S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8804
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               June 9, 2025
                                ___________
 
 Introduced  by M. of A. BORES -- (at request of the Department of Finan-
   cial Services) -- read once and referred to the Committee on Ways  and
   Means
 
 AN  ACT  to  amend the financial services law, in relation to prohibited
   unlicensed activities
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Legislative  findings.  The  legislature finds that it is
 essential to the protection of users of financial products and  services
 from  imprudent  conduct and harmful business practices in the financial
 services marketplace that all persons offering  financial  products  and
 services  in  New  York State be sufficiently deterred from disregarding
 the laws and regulations governing the offering of financial products or
 services, regardless of whether they are properly licensed or authorized
 otherwise to do business. Furthermore, to ensure that the  business  of,
 and the persons providing, financial products and services are appropri-
 ately  supervised,  the  law  should not advantage persons who disregard
 such requirements. Currently, as to engagement in  many  activities  for
 which a license or other authorization from the superintendent of finan-
 cial  services  is required by the banking law or financial services law
 or the regulations promulgated thereunder, an  unlicensed  or  otherwise
 unauthorized  person not exempt from licensing or other authorization is
 not subject to civil monetary penalty for  acts  that  would  constitute
 violations  subject  to penalty if the person were licensed or otherwise
 authorized. This act provides that persons engaged in activity for which
 a license or other authorization from the  superintendent  of  financial
 services  is  required  under  the banking law or financial services law
 will be subject to a civil penalty for conducting  such  activity  in  a
 manner  inconsistent  with the law, regardless of whether such person is
 licensed or otherwise authorized to do such activity.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10329-02-5
 A. 8804                             2
              

 
   § 2. Subsections (a) and (b) of section 305 of the financial  services
 law are amended to read as follows:
   (a)  Unless  otherwise  provided in this chapter, the banking law, the
 insurance law or any other law, any hearing pursuant to any such law may
 be held before the superintendent, any  deputy  superintendent,  or  any
 designated  salaried employee of the department authorized by the super-
 intendent for such purpose. Any adjudicatory proceeding,  including  any
 hearings  to  assess civil penalties under section four hundred eight OR
 FOUR HUNDRED EIGHT-A of this chapter, held pursuant to the provisions of
 this chapter, the insurance law or the banking  law  shall  be  noticed,
 conducted  and  administered in compliance with the state administrative
 procedure act.
   (b) The person conducting such hearing shall have power to  administer
 oaths,  examine  and  cross-examine  witnesses  and  receive documentary
 evidence, and shall report [his or her] SUCH PERSON'S  findings,  orally
 or  in  writing,  to  the superintendent with or without recommendation.
 Such report, if adopted by the superintendent may be the  basis  of  any
 determination  made by the superintendent. One hundred twenty days after
 the effective date of a determination of liability for a  civil  penalty
 pursuant  to  section four hundred eight OR FOUR HUNDRED EIGHT-A of this
 chapter or four hundred three, one thousand one hundred two,  two  thou-
 sand  one  hundred two, two thousand one hundred seventeen, two thousand
 one hundred thirty-three or seven thousand eight hundred sixteen of  the
 insurance  law,  such determination of liability for a civil penalty may
 be entered as a judgment and enforced, without court proceedings, in the
 same manner as the enforcement of a money judgment in civil  actions  in
 any  court of competent jurisdiction or any other place provided for the
 entry of civil judgment within this state.
   § 3. Subsection (a) of section 404 of the financial  services  law  is
 amended to read as follows:
   (a)  The  superintendent has authority under this article, the banking
 law, the insurance law and other applicable laws to  investigate  activ-
 ities  that  may  constitute  violations subject to section four hundred
 eight OR FOUR HUNDRED EIGHT-A of  this  article  or  violations  of  the
 insurance law or banking law and to develop evidence thereon.
   §  4.  The  financial  services law is amended by adding a new section
 408-a to read as follows:
   § 408-A. UNLICENSED ACTIVITIES PROHIBITED. (A)  FOR  THE  PURPOSES  OF
 THIS SECTION, A "PROHIBITED UNLICENSED ACT" SHALL MEAN:
   (1) ENGAGING IN AN ACTIVITY IN THIS STATE FOR WHICH A LICENSE, CERTIF-
 ICATION, REGISTRATION, AUTHORIZATION, CHARTER, ACCREDITATION OR INCORPO-
 RATION  IS  REQUIRED  BY  THIS  CHAPTER OR THE BANKING LAW, OR THE REGU-
 LATIONS PROMULGATED THEREUNDER,  WITHOUT  SUCH  LICENSE,  CERTIFICATION,
 REGISTRATION,  AUTHORIZATION, CHARTER, ACCREDITATION OR INCORPORATION OR
 AN EXEMPTION FROM SUCH REQUIREMENT; OR
   (2) ANY ACT OR OMISSION BY A PERSON WHO IS REQUIRED BY THIS CHAPTER OR
 THE BANKING LAW,  OR  THE  REGULATIONS  PROMULGATED  THEREUNDER,  TO  BE
 LICENSED,  CERTIFIED,  REGISTERED,  AUTHORIZED, CHARTERED, ACCREDITED OR
 INCORPORATED AND IS NOT SO LICENSED, CERTIFIED, REGISTERED,  AUTHORIZED,
 CHARTERED,  ACCREDITED  OR  INCORPORATED, OR EXEMPTED FROM SUCH REQUIRE-
 MENT, IF SUCH ACT OR OMISSION WOULD CONSTITUTE A VIOLATION OF THIS CHAP-
 TER OR THE BANKING  LAW,  OR  THE  REGULATIONS  PROMULGATED  THEREUNDER,
 SUBJECT  TO MONETARY PENALTY IF SUCH PERSON WERE SO LICENSED, CERTIFIED,
 REGISTERED, AUTHORIZED, CHARTERED, ACCREDITED OR INCORPORATED.
 A. 8804                             3

