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

                                 5215--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 3, 2011
                               ___________

Introduced  by  Sens.  GRIFFO, ZELDIN -- read twice and ordered printed,
  and when  printed  to  be  committed  to  the  Committee  on  Consumer
  Protection  -- reported favorably from said committee and committed to
  the Committee on Banks -- committee discharged, bill amended,  ordered
  reprinted as amended and recommitted to said committee

AN  ACT  to  amend  the  general  business  law  and the banking law, in
  relation to defining terms related to budget planning  and  regulating
  the activities of budget planners

  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
business  of budget planning with a particular debtor whereby THE DEBTOR
AGREES TO PAY TO SUCH PERSON ANY  VALUABLE  CONSIDERATION  AND  (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 plan
agreed  upon  [and]; OR (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.]  PERSON ENGAGED IN THE BUSINESS OF
BUDGET PLANNING PROVIDES ADVICE OR SERVICES, OR ACTS AS AN  INTERMEDIARY
BETWEEN  OR ON BEHALF OF A DEBTOR AND ONE OR MORE OF THE DEBTOR'S CREDI-
TORS, WHERE THE PRIMARY PURPOSE OF THE ADVICE, SERVICE, OR ACTION IS  TO

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11381-02-1
              

S. 5215--A                          2

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; OR (III) THE PERSON ENGAGED IN THE BUSINESS OF BUDGET PLANNING
PROVIDES  SERVICES  RELATED TO, OR PROVIDES SERVICES ADVISING, ENCOURAG-
ING, ASSISTING, OR COUNSELING A DEBTOR  TO,  ACCUMULATE  FUNDS  FOR  THE
PRIMARY  PURPOSE OF PROPOSING, OBTAINING, OR SEEKING TO OBTAIN A SETTLE-
MENT, 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  TO  PAY
TO  SUCH  PERSON. For the purposes of this article, a person [or entity]
shall be considered as engaged in the business of budget planning in New
York, and subject to this article and the licensing and  other  require-
ments of article twelve-C of the banking law, if such person [or entity]
solicits  budget  planning business within this state 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, MEANS AN INDIVIDUAL, LIMITED
LIABILITY COMPANY, CORPORATION, ASSOCIATION, OR ANY OTHER LEGAL ENTITY.
  3. 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 incorporated
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] OR EXEMPT FROM LICENSURE AS A BUDGET  PLAN-
NER UNDER ARTICLE TWELVE-C OF THE BANKING LAW.
  [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  456 of the general business law, as amended by chapter
456 of the laws of 2006, is amended to read as follows:
  S 456. Budget planning prohibited. No person [or entity] shall  engage
in  the  business  of budget planning as defined in section four hundred
fifty-five of this article, except as authorized in article twelve-C  of
the banking law.
  S  3.  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. 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 FOUR HUNDRED  FIFTY-SIX  OF
THIS ARTICLE shall be guilty of a misdemeanor for each such violation.
  S  4. Section 579 of the banking law is renumbered section 579-a and a
new section 579 is added to read as follows:
  S 579. DEFINITIONS. AS USED IN THIS ARTICLE:
  1. "PERSON" MEANS AN INDIVIDUAL, PARTNERSHIP, LIMITED LIABILITY COMPA-
NY, CORPORATION, ASSOCIATION, OR ANY OTHER LEGAL ENTITY.

