S T A T E   O F   N E W   Y O R K
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                                  8341

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                              June 14, 2011
                               ___________

Introduced by M. of A. DINOWITZ -- read once and referred to the Commit-
  tee on Consumer Affairs and Protection

AN  ACT  to  amend  the  general  business  law  and the banking law, in
  relation to providing for budget planning and debt settlement services

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

  Section  1.  Section  455  of  the general business law, as amended by
chapter 629 of the laws of 2002, subdivisions 1  and  4  as  amended  by
chapter 456 of the laws of 2006, is amended to read as follows:
  S 455. Definitions. 1. Budget planning, as used in this article, means
the making of a contract between a person or entity engaged in the busi-
ness of budget planning with a particular debtor whereby:
  (i)  the  debtor agrees to pay a sum or sums of money in any manner or
form and the person or entity engaged in the business of budget planning
distributes, or supervises, coordinates or controls the distribution of,
or has a contractual relationship with another  person  or  entity  that
distributes,  or  supervises,  coordinates or controls such distribution
of, the same among certain specified  creditors  in  accordance  with  a
PERIODIC PAYMENT plan agreed upon; and
  (ii)  the debtor agrees to pay to such person or entity, or such other
person  or  entity  that  distributes,  or  supervises,  coordinates  or
controls  such  distribution  of,  a  sum or sums of money, any valuable
consideration for such services or for any other  services  rendered  in
connection therewith; PROVIDED, HOWEVER, THAT "BUDGET PLANNING" DOES NOT
INCLUDE  "DEBT  SETTLEMENT  SERVICES" AS DEFINED IN SECTION FIVE HUNDRED
EIGHTY-EIGHT-A OF THE BANKING LAW. For the purposes of this  article,  a
person or entity shall be considered as engaged in the business of budg-
et  planning  in New York, and subject to this article and the licensing
and other requirements of article twelve-C of the banking law,  if  such
person  or  entity  solicits  budget planning business within this state

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00513-01-1

              

A. 8341                             2

and, in connection with such solicitation, enters into  a  contract  for
budget planning with an individual then resident in this state.
  2.  Person, as used in this article, shall not include a person admit-
ted to practice law in this state.
  3. Entity, as used in this article, shall not include a firm, partner-
ship, professional  corporation,  or  other  organization,  all  of  the
members  or  principals  of  which  are admitted to practice law in this
state.
  4. [Person or entity as used in this article shall not include a  type
B  not-for-profit  corporation  as defined in section two hundred one of
the not-for-profit corporation law of this state, or an entity  incorpo-
rated  in  another  state  and  having  a similar not-for-profit status,
licensed by the superintendent, to engage  in  the  business  of  budget
planning as defined in this section.
  5.] Any attorney licensed to practice law in this state who is engaged
in budget planning shall:
  (a) negotiate directly with creditors on behalf of the client;
  (b)  ensure  that all moneys received from the client are deposited in
the attorney's account maintained for client funds;
  (c) pay creditors from such account; and
  (d) offer budget planning services through the same legal entity  that
the attorney uses to practice law.
  S  2.  Section  457 of the general business law, as amended by chapter
629 of the laws of 2002, is amended to read as follows:
  S 457. [Penalty] PENALTIES FOR VIOLATION OF THIS ARTICLE; CRIMINAL AND
CIVIL.   (A) Whoever either individually  or  as  officer,  director  or
employee  of  any person, firm, association or corporation, violates any
of the provisions of the preceding section shall be guilty of a CLASS  A
misdemeanor [for each such violation] PUNISHABLE AS PROVIDED IN ARTICLES
SEVENTY AND EIGHTY OF THE PENAL LAW.
  (B)  WHENEVER THERE SHALL BE A VIOLATION OF THIS  ARTICLE, APPLICATION
MAY BE MADE BY THE ATTORNEY GENERAL IN THE NAME OF  THE  PEOPLE  OF  THE
STATE OF NEW YORK TO A COURT OR JUSTICE HAVING JURISDICTION BY A SPECIAL
PROCEEDING  TO  ISSUE AN INJUNCTION, AND UPON NOTICE TO THE DEFENDANT OF
NOT LESS THAN FIVE DAYS, TO ENJOIN AND RESTRAIN THE CONTINUANCE OF  SUCH
VIOLATIONS;  AND  IF IT SHALL APPEAR TO THE SATISFACTION OF THE COURT OR
JUSTICE THAT THE DEFENDANT HAS,  IN  FACT,  VIOLATED  THIS  ARTICLE,  AN
INJUNCTION  MAY  BE  ISSUED  BY  SUCH  COURT  OR  JUSTICE, ENJOINING AND
RESTRAINING ANY FURTHER VIOLATION,  WITHOUT  REQUIRING  PROOF  THAT  ANY
PERSON HAS, IN FACT, BEEN INJURED OR DAMAGED THEREBY. IN CONNECTION WITH
ANY  SUCH  PROPOSED  APPLICATION,  THE ATTORNEY GENERAL IS AUTHORIZED TO
TAKE PROOF AND MAKE A DETERMINATION OF THE RELEVANT FACTS AND  TO  ISSUE
SUBPOENAS  IN ACCORDANCE WITH THE CIVIL PRACTICE LAW AND RULES. WHENEVER
THE COURT SHALL DETERMINE THAT  A  VIOLATION  OF  SECTION  FOUR  HUNDRED
FIFTY-SIX  OF  THIS  ARTICLE  HAS OCCURRED, THE COURT MAY IMPOSE A CIVIL
PENALTY OF NOT MORE THAN FIVE  HUNDRED  DOLLARS  PER  CONTRACT  MADE  IN
VIOLATION OF SUCH SECTION, NOT TO EXCEED ONE HUNDRED THOUSAND DOLLARS.
  S  3. Section 579 of the banking law, as amended by chapter 629 of the
laws of 2002, is amended to read as follows:
  S 579. Doing business without license prohibited. [Only a type B  not-
for-profit  corporation  as  defined  in  section two hundred one of the
not-for-profit corporation law of this state, or an entity  incorporated
in  another state and having a similar not-for-profit status,] NO PERSON
OR ENTITY shall engage in the business of budget planning as defined  in
subdivision  one of section four hundred fifty-five of the general busi-

A. 8341                             3

ness law [of this state] except as authorized by this article and  with-
out first obtaining a license from the superintendent.
  S  4.  Subdivision  2 of section 584-a of the banking law, as added by
chapter 629 of the laws of 2002, is amended to read as follows:
  2. the total fees agreed to for such services, including  any  adjust-
ments  for  estimated  available  rebates  from creditors, provided that
nothing in this subdivision shall require a licensee  to  share  rebates
with  its  clients AND PROVIDED THAT ANY FEES OR CHARGES IMPOSED MUST BE
FAIR, REASONABLE AND EASILY UNDERSTOOD;
  S 5. Section 584-b of the banking law  is  amended  by  adding  a  new
subdivision 4-a to read as follows:
  4-A.    NO  LICENSEE SHALL IMPOSE ANY FEE OR CHARGE WHATSOEVER THAT IS
NOT FAIR, REASONABLE AND ABLE TO BE EASILY UNDERSTOOD.
  S 6. Section 585 of the banking law, as amended by chapter 629 of  the
laws of 2002, is amended to read as follows:
  S  585.  Superintendent  authorized  to  examine.  For  the purpose of
discovering violations of this article or securing information  lawfully
required  by  him  or her hereunder, the superintendent may at any time,
and as often as he or she may  determine,  either  personally  or  by  a
person duly designated by him or her, investigate the business and exam-
ine the books, accounts, records, and files used therein of every licen-
see  hereunder.  For that purpose the superintendent and his or her duly
designated representative shall have free  access  to  the  offices  and
place  of  business,  books, accounts, papers, records, files, safes and
vaults of all such licensees. The superintendent  and  any  person  duly
designated  by him or her shall have authority to require the attendance
of and to examine under oath all persons whose testimony he or  she  may
require  relative  to such business. The expenses incurred in making any
examination pursuant to this section shall be assessed against and  paid
by  the  licensee  so  examined,  except  that traveling and subsistence
expenses so incurred shall be charged against and paid by  licensees  in
such  proportions  as the superintendent shall deem just and reasonable,
and such proportionate charges shall be added to the assessment  of  the
other  expenses  incurred  upon each examination. Upon written notice by
the superintendent of the total amount of such assessment, the  licensee
shall become liable for and shall pay such assessment to the superinten-
dent.  If, upon review, the superintendent shall determine that the fees
or service charges set by  the  licensee  are  UNFAIR,  unreasonable  OR
UNCLEAR, he or she shall direct the licensee to make adjustments in said
fees  and  service charges in accordance with his or her findings, which
shall set forth a detailed factual basis and reasoning  supporting  such
finding.
  S  7.  Subdivision  10 of section 36 of the banking law, as amended by
chapter 472 of the laws of 2008, is amended to read as follows:
  10. All reports of examinations and investigations, correspondence and
memoranda concerning or arising out of  such  examination  and  investi-
gations,  including any duly authenticated copy or copies thereof in the
possession of any banking organization,  bank  holding  company  or  any
subsidiary  thereof  (as  such terms "bank holding company" and "subsid-
iary" are defined in article three-A of this chapter),  any  corporation
or  any  other  entity affiliated with a banking organization within the
meaning of subdivision six of this section and any  non-banking  subsid-
iary  of  a  corporation  or any other entity which is an affiliate of a
banking organization within the meaning of  subdivision  six-a  of  this
section,  foreign  banking corporation, licensed lender, licensed casher
of  checks,  licensed  mortgage  banker,  registered  mortgage   broker,

A. 8341                             4

licensed  sales  finance  company,  registered  mortgage  loan servicer,
licensed insurance  premium  finance  agency,  licensed  transmitter  of
money, licensed budget planner, LICENSED DEBT SETTLEMENT COMPANY, or the
department,  shall  be confidential communications, shall not be subject
to subpoena and shall not be made public unless, in the judgment of  the
superintendent,  the  ends  of  justice and the public advantage will be
subserved by the publication thereof, in which event the  superintendent
may publish or authorize the publication of a copy of any such report or
any  part  thereof  in  such  manner  as  may  be deemed proper. For the
purposes of this subdivision,  "reports  of  examinations  and  investi-
gations,  and any correspondence and memoranda concerning or arising out
of such examinations and investigations", includes any such materials of
a bank, insurance or securities regulatory agency or  any  unit  of  the
federal  government or that of this state any other state or that of any
foreign government which are considered confidential by such  agency  or
unit  and  which  are  in  the possession of the department or which are
otherwise confidential materials that have been shared by the department
with any such agency or unit and are in the possession of such agency or
unit.
  S 8. Subdivisions 1, 2, 3 and 5 of section  39  of  the  banking  law,
subdivisions  1,  2  and 5 as amended by chapter 123 of the laws of 2009
and subdivision 3 as amended by section 1 of part FF of  chapter  59  of
the laws of 2004, are amended to read as follows:
  1.  To  appear  and  explain  an apparent violation. Whenever it shall
appear to the superintendent that any banking organization, bank holding
company, registered mortgage broker, licensed  mortgage  banker,  regis-
tered   mortgage  loan  servicer,  licensed  mortgage  loan  originator,
licensed lender, licensed  casher  of  checks,  licensed  sales  finance
company, licensed insurance premium finance agency, licensed transmitter
of  money,  licensed  budget  planner, LICENSED DEBT SETTLEMENT COMPANY,
out-of-state state bank that maintains a branch or branches or represen-
tative or other offices in this state, or  foreign  banking  corporation
licensed  by  the  superintendent to do business or maintain a represen-
tative office in this state has violated any law or  regulation,  he  or
she may, in his or her discretion, issue an order describing such appar-
ent  violation  and  requiring  such  banking organization, bank holding
company, registered mortgage broker, licensed mortgage banker,  licensed
mortgage  loan  originator,  licensed lender, licensed casher of checks,
licensed sales finance company, licensed insurance premium finance agen-
cy, licensed transmitter of money,  licensed  budget  planner,  LICENSED
DEBT SETTLEMENT COMPANY, out-of-state state bank that maintains a branch
or branches or representative or other offices in this state, or foreign
banking  corporation  to  appear  before him or her, at a time and place
fixed in  said  order,  to  present  an  explanation  of  such  apparent
violation.
  2.  To discontinue unauthorized or unsafe and unsound practices. When-
ever it shall appear to the superintendent that  any  banking  organiza-
tion,  bank  holding company, registered mortgage broker, licensed mort-
gage banker, registered mortgage loan servicer, licensed  mortgage  loan
originator,  licensed  lender, licensed casher of checks, licensed sales
finance company, licensed insurance  premium  finance  agency,  licensed
transmitter  of money, licensed budget planner, LICENSED DEBT SETTLEMENT
COMPANY, out-of-state state bank that maintains a branch or branches  or
representative or other offices in this state, or foreign banking corpo-
ration  licensed  by  the superintendent to do business in this state is
conducting business in an unauthorized or unsafe and unsound manner,  he

