NY State Senate Bill 2009-S4827

Archive: Last Bill Status - In Senate Committee Banks 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

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to banks
May 27, 2009	reported and committed to codes
Apr 27, 2009	referred to banks

2009-S4827 (ACTIVE) - Details

Current Committee:: Senate Banks
Law Section:: Banking Law
Laws Affected:: Add §44-b, Bank L

2009-S4827 (ACTIVE) - Summary

Provides civil enforcement and penalties for operations in violation of the banking law which are not authorized by the superintendent of banking.

2009-S4827 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S4827

 TITLE OF BILL :
An act to amend the banking law, in relation to the enforcement of
provisions relating to unlicensed operations


 PURPOSE :
This bill would provide the Banking Department with the authority to
undertake civil enforcement proceedings and impose civil penalties
against persons who are violating the Banking Law by operating without
the required banking charter or financial service license.

 SUMMARY :
This bill adds a new Section 44-b to the Banking Law to authorize the
Banking Department to issue cease and desist orders and seek civil
restitution from persons who are violating the Banking Law by
operating without the required banking charter or financial service
license. Civil penalties of up to $5,000 per day may be imposed for
each violation, and the person may also be ordered to make restitution
to those who are affected by such violation.

 JUSTIFICATION :
New York State has established a comprehensive system for regulating,
examining and overseeing the activities and operations of banking
institutions and financial service companies.  This regulatory system

is important for the promotion and protection of the financial system,
and for ensuring the protection of consumers.

However, there continue to be concerns and some problems with persons
performing such financial activities without the required approval and
oversight of the Banking Department.  Licensing and regulation are
crucial for the protection of consumers.  Because some entities may be
avoiding regulation and not complying with rules established to
protect consumers, there is a much greater likelihood that consumers
will be defrauded and that the entity will be engaged in other illegal
activities.

Although operating without the required authorization under the
Banking Law is already a crime, the current system is not always
adequate to protect the public. Therefore, this legislation will
complement the existing criminal penalties by giving the Banking
Department the ability to assess and enforce specific sanctions
against persons and entities who violate the Banking Law by operating
without the required charter or license. This may be a more
appropriate approach in certain situations to ensure compliance with
the law. This new mechanism will serve as an additional deterrent to
violations and will result in meaningful sanctions when necessary.
This will help protect consumers and the integrity of the financial
system.

This bill is modeled after Chapter 615 of 2003, which established a
similar civil enforcement process to enable the State Education
Department to take action against individuals engaged in the
unauthorized practice of a licensed profession.

 LEGISLATIVE HISTORY :
Bill S.2864: passed Senate in 2007 and 2008
Bill S.2860 of 2005-06:  passed Senate in 2005 and 2006

 FISCAL IMPACT :
Minimal. Enforcement actions may result in fine revenues to the State.

 EFFECTIVE DATE :
Immediately.

2009-S4827 (ACTIVE) - Bill Text download pdf

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

                                  4827

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             April 27, 2009
                               ___________

Introduced  by  Sen.  FARLEY -- 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  the  enforcement  of
  provisions relating to unlicensed operations

