
until ten days after written notice thereof has been sent by  registered
or  certified  mail to the licensee at such principal place of business,
except that revocation by reason of the licensee's bond not  being  kept
in  full  force  and effect as required by this article, or by reason of
failure to keep on deposit sufficient securities or funds as required by
this article, may take  effect  immediately  if  the  superintendent  so
orders].
  6.  (A)  The  superintendent may, [on] FOR good cause [shown, or where
there is a substantial risk of public harm, suspend] WITHOUT NOTICE OR A
HEARING, ISSUE AN ORDER SUSPENDING any license issued pursuant  to  this
article  for a period not exceeding [thirty] NINETY days, pending inves-
tigation. "Good cause", as used in this subdivision,  shall  exist  only
when  the  licensee  has defaulted or is likely to default in performing
its financial engagements or engages in dishonest or  inequitable  prac-
tices  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 THE LICENSE ISSUED HERE-
UNDER UPON THE FAILURE OF SUCH LICENSEE TO MAKE ANY PAYMENT 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  HERE-
UNDER:  (I)  THIRTY  DAYS  AFTER THE DATE THE LICENSEE FAILS TO FILE ANY
REPORT REQUIRED TO BE FILED BY IT WITH THE  SUPERINTENDENT  PURSUANT  TO
THE  AUTHORITY PROVIDED BY THIS ARTICLE; (II) IMMEDIATELY UPON NOTICE TO
THE SUPERINTENDENT THAT A LICENSEE HAS FILED 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 RECEIPT BY THE SUPER-
INTENDENT OF NOTICE THAT THE LICENSEE HAS FAILED TO MAINTAIN THE BOND OR
SECURITIES REQUIRED BY SECTION SIX HUNDRED FORTY-THREE OF  THIS  ARTICLE
OR  FAILED  TO  MAINTAIN THE INVESTMENTS REQUIRED BY SECTION SIX HUNDRED
FIFTY-ONE OF THIS ARTICLE.
  7. IF THE SUPERINTENDENT HAS ISSUED  AN  ORDER  SUSPENDING  A  LICENSE
PURSUANT  TO  PARAGRAPH  (A)  OF  SUBDIVISION  SIX OF THIS SECTION, SUCH
LICENSE MAY BE REINSTATED IF THE SUPERINTENDENT DETERMINES,  IN  HIS  OR

S. 3727--B                         23

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 SUBDIVI-
SION  SIX OF THIS SECTION, SUCH LICENSE MAY BE REINSTATED, IF THE SUPER-
INTENDENT DETERMINES, IN HIS OR HER SOLE DISCRETION, THAT  THE  LICENSEE
HAS CURED ALL DEFICIENCIES SET FORTH IN SUCH ORDER BY THE CLOSE OF BUSI-
NESS  NINETY  DAYS  AFTER  THE DATE OF SUCH SUSPENSION ORDER, INCLUDING,
WITHOUT LIMITATION, MAKING ANY OVERDUE PAYMENT, HAVING  ANY  SUCH  BANK-
RUPTCY  PETITION  DISMISSED  OR  REINSTATING SUCH BOND OR INCREASING THE
VALUE OF SUCH INVESTMENTS. OTHERWISE, IN THE CASE OF A SUSPENSION PURSU-
ANT TO PARAGRAPH (B) OR (C) OF SUBDIVISION SIX OF THIS  SECTION,  UNLESS
THE  SUPERINTENDENT HAS, IN HIS OR HER DISCRETION, EXTENDED SUCH SUSPEN-
SION, THE LICENSE OF SUCH LICENSEE SHALL BE DEEMED TO  BE  AUTOMATICALLY
TERMINATED  BY OPERATION OF LAW AT THE CLOSE OF BUSINESS ON SUCH NINETI-
ETH DAY.
  8. 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
MONEY TRANSMITTER.
  S 39. Subdivision 1 of section 643 of the banking law, as  amended  by
chapter 625 of the laws of 2004, is amended to read as follows:
  1.  As  a  condition  for  the  issuance and retention of the license,
applicants for a license and other licensees shall, within  thirty  days
after  notice by the superintendent, or such longer or shorter period as
he or she shall prescribe, file with  the  superintendent  one  or  more
corporate  surety bond or bonds, as required below, in form satisfactory
to him or her and issued by  a  bonding  company  or  insurance  company
authorized  to do business in this state.  One bond shall be in favor of
the superintendent and in such principal  amount  as  he  or  she  shall
determine is necessary or desirable for the protection of the purchasers
and  holders of New York instruments sold or to be sold by the applicant
or licensee, provided, [however, that until June first, nineteen hundred
seventy-seven, the principal amount of such bond shall be no  less  than
two  hundred  ten thousand dollars and on and after June first, nineteen
hundred seventy-seven,] THAT the principal amount of such bond shall  be
no less than five hundred thousand dollars. If the applicant or licensee
intends  to engage or engages in the sale of New York traveler's checks,
such applicant or licensee shall file with the superintendent a separate
bond. Said bond shall be in favor of  the  superintendent  and  in  such
principal  amount as he or she shall determine is necessary or desirable
for the protection of the purchasers and holders of the New York travel-
er's checks sold or to be sold by the applicant or  licensee;  provided,
however,  that  the principal amount of such bond shall not be less than
seven hundred fifty thousand dollars,  unless  the  superintendent,  for
good  cause  shown,  shall  have  determined  that  a lesser amount will
adequately protect the purchasers and holders of the New York traveler's
checks sold or to be sold by such applicant or licensee.
  In making any determination under this subdivision, the superintendent
may take into account the  financial  condition  of  the  licensee,  the
number of locations in this state at which the licensee, either directly
or  through  agents,  transacts the business of selling New York instru-
ments or New York traveler's checks, the controls imposed on such agents
or, and the possible exposure of purchasers  and  holders  of  New  York
instruments  and  New York traveler's checks to loss in the event of the
insolvency, bankruptcy or other financial impairment  of  the  licensee.
The  proceeds  of each bond shall constitute a trust fund for the exclu-