A. 8341                             5

or  she  may,  in  his  or  her discretion, issue an order directing the
discontinuance of such unauthorized or unsafe and unsound practices, and
fixing a time and place at which such banking organization, bank holding
company,  registered  mortgage  broker, licensed mortgage banker, regis-
tered  mortgage  loan  servicer,  licensed  mortgage  loan   originator,
licensed  lender,  licensed  casher  of  checks,  licensed sales finance
company, licensed insurance premium finance agency, licensed transmitter
of money, licensed budget planner,  LICENSED  DEBT  SETTLEMENT  COMPANY,
out-of-state state bank that maintains a branch or branches or represen-
tative  or  other  offices in this state, or foreign banking corporation
may voluntarily appear before him or her to present any  explanation  in
defense of the practices directed in said order to be discontinued.
  3.  To  make  good  impairment of capital or to ensure compliance with
financial requirements. Whenever it shall appear to  the  superintendent
that  the  capital  or  capital  stock of any banking organization, bank
holding company or any subsidiary thereof which is  organized,  licensed
or  registered  pursuant  to this chapter, is impaired, or the financial
requirements imposed by subdivision one of section two hundred two-b  of
this  chapter  or  any  regulation  of the superintendent or the banking
board on any branch or agency of a foreign banking  corporation  or  the
financial  requirements imposed by this chapter or any regulation of the
superintendent or banking board on any licensed lender, registered mort-
gage broker,  licensed  mortgage  banker,  licensed  casher  of  checks,
licensed sales finance company, licensed insurance premium finance agen-
cy,  licensed  transmitter  of  money, licensed budget planner, LICENSED
DEBT SETTLEMENT COMPANY or private banker are not satisfied, he  or  she
may,  in his or her discretion, issue an order directing that such bank-
ing organization, bank holding company, branch or agency  of  a  foreign
banking corporation, registered mortgage broker, licensed mortgage bank-
er,  licensed  lender, licensed casher of checks, licensed sales finance
company, licensed insurance premium finance agency, licensed transmitter
of money, licensed budget planner, LICENSED DEBT SETTLEMENT  COMPANY  or
private  banker  make  good  such  deficiency forthwith or within a time
specified in such order.
  5. To keep books and accounts as prescribed. Whenever it shall  appear
to the superintendent that any banking organization, bank holding compa-
ny,  registered  mortgage  broker,  licensed mortgage banker, registered
mortgage loan servicer,  licensed  mortgage  loan  originator,  licensed
lender,  licensed  casher  of  checks,  licensed  sales finance company,
licensed insurance  premium  finance  agency,  licensed  transmitter  of
money, licensed budget planner, LICENSED DEBT SETTLEMENT COMPANY, agency
or  branch  of a foreign banking corporation licensed by the superinten-
dent to do business in this state, does not keep its books and  accounts
in  such  manner  as  to enable him or her to readily ascertain its true
condition, he or she may, in his  or  her  discretion,  issue  an  order
requiring  such  banking  organization, bank holding company, registered
mortgage broker, licensed  mortgage  banker,  registered  mortgage  loan
servicer,  licensed  mortgage loan originator, licensed lender, licensed
casher of checks, licensed sales  finance  company,  licensed  insurance
premium  finance  agency, licensed transmitter of money, licensed budget
planner, LICENSED DEBT SETTLEMENT COMPANY,  or  foreign  banking  corpo-
ration,  or  the officers or agents thereof, or any of them, to open and
keep such books or accounts as he or she may, in his or her  discretion,
determine  and prescribe for the purpose of keeping accurate and conven-
ient records of its transactions and accounts.

A. 8341                             6

  S 9. Paragraph (a) of subdivision 1 of section 44 of the banking  law,
as  amended  by  chapter  123 of the laws of 2009, is amended to read as
follows:
  (a) Without limiting any power granted to the superintendent under any
other provision of this chapter, the superintendent may, in a proceeding
after  notice  and a hearing, require any safe deposit company, licensed
lender, licensed casher  of  checks,  licensed  sales  finance  company,
licensed  insurance  premium  finance  agency,  licensed  transmitter of
money, licensed mortgage banker, registered  mortgage  broker,  licensed
mortgage  loan  originator,  registered  mortgage  loan  servicer  [or],
licensed budget planner OR LICENSED DEBT SETTLEMENT COMPANY  to  pay  to
the  people  of  this state a penalty for any violation of this chapter,
any regulation promulgated thereunder,  any  final  or  temporary  order
issued  pursuant  to  section thirty-nine of this article, any condition
imposed in writing by the superintendent or banking board in  connection
with  the  grant of any application or request, or any written agreement
entered into with the superintendent.
  S 10. The banking law is amended by adding a new article 12-CC to read
as follows:
                             ARTICLE XII-CC
                        DEBT SETTLEMENT COMPANIES
SECTION 588-A. DEFINITIONS.
        588-B. DOING BUSINESS WITHOUT LICENSE PROHIBITED.
        588-C. APPLICATION FOR LICENSE.
        588-D. CONDITIONS FOR ISSUANCE OF  A  LICENSE;  PROCEDURE  WHERE
                 APPLICATION DENIED.
        588-E. LICENSE PROVISIONS.
        588-F. CHANGES IN OFFICERS OR DIRECTORS OF LICENSEE.
        588-G. CHANGES IN CONTROL.
        588-H. GROUNDS  FOR  SUSPENSION,  REVOCATION,  OR TERMINATION OF
                 LICENSE; PROCEDURE.
        588-I. ADVERTISING AND MARKETING PRACTICES.
        588-J. INDIVIDUALIZED FINANCIAL ANALYSIS; STATEMENT.
        588-K. REQUIRED PRE-AGREEMENT DISCLOSURES AND WARNINGS.
        588-L. DEBT SETTLEMENT SERVICES AGREEMENTS.
        588-M. FEES.
        588-N. DEBTOR SETTLEMENT ACCOUNTS; MONTHLY ACCOUNTING.
        588-O. CANCELLATION OF DEBT SETTLEMENT SERVICES AGREEMENT; RIGHT
                 TO REFUNDS.
        588-P. OBLIGATION OF GOOD FAITH.
        588-Q. PROHIBITED ACTIVITIES.
        588-R. SUPERINTENDENT AUTHORIZED TO EXAMINE.
        588-S. LICENSEE'S BOOKS AND RECORDS; REPORTS.
        588-T. PENALTIES; NONCOMPLIANCE.
        588-U. AUTHORITY OF SUPERINTENDENT.
        588-V. SEVERABILITY.
  S 588-A. DEFINITIONS. AS USED IN THIS ARTICLE:  1.  "AFFILIATE"  MEANS
ANY PERSON THAT DIRECTLY OR INDIRECTLY CONTROLS, IS CONTROLLED BY, OR IS
UNDER COMMON CONTROL WITH ANOTHER PERSON.
  2. "CLEARLY AND CONSPICUOUSLY" MEANS THAT A STATEMENT, REPRESENTATION,
TERM, OR DISCLOSURE IS SO PRESENTED AS TO BE READILY APPARENT AND UNDER-
STOOD BY THE PERSON TO WHOM IT IS BEING ADDRESSED. FACTORS TO BE CONSID-
ERED  FOR  THIS  PURPOSE INCLUDE BUT ARE NOT LIMITED TO SIZE, PLACEMENT,
COLOR CONTRAST, LENGTH, CRAWL TIME, AND AUDIBILITY.
  3. "DEBTOR" MEANS ANY INDIVIDUAL WHO HAS INCURRED INDEBTEDNESS OR OWES
A DEBT.

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  4. "DEBTOR SETTLEMENT ACCOUNT" MEANS ANY ACCOUNT  OR  OTHER  MEANS  OR
DEVICE IN WHICH PAYMENTS, DEPOSITS, OR OTHER TRANSFERS FROM A DEBTOR ARE
ARRANGED,  HELD,  OR  TRANSFERRED BY OR TO A DEBT SETTLEMENT COMPANY FOR
THE ACCUMULATION OF THE DEBTOR'S FUNDS IN ANTICIPATION OF PROFFERING  AN
ADJUSTMENT OR SETTLEMENT OF A DEBT OR OBLIGATION OF THE DEBTOR.
  5. "DEBT SETTLEMENT COMPANY" MEANS ANY PERSON:
  (A)  ENGAGING IN, OR HOLDING HIMSELF, HERSELF, OR ITSELF OUT AS ENGAG-
ING IN, THE BUSINESS OF PROVIDING DEBT SETTLEMENT SERVICES  IN  EXCHANGE
FOR OR IN EXPECTATION OF ANY COMPENSATION OR GAIN; OR
  (B)  SOLICITING  FOR OR ACTING ON BEHALF OF ANY PERSON ENGAGING IN, OR
HOLDING HIMSELF, HERSELF, OR ITSELF OUT AS ENGAGING IN, THE BUSINESS  OF
PROVIDING  DEBT SETTLEMENT SERVICES IN EXCHANGE FOR OR IN EXPECTATION OF
ANY COMPENSATION OR  GAIN;  PROVIDED,  HOWEVER,  THAT  "DEBT  SETTLEMENT
COMPANY" SHALL NOT INCLUDE:
  (I) THE FOLLOWING EXEMPT PERSONS:
  (A) ANY ATTORNEY LICENSED TO PRACTICE LAW IN THIS STATE WHEN ACTING IN
THE ORDINARY PRACTICE OF LAW AND THROUGH THE ENTITY USED BY THE ATTORNEY
IN  THE ORDINARY PRACTICE OF LAW, AND NOT HOLDING HIMSELF OR HERSELF OUT
AS  A  DEBT  SETTLEMENT  COMPANY,  AND  NOT  PROVIDING  DEBT  SETTLEMENT
SERVICES, EXCEPT AS INCIDENTAL TO LEGAL REPRESENTATION;
  (B)  ANY  PUBLIC  OFFICER WHILE ACTING IN AN OFFICIAL CAPACITY AND ANY
PERSON ACTING UNDER COURT ORDER; OR
  (C) ANY PERSON WHILE PERFORMING SERVICES  INCIDENTAL  TO  THE  DISSOL-
UTION,  WINDING  UP,  OR  LIQUIDATION  OF A PARTNERSHIP, CORPORATION, OR
OTHER BUSINESS ENTERPRISE; OR
  (D) ANY BANK, TRUST COMPANY, SAVINGS BANK, SAVINGS  AND  LOAN  ASSOCI-
ATION,  OR  CREDIT  UNION, WHETHER INCORPORATED, CHARTERED, OR ORGANIZED
UNDER THE LAWS OF THIS STATE OR ANY OTHER STATE OR THE UNITED STATES, OR
ANY OPERATING SUBSIDIARY OF ANY SUCH BANK, TRUST COMPANY, SAVINGS  BANK,
SAVINGS AND LOAN ASSOCIATION, OR CREDIT UNION.
  (II)  SUCH OTHER PERSONS AS MAY BE SPECIFICALLY EXEMPTED BY THE SUPER-
INTENDENT IN HIS OR HER SOLE DISCRETION AND CONSISTENT WITH THE PURPOSES
OF THIS ARTICLE AND THE RULES AND REGULATIONS PROMULGATED HEREUNDER.
  6. "DEBT SETTLEMENT SERVICES" MEANS:
  (A) OFFERING TO PROVIDE OR PROVIDING ADVICE OR SERVICES,  OR  OFFERING
TO ACT OR ACTING AS AN INTERMEDIARY BETWEEN OR ON BEHALF OF A DEBTOR AND
ONE  OR MORE OF THE DEBTOR'S CREDITORS, WHERE THE PRIMARY PURPOSE OF THE
ADVICE, SERVICE, OR ACTION IS TO OBTAIN  A  SETTLEMENT,  ADJUSTMENT,  OR
SATISFACTION  OF  THE DEBTOR'S UNSECURED DEBT TO A CREDITOR IN AN AMOUNT
LESS THAN THE PRINCIPAL AMOUNT OF THE DEBT OR IN AN AMOUNT LESS THAN THE
CURRENT OUTSTANDING BALANCE OF THE DEBT; OR
  (B) OFFERING TO PROVIDE SERVICES  RELATED  TO  OR  PROVIDING  SERVICES
ADVISING,  ENCOURAGING,  ASSISTING, OR COUNSELING A DEBTOR TO ACCUMULATE
FUNDS FOR THE PRIMARY PURPOSE OF PROPOSING,  OBTAINING,  OR  SEEKING  TO
OBTAIN  A  SETTLEMENT, ADJUSTMENT, OR SATISFACTION OF THE DEBTOR'S UNSE-
CURED DEBT TO A CREDITOR IN AN AMOUNT LESS THAN THE PRINCIPAL AMOUNT  OF
THE  DEBT  OR  IN AN AMOUNT LESS THAN THE CURRENT OUTSTANDING BALANCE OF
THE DEBT; PROVIDED, HOWEVER, THAT DEBT  SETTLEMENT  SERVICES  SHALL  NOT
INCLUDE:
  (I) "BUDGET PLANNING" AS DEFINED IN SECTION FOUR HUNDRED FIFTY-FIVE OF
THE GENERAL BUSINESS LAW; OR
  (II)  THE SERVICES OF AN ATTORNEY IN PROVIDING INFORMATION, ADVICE, OR
LEGAL REPRESENTATION WITH RESPECT TO FILING A CASE OR  PROCEEDING  UNDER
TITLE 11 OF THE UNITED STATES CODE.

