S T A T E O F N E W Y O R K
________________________________________________________________________
7770--A
2023-2024 Regular Sessions
I N A S S E M B L Y
June 9, 2023
___________
Introduced by M. of A. BORES, ROZIC, BURDICK -- read once and referred
to the Committee on Banks -- recommitted to the Committee on Banks in
accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the banking law, in relation to allowing the department
of financial services to impose penalties on unlawfully unlicensed
entities
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivisions 1, 2, 3 and 4 of section 44 of the banking
law, subdivisions 1, 3, 4, and paragraph (b) of subdivision 2 as amended
by section 9 of part O of chapter 59 of the laws of 2006, paragraph (a)
of subdivision 1 as amended by section 4 of part L of chapter 58 of the
laws of 2019, subdivision 2 as amended by chapter 356 of the laws of
2004, paragraph (a) of subdivision 2 as amended by chapter 155 of the
laws of 2012, are amended and a new subdivision 10 is added to read as
follows:
1. (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, licensed student loan servicer,
registered mortgage broker, licensed mortgage loan originator, regis-
tered mortgage loan servicer [or], licensed budget planner OR UNLAWFULLY
UNLICENSED ENTITY 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 in
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11198-06-4
A. 7770--A 2
connection with the grant of any application or request, or any written
agreement entered into with the superintendent.
(b) The penalty for each violation prescribed in paragraph (a) of this
subdivision shall not exceed two thousand five hundred dollars for each
day during which such violation continues.
(c) Notwithstanding paragraph (b) of this subdivision, if the super-
intendent determines (i) that any such licensee, registrant [or], safe
deposit company OR UNLAWFULLY UNLICENSED ENTITY has committed a
violation as described in paragraph (a) of this subdivision, or has
recklessly engaged in any unsafe and unsound practice and (ii) that such
violation or practice is part of a pattern of misconduct, results or is
likely to result in more than minimal loss to such licensee, registrant
[or], safe deposit company, OR UNLAWFULLY UNLICENSED ENTITY or results
in pecuniary gain or other benefit to such licensee, registrant [or],
safe deposit company, OR UNLAWFULLY UNLICENSED ENTITY, then the penalty
shall not exceed fifteen thousand dollars for each day during which such
violation or practice continues.
(d) Notwithstanding paragraphs (b) or (c) of this subdivision, if the
superintendent determines (i) that any such licensee, registrant [or],
safe deposit company, OR UNLAWFULLY UNLICENSED ENTITY has knowingly and
willfully committed any violation as described in paragraph (a) of this
subdivision, or has knowingly and willfully engaged in any unsafe and
unsound practice, or (ii) that any licensee, registrant [or], safe
deposit company, OR UNLAWFULLY UNLICENSED ENTITY that has knowingly
committed any violation described in paragraph (a) of this subdivision
which substantially undermines public confidence in any such licensee,
registrant [or], safe deposit company OR UNLAWFULLY UNLICENSED ENTITY or
in such licensees, registrants or safe deposit companies generally, and,
in either case, (iii) that such licensee, registrant [or], safe deposit
company OR UNLAWFULLY UNLICENSED ENTITY has knowingly or recklessly
incurred so substantial a loss as a result of such violation or practice
as to threaten the safety and soundness of such licensee, registrant
[or], safe deposit company, OR UNLAWFULLY UNLICENSED ENTITY, then the
penalty shall not exceed seventy-five thousand dollars for each day
during which such violation continues.
(e) The superintendent, in determining the amount of any penalty
assessed pursuant to this subdivision, shall take into consideration the
net worth and annual business volume of such licensees, registrants
[or], safe deposit companies OR UNLAWFULLY UNLICENSED ENTITIES.