S. 5215--A                          3

  2. "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 PLAN AT THE TIME WHEN THE DEBTOR ENTERS INTO SUCH DSP.
  3.  "DEBT  MANAGEMENT PLAN" OR "DMP" MEANS A CONTRACT BETWEEN A PERSON
AND A DEBTOR WHEREBY  THE  PERSON  WILL  PROVIDE  BUDGET  PLANNING  THAT
CONTEMPLATES THAT CREDITORS WILL REDUCE FINANCE CHARGES OR FEES FOR LATE
PAYMENT, DEFAULT OR DELINQUENCY.
  4.  "DEBT  SETTLEMENT PLAN" OR "DSP" MEANS A CONTRACT BETWEEN A PERSON
AND A DEBTOR WHEREBY  THE  PERSON  WILL  PROVIDE  BUDGET  PLANNING  THAT
CONTEMPLATES  THAT CREDITORS WILL SETTLE DEBTS FOR LESS THAN THE PRINCI-
PAL AMOUNT OF THE DEBT.
  S 5. Section 579-a of the banking law, as amended by  chapter  629  of
the  laws  of  2002  and  as  renumbered by section four of this act, is
amended to read as follows:
  S 579-a.  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
shall engage in the business of budget planning as defined  in  subdivi-
sion  one of section four hundred fifty-five of the general business law
of this state except as authorized by this  article  and  without  first
obtaining a license from the superintendent, EXCEPT:
  1.  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 BUDGET PLANNER, AND NOT PROVIDING BUDGET PLANNING SERVICES, EXCEPT
AS INCIDENTAL TO LEGAL REPRESENTATION; OR
  2. ANY PUBLIC OFFICER WHILE ACTING IN AN  OFFICIAL  CAPACITY  AND  ANY
PERSON ACTING UNDER COURT ORDER; OR
  3. ANY PERSON WHILE PERFORMING SERVICES INCIDENTAL TO THE DISSOLUTION,
WINDING UP, OR LIQUIDATING OF A PARTNERSHIP, CORPORATION, OR OTHER BUSI-
NESS ENTERPRISE; OR
  4.  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 OR AFFILIATE OF ANY SUCH BANK, TRUST COMPANY,
SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT  UNION  WHICH  DOES
NOT  ENGAGE  IN  BUDGET  PLANNING  EXCEPT  AS  INCIDENTAL TO ITS BANKING
SERVICES; OR
  5. AN ATTORNEY IN PROVIDING INFORMATION, ADVICE,  OR  LEGAL  REPRESEN-
TATION  WITH RESPECT TO FILING A CASE OR PRECEDING UNDER TITLE 11 OF THE
UNTIES STATES CODE; OR
  6. 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.
  S  6.  Subdivision  4 of section 583-a of the banking law, as added by
chapter 142 of the laws of 1992, is amended to read as follows:
  4. As used in this section[: (a)],  the  term  ["person"  includes  an
individual, partnership, corporation, association or any other organiza-
tion,  and  (b)  the  term]  "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the manage-
ment 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 per centum or more of the voting stock of any