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

  Section 1.  The banking law is amended by adding a new section 44-b to
read as follows:
  S 44-B.  CIVIL ENFORCEMENT PROCEEDINGS AND CIVIL PENALTIES.  1.  ISSU-
ANCE  OF  CEASE AND DESIST ORDER. WHENEVER THE DEPARTMENT HAS REASONABLE
CAUSE TO BELIEVE THAT ANY PERSON HAS  VIOLATED  ANY  PROVISION  OF  THIS
CHAPTER  BY  OPERATING  WITHOUT THE REQUIRED AUTHORIZATION OF THE SUPER-
INTENDENT, THE DEPARTMENT MAY ISSUE AND SERVE UPON SUCH PERSON A  NOTICE
TO  CEASE  AND  DESIST  FROM SUCH VIOLATION. SUCH CEASE AND DESIST ORDER
SHALL BE SERVED PERSONALLY BY THE DEPARTMENT. IF  PERSONAL  SERVICE  CAN
NOT BE MADE AFTER DUE DILIGENCE AND SUCH FACT IS CERTIFIED UNDER OATH, A
COPY  OF  THE  ORDER  SHALL  BE  MADE  BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO THE PERSON'S LAST KNOWN ADDRESS BY THE DEPARTMENT.
  2. CONTENTS OF CEASE AND DESIST ORDER.  THE  CEASE  AND  DESIST  ORDER
SHALL  BE IN WRITING AND SHALL DESCRIBE WITH PARTICULARITY THE NATURE OF
THE VIOLATION, INCLUDING  A  REFERENCE  OF  THE  SPECIFIC  PROVISION  OR
PROVISIONS  OF  LAW  ALLEGED  TO  HAVE BEEN VIOLATED AND AN ORDER TO THE
RESPONDENT TO CEASE ANY UNLAWFUL ACTIVITY. THE CEASE  AND  DESIST  ORDER
SHALL  ADVISE  THE  RESPONDENT  (A) OF THE RIGHT TO CONTEST THE ORDER BY
REQUESTING A HEARING WITHIN THIRTY DAYS OF THE SERVICE OF THE CEASE  AND
DESIST  ORDER  BEFORE A HEARING OFFICER DESIGNATED BY THE DEPARTMENT (B)
OF THE RIGHT TO REQUEST A STAY OF THE CEASE AND DESIST ORDER AT THE TIME
A HEARING IS REQUESTED AND (C) SHALL SET FORTH THE  RESPONDENT'S  RIGHTS
AT SUCH A HEARING PURSUANT TO SUBDIVISION FIVE OF THIS SECTION.
  3.  CIVIL PENALTIES.   CIVIL PENALTIES UP TO FIVE THOUSAND DOLLARS PER
DAY MAY BE IMPOSED FOR EACH VIOLATION AND THE RESPONDENT MAY BE  ORDERED