2. (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 hearing, require any banking organization,
bank holding company, out-of-state state bank that maintains a branch or
branches or representative or other offices in this state, or foreign
banking corporation licensed by the superintendent to maintain a branch,
agency or representative office in this state, OR UNLAWFULLY UNLICENSED
ENTITY to pay to the people of this state a penalty for any violation of
this chapter, any regulation promulgated thereunder, any final or tempo-
rary order issued pursuant to section thirty-nine of this article, any
condition imposed in writing by the superintendent in connection with
the grant of any application or request, or any written agreement
entered into with the superintendent. For purposes of this section, any
reference to a "banking organization" shall be deemed to exclude a safe
deposit company and any reference to a "foreign bank licensee" shall be
deemed to include an out-of-state state bank that maintains a branch or
branches or representative or other offices in this state and a foreign
A. 7770--A 3
banking corporation licensed to maintain a branch, agency or represen-
tative office in this state.
(b) The penalty for each violation prescribed in paragraph (a) of this
subdivision shall not exceed five thousand dollars for each day during
which such violation continues.
3. Notwithstanding paragraph (b) of subdivision two of this section,
if the superintendent determines: (a) that any banking organization,
bank holding company, [or] foreign bank licensee OR UNLAWFULLY UNLI-
CENSED ENTITY has committed any violation described in subdivision two
of this section or has recklessly engaged in any unsafe and unsound
practice, and
(b) that such violation or practice is part of a pattern of miscon-
duct, results or is likely to result in more than minimal loss to the
banking organization, bank holding company, [or] foreign bank licensee,
OR UNLAWFULLY UNLICENSED ENTITY or results in pecuniary gain or other
benefit to the banking organization, bank holding company, [or] foreign
bank licensee, OR UNLAWFULLY UNLICENSED ENTITY then the penalty shall
not exceed twenty-five thousand dollars for each day during which such
violation or practice continues.
4. Notwithstanding paragraph (b) of subdivision two and subdivision
three of this section, if the superintendent determines: (a) (i) that
any banking organization, bank holding company, [or] foreign bank licen-
see OR UNLAWFULLY UNLICENSED ENTITY has knowingly and willfully commit-
ted any violation described in subdivision two of this section or has
knowingly and willfully engaged in any unsafe and unsound practice, or
(ii) that any banking organization, bank holding company, [or] foreign
bank licensee OR UNLAWFULLY UNLICENSED ENTITY has knowingly committed
any violation described in subdivision two of this section which
substantially undermines public confidence in any such banking organiza-
tion, bank holding company, [or] foreign bank licensee OR UNLAWFULLY
UNLICENSED ENTITY or in banking organizations, bank holding companies,
or foreign bank licensees generally, and, in either case, (b) that the
banking organization, bank holding company, [or] foreign bank licensee
OR UNLAWFULLY UNLICENSED ENTITY has knowingly or recklessly incurred so
substantial a loss as a result of such violation or practice as to
threaten the safety and soundness of such banking organization, bank
holding company, or foreign bank licensee, OR UNLAWFULLY UNLICENSED
ENTITY then the penalty shall not exceed the lesser of (i) two hundred
fifty thousand dollars or (ii) one percent of the total assets of such
banking organization OR UNLAWFULLY UNLICENSED ENTITY, or one percent of
the total assets of the banking subsidiaries, as such term is defined
pursuant to section one hundred forty-one of this chapter, of such bank
holding company OR UNLAWFULLY UNLICENSED ENTITY, or one percent of the
total assets in this state of such foreign bank licensee, as applicable,
for each day during which such violation or practice continues.
10. AS USED IN THIS SECTION, "UNLAWFULLY UNLICENSED ENTITY" SHALL MEAN
ANY ENTITY ENGAGING IN AN ACTIVITY IN THIS STATE FOR WHICH A LICENSE,
CERTIFICATION, REGISTRATION, AUTHORIZATION, CHARTER, ACCREDITATION,
INCORPORATION, OR APPROVAL BY THE SUPERINTENDENT IS REQUIRED BY THIS
CHAPTER OR THE REGULATIONS PROMULGATED THEREUNDER, WITHOUT SUCH LICENSE,
CERTIFICATION, REGISTRATION, AUTHORIZATION, CHARTER, ACCREDITATION,
INCORPORATION OR APPROVAL.
§ 2. This act shall take effect immediately.