S T A T E O F N E W Y O R K
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5946--B
2009-2010 Regular Sessions
I N S E N A T E
June 19, 2009
___________
Introduced by Sen. FOLEY -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee -- recommitted to the Committee on Banks in accord-
ance with Senate Rule 6, sec. 8 -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee
AN ACT to amend the banking law, in relation to establishing the empire
state commission to improve the regulation of financial services
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 article 17 to
read as follows:
ARTICLE 17
EMPIRE STATE COMMISSION TO IMPROVE THE REGULATION OF
FINANCIAL SERVICES
SECTION 9030. LEGISLATIVE INTENT.
9031. EMPIRE STATE COMMISSION TO IMPROVE THE REGULATION OF
FINANCIAL SERVICES.
9032. MEMBERS.
9033. PURPOSES OF THE COMMISSION.
S 9030. LEGISLATIVE INTENT. NEW YORK IS THE HISTORIC FINANCIAL CAPITAL
OF THE WORLD, AND TO MAINTAIN ITS PLACE IT IS ESSENTIAL TO HAVE A
MODERNIZED AND EFFICIENT REGULATORY SYSTEM. THERE HAVE BEEN FUNDAMENTAL
CHANGES IN THE GLOBAL FINANCIAL MARKETS SINCE THE LEGISLATURE LAST
COMPREHENSIVELY EXAMINED NEW YORK'S STATUTORY FRAMEWORK FOR THE REGU-
LATION OF THE FINANCIAL INDUSTRY. THE COMMERCIAL ACTIVITIES OF FINANCIAL
SERVICES FIRMS HAVE INCREASED IN SCOPE AND COMPLEXITY, BEYOND THE EFFEC-
TIVE OVERSIGHT AND MANAGEMENT OF EXISTING REGULATORY SCHEMES.
IN THE WAKE OF THE NATIONAL AND STATE FINANCIAL CRISES AND SCANDALS,
THERE IS WIDESPREAD INTEREST FROM ELECTED OFFICIALS, CONSUMER ADVOCATES
AND OTHER REFORMERS TO ENHANCE AND STRENGTHEN THE STATE'S FINANCIAL
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14291-07-0
S. 5946--B 2
REGULATIONS TO PREVENT SIMILAR CRISES IN THE FUTURE, AND SOFTEN THE
IMPACT OF THE CURRENT CRISES ON VICTIMS AND COMMUNITIES. GIVEN THE
FRAGILITY OF MANY FINANCIAL INSTITUTIONS, THE ASSEMBLY AND SENATE MUST
RESTORE CONFIDENCE IN NEW YORK'S FINANCIAL AND REGULATORY SCHEME AND
PROTECT NEW YORKERS AGAINST FUTURE ABUSES. STATE ACTIONS AND
DECISION-MAKING REGARDING THE REGULATION OF FINANCIAL SERVICES SHOULD BE
BASED ON CLEARLY IDENTIFIED POLICIES AND LONG-RANGE ECONOMIC OBJECTIVES
AND STRATEGIES.
S 9031. EMPIRE STATE COMMISSION TO IMPROVE THE REGULATION OF FINANCIAL
SERVICES. THE EMPIRE STATE COMMISSION TO IMPROVE THE REGULATION OF
FINANCIAL SERVICES IS HEREBY ESTABLISHED TO PROMOTE INNOVATIVE AND
EFFECTIVE FINANCIAL REGULATION, AND TO ENHANCE CONSUMER PROTECTION.
S 9032. MEMBERS. 1. THE COMMISSION SHALL CONSIST OF TWENTY-SIX TOTAL
MEMBERS; TEN SHALL BE APPOINTED BY THE GOVERNOR, FIVE SHALL BE APPOINTED
BY THE TEMPORARY PRESIDENT OF THE SENATE, FIVE SHALL BE APPOINTED BY THE
SPEAKER OF THE ASSEMBLY, TWO SHALL BE APPOINTED BY THE MINORITY LEADER
OF THE SENATE, TWO SHALL BE APPOINTED BY THE MINORITY LEADER OF THE
ASSEMBLY, THE ATTORNEY GENERAL OR HIS OR HER REPRESENTATIVE AND THE
STATE COMPTROLLER OR HIS OR HER REPRESENTATIVE. THE GOVERNOR SHALL
APPOINT A CHAIR OF THE COMMISSION. THE MEMBERS OF THE COMMISSION SHALL
RECEIVE NO COMPENSATION FOR THEIR SERVICES, HOWEVER, THEY SHALL BE
ALLOWED THEIR ACTUAL AND NECESSARY EXPENSES INCURRED IN THE PERFORMANCE
OF THEIR DUTIES.