S. 5215--A                          4

licensee or of any person which owns, controls or holds  with  power  to
vote  ten per centum 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 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 hold-
ing of such voting stock constitutes or would constitute control of such
licensee for purposes of this section.
  S 7. Sections 584-a and  584-b  of  the  banking  law  are  renumbered
sections  584-c and 584-d and two new sections 584-a and 584-b are added
to read as follows:
  S 584-A. DISCLOSURES. BEFORE A DEBTOR SIGNS A CONTRACT WITH A LICENSEE
FOR BUDGET PLANNING, THE LICENSEE MUST DISCLOSE TRUTHFULLY, IN  A  CLEAR
AND CONSPICUOUS MANNER, THE FOLLOWING MATERIAL INFORMATION:
  1.  THE  AMOUNT  OF TIME NECESSARY TO ACHIEVE THE REPRESENTED RESULTS,
AND TO THE EXTENT THAT THE BUDGET  PLANNING  MAY  INCLUDE  A  SETTLEMENT
OFFER  TO  ANY OF THE DEBTOR'S CREDITORS OR DEBT COLLECTORS, THE TIME BY
WHICH THE LICENSEE WILL MAKE A BONA FIDE SETTLEMENT  OFFER  TO  EACH  OF
THEM;
  2.  TO  THE  EXTENT  THAT THE BUDGET PLANNING MAY INCLUDE A SETTLEMENT
OFFER TO ANY OF THE DEBTOR'S CREDITORS OR DEBT COLLECTORS, THE AMOUNT OF
MONEY OR THE PERCENTAGE OF EACH OUTSTANDING DEBT THAT  THE  DEBTOR  MUST
ACCUMULATE BEFORE THE LICENSEE WILL MAKE A BONA FIDE SETTLEMENT OFFER TO
EACH OF THEM;
  3. TO THE EXTENT THAT ANY ASPECT OF THE BUDGET PLANNING RELIES UPON OR
RESULTS  IN THE DEBTOR'S FAILURE TO MAKE TIMELY PAYMENTS TO CREDITORS OR
DEBT COLLECTORS, THAT  THE  USE  OF  THE  BUDGET  PLANNING  WILL  LIKELY
ADVERSELY AFFECT THE DEBTOR'S CREDITWORTHINESS, MAY RESULT IN THE DEBTOR
BEING SUBJECT TO COLLECTION ACTIONS OR SUED BY CREDITORS OR DEBT COLLEC-
TORS,  AND  MAY  INCREASE THE AMOUNT OF MONEY THE DEBTOR OWES DUE TO THE
ACCRUAL OF FEES AND INTEREST; AND
  4. TO THE EXTENT THAT THE LICENSEE REQUESTS OR REQUIRES THE DEBTOR  TO
PLACE  FUNDS IN AN ACCOUNT AT AN INSURED FINANCIAL INSTITUTION, THAT THE
DEBTOR OWNS THE FUNDS HELD IN THE ACCOUNT, THE DEBTOR MAY WITHDRAW  FROM
THE  BUDGET  PLANNING  AT  ANY  TIME WITHOUT PENALTY, AND, IF THE DEBTOR
WITHDRAWS, THE DEBTOR MUST RECEIVE ALL FUNDS IN THE ACCOUNT, OTHER  THAN
FEES  EARNED BY THE LICENSEE, WITHIN SEVEN BUSINESS DAYS OF THE DEBTOR'S
REQUEST.
  S 584-B. FEES. A LICENSEE SHALL NOT RECEIVE  PAYMENT  OF  ANY  FEE  OR
CONSIDERATION FOR ANY BUDGET PLANNING UNTIL AND UNLESS:
  1.  THE  LICENSEE  HAS  RENEGOTIATED,  SETTLED,  REDUCED, OR OTHERWISE
ALTERED THE TERMS OF AT LEAST ONE DEBT PURSUANT  TO  A  DEBT  SETTLEMENT
PLAN OR DEBT MANAGEMENT PLAN;
  2.  THE  DEBTOR  HAS  MADE  AT LEAST ONE PAYMENT PURSUANT TO THAT DEBT
SETTLEMENT PLAN OR DEBT MANAGEMENT PLAN; AND
  3. THE FEE OR CONSIDERATION FOR SETTLING EACH INDIVIDUAL DEBT ENROLLED
IN A DEBT SETTLEMENT PLAN SHALL NOT EXCEED TWENTY-FIVE  PERCENT  OF  THE
DEBT AT THE TIME IT WAS ENROLLED, AND MUST EITHER:
  (A)  BEAR  THE  SAME  PROPORTIONAL  RELATIONSHIP  TO THE TOTAL FEE FOR
SETTLING THE ENTIRE DEBT BALANCE AS THE INDIVIDUAL DEBT AMOUNT BEARS  TO
THE  ENTIRE  DEBT AMOUNT. THE INDIVIDUAL DEBT AMOUNT AND THE ENTIRE DEBT
AMOUNT ARE THOSE OWED AT THE TIME THE DEBT WAS ENROLLED  IN  THE  BUDGET
PLANNING; OR

