NY State Senate Bill 2023-S5531

Current Bill Status - In Senate Committee Banks Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to banks
Mar 07, 2023	referred to banks

2023-S5531 (ACTIVE) - Details

Current Committee:: Senate Banks
Law Section:: Banking Law
Laws Affected:: Add Art 2-AAA §§76-a - 76-i, Bank L

2023-S5531 (ACTIVE) - Summary

Requires the registration and regulation of non-bank automated teller machines.

2023-S5531 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S5531

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the banking law, in relation to non-bank automated
teller machines

 
PURPOSE GENERAL IDEA OF BILL:

To regulate the operation of non-bank automated teller machines by
mandating that operators register with the superintendent, setting a
maximum operating fee, and increasing transparency to customers.

 
SUMMARY OF PROVISIONS:

Section 1 amends the banking law by adding a new Article 2 - AAA titled,
"non-bank ATM Registration."

Section 76-a of the new Article 2-AAA defines key terms used throughout
the bill in relation to non-bank automated teller machines.

Section 76-b lists the responsibilities of a person who operates a non-
bank ATM, including registration with the Superintendent, not charging
transaction fees in excess of the rates set by the Superintendent, and
operating in compliance with state and federal laws.

Section 76-c describes the registration requirements for a non-bank ATM.

Section 76-d requires non-bank ATM operators to disclose the name and
contact information of the operator and the contact information at DFS
where customers can file complaints on a sign posted on the non-bank
ATM. The operator must also disclose certain information to a customer
during the transaction, including the transaction fee that will be
charged and an option to cancel the transaction without incurring the
fee. All transactions must conclude with a receipt that states the
amount of the transaction, the fee imposed, the total amount debited to
the customer's account, the date and time of the transaction, a number
or code to identify the customer and account accessed; and the location
of the non-bank ATM.

Section 76-e states the penalties imposed on non-bank ATM operators who
do not comply with the provisions of this article. The penalty for the
first violation can be up to $500 and penalties for subsequent
violations can be up to $1,000 for each violation.

Section 76-f authorizes the superintendent to examine an operator's
books, accounts, records, and files relating to this article.  Non-bank
ATM operators are responsible for the reasons costs and expenses of the
investigation or examination.

Section 76-g permits the superintendent, after notice and hearing, to
suspend or revoke an operator's non-bank ATM registration for knowingly
violating the law or failing to cooperate with an examination or inves-
tigation.

Section 76-h relates to the treatment of fees.


Section 76-i allows the superintended to promulgate rules and regu-
lations consistent with the purposes of this article.

Section two states the effective date.

 
JUSTIFICATION:

Despite a shift towards cashless payments and credit cards, automated
teller machines (ATMs) have retained their popularity and high demand.
However, more Americans have been using non-bank ATMs to withdraw and
deposit cash, as opposed to using their financial institution's. Accord-
ing to RBR London's Global ATM Market and Forecasts to 20261, 16% of
ATM's are not owned or operated by banks and over 500,000 non-bank ATMs
will be deployed in the U.S. by 2026.  These ATM's provide convenience
to customers and fulfill basic banking needs without having to see a
teller or travel to a bank.

However, non-bank ATM's have their disadvantages. Non-bank ATMs are
notorious for charging service and operating fees to customers, some-
times without their knowledge and only after completing their trans-
action. Customers were frequently unable to contact anyone with
inquiries, as there was no sign denoting a point of contact for ques-
tions or concerns.

This legislation will protect customers by limiting the operating fee
they can be charged at non-bank ATM. This will ensure that operators
cannot take advantage of the convenience of these machines by levying
extreme fees on consumers. The bill also promotes transparency to
customers by requiring operators to disclose near or on the ATM that a
fee may be assessed during a transaction and where a customer can direct
inquiries. This will allow customers to make informed decisions before
proceeding with a transaction and provide a point of contact for any
concerns.

