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A09634 Summary:

BILL NOA09634A
 
SAME ASSAME AS S06985-A
 
SPONSORRodriguez
 
COSPNSRArroyo, Benedetto, Pichardo, Perry, Linares, Crespo, Hyndman, Rivera, Dilan, Tenney, Sepulveda, Jean-Pierre, Weprin
 
MLTSPNSRAbbate, Farrell
 
Amd Bank L, generally
 
Relates to enacting the "community financial services access and modernization act".
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A09634 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A9634A
 
SPONSOR: Rodriguez
  TITLE OF BILL: An act to amend the banking law, in relation to enacting the "community financial services access and modernization act of 2016"; and providing for the repeal of certain provisions upon expiration thereof   PURPOSE OR GENERAL IDEA OF BILL: To amend existing law by modernizing existing statute to reflect the full scope of financial services available at neighborhood "check cash- ing" establishments and provide for a comprehensive regulatory framework for the delivery of the expanded financial services currently being offered.   SUMMARY OF SPECIFIC PROVISIONS: Amends definitions in law to reflect financial services currently avail- able to include but not be limited to cashing of checks, money trans- mission services, bill payment services, and sale of prepaid debit cards. It expands existing services available by permitting licensed check cashers to offer commercial loan products as permitted by state law and authorizes conduit services which can be offered in partnership with properly licensed banks and credit unions. It modernizes the relationship between entities licensed to offer finan- cial services and the Department of Financial Services by creating a master license mechanism for licensees operating more than one outlet and streamlining the licensure process, the licensure review process in certain instances, reporting requirements and record keeping. It clarifies existing Penal Law forgery provisions to explicitly include their application to checks, drafts and money orders.   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. The enabling law authorizing, licensing and overseeing the delivery of services by check cashing establishments has not comprehensively been updated since its inception in 1944. Regu- lated 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 Currently, unregulated lenders within and without the State, are engag- ing in predatory lending practices which victimize hard working New Yorkers. Furthermore, many small businesses are unable to obtain busi- ness loans that will permit them to
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A09634 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         9634--A
 
                   IN ASSEMBLY
 
                                     March 23, 2016
                                       ___________
 
        Introduced  by  M.  of A. RODRIGUEZ, ARROYO, BENEDETTO, PICHARDO, PERRY,
          LINARES,  CRESPO,   HYNDMAN,   RIVERA,   DILAN,   TENNEY,   SEPULVEDA,
          JEAN-PIERRE,  WEPRIN -- Multi-Sponsored by -- M. of A. ABBATE, FARRELL
          -- read once and referred to  the  Committee  on  Banks  --  committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee

        AN  ACT to amend the banking law, in relation to enacting the "community
          financial services access and modernization act of 2016"; and  provid-
          ing for the repeal of certain provisions upon expiration thereof
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Short title. This act shall be known as and may be cited as
     2  the "community financial services access and modernization act of 2016".
     3    § 2. Paragraph (b) of subdivision 5 of section  18-a  of  the  banking
     4  law,  as  amended by chapter 155 of the laws of 2012, is amended to read
     5  as follows:
     6    (b) two thousand dollars when the application relates to the licensing
     7  of an additional location or change of location or the  licensing  of  a
     8  [mobile  unit]   limited station of a licensed [casher of checks] finan-
     9  cial services provider; or
    10    § 3. The third undesignated paragraph of section 340  of  the  banking
    11  law,  as  added by chapter 22 of the laws of 1990, is amended to read as
    12  follows:
    13    Nothing in this  article  shall  apply  to  licensed  collateral  loan
    14  brokers or licensed financial services providers.
    15    §  4.  Section 366 of the banking law, as amended by chapter 49 of the
    16  laws of 1961, subdivision 1 as amended by chapter 849  of  the  laws  of
    17  1964  and  as  further amended by section 104 of part A of chapter 62 of
    18  the laws of 2011, subdivisions 2 and 3 as renumbered by chapter  132  of
    19  the laws of 1969, is amended to read as follows:
    20    § 366.  Definitions.  When used in this article. 1. The term "licensed
    21  [casher of checks] financial services provider" means  any  [individual,
    22  partnership,  unincorporated  association  or  corporation]  person duly
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14451-06-6