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10520-01-9

S. 4827                             2

TO  MAKE  RESTITUTION  TO ANY PERSON WHO HAS AN INTEREST IN ANY MONEY OR
PROPERTY, EITHER REAL OR PERSONAL,  ACQUIRED  BY  THE  RESPONDENT  AS  A
RESULT  OF  A  VIOLATION.   WHENEVER THE DEPARTMENT CONCLUDES THAT CIVIL
PENALTIES  AND/OR RESTITUTION MAY BE WARRANTED BECAUSE OF THE EGREGIOUS-
NESS OF THE UNLAWFUL ACTIVITY, IT MAY SERVE, ALONG WITH  THE  CEASE  AND
DESIST  ORDER,  A  NOTICE  OF  A  HEARING ON THE ALLEGATIONS OF UNLAWFUL
ACTIVITY AND THE DEPARTMENT'S INTENTION TO ORDER THE RESPONDENT TO  MAKE
RESTITUTION AND/OR IMPOSE A CIVIL PENALTY. THE NOTICE SHOULD SPECIFY THE
CIVIL PENALTY SOUGHT FOR EACH VIOLATION.
  4.  REQUEST FOR HEARING. IF THE RESPONDENT TO A CEASE AND DESIST ORDER
CONTESTS THE CEASE AND DESIST ORDER,  THE  RESPONDENT  SHALL  REQUEST  A
HEARING CONDUCTED BY THE DEPARTMENT WITHIN THIRTY DAYS OF THE RECEIPT OF
THE  CEASE AND DESIST ORDER.  SUCH A HEARING SHALL BE SCHEDULED, AND THE
REQUESTING PARTY NOTIFIED OF  THE  DATE,  WITHIN  FIFTEEN  DAYS  OF  THE
RECEIPT OF THE REQUEST FOR A HEARING.  IF THE RESPONDENT REQUESTS A STAY
OF  THE  CEASE  AND  DESIST  ORDER,  THE HEARING OFFICER SHALL DETERMINE
WHETHER THE CEASE AND DESIST ORDER SHOULD BE STAYED IN WHOLE OR IN  PART
WITHIN  FIVE  WORKING DAYS OF THE REQUEST FOR A STAY. THE RESPONDENT MAY
FILE A WRITTEN ANSWER TO THE CEASE AND DESIST ORDER PRIOR TO  THE  HEAR-
ING.  A STENOGRAPHIC RECORD OF THE HEARING SHALL BE MADE.
  5. CONDUCT OF HEARING. THE EVIDENCE IN SUPPORT OF THE CEASE AND DESIST
ORDER SHALL BE PRESENTED BY AN ATTORNEY FOR THE DEPARTMENT. THE RESPOND-
ENT MAY APPEAR PERSONALLY AND MAY BE REPRESENTED BY COUNSEL AT THE HEAR-
ING,  MAY  PRODUCE  WITNESSES  AND  EVIDENCE IN HIS OR HER BEHALF AT THE
HEARING, MAY  CROSS-EXAMINE  WITNESSES  AND  EXAMINE  EVIDENCE  PRODUCED
AGAINST HIM OR HER AT THE HEARING, AND MAY ISSUE SUBPOENAS IN ACCORDANCE
WITH  SECTION  THREE  HUNDRED FOUR OF THE STATE ADMINISTRATIVE PROCEDURE
ACT.  THE HEARING OFFICER SHALL NOT BE BOUND BY THE RULES  OF  EVIDENCE,
BUT  HIS  OR  HER  DETERMINATION  THAT  A  VIOLATION OF THIS CHAPTER HAS
OCCURRED SHALL BE BASED ON A PREPONDERANCE OF THE  EVIDENCE.  A  HEARING
WHICH  HAS BEEN INITIATED SHALL NOT BE DISCONTINUED BECAUSE OF THE DEATH
OR INCAPACITY OF THE HEARING OFFICER. IN THE EVENT OF  A  HEARING  OFFI-
CER'S  DEATH  OR  INCAPACITY  TO  SERVE,  A NEW HEARING OFFICER SHALL BE
DESIGNATED BY THE DEPARTMENT TO CONTINUE THE HEARING.  THE  NEW  HEARING
OFFICER  SHALL  AFFIRM IN WRITING THAT HE OR SHE HAS READ AND CONSIDERED
EVIDENCE AND TRANSCRIPTS OF THE PRIOR PROCEEDINGS.
  6. RESULTS OF HEARING. THE HEARING OFFICER DESIGNATED BY  THE  DEPART-
MENT  SHALL  RENDER A WRITTEN REPORT WHICH SHALL INCLUDE (A) FINDINGS OF
FACT, (B) A DETERMINATION ON EACH VIOLATION ALLEGED  IN  THE  CEASE  AND
DESIST  ORDER,  (C)  A DETERMINATION AS TO WHETHER TO ACCEPT, REJECT, OR
MODIFY ANY OF THE TERMS OF THE CEASE AND DESIST ORDER  IN  WHOLE  OR  IN
PART,  AND  (D) THE CIVIL PENALTY IMPOSED, IF ANY. A COPY OF THE HEARING
OFFICER'S WRITTEN REPORT SHALL BE SERVED  UPON  THE  RESPONDENT  WITH  A
NOTICE SETTING FORTH THE RESPONDENT'S RIGHTS TO AN ADMINISTRATIVE APPEAL
WITHIN TEN DAYS OF THE CONCLUSION OF THE HEARING.
  7. APPEALS. THE DECISION OF THE HEARING OFFICER SHALL BE FINAL, EXCEPT
THAT  IT MAY BE APPEALED TO THE SUPERINTENDENT WITHIN TWENTY DAYS OF THE
RECEIPT OF THE HEARING OFFICER'S REPORT.   THE INITIATION OF  AN  APPEAL
SHALL NOT IN AND OF ITSELF AFFECT THE VALIDITY OR TERMS OF THE CEASE AND
DESIST  ORDER.    THE  REVIEW  SHALL  BE BASED ON THE TRANSCRIPT AND THE
REPORT OF THE HEARING OFFICER. THE RESPONDENT MAY APPEAR AT THE MEETING,
AND THE  SUPERINTENDENT  MAY  REQUIRE  THE  RESPONDENT  TO  APPEAR.  THE
RESPONDENT  MAY  BE  REPRESENTED BY COUNSEL. THE DEPARTMENT SHALL NOTIFY
THE RESPONDENT AT LEAST TEN DAYS BEFORE THE MEETING (A) OF THE TIME  AND
PLACE OF THE MEETING, (B) OF THE RIGHT TO APPEAR, (C) OF THE RIGHT TO BE
REPRESENTED BY COUNSEL, (D) WHETHER OR NOT THE RESPONDENT IS REQUIRED TO