This legislation also provides for increased accountability by requiring
non-bank ATM operators to register their machines with the superinten-
dent. Granting the superintendent the ability to review an operator's
records and levy penalties or even revoke their registration if they
fail to comply with the provisions of the bill will discourage predatory
operating practices that disadvantage customers.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None to the state.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law; provided that any rules or regulations necessary for the
implementation of this act are authorized to be made on or before such
effective date.
1 https://www.rbrlondon.com/wp- content/uploads/2022/02/GA26_Press
Release_070222.pdf

2023-S5531 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5531
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               March 7, 2023
                                ___________
 
 Introduced  by  Sen.  THOMAS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Banks
 
 AN ACT to amend the banking  law,  in  relation  to  non-bank  automated
   teller machines
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. The banking law is amended by adding a new article 2-AAA to
 read as follows:
 
                              ARTICLE II-AAA
                         NON-BANK ATM REGISTRATION
 
 SECTION 76-A. DEFINITIONS.
         76-B. RESPONSIBILITIES.
         76-C. REGISTRATION.
         76-D. REQUIRED DISCLOSURES.
         76-E. PENALTIES.
         76-F. EXAMINATION OF BOOKS.
         76-G. SUSPENSION OR REVOCATION OF REGISTRATION.
         76-H. TREATMENT OF FEES.
         76-I. RULES AND REGULATIONS.
   § 76-A. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE, THE FOLLOWING TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   1. "NON-BANK AUTOMATED TELLER MACHINE" OR  "NON-BANK  ATM"  MEANS  ANY
 AUTOMATED TELLER MACHINE THAT IS NOT UNDER THE DOMINION AND CONTROL OF A
 STATE  OR FEDERALLY CHARTERED BANK, TRUST COMPANY, SAVINGS BANK, SAVINGS
 AND LOAN ASSOCIATION OR CREDIT UNION.
   2. "OPERATE" MEANS TO OWN, LEASE OR OTHERWISE LEGALLY CONTROL  A  NON-
 BANK ATM.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10045-01-3
 S. 5531                             2