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  7.  "DEBT  SETTLEMENT  SERVICES  AGREEMENT"  MEANS A CONTRACT OR OTHER
AGREEMENT WITH A DEBTOR RELATED TO  THE  PROVISION  OF  DEBT  SETTLEMENT
SERVICES.
  8. "ENROLLMENT FEE" MEANS ANY FEE, OBLIGATION, OR COMPENSATION PAID OR
TO  BE  PAID BY THE DEBTOR TO A DEBT SETTLEMENT COMPANY IN CONSIDERATION
OF OR IN CONNECTION WITH ESTABLISHING A DEBT SETTLEMENT SERVICES  AGREE-
MENT.
  9.  "MAINTENANCE  FEE" MEANS ANY FEE, OBLIGATION, OR COMPENSATION PAID
OR TO BE PAID BY A DEBTOR TO A DEBT SETTLEMENT COMPANY IN  CONSIDERATION
OF  OR  IN  CONNECTION  WITH  MAINTAINING  THE RELATIONSHIP AND SERVICES
PROVIDED BY A DEBT SETTLEMENT COMPANY IN ACCORDANCE WITH A DEBT  SETTLE-
MENT SERVICES AGREEMENT.
  10.  "PERSON"  MEANS  AN  INDIVIDUAL,  PARTNERSHIP,  LIMITED LIABILITY
COMPANY, CORPORATION, ASSOCIATION, OR ANY OTHER LEGAL ENTITY.
  11. "PRINCIPAL AMOUNT OF THE DEBT" MEANS THE TOTAL AMOUNT  OWED  BY  A
DEBTOR  TO  ONE  OR MORE CREDITORS FOR A DEBT THAT IS INCLUDED IN A DEBT
SETTLEMENT SERVICES AGREEMENT AT THE TIME WHEN THE  DEBTOR  ENTERS  INTO
SUCH AGREEMENT.
  12.  "SETTLEMENT  FEE" MEANS ANY FEE, OBLIGATION, OR COMPENSATION PAID
OR TO BE PAID BY A DEBTOR TO A DEBT SETTLEMENT COMPANY IN  CONSIDERATION
OF  OR  IN CONNECTION WITH AN AGREEMENT OR OTHER ARRANGEMENT ON THE PART
OF A CREDITOR TO ACCEPT LESS THAN THE PRINCIPAL AMOUNT OF  THE  DEBT  AS
SATISFACTION OF THE CREDITOR'S CLAIM AGAINST THE DEBTOR.
  S  588-B.  DOING  BUSINESS  WITHOUT  LICENSE  PROHIBITED. 1. EXCEPT AS
PROVIDED IN SUBDIVISION THREE OF THIS SECTION, NO PERSON SHALL ENGAGE IN
THE BUSINESS OF A DEBT SETTLEMENT COMPANY IN THIS  STATE  WITHOUT  FIRST
OBTAINING  A  LICENSE  FROM  THE  SUPERINTENDENT  IN ACCORDANCE WITH THE
LICENSING PROCEDURE PROVIDED IN THIS ARTICLE AND SUCH  RULES  AND  REGU-
LATIONS AS MAY BE PROMULGATED HEREUNDER.
  2.  THE  BUSINESS  OF  A  DEBT SETTLEMENT COMPANY IS CONDUCTED IN THIS
STATE IF THE DEBT SETTLEMENT COMPANY, ITS EMPLOYEES, OR ITS  AGENTS  ARE
LOCATED  IN  THIS  STATE  OR  IF THE DEBT SETTLEMENT COMPANY ADVERTISES,
SOLICITS, OFFERS, OR CONTRACTS TO PROVIDE DEBT  SETTLEMENT  SERVICES  TO
DEBTORS THEN RESIDENT IN THIS STATE.
  3. IF A DEBT SETTLEMENT COMPANY IS LICENSED UNDER THIS ARTICLE, SUBDI-
VISION ONE OF THIS SECTION DOES NOT APPLY TO ANY EMPLOYEE OF SUCH LICEN-
SEE.
  S  588-C.  APPLICATION  FOR  LICENSE.  1.  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 AND COMPLETE STREET ADDRESS OF THE APPLICANT AND,
IF APPLICABLE, ITS DATE OF INCORPORATION OR ORGANIZATION;
  (B) THE NAME AND COMPLETE BUSINESS AND RESIDENTIAL ADDRESS AND OCCUPA-
TION OF EACH OFFICER AND DIRECTOR OF THE APPLICANT AND EACH PERSON  THAT
OWNS  AT LEAST TEN PERCENT OF THE SHARES OR OTHER OWNERSHIP INTERESTS OF
THE APPLICANT;
  (C) THE COMPLETE STREET ADDRESS OF THE PRINCIPAL OFFICE FROM WHICH THE
BUSINESS IS TO BE CONDUCTED;
  (D) IF THE APPLICANT HAS ONE OR MORE BRANCHES, SUBSIDIARIES, OR AFFIL-
IATES LOCATED IN THIS STATE, SOLICITING BUSINESS IN THIS STATE, OR DOING
BUSINESS WITH RESIDENTS OF THIS STATE, THE COMPLETE ADDRESS OF EACH SUCH
PLACE OF BUSINESS; AND
  (E)  SUCH  OTHER  PERTINENT  INFORMATION  AS  THE  SUPERINTENDENT  MAY
REQUIRE,  INCLUDING  BUT  NOT  LIMITED  TO  EVIDENCE INDICATING THAT THE
APPLICANT, OR AN OFFICER, DIRECTOR, OR MANAGER OF SUCH APPLICANT HAS  AT

A. 8341                             9

LEAST  ONE  YEAR  OF  EXPERIENCE IN FINANCIAL SERVICES OR RELATED FIELDS
APPLICABLE TO DEBT SETTLEMENT SERVICES.
  2.  AN  APPLICANT  SHALL  FILE  A MASTER APPLICATION FOR ITS PRINCIPAL
OFFICE AND SUPPLEMENTAL APPLICATIONS FOR EACH BRANCH  OFFICE  THAT  WILL
CONDUCT THE BUSINESS OF A DEBT SETTLEMENT COMPANY IN THIS STATE.
  3.  UPON ORIGINAL APPLICATION FOR A LICENSE OR LICENSES, THE APPLICANT
SHALL PAY AN INVESTIGATION FEE IN  AN  AGGREGATE  AMOUNT  AS  PRESCRIBED
PURSUANT  TO  SECTION EIGHTEEN-A OF THIS CHAPTER. NO ADDITIONAL INVESTI-
GATION FEE SHALL BE  REQUIRED  FOR  ANY  SUBSEQUENT  APPLICATION  FOR  A
LICENSE  UNLESS  SUCH APPLICATION IS SUBSEQUENT TO A DENIAL OF A LICENSE
OR TO A REVOCATION, SUSPENSION, SURRENDER, OR TERMINATION 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 EIGH-
TEEN-A OF THIS CHAPTER.
  4. AS A CONDITION FOR THE ISSUANCE AND RETENTION  OF  A  LICENSE,  AND
SUBJECT  TO  SUCH  REGULATIONS  AS  THE  SUPERINTENDENT SHALL PRESCRIBE,
APPLICANTS FOR A LICENSE SHALL FILE WITH  THE  SUPERINTENDENT  A  SURETY
BOND  IN  FAVOR  OR  THE  SUPERINTENDENT, ISSUED BY A BONDING COMPANY OR
INSURANCE COMPANY AUTHORIZED TO DO BUSINESS IN THIS STATE, AND IN A FORM
SATISFACTORY TO THE SUPERINTENDENT.
  (A) IN LIEU OF THE SURETY BOND REQUIRED BY THIS SUBDIVISION, AN APPLI-
CANT MAY PLEDGE TO THE SUPERINTENDENT AND MAINTAIN IN A  PLEDGE  ACCOUNT
WITH  SUCH  BANKS,  SAVINGS  BANKS, SAVINGS AND LOAN ASSOCIATIONS, TRUST
COMPANIES, NATIONAL BANKS, FEDERAL SAVINGS BANKS, OR FEDERAL SAVINGS AND
LOAN ASSOCIATIONS IN THE STATE AS SUCH LICENSEE MAY  DESIGNATE  AND  THE
SUPERINTENDENT MAY APPROVE:
  (I)  INTEREST-BEARING  BILLS, NOTES, BONDS, DEBENTURES, OR OTHER OBLI-
GATIONS ISSUED OR GUARANTEED BY THE UNITED STATES OR ANY STATE OR  OTHER
LOCAL  GOVERNMENTAL  ENTITY  OR  ANY  INSTRUMENTALITY THEREOF, BEARING A
RATING OF ONE OF THE THREE HIGHEST GRADES  BY  A  NATIONALLY  RECOGNIZED
STATISTICAL  RATING  ORGANIZATION  THAT HAS BEEN ENGAGED IN RATING STATE
AND MUNICIPAL ISSUES FOR A PERIOD OF NOT LESS THAN FIVE YEARS;
  (II) DOLLAR DEPOSITS; OR
  (III) SUCH OTHER ASSETS OR LETTERS OF  CREDIT  AS  THE  SUPERINTENDENT
SHALL BY RULE OR REGULATION PERMIT.
  (B)  EXCEPT AS PROVIDED HEREUNDER, THE PRINCIPAL AMOUNT OF SUCH SURETY
BOND OR DEPOSIT SHALL BE TWO HUNDRED FIFTY THOUSAND DOLLARS. THE  SUPER-
INTENDENT MAY:
  (I)  REQUIRE  A LARGER BOND OR DEPOSIT IF HE OR SHE DETERMINES, IN HIS
OR HER SOLE DISCRETION, THAT A LICENSEE HAS  ENGAGED  IN  A  PATTERN  OF
CONDUCT  RESULTING IN BONA FIDE DEBTOR COMPLAINTS OF MISCONDUCT AND THAT
SUCH INCREASED BOND OR  DEPOSIT  IS  NECESSARY  FOR  THE  PROTECTION  OF
DEBTORS; OR
  (II)  INCREASE  OR  DECREASE  THE AMOUNT OF SUCH BOND OR DEPOSIT BASED
UPON THE APPLICANT'S OR LICENSEE'S FINANCIAL CONDITION,  BUSINESS  PLAN,
BUSINESS  EXPERIENCE,  OR  ANY OTHER FACTOR THE SUPERINTENDENT CONSIDERS
APPROPRIATE.
  (C) THE PROCEEDS OF SUCH SURETY BOND OR  DEPOSIT  SHALL  CONSTITUTE  A
TRUST FUND TO BE USED EXCLUSIVELY:
  (A)  TO  REIMBURSE  FEES  THAT  HAVE  BEEN  IMPROPERLY  CHARGED  TO OR
COLLECTED FROM DEBTORS WITH RESPECT TO THE BUSINESS OF A DEBT SETTLEMENT
COMPANY IN THIS STATE, AS SUCH BUSINESS IS  DESCRIBED  IN  SECTION  FIVE
HUNDRED EIGHTY-EIGHT-B OF THIS ARTICLE;
  (B)  TO  REIMBURSE  AMOUNTS THAT HAVE NOT BEEN PROPERLY DISTRIBUTED TO
CREDITORS OR PROPERLY RETURNED TO DEBTORS WITH RESPECT TO  THE  BUSINESS