S. 5215--A                          5

  (B) BE A PERCENTAGE OF THE AMOUNT SAVED AS A RESULT OF THE SETTLEMENT.
THE  PERCENTAGE CHARGED CANNOT CHANGE FROM ONE INDIVIDUAL DEBT TO ANOTH-
ER. THE AMOUNT SAVED IS THE DIFFERENCE BETWEEN THE AMOUNT  OWED  AT  THE
TIME THE DEBT WAS ENROLLED IN THE BUDGET PLANNING AND THE AMOUNT ACTUAL-
LY PAID TO SATISFY THE DEBT.
  4.  NOTHING  IN  THIS  SECTION  PROHIBITS  REQUESTING OR REQUIRING THE
DEBTOR TO PLACE FUNDS IN AN ACCOUNT TO BE USED FOR THE  LICENSEE'S  FEES
AND FOR PAYMENTS TO CREDITORS OR DEBT COLLECTORS, PROVIDED THAT:
  (A)  THE FUNDS ARE HELD IN AN ACCOUNT AT AN INSURED FINANCIAL INSTITU-
TION;
  (B) THE DEBTOR OWNS THE FUNDS HELD IN THE ACCOUNT AND IS PAID  ACCRUED
INTEREST ON THE ACCOUNT, IF ANY;
  (C) IF THE LICENSEE DOES NOT ADMINISTER THE ACCOUNT, THE ENTITY ADMIN-
ISTERING THE ACCOUNT IS NOT OWNED OR CONTROLLED BY, OR IN ANY WAY AFFIL-
IATED WITH, THE LICENSEE;
  (D)  THE  ENTITY ADMINISTERING THE ACCOUNT DOES NOT GIVE OR ACCEPT ANY
MONEY OR OTHER COMPENSATION IN EXCHANGE FOR REFERRALS OF BUSINESS BY THE
LICENSEE; AND
  (E) THE DEBTOR MAY WITHDRAW FROM THE BUDGET PLANNING AT ANY TIME WITH-
OUT PENALTY, AND MUST RECEIVE ALL FUNDS IN THE ACCOUNT, OTHER THAN  FEES
EARNED  BY  THE  LICENSEE,  WITHIN  SEVEN  BUSINESS DAYS OF THE DEBTOR'S
REQUEST.
  S 8. Section 584-d of the banking law, as renumbered by section  seven
of  this  act,  is  amended  by  adding a new subdivision 3-a to read as
follows:
  3-A. NO LICENSEE SHALL MISREPRESENT, DIRECTLY OR BY  IMPLICATION,  ANY
MATERIAL  ASPECT  OF ANY BUDGET PLANNING, INCLUDING, BUT NOT LIMITED TO,
THE AMOUNT OF MONEY OR THE PERCENTAGE OF THE DEBT AMOUNT THAT  A  DEBTOR
MAY  SAVE BY USING SUCH SERVICE; THE AMOUNT OF TIME NECESSARY TO ACHIEVE
THE REPRESENTED RESULTS; THE AMOUNT OF MONEY OR THE PERCENTAGE  OF  EACH
OUTSTANDING DEBT THAT THE DEBTOR MUST ACCUMULATE BEFORE THE BUDGET PLAN-
NER  WILL  INITIATE ATTEMPTS WITH THE DEBTOR'S CREDITORS OR DEBT COLLEC-
TORS OR MAKE A BONA FIDE OFFER TO NEGOTIATE, SETTLE, OR MODIFY THE TERMS
OF THE DEBTOR'S DEBT; THE EFFECT OF THE SERVICE ON A DEBTOR'S CREDITWOR-
THINESS; THE EFFECT OF THE SERVICE ON COLLECTION EFFORTS OF THE DEBTOR'S
CREDITORS OR DEBT COLLECTORS; THE PERCENTAGE OR NUMBER  OF  DEBTORS  WHO
ATTAIN  THE  REPRESENTED  RESULTS;  AND  WHETHER  THE BUDGET PLANNING IS
OFFERED OR PROVIDED BY A NON-PROFIT ENTITY.
  S 9. This act shall take effect immediately.

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

                                 5215--B
    Cal. No. 1060

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 3, 2011
                               ___________

Introduced  by  Sens.  GRIFFO, ZELDIN -- read twice and ordered printed,
  and when  printed  to  be  committed  to  the  Committee  on  Consumer
  Protection  -- reported favorably from said committee and committed to
  the Committee on Banks -- committee discharged, bill amended,  ordered
  reprinted  as  amended  and  recommitted to said committee -- reported
  favorably from said committee, ordered to  first  and  second  report,
  ordered  to  a third reading, amended and ordered reprinted, retaining
  its place in the order of third reading

AN ACT to amend the  general  business  law  and  the  banking  law,  in
  relation  to  defining terms related to budget planning and regulating
  the activities of budget planners

  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
business of budget planning with a particular debtor whereby THE  DEBTOR
AGREES  TO  PAY  TO  SUCH  PERSON ANY VALUABLE CONSIDERATION AND (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 plan
agreed upon [and]; OR (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.] PERSON ENGAGED  IN  THE  BUSINESS  OF