2. THE CHAIR OF THE COMMISSION MAY DESIGNATE AN EXECUTIVE STAFF REPRE-
SENTATIVE TO PARTICIPATE ON THE COMMISSION ON THEIR BEHALF. A MAJORITY
OF THE MEMBERS OF THE COMMISSION SHALL CONSTITUTE A QUORUM, AND ALL
ACTIONS AND RECOMMENDATIONS OF THE COMMISSION SHALL REQUIRE APPROVAL OF
A MAJORITY OF THE TOTAL MEMBERS OF THE COMMISSION.
3. THE APPOINTED MEMBERS OF THE COMMISSION SHALL BE INDIVIDUALS WITH
SIGNIFICANT EXPERIENCE IN THE FINANCIAL SERVICES INDUSTRY.
S 9033. PURPOSES OF THE COMMISSION. 1. IT SHALL BE THE DUTY OF THE
COMMISSION TO:
(A) CONDUCT A COMPREHENSIVE REVIEW OF NEW YORK'S FINANCIAL SERVICES,
STATUTES, RULES, REGULATIONS AND POLICIES IN ORDER TO MODERNIZE REGU-
LATIONS AND REDUCE UNNECESSARY BURDENS AND COSTS ON BUSINESSES, INCREASE
OPPORTUNITIES FOR VICTIM ASSISTANCE OR RECOVERY, AND TO STRENGTHEN
ANTI-FRAUD LAWS AND INCREASE ENFORCEMENT;
(B) EXPLORE INSTITUTING, WHERE APPROPRIATE, A "PRINCIPLES-BASED" REGU-
LATORY STRUCTURE, THAT RELIES ON PRINCIPLES AND OUTCOME-FOCUSED RULES
RATHER THAN DETAILED RULES PRESCRIBING HOW OUTCOMES MUST BE ACHIEVED,
RESULTING IN A CLOSER FIT FOR FIRMS BETWEEN MEETING BUSINESS OBJECTIVES
AND COMPLYING WITH REGULATORY REQUIREMENTS;
(C) IDENTIFY WAYS IN WHICH REGULATORY POWERS MAY BE INTEGRATED, RATIO-
NALIZED, AND CHANGED IN ORDER TO PROMOTE ECONOMIC INNOVATION AND PROTECT
CONSUMERS;
(D) RECOMMEND SPECIFIC CHANGES IN STATUTES AND REGULATIONS THAT
PROMOTE COMPETITION AND THE GROWTH OF BUSINESS, WHILE EFFECTIVELY
PROTECTING BOTH CONSUMERS AND BUSINESSES FROM UNFAIR OR UNETHICAL PRAC-
TICES;
(E) ENSURE THAT ALL STATUTES AND REGULATIONS SERVE A BENEFICIAL
PURPOSE AND DO NOT IMPOSE COSTS HIGHER THAN ANY BENEFITS THEY PROVIDE;
(F) RECOMMEND SPECIFIC REFORMS TO DEVELOP THE CAPABILITIES OF REGULA-
TORY AUTHORITIES TO ENSURE THAT THEY HAVE THE EXPERIENCE, EXPERTISE,
JUDGMENT AND KNOWLEDGE TO MAKE PRINCIPLES-BASED REGULATION WORK;
S. 5946--B 3
(G) AS PART OF UNDERTAKING ITS REVIEW AND AT ITS DISCRETION, REQUEST
DOCUMENTS, CONDUCT PUBLIC HEARINGS, HEAR THE TESTIMONY OF WITNESSES, AND
TAKE ANY OTHER ACTION IT DEEMS NECESSARY TO CARRY OUT ITS FUNCTIONS;
(H) CONSULT WITH AND SEEK TO MAXIMIZE INPUT FROM STATE DEPARTMENTS,
AGENCIES, AND PUBLIC AUTHORITIES, AS WELL AS PRIVATE AND PUBLIC ENTI-
TIES, WITH RESPECT TO THE DEVELOPMENT OF THEIR RECOMMENDATIONS; AND
(I) ISSUE SUCH INTERIM REPORTS AS IT DEEMS NECESSARY AND APPROPRIATE,
AND SHALL ISSUE ITS FINAL REPORT AND RECOMMENDATIONS ON OR BEFORE DECEM-
BER THIRTY-FIRST, TWO THOUSAND ELEVEN. ALL REPORTS SHALL BE SUBMITTED TO
THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE SENATE, THE SPEAKER OF THE
ASSEMBLY, THE MINORITY LEADER OF THE SENATE, THE MINORITY LEADER OF THE
ASSEMBLY AND THE CHAIRS OF THE SENATE AND ASSEMBLY BANKS COMMITTEES.
2. EVERY AGENCY, DEPARTMENT, OFFICE, DIVISION OR PUBLIC AUTHORITY OF
THIS STATE, OR ANY SUBDIVISION THEREOF, SHALL COOPERATE WITH THE COMMIS-
SION AND FURNISH SUCH INFORMATION AND ASSISTANCE AS THE COMMISSION
DETERMINES IS REASONABLY NECESSARY TO ACCOMPLISH ITS PURPOSE.
S 2. This act shall take effect one year after it shall have become a
law.