A. 8341                            10

OF  A  DEBT  SETTLEMENT  COMPANY  IN  THIS  STATE,  AS  SUCH BUSINESS IS
DESCRIBED IN SECTION FIVE HUNDRED EIGHTY-EIGHT-B OF THIS ARTICLE; AND
  (C)  TO  PAY  OUTSTANDING  BANKING  DEPARTMENT  EXAMINATION  COSTS AND
ASSESSMENTS.
  S 588-D. CONDITIONS FOR ISSUANCE OF A LICENSE; PROCEDURE WHERE  APPLI-
CATION  DENIED.  UPON THE FILING OF AN APPLICATION FOR A LICENSE, IF THE
SUPERINTENDENT SHALL FIND THAT THE FINANCIAL RESPONSIBILITY, EXPERIENCE,
CHARACTER, AND GENERAL FITNESS OF THE  APPLICANT,  AND  OF  THE  CONTROL
PERSONS,  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, FAIRLY, AND EFFICIENTLY  WITHIN  THE  PURPOSES  OF
THIS  ARTICLE, HE OR SHE SHALL THEREUPON ISSUE A LICENSE IN DUPLICATE TO
ENGAGE IN DEBT SETTLEMENT SERVICES IN ACCORDANCE WITH THE PROVISIONS  OF
THIS  ARTICLE.    THE  SUPERINTENDENT  SHALL  TRANSMIT  ONE COPY OF SUCH
LICENSE TO THE APPLICANT AND FILE THE OTHER 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, SUSPENDED, OR TERMINATED 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 APPLI-
CANT OF THE DENIAL.
  S 588-E. LICENSE PROVISIONS. EACH LICENSE ISSUED  UNDER  THIS  ARTICLE
SHALL STATE THE PRINCIPAL OFFICE ADDRESS AND, IF APPLICABLE, THE ADDRESS
OF  THE  BRANCH OFFICE FOR WHICH IT WAS ISSUED. SUCH LICENSE SHALL STATE
FULLY THE NAME OF THE LICENSEE AND, IF APPLICABLE, THE DATE AND PLACE OF
ITS INCORPORATION OR ORGANIZATION. A COPY OF SUCH LICENSE SHALL BE PROM-
INENTLY POSTED IN THE PRINCIPAL OFFICE AND, IF APPLICABLE,  SUCH  BRANCH
OFFICE.    SUCH  LICENSE SHALL NOT BE TRANSFERABLE OR ASSIGNABLE. IN THE
EVENT THE LOCATION AT WHICH THE BUSINESS IS TO  BE  CONDUCTED  SHALL  BE
CHANGED,  THE  LICENSEE  SHALL  FORTHWITH  NOTIFY THE SUPERINTENDENT WHO
SHALL THEREUPON WITHOUT CHARGE ATTACH TO THE  LICENSE  A  RIDER  SETTING
FORTH SUCH CHANGED LOCATION.
  S  588-F.  CHANGES  IN OFFICERS OR DIRECTORS OF LICENSEE. IN THE EVENT
THAT THERE SHALL BE ANY CHANGE AMONG THE OFFICERS OR  DIRECTORS  OF  ANY
LICENSEE,  THE  LICENSEE SHALL PROMPTLY NOTIFY THE SUPERINTENDENT OF THE
NAME, ADDRESS, AND OCCUPATION  OF  EACH  NEW  OFFICER  OR  DIRECTOR  AND
PROVIDE SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  S  588-G.  CHANGES IN CONTROL. 1. IT SHALL BE UNLAWFUL EXCEPT WITH THE
PRIOR APPROVAL OF THE SUPERINTENDENT FOR ANY ACTION TO  BE  TAKEN  WHICH
RESULTS  IN  A CHANGE OF CONTROL OF THE BUSINESS OF A LICENSEE. PRIOR TO
ANY CHANGE OF CONTROL, THE PERSON DESIROUS OF ACQUIRING CONTROL  OF  THE
BUSINESS OF A LICENSEE SHALL MAKE WRITTEN APPLICATION TO THE SUPERINTEN-
DENT  AND  PAY  AN  INVESTIGATION  FEE AS PRESCRIBED PURSUANT TO SECTION
EIGHTEEN-A OF THIS CHAPTER TO THE SUPERINTENDENT.  THE APPLICATION SHALL
CONTAIN SUCH INFORMATION AS THE SUPERINTENDENT MAY PRESCRIBE  AS  NECES-
SARY OR APPROPRIATE FOR THE PURPOSE OF MAKING THE DETERMINATION REQUIRED
BY SUBDIVISION TWO OF THIS SECTION.
  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-EIGHT-D OF THIS ARTICLE.
  3.  AS  USED IN THIS SECTION, 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 LICENSEE, WHETHER THROUGH THE OWNERSHIP
OF VOTING STOCK OF SUCH LICENSEE, THE OWNERSHIP OF VOTING STOCK  OF  ANY
PERSON  WHICH  POSSESSES  SUCH  POWER  OR  OTHERWISE.  CONTROL  SHALL BE
PRESUMED TO EXIST IF ANY PERSON, DIRECTLY OR INDIRECTLY, OWNS,  CONTROLS
OR  HOLDS  WITH POWER TO VOTE TEN PERCENT OR MORE OF THE VOTING STOCK OF

A. 8341                            11

ANY LICENSEE OR OF ANY PERSON WHICH OWNS, CONTROLS OR HOLDS  WITH  POWER
TO  VOTE TEN PERCENT OR MORE OF THE VOTING STOCK OF ANY LICENSEE, BUT NO
PERSON SHALL BE DEEMED TO CONTROL A LICENSEE SOLELY BY REASON  OF  BEING
AN  OFFICER  OR  DIRECTOR OF SUCH LICENSEE OR PERSON. THE SUPERINTENDENT
MAY IN HIS OR HER DISCRETION, UPON THE APPLICATION OF A LICENSEE OR  ANY
PERSON  WHO,  DIRECTLY OR INDIRECTLY, OWNS, CONTROLS OR HOLDS WITH POWER
TO VOTE OR SEEKS TO OWN, CONTROL OR HOLD WITH POWER TO VOTE  ANY  VOTING
STOCK  OF SUCH LICENSEE, DETERMINE WHETHER OR NOT THE OWNERSHIP, CONTROL
OR HOLDING OF SUCH VOTING STOCK CONSTITUTES OR WOULD CONSTITUTE  CONTROL
OF SUCH LICENSEE FOR PURPOSES OF THIS SECTION.
  S  588-H.  GROUNDS  FOR  SUSPENSION,  REVOCATION,  OR  TERMINATION  OF
LICENSE; PROCEDURE. 1. IN ADDITION TO THE AUTHORITY SET FORTH IN  SUBDI-
VISION TWO OF THIS SECTION, THE SUPERINTENDENT MAY SUSPEND OR REVOKE ANY
LICENSE  ISSUED 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 LICENSEE OR AN OFFICER, DIRECTOR, OR  CONTROL  PERSON  OF  THE
LICENSEE HAS BEEN CONVICTED OF A CRIME AGAINST THE LAWS OF THIS STATE OR
ANY  OTHER  STATE  OR  OF THE UNITED STATES INVOLVING MORAL TURPITUDE OR
FRAUDULENT OR DISHONEST ACTIONS, OR A  FINAL  JUDGMENT  IN  A  COURT  OF
COMPETENT JURISDICTION HAS BEEN ENTERED AGAINST THE LICENSEE OR AN OFFI-
CER, DIRECTOR, OR CONTROL PERSON OF THE LICENSEE IN A CIVIL ACTION ARIS-
ING FROM FRAUD, MISREPRESENTATION, OR DECEIT.
  2.  (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  ONLY  WHEN  THE
LICENSEE  HAS DEFAULTED OR IS LIKELY TO DEFAULT IN PERFORMING ITS FINAN-
CIAL ENGAGEMENTS OR ENGAGES OR HAS ENGAGED 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 UNDER THIS ARTICLE TO BE FILED BY IT WITH THE SUPERINTENDENT;
  (II) IMMEDIATELY UPON THE LICENSEE FILING 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 SURETY BOND REQUIRED PURSUANT TO SECTION FIVE HUNDRED EIGHTY-EIGHT-C
OF THIS ARTICLE IS NO LONGER IN EFFECT OR THAT THE VALUE  OF  ASSETS  IN
THE PLEDGE ACCOUNT IS LESS THAN THE REQUIRED AMOUNT.
  3.  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

A. 8341                            12

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 OR DEPOSITING ALL REQUIRED
ADDITIONAL ASSETS. 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 SUSPEN-
SION, ALL LICENSES OF SUCH LICENSEE SHALL BE DEEMED TO BE  AUTOMATICALLY
TERMINATED  BY OPERATION OF LAW AT THE CLOSE OF BUSINESS ON SUCH NINETI-
ETH DAY.
  4. EXCEPT AS PROVIDED FOR IN  SUBDIVISION  TWO  OF  THIS  SECTION,  NO
LICENSE  SHALL BE REVOKED OR SUSPENDED EXCEPT AFTER NOTICE AND A HEARING
THEREON.
  5. WITH THE PRIOR CONSENT OF  THE  SUPERINTENDENT,  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 THE PERIODS
BEFORE SUCH SURRENDER.
  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.
  7.  EVERY  LICENSE  ISSUED  HEREUNDER SHALL REMAIN IN FORCE AND EFFECT
UNTIL THE SAME SHALL  HAVE  BEEN  SURRENDERED,  REVOKED,  SUSPENDED,  OR
TERMINATED  IN  ACCORDANCE  WITH THE PROVISIONS OF THIS ARTICLE, 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.
  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 BANKING DEPARTMENT 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
DEBT SETTLEMENT COMPANY IN THIS STATE.
  S 588-I. ADVERTISING AND MARKETING PRACTICES.  1.  A  DEBT  SETTLEMENT
COMPANY  SHALL  NOT,  EXPRESSLY  OR  BY  IMPLICATION, MAKE ANY UNFAIR OR
DECEPTIVE REPRESENTATIONS, OR ANY OMISSIONS OF MATERIAL FACTS, IN ANY OF
ITS ADVERTISING OR MARKETING COMMUNICATIONS CONCERNING  DEBT  SETTLEMENT
SERVICES.
  2.  ALL  ADVERTISING  AND  MARKETING  COMMUNICATIONS  CONCERNING  DEBT
SETTLEMENT SERVICES SHALL DISCLOSE THE FOLLOWING INFORMATION CLEARLY AND