S. 3727--B                         24

sive benefit of the purchasers and holders of the New  York  instruments
[and]  OR  New  York  traveler's  checks,  as the case may be. Except as
otherwise provided in the following sentence, in the event of the insol-
vency  or  bankruptcy of any licensee, the proceeds of the bond or bonds
held for the exclusive benefit of the purchasers and holders of New York
instruments and the proceeds of the bond or bonds held for the exclusive
benefit of the purchasers and holders  of  New  York  traveler's  checks
shall be paid to the superintendent forthwith for disposition in accord-
ance  with  the  provisions of this article. If any New York instruments
have been assigned to the fund, the proceeds of the bond  held  for  the
exclusive  benefit of the purchasers and holders of New York instruments
shall constitute a trust fund for the benefit of, and shall  be  payable
to,  the  fund  to the extent of such assignment. From time to time, the
superintendent may require, upon thirty days notice or  such  longer  or
shorter  period as he or she shall prescribe, that such bond or bonds be
increased if he or she shall determine that such increase  is  necessary
or  desirable  for  the  protection of the purchasers and holders of New
York instruments and New York traveler's checks.
  S 40. Subdivision 4 of section 646 of the banking law is REPEALED.
  S 41. Section 647 of the banking law, as amended by chapter 455 of the
laws of 1993, is amended to read as follows:
  S 647. Judicial review. [The  refusal  by  the  superintendent  of  an
original  license,  in  the case of an applicant which, prior to January
first, nineteen hundred sixty-three, and upon the date  of  filing  such
application,  has lawfully been engaged in this state in the business of
selling or issuing checks or of  receiving  money  for  transmission  or
transmitting  the same, and in] IN all cases INVOLVING the suspension or
revocation of any license by  the  superintendent,  SUCH  SUSPENSION  OR
REVOCATION  shall  be  subject  to judicial review in the manner in such
cases made and provided by law.
  S 42. Subdivision 2 of section 650 of the banking law, as  amended  by
chapter 543 of the laws of 1990, is amended to read as follows:
  2.  a.  Any person who either (1) engages in the business of receiving
money for transmission or transmitting the same or (2) sells  or  issues
New  York  instruments  or New York traveler's checks as those terms are
defined by section six hundred fifty-three of this  chapter,  without  a
license  therefor  obtained  from the superintendent as provided in this
article, shall be guilty of a [Class] CLASS A misdemeanor.
  b. Any person who violates paragraph a of this subdivision and in  the
course of that violation:
  (1)  knowingly receives or agrees to receive for transmission from one
or more individuals a total of ten thousand dollars or more in a  single
transaction,  a  total  of twenty-five thousand dollars or more during a
period of thirty days or less, or a total of two hundred fifty  thousand
dollars or more during a period of one year or less; or
  (2) knowingly sells or issues New York instruments or New York travel-
er's  checks to one or more individuals totaling ten thousand dollars or
more in a single transaction, a total of twenty-five thousand dollars or
more during a period of thirty days or less, or a total of  two  hundred
fifty thousand dollars or more during a period of one year or less SHALL
BE GUILTY OF A CLASS E FELONY; [or
  (3)] C. ANY PERSON WHO VIOLATES PARAGRAPH A OF THIS SUBDIVISION AND IN
THE COURSE OF THAT VIOLATION:
  (1) knowingly engages in the business of receiving money for transmit-
ting  or transmitting the same, knowing such money to be the proceeds of
any criminal conduct; or

