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This entry was published on 2019-10-11
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SECTION 44
Violations; penalties
Banking (BNK) CHAPTER 2, ARTICLE 2
§ 44. Violations; penalties. 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, registered mortgage loan servicer or licensed
budget planner 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
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
superintendent determines (i) that any such licensee, registrant or safe
deposit company 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 results in
pecuniary gain or other benefit to such licensee, registrant or safe
deposit company, 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 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 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 in such licensees, registrants or
safe deposit companies generally, and, in either case, (iii) that such
licensee, registrant or safe deposit company 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, 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.

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 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 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 banking corporation licensed to
maintain a branch, agency or representative 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 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
misconduct, results or is likely to result in more than minimal loss to
the banking organization, bank holding company, or foreign bank
licensee, or results in pecuniary gain or other benefit to the banking
organization, bank holding company, or foreign bank licensee, 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 licensee
has knowingly and willfully committed 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 has
knowingly committed any violation described in subdivision two of this
section which substantially undermines public confidence in any such
banking organization, bank holding company, or foreign bank licensee 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 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, 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 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 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.

5. In assessing any penalty against any entity listed in paragraph (a)
of subdivision one or paragraph (a) of subdivision two of this section,
the superintendent shall take into account, without limitation, factors
including: (a) the extent, if any, to which senior management or board
directors or trustees participated therein, (b) the extent to which the
entity has cooperated with the superintendent in the investigation of
such conduct, (c) any sanction imposed by any other regulatory agency,
(d) the financial resources and good faith of the entity, (e) the
gravity of the violation, (f) any history of prior violations, and (g)
such other matters as justice and the public interest may require.

6. Whenever the superintendent shall require the payment of such
penalty by any such entity, he shall forthwith execute in duplicate a
written order to that effect. On the date such order is executed, the
superintendent shall file one copy of such order in the office of the
department and serve the second copy upon such entity either personally
or by registered or certified mail, return receipt requested, directed
to the entity's principal place of business or, in the case of a
licensee or registrant, its last known address of record. Such order may
be reviewed in the manner provided by article seventy-eight of the civil
practice law and rules. Such special proceeding for review as authorized
by this section must be commenced within thirty days from the service of
such order.

7. The superintendent may compromise, modify, or remit any penalty
which he or she may assess or had already assessed under this section.

8. The superintendent may prescribe regulations to carry out the
provisions and purposes of this section.

9. As used in this section, "bank holding company" shall have the same
meaning as that term is defined in subdivision six of section
thirty-nine of this article.