   3.  "OPERATOR" MEANS THE PERSON WHO OWNS, LEASES, OR OTHERWISE LEGALLY
 CONTROLS A NON-BANK ATM AND IS RESPONSIBLE FOR REGISTERING THE  NON-BANK
 ATM.
   § 76-B. RESPONSIBILITIES. 1. A PERSON SHALL NOT OPERATE A NON-BANK ATM
 IN  THIS  STATE  UNLESS  THAT PERSON REGISTERS THE NON-BANK ATM WITH THE
 SUPERINTENDENT.
   2. OPERATORS SHALL NOT CHARGE A TRANSACTION FEE IN EXCESS OF THE  RATE
 SET BY THE SUPERINTENDENT.
   3. NON-BANK ATMS MUST BE OPERATED IN COMPLIANCE WITH THE FEDERAL ELEC-
 TRONIC  FUNDS TRANSFER ACT, ANTI MONEY LAUNDERING ACT, BANK SECRECY ACT,
 AND THE ATM SAFETY ACT UNDER ARTICLE TWO-AA OF THIS CHAPTER.
   § 76-C. REGISTRATION. 1. OPERATORS MUST REGISTER ANY NON-BANK ATM WITH
 THE SUPERINTENDENT ON A REGISTRATION FORM ESTABLISHED BY THE SUPERINTEN-
 DENT THAT CONTAINS SUCH INFORMATION AS THE SUPERINTENDENT  MAY  REQUIRE,
 INCLUDING AT A MINIMUM:
   (A) THE OPERATOR'S NAME, ADDRESS, AND TELEPHONE NUMBER;
   (B) THE NAME AND ADDRESS OF WHERE THE NON-BANK ATM IS LOCATED;
   (C) THE TYPES OF TRANSACTIONS AVAILABLE;
   (D) THE PROCESSOR'S NAME, ADDRESS, AND TELEPHONE NUMBER;
   (E) THE SERVICING AGENT'S NAME, ADDRESS, AND TELEPHONE NUMBER;
   (F)  THE  NAME,  TITLE,  ADDRESS,  AND  TELEPHONE NUMBER OF THE PERSON
 COMPLETING THE REGISTRATION; AND
   (G) ANY OTHER INFORMATION REQUIRED BY THE SUPERINTENDENT.
   2. THE OPERATOR SHALL PAY TO THE SUPERINTENDENT A REGISTRATION FEE  AS
 PRESCRIBED PURSUANT TO SECTION EIGHTEEN-A OF THIS CHAPTER.
   3.  AFTER  THE  INITIAL  REGISTRATION,  THE OPERATOR SHALL BI-ANNUALLY
 SUBMIT TO THE SUPERINTENDENT A  REGISTRATION  RENEWAL  AND  REGISTRATION
 FEE.
   4. THE OPERATOR SHALL PROMPTLY NOTIFY THE SUPERINTENDENT IN WRITING:
   (A)  OF  ANY CHANGES TO THE INFORMATION REQUIRED IN SUBDIVISION ONE OF
 THIS SECTION; OR
   (B) IF THE OPERATION OF THE NON-BANK ATM IS TERMINATED.
   5. THE CERTIFICATE OF REGISTRATION ISSUED SHALL  NOT  BE  TRANSFERABLE
 FROM  ONE  OPERATOR TO ANOTHER OPERATOR OR FROM ONE LOCATION TO ANOTHER.
 IF THE OPERATOR OF THE NON-BANK  ATM  CHANGES,  THE  NEW  OPERATOR  MUST
 RE-REGISTER THE NON-BANK ATM WITH THE SUPERINTENDENT.
   §  76-D. REQUIRED  DISCLOSURES.  1.  AN  OPERATOR  SHALL  CLEARLY  AND
 CONSPICUOUSLY DISCLOSE ON A SIGN POSTED ON THE NON-BANK ATM OR IN  CLEAR
 VIEW OF THE NON-BANK ATM:
   (A) THE NAME OF THE OPERATOR;
   (B)  THE  NAME,  ADDRESS,  AND  TELEPHONE  NUMBER WHERE A CUSTOMER MAY
 DIRECT INQUIRIES OR COMPLAINTS;
   (C) A STATEMENT THAT THE DEPARTMENT IS RESPONSIBLE FOR THE  OPERATOR'S
 COMPLIANCE  WITH  STATE LAW AND THE ADDRESS AND TELEPHONE NUMBER FOR THE
 DEPARTMENT; AND
   (D) THAT A FEE MAY BE ASSESSED BY THE OPERATOR.
   2. AN OPERATOR MAY NOT CHARGE A FEE FOR THE USE OF  THE  NON-BANK  ATM
 THAT  EXCEEDS  THE  RATE  PERMITTED  UNDER SECTION SEVENTY-SIX-B OF THIS
 ARTICLE. AN OPERATOR SHALL CLEARLY AND CONSPICUOUSLY  DISCLOSE  THE  FEE
 DURING  THE  COURSE  OF  THE  TRANSACTION  IN  A MANNER THAT PERMITS THE
 CUSTOMER TO CANCEL THE TRANSACTION WITHOUT INCURRING THE FEE.
   3. A NON-BANK ATM MUST PROVIDE A  RECEIPT  FOR  THE  TRANSACTION  THAT
 INCLUDES THE FOLLOWING INFORMATION IN A CLEAR AND CONSPICUOUS MANNER:
   (A) THE AMOUNT OF THE TRANSACTION;
   (B) THE AMOUNT OF ANY FEE IMPOSED BY THE OPERATOR;
 S. 5531                             3
 