S. 3727--B                         25

  [(4)] (2) knowingly sells or issues New York instruments or  New  York
traveler's  checks  as  those  terms  are defined by section six hundred
fifty-three of this chapter, knowing such instruments or  checks  to  be
purchased  with  the  proceeds  of or derived from any criminal conduct;
shall be guilty of a class [E] D felony.
  S 43. Section 651 of the banking law, as amended by chapter 677 of the
laws of 2004, is amended to read as follows:
  S 651. Investments. Every licensee shall at all times maintain permis-
sible investments having (i) a market value, computed in accordance with
generally  accepted  accounting principles, at least equal to the aggre-
gate of the amount of all its outstanding payment  instruments  and  all
its outstanding traveler's checks or (ii) a net carrying value, computed
in  accordance  with  generally accepted accounting principles, at least
equal to the aggregate of the amount  of  all  its  outstanding  payment
instruments  and  all  its  outstanding traveler's checks so long as the
market value of such permissible investments is at least [eighty] NINETY
per centum of the net carrying value.    Notwithstanding  the  foregoing
provisions of this section, the superintendent shall have the authority,
for  good  cause  shown, to exempt from the requirements of this section
any licensee.
  S 44. Section 657 of the banking law, as amended by chapter 78 of  the
laws of 1977, is amended to read as follows:
  S 657.  Payments  to  the fund. In the event the fund has borrowed any
monies from the property and liability insurance security fund  pursuant
to  the  provisions of section six hundred fifty-eight of this [chapter]
ARTICLE, and has any debt outstanding thereto, or in the event an  unin-
sured transmitter of money is declared, or declares itself, insolvent or
defaults  on its New York instruments, the fund shall levy an assessment
upon each uninsured transmitter of money. The amount of such  assessment
shall  be  determined by the superintendent provided, however, that each
uninsured transmitter of money shall be assessed ratably, in  proportion
to  the average of the dollar amounts of the New York instruments issued
by such uninsured transmitter of money outstanding at the  end  of  each
calendar  quarter  for  the  calendar  year  preceding that in which the
assessment is made, and provided,  further,  that  no  such  assessments
shall  be  levied once the net value of the fund shall equal such amount
as the superintendent shall have determined to be necessary  to  protect
the  interests of the purchasers and holders of New York instruments. In
making his OR HER determination, the superintendent shall  consider  the
scope of the risk covered by the fund, the expenses incurred or expected
to  be incurred by the fund, the amount of any loans and advances to the
fund, and the interest thereon.
  In no event shall the total amount so assessed in any one year against
any uninsured transmitter of money pursuant to this section exceed  [two
per  centum of the] ONE PERCENT OF THE ANNUAL VOLUME OF New York instru-
ments of such uninsured transmitter of money [which were outstanding  at
the  end  of] FOR the calendar year preceding that in which such assess-
ments are made or one hundred twenty-five thousand dollars, whichever is
less. The net value of the fund shall be determined  by  deducting  from
the  value  of the assets of the fund the aggregate actual and estimated
liabilities of the fund as determined by the superintendent.
  S 45. This act shall take effect immediately.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Find your Senator and share your views on important issues.

Do you support this bill?

Senate Bill S3727B

Sponsored By

Archive: Last Bill Status - In Assembly Committee

Actions

Votes

Jun 22, 2010 - Floor Vote

Floor Vote: Jun 22, 2010

Jun 9, 2010 - Banks Committee Vote

Banks Committee Vote: Jun 9, 2010

Bill Amendments

2009-S3727 - Details

2009-S3727 - Summary

2009-S3727 - Sponsor Memo

2009-S3727 - Bill Text download pdf

2009-S3727A - Details

2009-S3727A - Summary

2009-S3727A - Sponsor Memo

2009-S3727A - Bill Text download pdf

2009-S3727B (ACTIVE) - Details

2009-S3727B (ACTIVE) - Summary

2009-S3727B (ACTIVE) - Sponsor Memo

2009-S3727B (ACTIVE) - Bill Text download pdf

Comments

Do you support this bill?

Get Status Alerts for 2009-S3727B

Senate Bill S3727B

Share this bill

Sponsored By

Brian X. Foley

Archive: Last Bill Status - In Assembly Committee

Actions

Votes

Bill Amendments

2009-S3727 - Details

2009-S3727 - Summary

2009-S3727 - Sponsor Memo

2009-S3727 - Bill Text download pdf

2009-S3727A - Details

2009-S3727A - Summary

2009-S3727A - Sponsor Memo

2009-S3727A - Bill Text download pdf

2009-S3727B (ACTIVE) - Details

2009-S3727B (ACTIVE) - Summary

2009-S3727B (ACTIVE) - Sponsor Memo

2009-S3727B (ACTIVE) - Bill Text download pdf

Comments