S. 4827                             3

APPEAR, AND (E) OF SUCH OTHER INFORMATION AS MAY BE CONSIDERED APPROPRI-
ATE.  AFTER THE MEETING, THE SUPERINTENDENT (I) SHALL CONSIDER THE TRAN-
SCRIPT AND THE REPORT OF THE HEARING OFFICER, (II) SHALL DECIDE  WHETHER
THE  RESPONDENT  HAS VIOLATED EACH CHARGE IN THE CEASE AND DESIST ORDER,
(III) SHALL DECIDE WHAT PENALTIES, IF ANY, TO IMPOSE  AS  PRESCRIBED  IN
THIS  SECTION,  AND  (IV)  SHALL  ISSUE AN ORDER TO CARRY OUT HIS OR HER
DECISIONS.  THE ORDER SHALL BE SERVED UPON THE RESPONDENT PERSONALLY  OR
BY  CERTIFIED  MAIL  TO  THE  RESPONDENT'S  LAST  KNOWN ADDRESS AND SUCH
SERVICE SHALL BE EFFECTIVE AS OF THE DATE OF  THE  PERSONAL  SERVICE  OR
FIVE  DAYS AFTER MAILING BY CERTIFIED MAIL.  THE DECISIONS OF THE SUPER-
INTENDENT UNDER THIS SECTION MAY BE REVIEWED IN A PROCEEDING PURSUANT TO
ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES BROUGHT IN THE
SUPREME COURT, ALBANY COUNTY. SUCH DECISIONS  SHALL  NOT  BE  STAYED  OR
ENJOINED EXCEPT UPON APPLICATION TO SUCH SUPREME COURT PURSUANT TO ARTI-
CLE  SIXTY-THREE  OF THE CIVIL PRACTICE LAW AND RULES WITH NOTICE TO THE
DEPARTMENT AND TO THE ATTORNEY GENERAL.
  8. GENERAL ENFORCEMENT OF CEASE AND DESIST ORDER. IN  ANY  CASE  WHERE
THE  CEASE  AND DESIST ORDER IS CONFIRMED BY THE SUPERINTENDENT OR WHERE
THE RESPONDENT DOES NOT REQUEST AN  ADMINISTRATIVE  HEARING  WITHIN  THE
ALLOTTED  TIME  OR  DOES  NOT APPEAL THE DECISION OF THE HEARING OFFICER
WITHIN THE ALLOTTED TIME, AN ACTION OR PROCEEDING MAY BE  FILED  IN  THE
NAME  OF  THE STATE OF NEW YORK SEEKING A RESTRAINING ORDER, INJUNCTION,
APPROPRIATE WRIT, OR JUDGMENT AGAINST ANY PERSON WHO VIOLATES THE  TERMS
OF THE CEASE AND DESIST ORDER.
  9.  SPECIAL ENFORCEMENT OF CIVIL MONETARY PENALTIES.  PROVIDED THAT NO
APPEAL IS PENDING ON THE IMPOSITION OF SUCH CIVIL PENALTY, IN THE  EVENT
SUCH CIVIL PENALTY IMPOSED BY THE DEPARTMENT REMAINS UNPAID, IN WHOLE OR
IN  PART, MORE THAN FORTY-FIVE DAYS AFTER WRITTEN DEMAND FOR PAYMENT HAS
BEEN SENT BY FIRST CLASS MAIL TO THE ADDRESS OF THE RESPONDENT, A NOTICE
OF IMPENDING DEFAULT JUDGMENT SHALL BE SENT BY FIRST CLASS MAIL  TO  THE
RESPONDENT.  THE  NOTICE  OF IMPENDING DEFAULT JUDGMENT SHALL ADVISE THE