A. 8341                            13

CONSPICUOUSLY:  "DEBT SETTLEMENT SERVICES ARE NOT APPROPRIATE FOR EVERY-
ONE. FAILURE TO PAY YOUR MONTHLY BILLS IN A TIMELY MANNER WILL RESULT IN
INCREASED BALANCES AND WILL HARM YOUR CREDIT RATING. NOT  ALL  CREDITORS
WILL AGREE TO REDUCE THE AMOUNT YOU OWE, AND THEY MAY PURSUE COLLECTION,
INCLUDING LAWSUITS."
  3.  ALL  ADVERTISING  AND  MARKETING COMMUNICATIONS OF A LICENSED DEBT
SETTLEMENT COMPANY CONCERNING DEBT SETTLEMENT  SERVICES  SHALL  INDICATE
THAT  THE  DEBT SETTLEMENT COMPANY IS LICENSED BY THE BANKING DEPARTMENT
AND SHALL CONTAIN THE NAME AND OFFICE ADDRESS OF  SUCH  DEBT  SETTLEMENT
COMPANY,  WHICH  SHALL  CONFORM TO A NAME AND ADDRESS ON RECORD WITH THE
BANKING DEPARTMENT.
  S 588-J. INDIVIDUALIZED FINANCIAL ANALYSIS;  STATEMENT.  1.  PRIOR  TO
ENTERING  INTO  A  DEBT SETTLEMENT SERVICES AGREEMENT, A DEBT SETTLEMENT
COMPANY SHALL PREPARE AND PROVIDE TO THE DEBTOR IN WRITING AND RETAIN  A
COPY OF:
  (A)  AN  INDIVIDUALIZED FINANCIAL ANALYSIS, INCLUDING A LISTING OF THE
DEBTOR'S INCOME, EXPENSES, AND DEBTS; AND
  (B) A STATEMENT CONTAINING:
  (I) A DESCRIPTION OF THE SERVICES TO BE PROVIDED  UNDER  THE  PROPOSED
DEBT SETTLEMENT SERVICES AGREEMENT;
  (II)  A  GOOD  FAITH ESTIMATE OF THE TIME IT WILL TAKE TO COMPLETE ALL
STEPS NECESSARY FOR  A  SETTLEMENT  OF  EACH  DEBT  INCLUDED  UNDER  THE
PROPOSED DEBT SETTLEMENT SERVICES AGREEMENT;
  (III)  THE  TOTAL  AMOUNT OF DEBT OWED TO EACH CREDITOR INCLUDED UNDER
THE PROPOSED DEBT SETTLEMENT SERVICES AGREEMENT;
  (IV) THE TOTAL AMOUNT OF MONEY ESTIMATED TO BE NECESSARY  TO  COMPLETE
ALL  STEPS  NECESSARY  FOR  A SETTLEMENT OF EACH DEBT INCLUDED UNDER THE
PROPOSED DEBT SETTLEMENT SERVICES AGREEMENT; AND
  (V) THE MONTHLY TARGETED AMOUNT OF MONEY  NECESSARY  TO  COMPLETE  ALL
STEPS  NECESSARY  FOR  A  SETTLEMENT  OF  EACH  DEBT  INCLUDED UNDER THE
PROPOSED DEBT SETTLEMENT SERVICES AGREEMENT.
  2. A DEBT SETTLEMENT COMPANY SHALL NOT ENTER INTO  A  DEBT  SETTLEMENT
SERVICES  AGREEMENT UNLESS IT MAKES WRITTEN DETERMINATIONS, SUPPORTED BY
THE FINANCIAL ANALYSIS, THAT:
  (A) THE DEBTOR CAN REASONABLY MEET THE REQUIREMENTS OF  SUCH  PROPOSED
DEBT  SETTLEMENT  SERVICES AGREEMENT, INCLUDING THE FEES AND THE SAVINGS
GOALS; AND
  (B) SUCH PROPOSED DEBT SETTLEMENT SERVICES AGREEMENT WILL BE  SUITABLE
FOR THE DEBTOR AT THE TIME IT IS TO BE SIGNED.
  S  588-K.  REQUIRED  PRE-AGREEMENT DISCLOSURES AND WARNINGS. 1. BEFORE
THE DEBTOR SIGNS A DEBT SETTLEMENT SERVICES AGREEMENT, THE DEBT  SETTLE-
MENT COMPANY SHALL PROVIDE AN ORAL AND WRITTEN NOTICE TO THE DEBTOR THAT
CLEARLY AND CONSPICUOUSLY DISCLOSES ALL OF THE FOLLOWING:
  (A) DEBT SETTLEMENT SERVICES MAY NOT BE SUITABLE FOR ALL DEBTORS;
  (B) USING DEBT SETTLEMENT SERVICES LIKELY WILL HARM THE DEBTOR'S CRED-
IT HISTORY, CREDIT RATING, AND CREDIT SCORE;
  (C)  USING  DEBT SETTLEMENT SERVICES DOES NOT STOP CREDITOR COLLECTION
ACTIVITY, INCLUDING CREDITOR LAWSUITS AND GARNISHMENTS;
  (D) NOT ALL CREDITORS WILL ACCEPT A REDUCTION IN THE BALANCE, INTEREST
RATE, OR FEES A DEBTOR OWES;
  (E) THE DEBTOR SHOULD INQUIRE ABOUT OTHER MEANS OF DEALING WITH  DEBT,
INCLUDING BUT NOT LIMITED TO BUDGET PLANNING AND BANKRUPTCY;
  (F)  THE  DEBTOR  REMAINS  OBLIGATED  TO  MAKE  PERIODIC  OR SCHEDULED
PAYMENTS TO CREDITORS WHILE PARTICIPATING IN A DEBT SETTLEMENT PROGRAM;
  (G) THE FAILURE TO MAKE PERIODIC OR SCHEDULED PAYMENTS TO  A  CREDITOR
IS LIKELY TO:

A. 8341                            14

  (I)  HARM  THE  DEBTOR'S  CREDIT HISTORY, CREDIT RATING, AND/OR CREDIT
SCORE;
  (II) LEAD THE CREDITOR TO INCREASE LAWFUL COLLECTION ACTIVITY, INCLUD-
ING LITIGATION, GARNISHMENT OF THE DEBTOR'S WAGES, AND JUDGMENT LIENS ON
THE DEBTOR'S PROPERTY; AND
  (III) LEAD TO THE IMPOSITION BY THE CREDITOR OF INTEREST CHARGES, LATE
FEES,  AND OTHER PENALTY FEES, INCREASING THE AMOUNT OWED BY THE DEBTOR;
AND
  (H) THE DEBTOR MAY BE REQUIRED TO PAY TAXES ON ANY AMOUNT OF DEBT THAT
IS FORGIVEN.
  2. THE WRITTEN NOTICE REQUIRED BY  SUBDIVISION  ONE  OF  THIS  SECTION
SHALL BE ENTITLED "DEBTOR NOTICE AND RIGHTS FORM".
  3.  PRIOR  TO SIGNING A DEBT SETTLEMENT SERVICES AGREEMENT, THE DEBTOR
SHALL SIGN AND DATE AN ACKNOWLEDGMENT FORM AT  THE  END  OF  THE  DEBTOR
NOTICE  AND  RIGHTS FORM.   THE ACKNOWLEDGMENT FORM SHALL STATE: "I, THE
DEBTOR, HAVE RECEIVED FROM THE DEBT SETTLEMENT COMPANY  A  COPY  OF  THE
FORM ENTITLED DEBTOR NOTICE AND RIGHTS FORM." THE DEBT SETTLEMENT COMPA-
NY  OR  ITS  REPRESENTATIVE  SHALL ALSO SIGN AND DATE THE ACKNOWLEDGMENT
FORM, WHICH SHALL INCLUDE THE NAME AND ADDRESS OF  THE  DEBT  SETTLEMENT
COMPANY.  THE ACKNOWLEDGMENT FORM SHALL BE IN DUPLICATE AND INCORPORATED
INTO THE DEBTOR NOTICE AND RIGHTS FORM. THE ORIGINAL ACKNOWLEDGMENT FORM
SHALL BE RETAINED BY THE DEBT SETTLEMENT COMPANY, AND THE DUPLICATE COPY
SHALL BE GIVEN TO THE DEBTOR.
  4. THE REQUIREMENTS OF THIS SECTION ARE SATISFIED IF THE DEBT  SETTLE-
MENT COMPANY GIVES THE DEBTOR THE FOLLOWING WARNING VERBATIM, BOTH ORAL-
LY  AND  IN WRITING, WITH THE CAPTION "DEBTOR NOTICE AND RIGHTS FORM" IN
AT LEAST TWENTY-EIGHT-POINT FONT AND THE REMAINING PORTION IN  AT  LEAST
FOURTEEN-POINT  FONT, BEFORE THE DEBTOR SIGNS A DEBT SETTLEMENT SERVICES
AGREEMENT:

                     "DEBTOR NOTICE AND RIGHTS FORM
                                 CAUTION
  USING DEBT SETTLEMENT SERVICES WILL LIKELY HARM YOUR  CREDIT  HISTORY,
CREDIT RATING, AND CREDIT SCORE.
  WE  CANNOT  GUARANTEE  THAT  YOU WILL SUCCESSFULLY REDUCE OR ELIMINATE
YOUR DEBT.
  YOU REMAIN OBLIGATED TO MAKE PAYMENTS TO YOUR CREDITORS.  IF YOU  STOP
PAYING  YOUR  CREDITORS, THERE IS A STRONG LIKELIHOOD SOME OR ALL OF THE
FOLLOWING MAY HAPPEN:
  - CREDITORS MAY STILL CONTACT YOU AND TRY TO COLLECT.
  - CREDITORS MAY STILL SUE YOU FOR THE MONEY YOU OWE.
  - YOUR WAGES OR BANK ACCOUNT MAY STILL BE GARNISHED.
  - LIENS MAY STILL BE PLACED ON YOUR PROPERTY.
  - YOUR CREDIT HISTORY, CREDIT RATING, AND/OR CREDIT SCORE LIKELY  WILL
BE HARMED.
  -  THE AMOUNT OF MONEY YOU OWE MAY INCREASE DUE TO CREDITOR IMPOSITION
OF INTEREST CHARGES, LATE FEES, AND OTHER PENALTY FEES.
  - NOT ALL CREDITORS WILL AGREE TO ACCEPT A BALANCE REDUCTION.
  IF WE DO SETTLE YOUR DEBT, YOU MAY BE REQUIRED TO  PAY  TAXES  ON  THE
AMOUNT FORGIVEN.
  DEBT  SETTLEMENT  SERVICES  ARE  NOT  RIGHT  FOR  EVERYONE. YOU SHOULD
CONSIDER ALL YOUR OPTIONS FOR ADDRESSING YOUR DEBT, SUCH AS BUDGET PLAN-
NING OR A BANKRUPTCY FILING.
  YOUR RIGHT TO CANCEL
  IF YOU SIGN A DEBT SETTLEMENT SERVICES AGREEMENT, YOU HAVE  THE  RIGHT
TO CANCEL AT ANY TIME AND RECEIVE A FULL REFUND OF ALL UNEARNED FEES YOU

A. 8341                            15

HAVE  PAID  TO  THE DEBT SETTLEMENT COMPANY AND ALL FUNDS PLACED IN YOUR
DEBTOR SETTLEMENT ACCOUNT THAT HAVE NOT BEEN PAID TO ANY  CREDITORS.  IF
YOU  CANCEL  WITHIN  NINETY DAYS OF SIGNING THE DEBT SETTLEMENT SERVICES
AGREEMENT  YOU  ALSO  HAVE  THE  RIGHT  TO  RECEIVE A FULL REFUND OF ANY
ENROLLMENT FEES YOU HAVE PAID.
  ACKNOWLEDGMENT BY DEBTOR
  I, THE DEBTOR, HAVE RECEIVED FROM THE DEBT SETTLEMENT COMPANY  A  COPY
OF THE FORM ENTITLED DEBTOR NOTICE AND RIGHTS FORM."
  S  588-L.  DEBT  SETTLEMENT  SERVICES AGREEMENTS. 1. A DEBT SETTLEMENT
COMPANY SHALL NOT PROVIDE DEBT SETTLEMENT SERVICES TO A DEBTOR WITHOUT A
WRITTEN DEBT SETTLEMENT SERVICES AGREEMENT SIGNED AND DATED BY BOTH  THE
DEBTOR AND THE DEBT SETTLEMENT COMPANY.
  2. ANY DEBT SETTLEMENT SERVICES AGREEMENT ENTERED INTO IN VIOLATION OF
THE PROVISIONS OF THIS SECTION IS VOID.
  3. EACH DEBT SETTLEMENT COMPANY SHALL SUBMIT TO THE BANKING DEPARTMENT
ANY FORM OF DEBT SETTLEMENT SERVICES AGREEMENT IT INTENDS TO USE.
  4.  A  DEBT  SETTLEMENT  SERVICES  AGREEMENT SHALL DISCLOSE ALL OF THE
FOLLOWING CLEARLY AND CONSPICUOUSLY:
  (A) THE NAME AND ADDRESS OF THE DEBTOR;
  (B) THE DATE OF EXECUTION OF THE DEBT SETTLEMENT SERVICES AGREEMENT;
  (C) THE LEGAL NAME OF THE DEBT SETTLEMENT COMPANY, INCLUDING ANY OTHER
BUSINESS NAMES USED IN THIS STATE BY THE DEBT SETTLEMENT COMPANY;
  (D) THE COMPLETE STREET ADDRESS OF THE DEBT SETTLEMENT COMPANY,  WHICH
SHALL CONFORM TO AN ADDRESS ON RECORD WITH THE BANKING DEPARTMENT;
  (E)  THE LICENSE NUMBER OF THE PRINCIPAL OFFICE AND, IF APPLICABLE, OF
THE BRANCH OFFICE UNDER WHICH THE DEBT SETTLEMENT COMPANY IS LICENSED IN
THIS STATE;
  (F) A TOLL-FREE TELEPHONE NUMBER AT WHICH THE DEBTOR MAY SPEAK WITH  A
REPRESENTATIVE  OF  THE  DEBT  SETTLEMENT COMPANY DURING NORMAL BUSINESS
HOURS;
  (G) A COMPLETE LIST OF THE DEBTOR'S ACCOUNTS, DEBTS,  AND  OBLIGATIONS
COVERED BY THE DEBT SETTLEMENT SERVICES AGREEMENT, INCLUDING THE NAME OF
EACH CREDITOR AND THE PRINCIPAL AMOUNT OF EACH DEBT;
  (H)  A  DESCRIPTION OF THE SERVICES TO BE PROVIDED BY THE DEBT SETTLE-
MENT COMPANY, INCLUDING THE EXPECTED TIME FRAME FOR SETTLEMENT FOR  EACH
ACCOUNT,  DEBT, OR OBLIGATION INCLUDED IN PARAGRAPH (G) OF THIS SUBDIVI-
SION;
  (I) AN ITEMIZED LIST OF ALL FEES, INCLUDING  ANY  ENROLLMENT  FEE  AND
SETTLEMENT FEES TO BE PAID BY THE DEBTOR TO THE DEBT SETTLEMENT COMPANY,
AND  THE  DATE,  APPROXIMATE DATE, OR CIRCUMSTANCES UNDER WHICH EACH FEE
WILL BECOME DUE;
  (J) A GOOD FAITH ESTIMATE OF THE  TOTAL  AMOUNT  OF  ALL  FEES  TO  BE
COLLECTED  BY  THE  DEBT  SETTLEMENT  COMPANY  FROM  THE  DEBTOR FOR THE
PROVISION OF DEBT SETTLEMENT SERVICES UNDER THE DEBT SETTLEMENT SERVICES
AGREEMENT;
  (K) A STATEMENT OF THE PROPOSED SAVINGS GOALS FOR THE DEBTOR, STATING:
  (I) THE AMOUNT TO BE SAVED PER MONTH;
  (II) THE TIME PERIOD OVER WHICH THE SAVINGS GOALS EXTEND;
  (III) THE AMOUNT OF MONEY THE DEBTOR MUST  SAVE  BEFORE  A  SETTLEMENT
OFFER WILL BE MADE TO EACH OF THE DEBTOR'S CREDITORS; AND
  (IV) THE TOTAL AMOUNT OF THE SAVINGS EXPECTED TO BE PAID BY THE DEBTOR
PURSUANT TO THE TERMS OF THE DEBT SETTLEMENT SERVICES AGREEMENT;
  (L)  THE WRITTEN INDIVIDUALIZED FINANCIAL ANALYSIS REQUIRED BY SECTION
FIVE HUNDRED EIGHTY-EIGHT-J OF THIS ARTICLE;
  (M) A WRITTEN NOTICE TO THE DEBTOR STATING:

A. 8341                            16

  (I) THAT THE DEBTOR MAY CANCEL THE DEBT SETTLEMENT SERVICES  AGREEMENT
AT ANY TIME; AND
  (II) THAT UPON SUCH CANCELLATION:
  (A)  ALL  POWERS OF ATTORNEY GRANTED TO THE DEBT SETTLEMENT COMPANY BY
THE DEBTOR SHALL BE CONSIDERED REVOKED AND VOIDED; AND
  (B) THE DEBTOR MAY BE ENTITLED TO A REFUND. THE TERMS OF  SUCH  REFUND
SHALL  ALSO  BE  STATED AND SHALL BE CONSISTENT WITH THE REQUIREMENTS OF
SECTION FIVE HUNDRED EIGHTY-EIGHT-O OF THIS ARTICLE.
  (N) A FORM THE DEBTOR MAY USE TO CANCEL THE DEBT  SETTLEMENT  SERVICES
AGREEMENT   PURSUANT   TO   THE   PROVISIONS  OF  SECTION  FIVE  HUNDRED
EIGHTY-EIGHT-O OF THIS ARTICLE. THE  FORM  SHALL  DISCLOSE  CLEARLY  AND
CONSPICUOUSLY  HOW  THE  DEBTOR  CAN CANCEL THE DEBT SETTLEMENT SERVICES
AGREEMENT, INCLUDING APPLICABLE ADDRESSES, TELEPHONE NUMBERS,  FACSIMILE
NUMBERS,  AND ELECTRONIC MAIL ADDRESSES THE DEBTOR CAN USE TO CANCEL THE
DEBT SETTLEMENT SERVICES AGREEMENT;
  (O) A CLEAR AND CONSPICUOUS NOTICE TO THE DEBTOR THAT THE  DEBTOR  MAY
CONTACT  THE  DEPARTMENT  WITH ANY QUESTIONS OR COMPLAINTS REGARDING THE
DEBT SETTLEMENT COMPANY ALONG WITH THE  ADDRESS,  TELEPHONE  NUMBER  AND
INTERNET WEBSITE OF THE DEPARTMENT.
  5.  (A)  A  DEBT  SETTLEMENT  SERVICES  AGREEMENT MAY CONFER ON A DEBT
SETTLEMENT COMPANY A POWER OF ATTORNEY TO SETTLE THE DEBTOR'S  DEBT  FOR
NO  MORE  THAN  FIFTY  PERCENT  OF  THE PRINCIPAL AMOUNT OF THE DEBT. AN
AGREEMENT MAY NOT CONFER A POWER OF ATTORNEY TO SETTLE A DEBT  FOR  MORE
THAN FIFTY PERCENT OF THAT AMOUNT, BUT MAY CONFER A POWER OF ATTORNEY TO
NEGOTIATE  WITH  CREDITORS OF THE DEBTOR ON BEHALF OF THE DEBTOR. A DEBT
SETTLEMENT SERVICES AGREEMENT MUST  PROVIDE  THAT  THE  DEBT  SETTLEMENT
COMPANY  WILL  OBTAIN  THE  ASSENT  OF  THE  DEBTOR AFTER A CREDITOR HAS
ASSENTED TO A SETTLEMENT FOR MORE THAN FIFTY PERCENT  OF  THE  PRINCIPAL
AMOUNT OF THE DEBT.
  (B)  A DEBT SETTLEMENT SERVICES AGREEMENT MAY NOT PROVIDE FOR APPLICA-
TION OF THE LAW OF ANY JURISDICTION OTHER THAN  THE  UNITED  STATES  AND
THIS STATE.
  6.  IF  A DEBT SETTLEMENT COMPANY COMMUNICATES WITH A DEBTOR PRIMARILY
IN A LANGUAGE OTHER THAN ENGLISH, THEN THE DEBT SETTLEMENT COMPANY SHALL
FURNISH TO THE DEBTOR A WRITTEN TRANSLATION IN THAT  OTHER  LANGUAGE  OF
ALL THE DISCLOSURES AND DOCUMENTS REQUIRED BY THIS ARTICLE.
  S 588-M. FEES. 1. THE TYPES OF FEES THAT A DEBT SETTLEMENT COMPANY MAY
CHARGE A DEBTOR ARE THE FOLLOWING:
  (A) ENROLLMENT FEES; AND
  (B) SETTLEMENT FEES.
  2.  ALL  FEE  TYPES NOT INCLUDED UNDER SUBDIVISION ONE OF THIS SECTION
ARE PROHIBITED, INCLUDING MAINTENANCE FEES.
  3. THE AMOUNT OF AN ENROLLMENT FEE CHARGED BY A DEBT SETTLEMENT COMPA-
NY SHALL NOT EXCEED FIFTY DOLLARS OR SUCH OTHER AMOUNT  AS  SET  BY  THE
SUPERINTENDENT.
  4.  THE  AMOUNT  OF  THE  SETTLEMENT  FEE CHARGED BY A DEBT SETTLEMENT
COMPANY WITH RESPECT TO EACH DEBT COVERED BY A DEBT SETTLEMENT  SERVICES
AGREEMENT SHALL NOT EXCEED THE LESSER OF:
  (A) THE AMOUNT THAT IS REASONABLE AND COMMENSURATE TO THE DEBT SETTLE-
MENT SERVICES PROVIDED TO THE DEBTOR; AND
  (B) THE AMOUNT THAT IS TWENTY PERCENT OF THE DIFFERENCE BETWEEN:
  (I) THE PRINCIPAL AMOUNT OF THE DEBT; AND
  (II) THE AMOUNT:
  (A)  PAID  BY  THE DEBT SETTLEMENT COMPANY TO THE CREDITOR PURSUANT TO
THE SETTLEMENT NEGOTIATED BY THE DEBT SETTLEMENT COMPANY  ON  BEHALF  OF

A. 8341                            17

THE  DEBTOR  AS  FULL  AND COMPLETE SATISFACTION OF THE CREDITOR'S CLAIM
WITH REGARD TO THAT DEBT; OR
  (B)  NEGOTIATED  BY THE DEBT SETTLEMENT COMPANY AND PAID BY THE DEBTOR
TO THE CREDITOR PURSUANT TO A SETTLEMENT NEGOTIATED BY THE DEBT  SETTLE-
MENT  COMPANY  ON BEHALF OF THE DEBTOR AS FULL AND COMPLETE SATISFACTION
OF THE CREDITOR'S CLAIM WITH REGARD TO THAT DEBT.
  5. A DEBT SETTLEMENT COMPANY SHALL NOT COLLECT ANY SETTLEMENT FEE FROM
A DEBTOR UNTIL:
  (A) THE CREDITOR ENTERS INTO A LEGALLY ENFORCEABLE AGREEMENT WITH  THE
DEBTOR  TO ACCEPT FUNDS IN A SPECIFIC DOLLAR AMOUNT AS FULL AND COMPLETE
SATISFACTION OF THE CREDITOR'S CLAIM WITH REGARD TO THAT DEBT; AND
  (B) THOSE FUNDS ARE PROVIDED TO THE CREDITOR:
  (I) BY THE DEBT SETTLEMENT COMPANY ON BEHALF OF THE DEBTOR; OR
  (II) DIRECTLY BY THE DEBTOR PURSUANT TO A SETTLEMENT NEGOTIATED BY THE
DEBT SETTLEMENT COMPANY.
  6. IT SHALL BE UNLAWFUL TO SPLIT  OR  DIVIDE  THE  PROVISION  OF  DEBT
SETTLEMENT  SERVICES  TO A DEBTOR INTO SEPARATE DEBT SETTLEMENT SERVICES
AGREEMENTS FOR THE PURPOSE  OF  COLLECTING  ADDITIONAL  FEES  FROM  SUCH
DEBTOR.
  S  588-N.  DEBTOR  SETTLEMENT  ACCOUNTS; MONTHLY ACCOUNTING. 1. A DEBT
SETTLEMENT COMPANY THAT RECEIVES FUNDS FROM  A  DEBTOR  SHALL  HOLD  ALL
FUNDS  RECEIVED FOR A DEBTOR SETTLEMENT ACCOUNT IN A PROPERLY DESIGNATED
BANK ACCOUNT IN A FEDERALLY INSURED DEPOSITORY INSTITUTION.
  (A) SUCH FUNDS SHALL:
  (I) CONSTITUTE TRUST FUNDS OWNED BY THE DEBTOR  FROM  WHOM  THEY  WERE
RECEIVED;
  (II)  REMAIN  THE  PROPERTY  OF  SUCH DEBTOR UNTIL THE DEBT SETTLEMENT
COMPANY DISBURSES THE FUNDS TO A CREDITOR ON BEHALF OF SUCH DEBTOR;
  (III) BE KEPT SEPARATE AND APART AT ALL TIMES FROM FUNDS BELONGING  TO
THE  DEBT  SETTLEMENT  COMPANY  OR  ANY  OF  ITS OFFICERS, EMPLOYEES, OR
AGENTS; AND
  (IV) BE DEPOSITED IN SUCH BANK ACCOUNT NOT LATER THAN THE END  OF  THE
BUSINESS  DAY  FOLLOWING  RECEIPT  BY THE DEBT SETTLEMENT COMPANY OR ITS
AGENT.
  (B) A DEBT SETTLEMENT COMPANY OR ITS AGENT THAT MAINTAINS ONE OR  MORE
DEBTOR SETTLEMENT ACCOUNTS SHALL OBTAIN AND PRESERVE A WRITTEN AGREEMENT
FROM  EACH  BANK  IN  WHICH ANY SUCH ACCOUNT IS MAINTAINED. SUCH WRITTEN
AGREEMENT SHALL EXPRESSLY PROVIDE THAT THE FUNDS IN SUCH DEBTOR  SETTLE-
MENT  ACCOUNT  SHALL  BE SUBJECT TO NO RIGHT, CHARGE, SECURITY INTEREST,
LIEN, OR CLAIM OF ANY KIND IN FAVOR OF SUCH BANK OR ANY PERSON  CLAIMING
THROUGH SUCH BANK.
  (C)  ANY INTEREST EARNED ON A DEBTOR SETTLEMENT ACCOUNT SHALL BE CRED-
ITED TO THE DEBTOR. IF THE FUNDS OF  MULTIPLE  DEBTORS  ARE  KEPT  IN  A
SINGLE  INTEREST EARNING BANK ACCOUNT, THEN THE INTEREST EARNED SHALL BE
DEPOSITED PRO RATA AMONG THE DEBTORS WHOSE FUNDS ARE IN THE ACCOUNT.
  (D) A DEBT SETTLEMENT COMPANY MAY NOT HOLD FUNDS RECEIVED FOR A DEBTOR
SETTLEMENT ACCOUNT IN AN ACCOUNT ADMINISTERED BY A PERSON THAT GIVES  OR
ACCEPTS  ANY  MONEY  OR  OTHER COMPENSATION IN EXCHANGE FOR REFERRALS OF
BUSINESS INVOLVING THE DEBT SETTLEMENT COMPANY.
  2. A DEBT SETTLEMENT COMPANY SHALL, NO LESS THAN MONTHLY, PROVIDE EACH
DEBTOR WITH WHICH IT HAS A DEBT SETTLEMENT SERVICES AGREEMENT  A  STATE-
MENT  OF FEES PAID, SETTLEMENTS COMPLETED, REMAINING DEBTS AND, IF FUNDS
ARE HELD IN A BANK ACCOUNT PURSUANT TO SUBDIVISION ONE OF THIS  SECTION,
ACCOUNT BALANCES.
  3.  NOTHING  IN  THIS  ARTICLE  REQUIRES THE ESTABLISHMENT OF A DEBTOR
SETTLEMENT ACCOUNT IF NO DEBTOR FUNDS  OTHER  THAN  ENROLLMENT  FEES  OR