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

                                                           LBD11381-04-1

S. 5215--B                          2

BUDGET  PLANNING PROVIDES ADVICE OR SERVICES, OR ACTS AS AN INTERMEDIARY
BETWEEN OR ON BEHALF OF A DEBTOR AND ONE OR MORE OF THE DEBTOR'S  CREDI-
TORS,  WHERE THE PRIMARY PURPOSE OF THE ADVICE, SERVICE, OR ACTION IS 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; OR (III) THE PERSON ENGAGED IN THE BUSINESS OF BUDGET PLANNING
PROVIDES  SERVICES  RELATED TO, OR PROVIDES SERVICES ADVISING, ENCOURAG-
ING, ASSISTING, OR COUNSELING A DEBTOR  TO,  ACCUMULATE  FUNDS  FOR  THE
PRIMARY  PURPOSE OF PROPOSING, OBTAINING, OR SEEKING TO OBTAIN A SETTLE-
MENT, 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  TO  PAY
TO  SUCH  PERSON. For the purposes of this article, a person [or entity]
shall be considered as engaged in the business of budget planning in New
York, and subject to this article and the licensing and  other  require-
ments of article twelve-C of the banking law, if such person [or entity]
solicits  budget  planning business within this state 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, MEANS AN INDIVIDUAL, LIMITED
LIABILITY COMPANY, CORPORATION, ASSOCIATION, OR ANY OTHER LEGAL ENTITY.
  3. 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 incorporated
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] OR EXEMPT FROM LICENSURE AS A BUDGET  PLAN-
NER UNDER ARTICLE TWELVE-C OF THE BANKING LAW.
  [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  456 of the general business law, as amended by chapter
456 of the laws of 2006, is amended to read as follows:
  S 456. Budget planning prohibited. No person [or entity] shall  engage
in  the  business  of budget planning as defined in section four hundred
fifty-five of this article, except as authorized in article twelve-C  of
the banking law.
  S  3.  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. 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 FOUR HUNDRED  FIFTY-SIX  OF
THIS ARTICLE shall be guilty of a misdemeanor for each such violation.
  S  4. Section 579 of the banking law is renumbered section 579-a and a
new section 579 is added to read as follows:
  S 579. DEFINITIONS. AS USED IN THIS ARTICLE:

S. 5215--B                          3

  1. "PERSON" MEANS AN INDIVIDUAL, PARTNERSHIP, LIMITED LIABILITY COMPA-
NY, CORPORATION, ASSOCIATION, OR ANY OTHER LEGAL ENTITY.
  2.  "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 PLAN AT THE TIME WHEN THE DEBTOR ENTERS INTO SUCH DSP.
  3.  "DEBT  MANAGEMENT PLAN" OR "DMP" MEANS A CONTRACT BETWEEN A PERSON
AND A DEBTOR WHEREBY  THE  PERSON  WILL  PROVIDE  BUDGET  PLANNING  THAT
CONTEMPLATES THAT CREDITORS WILL REDUCE FINANCE CHARGES OR FEES FOR LATE
PAYMENT, DEFAULT OR DELINQUENCY.
  4.  "DEBT  SETTLEMENT PLAN" OR "DSP" MEANS A CONTRACT BETWEEN A PERSON
AND A DEBTOR WHEREBY  THE  PERSON  WILL  PROVIDE  BUDGET  PLANNING  THAT
CONTEMPLATES  THAT CREDITORS WILL SETTLE DEBTS FOR LESS THAN THE PRINCI-
PAL AMOUNT OF THE DEBT.
  S 5. Section 579-a of the banking law, as amended by  chapter  629  of
the  laws  of  2002  and  as  renumbered by section four of this act, is
amended to read as follows:
  S 579-a.  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
shall engage in the business of budget planning as defined  in  subdivi-
sion  one of section four hundred fifty-five of the general business law
of this state except as authorized by this  article  and  without  first
obtaining a license from the superintendent, EXCEPT:
  1.  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 BUDGET PLANNER, AND NOT PROVIDING BUDGET PLANNING SERVICES, EXCEPT
AS INCIDENTAL TO LEGAL REPRESENTATION; OR
  2. ANY PUBLIC OFFICER WHILE ACTING IN AN  OFFICIAL  CAPACITY  AND  ANY
PERSON ACTING UNDER COURT ORDER; OR
  3. ANY PERSON WHILE PERFORMING SERVICES INCIDENTAL TO THE DISSOLUTION,
WINDING UP, OR LIQUIDATING OF A PARTNERSHIP, CORPORATION, OR OTHER BUSI-
NESS ENTERPRISE; OR
  4.  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 OR AFFILIATE OF ANY SUCH BANK, TRUST COMPANY,
SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT  UNION  WHICH  DOES
NOT  ENGAGE  IN  BUDGET  PLANNING  EXCEPT  AS  INCIDENTAL TO ITS BANKING
SERVICES; OR
  5. AN ATTORNEY IN PROVIDING INFORMATION, ADVICE,  OR  LEGAL  REPRESEN-
TATION  WITH RESPECT TO FILING A CASE OR PRECEDING UNDER TITLE 11 OF THE
UNTIES STATES CODE; OR
  6. 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.
  S  6.  Subdivision  4 of section 583-a of the banking law, as added by
chapter 142 of the laws of 1992, is amended to read as follows:
  4. As used in this section[: (a)],  the  term  ["person"  includes  an
individual, partnership, corporation, association or any other organiza-
tion,  and  (b)  the  term]  "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the manage-
ment 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

