Senate Bill S7732

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

                                  7732

                            I N  S E N A T E

                               May 5, 2010
                               ___________

Introduced  by  Sen. PERALTA -- 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  money  services  busi-
  nesses

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

  Section 1.  Legislative  intent.  The  legislature  hereby  finds  and
declares that money services businesses play a vital role in the economy
of New York state and that access by the public to efficient, economical
and  safe  money  services  businesses is a public good.  Money services
businesses recognize that protection of the financial system from  abuse
from  money  launderers  and  terrorist  financiers  is  a paramount and
compelling state interest and therefore  comply  with  standards  estab-
lished by federal and state statutes and regulations, including the Bank
Secrecy Act (Public Law 91-508 and 31 U.S.C. 5311 subchapter II) and the
"Interagency  Interpretative  Guidance  on Providing Banking Services to
Money Services Businesses Operating in the United States" issued by  the
Financial  Crimes  Enforcement  Network  (FinCEN)  of  the U.S. treasury
department. Furthermore, in ensuring that money services businesses  are
partners  in  our  state's  fight against money laundering and terrorist
financing, money services businesses are subject to strict licensing and
background  verification  requirements  and,  in  many  cases,   bonding
requirements  by  the superintendent of banks.  Moreover, money services
businesses are subject to constant supervision and  examination  by  the
superintendent  of banks for safety and soundness, as well as compliance
with the bank secrecy act and other anti-money laundering and  anti-ter-
rorist  financing  laws and regulations.   Nevertheless, the legislature
finds that banks in the state have closed accounts and refused  to  open
accounts  for  money services businesses citing requirements of the bank
secrecy act.
  Therefore, the legislature finds and declares that the systematic  and
unchecked closing of money services businesses runs counter to the goals
of protecting the state and its financial system.
  S 2. The banking law is amended by adding a new section 9-v to read as
follows:
  S  9-V.  NEW  YORK  STATE LICENSED MONEY TRANSMITTER OR NEW YORK STATE
LICENSED CHECK CASHER ACCOUNTS.   1. (A) A  STATE  CHARTERED  DEPOSITORY
              