   (C)  THE TOTAL AMOUNT DEBITED TO THE CUSTOMER'S ACCOUNT, INCLUDING ANY
 FEE IMPOSED BY THE OPERATOR;
   (D) THE DATE AND TIME OF THE TRANSACTION;
   (E)  A  NUMBER  OR  CODE  THAT  IDENTIFIES  THE  CUSTOMER  AND ACCOUNT
 ACCESSED; AND
   (F) THE LOCATION OF THE NON-BANK ATM.
   § 76-E. PENALTIES. ANY OPERATOR WHO VIOLATES  ANY  PROVISION  OF  THIS
 ARTICLE  OR  ANY  RULE  ADOPTED  BY THE SUPERINTENDENT IS SUBJECT TO THE
 FOLLOWING:
   1. FOR THE FIRST VIOLATION OF THIS ARTICLE, A CIVIL PENALTY UP TO FIVE
 HUNDRED DOLLARS SHALL BE IMPOSED; AND
   2. FOR SECOND AND SUBSEQUENT VIOLATIONS, A CIVIL  PENALTY  UP  TO  ONE
 THOUSAND DOLLARS SHALL BE IMPOSED FOR EACH SINGLE VIOLATION.
   §  76-F. EXAMINATION  OF BOOKS. 1. THE SUPERINTENDENT MAY AT ANY TIME,
 AND AS OFTEN AS MAY BE DETERMINED, EITHER PERSONALLY OR BY A PERSON DULY
 DESIGNATED BY THE SUPERINTENDENT, MAKE INVESTIGATIONS  AND  EXAMINE  THE
 BOOKS,  ACCOUNTS, RECORDS, AND FILES OF AN OPERATOR TO DETERMINE COMPLI-
 ANCE WITH THIS ARTICLE. FOR THAT PURPOSE  THE  SUPERINTENDENT  AND  DULY
 DESIGNATED  REPRESENTATIVES  SHALL  HAVE  FREE ACCESS TO THE OFFICES AND
 PLACE OF BUSINESS, BOOKS, ACCOUNTS, PAPERS, RECORDS,  FILES,  SAFES  AND
 VAULTS OF ALL SUCH OPERATORS. THE SUPERINTENDENT SHALL HAVE AUTHORITY TO
 REQUIRE THE ATTENDANCE OF AND TO EXAMINE UNDER OATH ALL PERSONS WHOMSOE-
 VER WHOSE TESTIMONY MAY BE REQUIRED.
   2.  IN  THE  EVENT  OF SUCH INVESTIGATION OR EXAMINATION, THE OPERATOR
 SHALL PAY THE REASONABLE COSTS AND  EXPENSES  OF  THE  INVESTIGATION  OR
 EXAMINATION AS DETERMINED BY THE SUPERINTENDENT.
   §  76-G. SUSPENSION  OR  REVOCATION  OF REGISTRATION. AFTER NOTICE AND
 HEARING, THE SUPERINTENDENT MAY REVOKE OR SUSPEND AN  OPERATOR'S  REGIS-
 TRATION TO OPERATE A NON-BANK ATM IF THE SUPERINTENDENT FINDS THAT:
   1.  THE OPERATOR HAS KNOWINGLY VIOLATED ANY PROVISION OF THIS ARTICLE,
 ANY RULE OR REGULATION PROMULGATED BY THE SUPERINTENDENT UNDER AND WITH-
 IN THE AUTHORITY OF THIS ARTICLE, OR ANY OTHER APPLICABLE LAW; OR
   2. THE OPERATOR DOES NOT COOPERATE WITH  AN  EXAMINATION  OR  INVESTI-
 GATION BY THE SUPERINTENDENT.
   §  76-H. TREATMENT OF FEES. THE AGGREGATE OF FEES, EXAMINATION EXPENSE
 REIMBURSEMENT AND OTHER PAYMENTS  MADE  PURSUANT  TO  THIS  ARTICLE  ARE
 APPROPRIATED FOR THE USE OF THE SUPERINTENDENT.
   §  76-I. RULES  AND  REGULATIONS.  IN  ADDITION  TO SUCH POWERS AS MAY
 OTHERWISE BE PRESCRIBED BY LAW, THE SUPERINTENDENT IS HEREBY  AUTHORIZED
 AND  EMPOWERED  TO  PROMULGATE  SUCH RULES AND REGULATIONS AS MAY IN THE
 JUDGEMENT OF THE SUPERINTENDENT BE CONSISTENT WITH THE PURPOSES OF  THIS
 ARTICLE,  OR  APPROPRIATE FOR THE EFFECTIVE ADMINISTRATION OF THIS ARTI-
 CLE.
   § 2. This act shall take effect on the ninetieth day  after  it  shall
 have become a law; effective immediately, the addition, amendment and/or
 repeal  of  any  rule  or regulation necessary for the implementation of
 this act on its effective date are authorized to be made  and  completed
 on or before such effective date.

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Senate Bill S5531

Sponsored By

Current Bill Status - In Senate Committee Banks Committee

2023-S5531 (ACTIVE) - Details

2023-S5531 (ACTIVE) - Summary

2023-S5531 (ACTIVE) - Sponsor Memo

2023-S5531 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S5531

Share this bill

Sponsored By

Kevin Thomas

Current Bill Status - In Senate Committee Banks Committee

2023-S5531 (ACTIVE) - Details

2023-S5531 (ACTIVE) - Summary

2023-S5531 (ACTIVE) - Sponsor Memo

2023-S5531 (ACTIVE) - Bill Text download pdf

Comments