BILL NUMBER:  S6121

 TITLE OF BILL :  An act to amend the banking law, in relation to
conduit services

 PURPOSE :

To amend existing law to allow check cashers to provide limited
conduit services

 SUMMARY OF PROVISIONS :

Amends subdivision 2 of Section 366 of the banking law

1- to allow licensed cashers of checks to provide conduit services
2 - defines conduit services as: account access services;
*bill payment services; and
*assistance in preparation and submission of forms to be processed by
the collaborating financial institution
3 - conduit services must be done in collaboration with a state or
federally chartered bank, trust company, savings bank, savings and
loan association or credit union
4 - by written agreement between the parties that must approved by the
superintendent setting forth the exact nature of the services
5 - Services must not exceed the usury rate

              

 EXISTING LAW :

The enabling law authorizing, licensing and overseeing the delivery of
services by check cashing establishments has not been significantly
updated since its inception in 1944.

 JUSTIFICATION :

The New York check cashing industry has matured in scope and breadth
by offering more services than merely cashing negotiable instruments
in communities and neighborhoods that are unserved or underserved by
the banking/credit union industry. Regulated check cashing enterprises
continue to set the standard for the financial service industry in the
fight against money laundering, terrorist financing and other
financial crimes, and provide a critical entry point for suspect
transactions to be detected on the regulatory radar screen.  The
industry within this State generates the following economic activity:

*Financial services at 560 licensed locations
*Serving more than 1 million New Yorkers
*Cashing nearly 30 million checks having an aggregate value of $11-12
billion
*Processing 10 million customer bill payments having a total value of
$1B
*Selling more than 6 million money orders having a face value of
nearly $1B
*Processing more than 3 million money transfer transactions
*Employing approximately 4,000 people and more than eighty percent
(80%) of the employees are minorities, principally from the Black and
Latino communities

 LEGISLATIVE HISTORY :

New Legislation

 FISCAL IMPLICATIONS :

None to state or localities.

 EFFECTIVE DATE :
30 Days after signed into law