RESPONDENT: (A) THAT A CIVIL PENALTY WAS IMPOSED ON THE RESPONDENT;  (B)
THE  DATE  THE PENALTY WAS IMPOSED; (C) THE AMOUNT OF THE CIVIL PENALTY;
(D) THE AMOUNT OF THE CIVIL PENALTY THAT REMAINS UNPAID AS OF  THE  DATE
OF  THE  NOTICE;  (E)  THE  VIOLATIONS  FOR  WHICH THE CIVIL PENALTY WAS
IMPOSED; AND (F) THAT A JUDGMENT BY  DEFAULT  WILL  BE  ENTERED  IN  THE
SUPREME COURT, ALBANY COUNTY UNLESS THE DEPARTMENT RECEIVES FULL PAYMENT
OF  ALL CIVIL PENALTIES DUE WITHIN TWENTY DAYS OF THE DATE OF THE NOTICE
OF IMPENDING DEFAULT JUDGMENT. IF  FULL  PAYMENT  SHALL  NOT  HAVE  BEEN
RECEIVED  BY  THE DEPARTMENT WITHIN THIRTY DAYS OF MAILING OF THE NOTICE
OF IMPENDING DEFAULT JUDGMENT, THE DEPARTMENT  SHALL  PROCEED  TO  ENTER
WITH  SUCH  COURT  A  STATEMENT  OF  THE DEFAULT JUDGMENT CONTAINING THE
AMOUNT OF THE PENALTY OR PENALTIES REMAINING DUE AND UNPAID, ALONG  WITH
PROOF OF MAILING OF THE NOTICE OF IMPENDING DEFAULT JUDGMENT. THE FILING
OF SUCH JUDGMENT SHALL HAVE THE FULL FORCE AND EFFECT OF A DEFAULT JUDG-
MENT  DULY  DOCKETED  WITH SUCH COURT PURSUANT TO THE CIVIL PRACTICE LAW
AND RULES AND SHALL IN ALL RESPECTS BE GOVERNED BY THAT CHAPTER AND  MAY
BE ENFORCED IN THE SAME MANNER AND WITH THE SAME EFFECT AS THAT PROVIDED
BY LAW IN RESPECT TO EXECUTION ISSUED AGAINST PROPERTY UPON JUDGMENTS OF
A  COURT  OF  RECORD.    A JUDGMENT ENTERED PURSUANT TO THIS SUBDIVISION
SHALL REMAIN IN FULL FORCE AND EFFECT FOR  EIGHT  YEARS  NOTWITHSTANDING
ANY OTHER PROVISION OF LAW.
  S 2. This act shall take effect immediately.

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Senate Bill S4827

Sponsored By

Archive: Last Bill Status - In Senate Committee Banks Committee

2009-S4827 (ACTIVE) - Details

2009-S4827 (ACTIVE) - Summary

2009-S4827 (ACTIVE) - Sponsor Memo

2009-S4827 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S4827

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Sponsored By

Hugh T. Farley

Archive: Last Bill Status - In Senate Committee Banks Committee

2009-S4827 (ACTIVE) - Details

2009-S4827 (ACTIVE) - Summary

2009-S4827 (ACTIVE) - Sponsor Memo

2009-S4827 (ACTIVE) - Bill Text download pdf

Comments