   (B) IN ADDITION TO ANY CIVIL OR CRIMINAL LIABILITY  PROVIDED  BY  LAW,
 THE SUPERINTENDENT MAY, AFTER NOTICE AND A HEARING, LEVY A CIVIL PENALTY
 FOR ANY PROHIBITED UNLICENSED ACT AS FOLLOWS:
   (1)  THE  PENALTY  FOR A PROHIBITED UNLICENSED ACT THAT RELATES TO THE
 REQUIREMENTS OF THE BANKING LAW OR THE  REGULATIONS  PROMULGATED  THERE-
 UNDER SHALL BE THE SAME AS THE PENALTY PROVIDED IN SECTION FORTY-FOUR OF
 THE BANKING LAW FOR ANY VIOLATION OF THE BANKING LAW.
   (2)  THE  PENALTY  FOR A PROHIBITED UNLICENSED ACT THAT RELATES TO THE
 REQUIREMENTS OF THIS CHAPTER OR THE REGULATIONS  PROMULGATED  THEREUNDER
 SHALL  BE  THE  SAME AS THE PENALTY PROVIDED FOR IN SECTION FOUR HUNDRED
 EIGHT OF THIS ARTICLE FOR VIOLATIONS OF THIS CHAPTER OR THE  REGULATIONS
 PROMULGATED  THEREUNDER. HOWEVER, THE SUPERINTENDENT SHALL NOT IMPOSE OR
 COLLECT ANY PENALTY FOR A PROHIBITED UNLICENSED  ACT  PURSUANT  TO  THIS
 PARAGRAPH IF THE SUPERINTENDENT IMPOSES OR COLLECTS ANY PENALTY PURSUANT
 TO  PARAGRAPH  ONE  OF  THIS  SUBSECTION  OR  PARAGRAPHS TWO OR THREE OF
 SUBSECTION (A) OF SECTION FOUR HUNDRED EIGHT OF  THIS  ARTICLE  FOR  THE
 SAME ACT OR OMISSION.
   (3)  IF  A  PROHIBITED  UNLICENSED  ACT  RESULTS IN CONSUMER HARM, THE
 PENALTY SHALL BE NOT MORE THAN DOUBLE THE PENALTY AMOUNT  APPLICABLE  TO
 SUCH VIOLATION SET FORTH IN PARAGRAPHS ONE AND TWO OF THIS SUBSECTION.
   (C)  CIVIL  PENALTIES  RECEIVED BY THE SUPERINTENDENT PURSUANT TO THIS
 SECTION SHALL BE APPLIED IN THE SAME MANNER AS CIVIL PENALTIES  RECEIVED
 BY  THE  SUPERINTENDENT  PURSUANT  TO SECTION FOUR HUNDRED EIGHT OF THIS
 CHAPTER.
   (D) IN ADDITION TO ANY OTHER PENALTY OR SANCTION IMPOSED UPON A PERSON
 BY LAW FOR A PROHIBITED UNLICENSED ACT, AFTER NOTICE AND A HEARING,  THE
 SUPERINTENDENT  MAY ISSUE AN ORDER DIRECTING SUCH PERSON TO PAY RESTITU-
 TION FOR SUCH UNLICENSED ACT.
   § 5. Subsection (a) of section 409 of the financial  services  law  is
 amended to read as follows:
   (a)  Whenever the superintendent is satisfied that a violation subject
 to section four hundred eight OR FOUR HUNDRED EIGHT-A of this article or
 fraud or other criminal activity under the insurance law or banking  law
 has  been  committed  or  attempted, the superintendent shall report any
 such violation of law, as the superintendent deems appropriate,  to  the
 appropriate  licensing  agency,  the  district attorney of the county in
 which such acts were committed,  to  the  attorney  general,  and  where
 appropriate, to the person who submitted the report of fraudulent activ-
 ity,  as  provided by the provisions of this article. Within one hundred
 twenty days of receipt of  the  superintendent's  report,  the  attorney
 general  or the district attorney concerned shall inform the superinten-
 dent as to the status of the reported violations.
   § 6. This act shall take effect immediately.