S. 5215--B                          4

exist if any person, directly or indirectly,  owns,  controls  or  holds
with  power  to  vote  ten per centum or more of the voting stock of any
licensee or of any person which owns, controls or holds  with  power  to
vote  ten per centum 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 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 hold-
ing of such voting stock constitutes or would constitute control of such
licensee for purposes of this section.
  S 7. Sections 584-a and  584-b  of  the  banking  law  are  renumbered
sections  584-c and 584-d and two new sections 584-a and 584-b are added
to read as follows:
  S 584-A. DISCLOSURES. BEFORE A DEBTOR SIGNS A CONTRACT WITH A LICENSEE
FOR BUDGET PLANNING, THE LICENSEE MUST DISCLOSE TRUTHFULLY, IN  A  CLEAR
AND CONSPICUOUS MANNER, THE FOLLOWING MATERIAL INFORMATION:
  1.  THE  AMOUNT  OF TIME NECESSARY TO ACHIEVE THE REPRESENTED RESULTS,
AND TO THE EXTENT THAT THE BUDGET  PLANNING  MAY  INCLUDE  A  SETTLEMENT
OFFER  TO  ANY OF THE DEBTOR'S CREDITORS OR DEBT COLLECTORS, THE TIME BY
WHICH THE LICENSEE WILL MAKE A BONA FIDE SETTLEMENT  OFFER  TO  EACH  OF
THEM;
  2.  TO  THE  EXTENT  THAT THE BUDGET PLANNING MAY INCLUDE A SETTLEMENT
OFFER TO ANY OF THE DEBTOR'S CREDITORS OR DEBT COLLECTORS, THE AMOUNT OF
MONEY OR THE PERCENTAGE OF EACH OUTSTANDING DEBT THAT  THE  DEBTOR  MUST
ACCUMULATE BEFORE THE LICENSEE WILL MAKE A BONA FIDE SETTLEMENT OFFER TO
EACH OF THEM;
  3. TO THE EXTENT THAT ANY ASPECT OF THE BUDGET PLANNING RELIES UPON OR
RESULTS  IN THE DEBTOR'S FAILURE TO MAKE TIMELY PAYMENTS TO CREDITORS OR
DEBT COLLECTORS, THAT  THE  USE  OF  THE  BUDGET  PLANNING  WILL  LIKELY
ADVERSELY AFFECT THE DEBTOR'S CREDITWORTHINESS, MAY RESULT IN THE DEBTOR
BEING SUBJECT TO COLLECTION ACTIONS OR SUED BY CREDITORS OR DEBT COLLEC-
TORS,  AND  MAY  INCREASE THE AMOUNT OF MONEY THE DEBTOR OWES DUE TO THE
ACCRUAL OF FEES AND INTEREST; AND
  4. TO THE EXTENT THAT THE LICENSEE REQUESTS OR REQUIRES THE DEBTOR  TO
PLACE  FUNDS IN AN ACCOUNT AT AN INSURED FINANCIAL INSTITUTION, THAT THE
DEBTOR OWNS THE FUNDS HELD IN THE ACCOUNT, THE DEBTOR MAY WITHDRAW  FROM
THE  BUDGET  PLANNING  AT  ANY  TIME WITHOUT PENALTY, AND, IF THE DEBTOR
WITHDRAWS, THE DEBTOR MUST RECEIVE ALL FUNDS IN THE ACCOUNT, OTHER  THAN
FEES  EARNED BY THE LICENSEE, WITHIN SEVEN BUSINESS DAYS OF THE DEBTOR'S
REQUEST.
  S 584-B. FEES. A LICENSEE SHALL NOT RECEIVE  PAYMENT  OF  ANY  FEE  OR
CONSIDERATION FOR ANY BUDGET PLANNING UNTIL AND UNLESS:
  1.  THE  LICENSEE  HAS  RENEGOTIATED,  SETTLED,  REDUCED, OR OTHERWISE
ALTERED THE TERMS OF AT LEAST ONE DEBT PURSUANT  TO  A  DEBT  SETTLEMENT
PLAN OR DEBT MANAGEMENT PLAN;
  2.  THE  DEBTOR  HAS  MADE  AT LEAST ONE PAYMENT PURSUANT TO THAT DEBT
SETTLEMENT PLAN OR DEBT MANAGEMENT PLAN; AND
  3. THE FEE OR CONSIDERATION FOR SETTLING EACH INDIVIDUAL DEBT ENROLLED
IN A DEBT SETTLEMENT PLAN SHALL NOT EXCEED TWENTY-FIVE  PERCENT  OF  THE
DEBT AT THE TIME IT WAS ENROLLED, AND MUST EITHER:
  (A)  BEAR  THE  SAME  PROPORTIONAL  RELATIONSHIP  TO THE TOTAL FEE FOR
SETTLING THE ENTIRE DEBT BALANCE AS THE INDIVIDUAL DEBT AMOUNT BEARS  TO
THE  ENTIRE  DEBT AMOUNT. THE INDIVIDUAL DEBT AMOUNT AND THE ENTIRE DEBT