A. 8341                            18

EARNED  SETTLEMENT  FEES  ARE  HELD  OR  CONTROLLED BY A DEBT SETTLEMENT
COMPANY.
  S  588-O. CANCELLATION OF DEBT SETTLEMENT SERVICES AGREEMENT; RIGHT TO
REFUNDS. 1.  A DEBTOR MAY CANCEL A DEBT SETTLEMENT SERVICES AGREEMENT AT
ANY TIME UNTIL AFTER THE DEBT SETTLEMENT  COMPANY  HAS  FULLY  PERFORMED
EACH  SERVICE  THE  DEBT  SETTLEMENT  COMPANY  CONTRACTED  TO PERFORM OR
REPRESENTED THAT IT WOULD PERFORM.
  2. IF A DEBTOR CANCELS A DEBT SETTLEMENT SERVICES AGREEMENT NOT  LATER
THAN  NINETY DAYS AFTER THE DATE OF THE EXECUTION OF THE DEBT SETTLEMENT
SERVICES AGREEMENT OR AT ANY TIME UPON A VIOLATION  OF  A  PROVISION  OF
THIS ARTICLE BY THE DEBT SETTLEMENT COMPANY, THE DEBT SETTLEMENT COMPANY
SHALL REFUND TO THE DEBTOR:
  (A)  ALL  FEES PAID TO THE DEBT SETTLEMENT COMPANY BY THE DEBTOR, WITH
THE EXCEPTION OF ANY EARNED SETTLEMENT FEE; AND
  (B) ALL FUNDS PROVIDED BY THE DEBTOR TO THE  DEBT  SETTLEMENT  COMPANY
THAT:
  (I) HAVE ACCUMULATED IN A DEBTOR SETTLEMENT ACCOUNT; AND
  (II) THE DEBT SETTLEMENT COMPANY HAS NOT DISBURSED TO CREDITORS.
  3. IF A DEBTOR CANCELS A DEBT SETTLEMENT SERVICES AGREEMENT LATER THAN
NINETY  DAYS  AFTER  THE  DATE  OF  THE EXECUTION OF THE DEBT SETTLEMENT
SERVICES AGREEMENT AND FOR ANY REASON OTHER THAN FOR A  VIOLATION  OF  A
PROVISION  OF  THIS  ARTICLE  BY  THE  DEBT SETTLEMENT COMPANY, THE DEBT
SETTLEMENT COMPANY SHALL REFUND TO THE DEBTOR:
  (A) ALL FEES PAID TO THE DEBT SETTLEMENT COMPANY BY THE  DEBTOR,  WITH
THE EXCEPTION OF ANY EARNED SETTLEMENT FEE AND ANY ENROLLMENT FEE; AND
  (B)  ALL  FUNDS  PROVIDED BY THE DEBTOR TO THE DEBT SETTLEMENT COMPANY
THAT:
  (I) HAVE ACCUMULATED IN A DEBTOR SETTLEMENT ACCOUNT; AND
  (II) THE DEBT SETTLEMENT COMPANY HAS NOT DISBURSED TO CREDITORS.
  4. A DEBT SETTLEMENT COMPANY SHALL MAKE ANY REFUND REQUIRED UNDER THIS
SECTION WITHIN FIVE BUSINESS DAYS AFTER RECEIPT  OF  WRITTEN  NOTICE  OF
CANCELLATION,  AND  SHALL  INCLUDE  WITH SUCH REFUND A FULL STATEMENT OF
ACCOUNT SHOWING:
  (A) THE FEES RECEIVED BY THE DEBT SETTLEMENT COMPANY FROM THE DEBTOR;
  (B) THE FEES REFUNDED TO THE DEBTOR BY THE DEBT SETTLEMENT COMPANY;
  (C) THE PAYMENTS MADE BY THE DEBT SETTLEMENT COMPANY TO  CREDITORS  ON
BEHALF OF THE DEBTOR;
  (D) THE SETTLEMENT FEES EARNED, IF ANY, BY THE DEBT SETTLEMENT COMPANY
BY SETTLING DEBT ON BEHALF OF THE DEBTOR;
  (E)  THE  SAVINGS  OF  THE  DEBTOR HELD BY THE DEBT SETTLEMENT COMPANY
IMMEDIATELY PRIOR TO SUCH REFUND; AND
  (F) THE SAVINGS OF THE DEBTOR REFUNDED  TO  THE  DEBTOR  BY  THE  DEBT
SETTLEMENT COMPANY.
  5.  UPON  CANCELLATION  OF A DEBT SETTLEMENT SERVICES AGREEMENT BY THE
DEBTOR:
  (A) ALL POWERS OF ATTORNEY AND DIRECT DEBIT AUTHORIZATIONS GRANTED  TO
THE  DEBT  SETTLEMENT  COMPANY BY THE DEBTOR SHALL BE CONSIDERED REVOKED
AND VOIDED; AND
  (B) THE DEBT SETTLEMENT COMPANY  SHALL  IMMEDIATELY  TAKE  ANY  ACTION
NECESSARY TO REFLECT CANCELLATION OF THE DEBT SETTLEMENT SERVICES AGREE-
MENT, INCLUDING BUT NOT LIMITED TO NOTIFYING THE RECIPIENT OF ANY DIRECT
DEBIT AUTHORIZATION.
  6.  UPON THE CANCELLATION OF A DEBT SETTLEMENT SERVICES AGREEMENT, THE
DEBT SETTLEMENT COMPANY SHALL  PROVIDE  TIMELY  WRITTEN  NOTICE  OF  THE
CANCELLATION  OF  SUCH  AGREEMENT TO EACH OF THE CREDITORS WITH WHOM THE

A. 8341                            19

DEBT SETTLEMENT COMPANY HAS HAD ANY PRIOR COMMUNICATION ON BEHALF OF THE
DEBTOR IN CONNECTION WITH THE PROVISION OF ANY DEBT SETTLEMENT SERVICES.
  S 588-P. OBLIGATION OF GOOD FAITH. A DEBT SETTLEMENT COMPANY SHALL ACT
IN GOOD FAITH IN ALL MATTERS UNDER THIS ARTICLE.
  S  588-Q.  PROHIBITED ACTIVITIES. 1. NO PERSON, EXCEPT A LICENSEE, MAY
MAKE ANY REPRESENTATION, DIRECTLY OR INDIRECTLY, ORALLY  OR  IN  WRITING
THAT HE, SHE, OR IT IS LICENSED UNDER THIS ARTICLE.
  2.  NO  PERSON,  OTHER  THAN  A  LICENSEE  OR A PERSON EXEMPT FROM THE
LICENSING REQUIREMENTS OF  THIS  ARTICLE,  SHALL  USE  THE  TITLE  "DEBT
SETTLEMENT  COMPANY"  OR THE TERMS "DEBT SETTLEMENT" OR "DEBT SETTLEMENT
SERVICES" IN ANY ADVERTISING, MARKETING COMMUNICATION, BUSINESS CARD, OR
LETTERHEAD.
  3. A DEBT SETTLEMENT COMPANY SHALL NOT DO ANY OF THE FOLLOWING:
  (A) CHARGE OR COLLECT FROM A DEBTOR ANY FEE NOT PERMITTED  BY,  IN  AN
AMOUNT IN EXCESS OF THE MAXIMUM AMOUNT PERMITTED BY, OR AT A TIME EARLI-
ER  THAN  PERMITTED BY SECTION FIVE HUNDRED EIGHTY-EIGHT-M OF THIS ARTI-
CLE;
  (B) INCLUDE IN A DEBT SETTLEMENT SERVICES AGREEMENT ANY SECURED DEBT;
  (C) ADVISE OR REPRESENT, EXPRESSLY OR  BY  IMPLICATION,  THAT  DEBTORS
SHOULD STOP MAKING PAYMENTS TO THEIR CREDITORS;
  (D)  ADVISE  OR  REPRESENT,  EXPRESSLY OR BY IMPLICATION, THAT DEBTORS
SHOULD STOP COMMUNICATING WITH THEIR CREDITORS;
  (E) ENGAGE IN ANY PRACTICE THAT PROHIBITS OR LIMITS THE DEBTOR OR  ANY
CREDITOR FROM COMMUNICATION DIRECTLY WITH ONE ANOTHER;
  (F)  CHANGE THE MAILING ADDRESS ON ANY OF A DEBTOR'S STATEMENTS FROM A
CREDITOR;
  (G) MAKE LOANS OR OFFER CREDIT OR SOLICIT OR ACCEPT  ANY  NOTE,  MORT-
GAGE,  OR  NEGOTIABLE INSTRUMENT OTHER THAN A CHECK SIGNED BY THE DEBTOR
AND DATED NO LATER THAN THE DATE OF SIGNATURE;
  (H) TAKE ANY CONFESSION OF JUDGMENT OR POWER OF  ATTORNEY  TO  CONFESS
JUDGMENT  AGAINST THE DEBTOR OR APPEAR AS THE DEBTOR OR ON BEHALF OF THE
DEBTOR IN ANY JUDICIAL, ADMINISTRATIVE, OR OTHER ACTION OR PROCEEDING;
  (I) TAKE ANY RELEASE OR WAIVER OF ANY OBLIGATION TO  BE  PERFORMED  ON
THE PART OF THE DEBT SETTLEMENT COMPANY OR ANY RIGHT OF THE DEBTOR;
  (J) ADVERTISE, DISPLAY, DISTRIBUTE, BROADCAST, OR TELEVISE SERVICES OR
PERMIT  SERVICES  TO BE ADVERTISED, DISPLAYED, DISTRIBUTED, BROADCASTED,
OR TELEVISED,  IN  ANY  MANNER  WHATSOEVER,  THAT  CONTAINS  ANY  FALSE,
MISLEADING,  OR  DECEPTIVE  STATEMENTS OR REPRESENTATIONS WITH REGARD TO
ANY MATTER INVOLVING THE BUSINESS OF DEBT SETTLEMENT SERVICES, INCLUDING
BUT NOT LIMITED TO THE FEES TO BE CHARGED, THE SERVICES TO BE PERFORMED,
THE RESULTS OR OUTCOMES OF THOSE SERVICES, OR THE EFFECT THOSE  SERVICES
WILL HAVE ON A DEBTOR'S CREDIT RATING OR ON CREDITOR COLLECTION EFFORTS;
  (K)  RECEIVE  ANY  CASH,  FEE,  GIFT, BONUS, PREMIUM, REWARD, OR OTHER
COMPENSATION FROM ANY PERSON OTHER THAN THE DEBTOR  EXPLICITLY  FOR  THE
PROVISION OF DEBT SETTLEMENT SERVICES TO THAT DEBTOR;
  (L)  OFFER  OR  PROVIDE GIFTS OR BONUSES TO DEBTORS FOR SIGNING A DEBT
SETTLEMENT SERVICES AGREEMENT OR FOR REFERRING ANOTHER POTENTIAL CUSTOM-
ER OR CUSTOMER;
  (M) EXCEPT WITH THE PRIOR CONSENT OF THE DEBTOR,  DISCLOSE  TO  ANYONE
THE  NAME  OR  ANY  PERSONAL  INFORMATION  OF A DEBTOR FOR WHOM THE DEBT
SETTLEMENT COMPANY HAS PROVIDED OR IS PROVIDING DEBT SETTLEMENT SERVICES
OTHER THAN TO A DEBTOR'S OWN CREDITORS OR THE DEBT SETTLEMENT  COMPANY'S
AGENTS  OR  AFFILIATES  FOR  THE  PURPOSE  OF  PROVIDING DEBT SETTLEMENT
SERVICES. "PERSONAL INFORMATION  OF  A  DEBTOR"  AS  USED  HEREIN  SHALL
INCLUDE  BUT  NOT  BE  LIMITED  TO A DEBTOR'S NAME, PHOTOGRAPH, ADDRESS,
TELEPHONE NUMBER, SOCIAL SECURITY NUMBER, DATE OF BIRTH, DRIVER'S  IDEN-