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00088-04-0

S. 7732                             2

INSTITUTION  SHALL  HAVE  NO  OBLIGATION TO CONDUCT ANY DUE DILIGENCE OR
REVIEW OF THE COMPLIANCE BY A NEW YORK STATE LICENSED MONEY  TRANSMITTER
OR NEW YORK STATE LICENSED CHECK CASHER WITH SUCH BUSINESS'S OBLIGATIONS
UNDER CHAPTER 53 OF TITLE 31 OF THE UNITED STATES CODE, PROVIDED:
  (I)  THE  NEW  YORK STATE LICENSED MONEY TRANSMITTER OR NEW YORK STATE
LICENSED CHECK CASHER IS LICENSED OR APPROVED TO ENGAGE IN MONEY  TRANS-
MISSION  OR  CHECK  CASHING  UNDER THIS CHAPTER BY THE SUPERINTENDENT OF
BANKS; AND
  (II) THE NEW YORK STATE LICENSED MONEY TRANSMITTER OR NEW  YORK  STATE
LICENSED CHECK CASHER CERTIFIES TO THE STATE CHARTERED DEPOSITORY INSTI-
TUTION  THAT  IT  HAS  A  PROGRAM  THAT  FULFILLS  THE  REQUIREMENTS  OF
SUBSECTION (H)(1) OF 31 U.S.C. SECTION 5318 AND ITS  IMPLEMENTING  REGU-
LATIONS.
  (B)  A  NEW  YORK  STATE  LICENSED MONEY TRANSMITTER OR NEW YORK STATE
LICENSED CHECK CASHER MAKING A MATERIAL MISREPRESENTATION IN  A  CERTIF-
ICATION REQUIRED BY THIS SECTION SHALL BE SUBJECT TO THE CIVIL PENALTIES
PRESCRIBED  UNDER  LAW.  A  PERSON WHO KNOWINGLY MAKES ANY SUCH MATERIAL
MISREPRESENTATION OR OMISSION SHALL BE SUBJECT TO  CRIMINAL  PROSECUTION
AND ALL PENALTIES AS OTHERWISE PROVIDED BY LAW.
  (C)   NOTHING  IN  THIS  SECTION  SHALL  BE  CONSTRUED  TO  REQUIRE  A
STATE-CHARTERED DEPOSITORY INSTITUTION TO ESTABLISH, MAINTAIN,  ADMINIS-
TER OR MANAGE AN ACCOUNT FOR A NEW YORK STATE LICENSED MONEY TRANSMITTER
OR NEW YORK STATE LICENSED CHECK CASHER.
  (D)  A  STATE CHARTERED DEPOSITORY INSTITUTION SHALL HAVE NO LIABILITY
FOR THE FAILURE OF ANY NEW YORK STATE LICENSED MONEY TRANSMITTER OR  NEW
YORK  STATE LICENSED CHECK CASHER TO FULFILL ITS OBLIGATIONS UNDER CHAP-
TER 53 OF TITLE 31 OF THE UNITED STATES CODE.
  2. NOTWITHSTANDING ANY PROVISION OF LAW TO THE  CONTRARY,  NO  BANKING
INSTITUTION  IN  THE  STATE  SHALL  DENY  BANKING  SERVICES TO ANY MONEY
SERVICES BUSINESS ON THE BASIS OF COMPLIANCE WITH  THE  BANKING  SECRECY
ACT  (PL  91-508  AND 31 USC 5311 SUBCHAPTER II) WITHOUT THE APPROVAL OF
THE SUPERINTENDENT.
  3. NOTWITHSTANDING ANY PROVISION OF LAW TO THE  CONTRARY,  NO  BANKING
INSTITUTION  SHALL  DENY BANKING SERVICES TO ANY MONEY SERVICES BUSINESS
WITHOUT PROVIDING SUCH MONEY SERVICES BUSINESS AN  OPPORTUNITY  TO  MEET
ANY  REASONABLE  REQUIREMENTS SET BY THE BANKING INSTITUTION FOR OPENING
AND MAINTAINING SUCH SERVICES.
  4. THE BANKING INSTITUTION SHALL PROVIDE TO THE SUPERINTENDENT A WRIT-
TEN STATEMENT SETTING FORTH IN REASONABLE  DETAIL  THE  REASON  FOR  THE
DENIAL  OF  SUCH  BANKING  SERVICES TO ANY MONEY SERVICE BUSINESS.  SUCH
WRITTEN STATEMENT SHALL BE REVIEWED BY  THE  SUPERINTENDENT  WHO,  AFTER
SUCH REVIEW, MAY DIRECT THE BANKING INSTITUTION TO OFFER SERVICES IF THE
SUPERINTENDENT FINDS:
  (A)  THE  MONEY  SERVICES BUSINESS POSSESSES ADEQUATE COMPLIANCE SAFE-
GUARDS AS DETERMINED BY ITS MOST RECENT STATE AUDIT;
  (B) THE BANKING INSTITUTION MEETS THE  REQUIREMENTS  OUTLINED  IN  THE
"INTERAGENCY  INTERPRETATIVE  GUIDANCE  ON PROVIDING BANKING SERVICES TO
MONEY SERVICES BUSINESSES OPERATING IN THE UNITED STATES" BY THE  FINAN-
CIAL  CRIMES  ENFORCEMENT NETWORK (FINCEN) OF THE UNITED STATES TREASURY
DEPARTMENT; AND
  (C) THE BANKING INSTITUTION, AT THE TIME OF THE REVIEW, DID NOT HOLD A
DISPROPORTIONATE AMOUNT OF MONEY SERVICES BUSINESS ACCOUNTS.
  S 3. This act shall take effect immediately.