S. 5215--B                          5

AMOUNT ARE THOSE OWED AT THE TIME THE DEBT WAS ENROLLED  IN  THE  BUDGET
PLANNING; OR
  (B) BE A PERCENTAGE OF THE AMOUNT SAVED AS A RESULT OF THE SETTLEMENT.
THE  PERCENTAGE CHARGED CANNOT CHANGE FROM ONE INDIVIDUAL DEBT TO ANOTH-
ER. THE AMOUNT SAVED IS THE DIFFERENCE BETWEEN THE AMOUNT  OWED  AT  THE
TIME THE DEBT WAS ENROLLED IN THE BUDGET PLANNING AND THE AMOUNT ACTUAL-
LY PAID TO SATISFY THE DEBT.
  4.  NOTHING  IN  THIS  SECTION  PROHIBITS  REQUESTING OR REQUIRING THE
DEBTOR TO PLACE FUNDS IN AN ACCOUNT TO BE USED FOR THE  LICENSEE'S  FEES
AND FOR PAYMENTS TO CREDITORS OR DEBT COLLECTORS, PROVIDED THAT:
  (A)  THE FUNDS ARE HELD IN AN ACCOUNT AT AN INSURED FINANCIAL INSTITU-
TION;
  (B) THE DEBTOR OWNS THE FUNDS HELD IN THE ACCOUNT AND IS PAID  ACCRUED
INTEREST ON THE ACCOUNT, IF ANY;
  (C) IF THE LICENSEE DOES NOT ADMINISTER THE ACCOUNT, THE ENTITY ADMIN-
ISTERING THE ACCOUNT IS NOT OWNED OR CONTROLLED BY, OR IN ANY WAY AFFIL-
IATED WITH, THE LICENSEE;
  (D)  THE  ENTITY ADMINISTERING THE ACCOUNT DOES NOT GIVE OR ACCEPT ANY
MONEY OR OTHER COMPENSATION IN EXCHANGE FOR REFERRALS OF BUSINESS BY THE
LICENSEE; AND
  (E) THE DEBTOR MAY WITHDRAW FROM THE BUDGET PLANNING AT ANY TIME WITH-
OUT PENALTY, AND MUST RECEIVE ALL FUNDS IN THE ACCOUNT, OTHER THAN  FEES
EARNED  BY  THE  LICENSEE,  WITHIN  SEVEN  BUSINESS DAYS OF THE DEBTOR'S
REQUEST.
  S 8. Section 584-d of the banking law, as renumbered by section  seven
of  this  act,  is  amended  by  adding a new subdivision 3-a to read as
follows:
  3-A. NO LICENSEE SHALL MISREPRESENT, DIRECTLY OR BY  IMPLICATION,  ANY
MATERIAL  ASPECT  OF ANY BUDGET PLANNING, INCLUDING, BUT NOT LIMITED TO,
THE AMOUNT OF MONEY OR THE PERCENTAGE OF THE DEBT AMOUNT THAT  A  DEBTOR
MAY  SAVE BY USING SUCH SERVICE; THE AMOUNT OF TIME NECESSARY TO ACHIEVE
THE REPRESENTED RESULTS; THE AMOUNT OF MONEY OR THE PERCENTAGE  OF  EACH
OUTSTANDING DEBT THAT THE DEBTOR MUST ACCUMULATE BEFORE THE BUDGET PLAN-
NER  WILL  INITIATE ATTEMPTS WITH THE DEBTOR'S CREDITORS OR DEBT COLLEC-
TORS OR MAKE A BONA FIDE OFFER TO NEGOTIATE, SETTLE, OR MODIFY THE TERMS
OF THE DEBTOR'S DEBT; THE EFFECT OF THE SERVICE ON A DEBTOR'S CREDITWOR-
THINESS; THE EFFECT OF THE SERVICE ON COLLECTION EFFORTS OF THE DEBTOR'S
CREDITORS OR DEBT COLLECTORS; THE PERCENTAGE OR NUMBER  OF  DEBTORS  WHO
ATTAIN  THE  REPRESENTED  RESULTS;  AND  WHETHER  THE BUDGET PLANNING IS
OFFERED OR PROVIDED BY A NON-PROFIT ENTITY.
  S 9. This act shall take effect on the one hundred eightieth day after