A. 8341                            20

TIFICATION  NUMBER,  CREDIT  CARD  NUMBER, BANK ACCOUNT NUMBER, MOTHER'S
MAIDEN NAME, MEDICAL OR DISABILITY INFORMATION, IF ANY, AS WELL  AS  ANY
OTHER IDENTIFICATION NUMBER WHICH A LICENSEE MAY POSSESS;
  (N)  ENTER  INTO  A  DEBT  SETTLEMENT SERVICES AGREEMENT WITH A DEBTOR
WITHOUT FIRST PROVIDING  THE  DISCLOSURES  AND  FINANCIAL  ANALYSIS  AND
MAKING THE DETERMINATIONS REQUIRED BY THIS ARTICLE;
  (O)  MISREPRESENT ANY MATERIAL FACT, MAKE A MATERIAL OMISSION, OR MAKE
A FALSE PROMISE DIRECTED TO ONE OR MORE DEBTORS IN CONNECTION  WITH  THE
SOLICITATION,  OFFERING,  CONTRACTING,  OR  PROVISION OF DEBT SETTLEMENT
SERVICES;
  (P) VIOLATE THE PROVISIONS OF APPLICABLE DO-NOT-CALL STATUTES;
  (Q) PURCHASE DEBTS OR ENGAGE IN  THE  PRACTICE  OR  BUSINESS  OF  DEBT
COLLECTION;
  (R)  REPRESENT  OR  IMPLY  TO A PERSON PARTICIPATING IN OR CONSIDERING
DEBT SETTLEMENT SERVICES THAT THE PURCHASE OF  ANY  ANCILLARY  GOODS  OR
SERVICES IS REQUIRED;
  (S) USE A COMMUNICATION WHICH SIMULATES IN ANY MANNER A LEGAL OR JUDI-
CIAL  PROCESS,  OR WHICH GIVES THE FALSE APPEARANCE OF BEING AUTHORIZED,
ISSUED,  OR  APPROVED  BY  A   GOVERNMENT,   GOVERNMENTAL   AGENCY,   OR
ATTORNEY-AT-LAW; OR
  (T)  MAKE  A  REPRESENTATION  THAT  THE  DEBT  SETTLEMENT COMPANY WILL
FURNISH MONEY TO PAY BILLS OR PREVENT ATTACHMENT.
  S 588-R. SUPERINTENDENT AUTHORIZED TO EXAMINE. 1. FOR THE  PURPOSE  OF
DISCOVERING  VIOLATIONS OF THIS ARTICLE OR SECURING INFORMATION LAWFULLY
REQUIRED BY HIM OR HER HEREUNDER, THE SUPERINTENDENT MAY  AT  ANY  TIME,
AND  AS  OFTEN  AS  HE  OR  SHE MAY DETERMINE, EITHER PERSONALLY OR BY A
PERSON DULY DESIGNATED BY HIM OR HER, INVESTIGATE THE BUSINESS AND EXAM-
INE THE BOOKS, ACCOUNTS, RECORDS, AND FILES USED THEREIN OF EVERY LICEN-
SEE HEREUNDER. FOR THAT PURPOSE THE SUPERINTENDENT AND HIS OR  HER  DULY
DESIGNATED  REPRESENTATIVE  SHALL  HAVE  FREE  ACCESS TO THE OFFICES AND
PLACE OF BUSINESS, BOOKS, ACCOUNTS, PAPERS, RECORDS,  FILES,  SAFES  AND
VAULTS  OF  ALL  SUCH  LICENSEES. THE SUPERINTENDENT AND ANY PERSON DULY
DESIGNATED BY HIM OR HER SHALL HAVE AUTHORITY TO REQUIRE THE  ATTENDANCE
OF  AND  TO EXAMINE UNDER OATH ALL PERSONS WHOSE TESTIMONY HE OR SHE MAY
REQUIRE RELATIVE TO SUCH BUSINESS. THE EXPENSES INCURRED IN  MAKING  ANY
EXAMINATION  PURSUANT TO THIS SECTION SHALL BE ASSESSED AGAINST AND PAID
BY THE LICENSEE SO  EXAMINED,  EXCEPT  THAT  TRAVELING  AND  SUBSISTENCE
EXPENSES  SO  INCURRED SHALL BE CHARGED AGAINST AND PAID BY LICENSEES IN
SUCH PROPORTIONS AS THE SUPERINTENDENT SHALL DEEM JUST  AND  REASONABLE,
AND  SUCH  PROPORTIONATE CHARGES SHALL BE ADDED TO THE ASSESSMENT OF THE
OTHER EXPENSES INCURRED UPON EACH EXAMINATION. UPON  WRITTEN  NOTICE  BY
THE  SUPERINTENDENT OF THE TOTAL AMOUNT OF SUCH ASSESSMENT, THE LICENSEE
SHALL BECOME LIABLE FOR AND SHALL PAY SUCH ASSESSMENT TO THE SUPERINTEN-
DENT.
  S 588-S. LICENSEE'S BOOKS AND RECORDS; REPORTS. 1. THE LICENSEE  SHALL
CREATE AND USE IN ITS BUSINESS SUCH BOOKS, ACCOUNTS, AND RECORDS AS WILL
ENABLE  THE SUPERINTENDENT TO DETERMINE WHETHER SUCH LICENSEE IS COMPLY-
ING WITH THE PROVISIONS OF THIS ARTICLE AND WITH  THE  RULES  AND  REGU-
LATIONS  LAWFULLY  MADE  BY THE SUPERINTENDENT HEREUNDER. EVERY LICENSEE
SHALL PRESERVE SUCH BOOKS, ACCOUNTS, AND RECORDS FOR AT LEAST SIX  YEARS
BY ANY MANNER PERMITTED BY THIS CHAPTER.
  2.  EACH LICENSEE SHALL ANNUALLY, ON OR BEFORE THE FIRST DAY OF FEBRU-
ARY, FILE A REPORT WITH THE SUPERINTENDENT GIVING  SUCH  INFORMATION  AS
THE  SUPERINTENDENT  MAY  REQUIRE CONCERNING THE BUSINESS AND OPERATIONS
DURING THE PRECEDING CALENDAR YEAR OF SUCH LICENSEE UNDER  AUTHORITY  OF
THIS  ARTICLE.  SUCH  REPORT SHALL BE SUBSCRIBED AND AFFIRMED AS TRUE BY

A. 8341                            21

THE LICENSEE UNDER THE PENALTIES OF PERJURY AND SHALL  BE  IN  THE  FORM
PRESCRIBED  BY  THE  SUPERINTENDENT.  IN ADDITION TO ANNUAL REPORTS, THE
SUPERINTENDENT MAY REQUIRE SUCH ADDITIONAL REGULAR OR SPECIAL REPORTS AS
HE  OR  SHE  MAY  DEEM  NECESSARY TO THE PROPER SUPERVISION OF LICENSEES
UNDER THIS ARTICLE.  SUCH  ADDITIONAL  REPORTS  SHALL  BE  IN  THE  FORM
PRESCRIBED BY THE SUPERINTENDENT AND SHALL BE SUBSCRIBED AND AFFIRMED AS
TRUE UNDER THE PENALTIES OF PERJURY.
  3.  EACH  LICENSEE, WITHIN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF THE
LICENSEE'S FISCAL YEAR, SHALL SUBMIT AN INDEPENDENTLY AUDITED  FINANCIAL
STATEMENT TO THE SUPERINTENDENT.
  S  588-T.  PENALTIES;  NONCOMPLIANCE.  1.  ANY PERSON WHO VIOLATES ANY
PROVISION OF THE LICENSING REQUIREMENTS OF SECTION FIVE HUNDRED  EIGHTY-
EIGHT-B  OF  THIS  ARTICLE  SHALL  BE  GUILTY  OF A CLASS A MISDEMEANOR,
PUNISHABLE AS PROVIDED IN ARTICLES SEVENTY AND EIGHTY OF THE PENAL LAW.
  2. ANY DEBT SETTLEMENT SERVICES AGREEMENT THAT DOES  NOT  COMPLY  WITH
THE PROVISIONS OF THIS ARTICLE IS VOID.
  3.  ANY  WAIVER BY A DEBTOR OF ANY PROTECTION PROVIDED BY OR ANY RIGHT
OF THE DEBTOR UNDER THIS ARTICLE IS VOID.
  4. ANY ATTEMPT BY ANY PERSON TO OBTAIN A WAIVER FROM ANY DEBTOR OF ANY
PROTECTION PROVIDED BY OR ANY RIGHT OR PROTECTION OF THE DEBTOR  OR  ANY
OBLIGATION  OR  REQUIREMENT  OF  THE  DEBT SETTLEMENT COMPANY UNDER THIS
ARTICLE SHALL BE A VIOLATION OF THIS ARTICLE.
  5. UPON PROPER NOTICE OF A VOID DEBT  SETTLEMENT  SERVICES  AGREEMENT,
THE  DEBT SETTLEMENT COMPANY SHALL MAKE A REFUND TO THE DEBTOR AS IF THE
DEBT SETTLEMENT SERVICES AGREEMENT HAD BEEN  CANCELLED  AS  PROVIDED  IN
SUBDIVISION TWO OF SECTION FIVE HUNDRED EIGHTY-EIGHT-O OF THIS ARTICLE.
  6.  IN  ADDITION  TO  SUCH PENALTIES AS MAY OTHERWISE BE APPLICABLE BY
LAW, THE SUPERINTENDENT MAY, AFTER NOTICE AND HEARING AS PROVIDED  ELSE-
WHERE IN THIS ARTICLE, REQUIRE ANY PERSON FOUND VIOLATING THE PROVISIONS
OF THIS ARTICLE OR THE RULES OR REGULATIONS PROMULGATED HEREUNDER TO PAY
TO  THE PEOPLE OF THIS STATE AN ADDITIONAL PENALTY FOR EACH VIOLATION OF
THE ARTICLE OR ANY REGULATION OR POLICY PROMULGATED HEREUNDER A SUM  NOT
TO EXCEED AN AMOUNT AS DETERMINED PURSUANT TO SECTION FORTY-FOUR OF THIS
CHAPTER FOR EACH SUCH VIOLATION.
  7.  NOTHING  IN THIS ARTICLE SHALL CREATE A PRIVATE RIGHT OF ACTION ON
BEHALF OF A DEBTOR AGAINST A DEBT SETTLEMENT COMPANY FOR  VIOLATIONS  OF
THIS ARTICLE.
  8.  NOTHING  IN  THIS  ARTICLE SHALL LIMIT ANY STATUTORY OR COMMON-LAW
RIGHT OF ANY PERSON TO BRING ANY ACTION IN ANY COURT FOR ANY ACT, OR THE
RIGHT OF THE STATE TO PUNISH ANY PERSON FOR ANY VIOLATION OF ANY LAW.
  S 588-U. AUTHORITY OF SUPERINTENDENT.  THE  SUPERINTENDENT  IS  HEREBY
AUTHORIZED  AND EMPOWERED TO MAKE, IN ADDITION HERETO AND NOT INCONSIST-
ENT HEREWITH, SUCH GENERAL RULES  AND  REGULATIONS,  AND  SUCH  SPECIFIC
RULINGS,  DEMANDS,  AND FINDINGS AS HE OR SHE MAY DEEM NECESSARY FOR THE
PROPER CONDUCT OF THE BUSINESS AUTHORIZED AND LICENSED HEREUNDER AND FOR
THE ENFORCEMENT OF THIS ARTICLE.
  S 588-V. SEVERABILITY. IF ANY WORD, PHRASE,  CLAUSE,  SENTENCE,  PARA-
GRAPH,  SUBDIVISION,  SECTION, OR PART OF THIS ARTICLE SHALL BE ADJUDGED
BY ANY COURT OF COMPETENT JURISDICTION  TO  BE  INVALID,  SUCH  JUDGMENT
SHALL  NOT AFFECT, IMPAIR, OR INVALIDATE THE REMAINDER THEREOF WHICH CAN
BE GIVEN EFFECT WITHOUT THE INVALID PROVISION, BUT SHALL BE CONFINED  IN
ITS OPERATION TO THE WORD, PHRASE, CLAUSE, SENTENCE, PARAGRAPH, SUBDIVI-
SION,  SECTION, OR PART OF THIS ARTICLE DIRECTLY INVOLVED IN THE CONTRO-
VERSY IN WHICH THE JUDGMENT SHALL HAVE BEEN RENDERED.
  S 11. This act shall take effect on  the  one  hundred  eightieth  day
after  it shall have become a law and shall apply to all debt settlement

A. 8341                            22

services agreements entered into or  offered  on  or  after  such  date;
provided,  however,  that  effective  immediately, the superintendent of
banks shall add, amend, and/or repeal any rule or regulation he  or  she
deems necessary or desirable for implementation of this act.