it shall have become a law.

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

                                 5215--C

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 3, 2011
                               ___________

Introduced  by  Sens.  GRIFFO, ZELDIN -- read twice and ordered printed,
  and when  printed  to  be  committed  to  the  Committee  on  Consumer
  Protection  -- reported favorably from said committee and committed to
  the Committee on Banks -- committee discharged, bill amended,  ordered
  reprinted  as  amended  and  recommitted to said committee -- reported
  favorably from said committee, ordered to  first  and  second  report,
  ordered  to  a third reading, amended and ordered reprinted, retaining
  its place in the order of third reading -- recommitted to the  Commit-
  tee on Consumer Protection in accordance with Senate Rule 6, sec. 8 --
  reported  favorably from said committee and committed to the Committee
  on Finance -- committee discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee

AN ACT to amend the  general  business  law  and  the  banking  law,  in
  relation  to  defining terms related to budget planning and regulating
  the activities of budget planners

  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 BY THE DEBTOR'S CREDITORS AT OR NEAR
THE TIME THE CONTRACT IS ENTERED; and

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11381-06-2
              

S. 5215--C                          2

  (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.    For  the purposes of this article, a person or
entity shall be considered as engaged in the business of budget 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  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. 5215--C                          3

  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-
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 two new
subdivisions 4-a and 14 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.
  14. NO LICENSEE SHALL CHARGE THE DEBTOR FOR OR PROVIDE CREDIT OR OTHER
INSURANCE,  COUPONS  FOR GOODS OR SERVICES, MEMBERSHIP IN A CLUB, ACCESS
TO COMPUTERS OR THE INTERNET, OR ANY OTHER MATTER NOT  DIRECTLY  RELATED
TO BUDGET PLANNING SERVICES UNLESS PRE-APPROVED BY THE SUPERINTENDENT.
  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. 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

S. 5215--C                          4

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