        A. 9634--A                          2
 
     1  licensed by the superintendent of financial services to engage in  busi-
     2  ness pursuant to the provisions of this article.
     3    2.  The  term  "licensee"  means  a person licensed [casher of checks,
     4  drafts and/or money orders] to provide financial services  regulated  by
     5  this article.
     6    3.  The  term  ["mobile  unit"] "limited station" means any vehicle or
     7  other movable means from which the business of [cashing  checks,  drafts
     8  or  money orders] providing financial services regulated by this article
     9  is to be conducted.
    10    4. The term "person" means  any  individual  or  other  legal  entity,
    11  including any corporation, partnership, association or limited liability
    12  company.
    13    5.  The  term  "conduit  services"  means any activity permitted to be
    14  offered by a licensee under this article to  its  customers  in  collab-
    15  oration with a state or federally chartered bank or credit union subject
    16  to the approval of the superintendent, including but not limited to:
    17    (a)  business  and  commercial  loans  offered  by  licensees that are
    18  licensed under article nine of this chapter;
    19    (b) account access services;
    20    (c) bill payment services; and
    21    (d) assistance in preparation and submission of forms to be  processed
    22  by the collaborating bank or credit union.
    23    6.  The  term  "financial services" means offering or providing any of
    24  the following financial products or services: (a) the cashing of checks,
    25  drafts and/or money orders,
    26    (b) money transmission services as defined in  article  thirteen-B  of
    27  this  chapter, provided, however, a licensed financial services provider
    28  offering money transmission pursuant to article thirteen-B of this chap-
    29  ter, other than as an agent of a licensee, shall first obtain a  license
    30  under that article,
    31    (c) bill payment services,
    32    (d) the sale of prepaid debit cards; and
    33    (e) conduit services as defined in this article.
    34    7.  The term "master license" shall mean an original license issued by
    35  the superintendent that authorizes a person to engage in the business of
    36  cashing of checks and related financial services, and in the case  of  a
    37  licensee who has multiple licensed business locations at the time of the
    38  effective date of this subdivision, the initial longest site continuous-
    39  ly licensed under this article.
    40    8.  The term "supplemental license" shall mean a license issued by the
    41  superintendent that authorizes a  person  having  a  master  license  to
    42  engage  in  the  business  of  cashing  of  checks and related financial
    43  services at branch locations, and in the case of a licensee  who  has  a
    44  multiple  licensed  business locations at the time of the effective date
    45  of this subdivision, any license issued to an  existing  licensee  after
    46  the license for the original site.
    47    §  5. Section 367 of the banking law, as amended by chapter 151 of the
    48  laws of 1945, subdivision 3 as amended by section 7 of part D-1 of chap-
    49  ter 109 of the laws of 2006, subdivision 4 as amended by chapter  96  of
    50  the laws of 1981, is amended to read as follows:
    51    § 367.   License  requirements;  fees;  capital  requirements.  1.  No
    52  person[, partnership, association or corporation] shall  engage  in  the
    53  business  of  cashing checks, drafts or money orders for a consideration
    54  without first obtaining a license from the superintendent.
    55    2. Application for such license shall be in writing, under  oath,  and
    56  in  the  form  prescribed  by  the superintendent, and shall contain the

        A. 9634--A                          3
 
     1  name, and the address both of the residence and place  of  business,  of
     2  the  applicant,  and  if the applicant is a co-partnership [or], associ-
     3  ation or limited liability company, of every member thereof,  and  if  a
     4  corporation, of each officer and director thereof; also, if the business
     5  is to be conducted at a specific address, the address at which the busi-
     6  ness  is  to be conducted, and if the business is to be conducted from a
     7  [mobile unit] limited station, the New York state registration number or
     8  other identification of such [mobile unit] limited station and the  area
     9  in  which  the  applicant proposes to operate such [mobile unit] limited
    10  station; and also such further information  as  the  superintendent  may
    11  require.
    12    3.  Such applicant at the time of making such application shall pay to
    13  the superintendent a fee as prescribed pursuant to section eighteen-a of
    14  this chapter for investigating the application.   An application  for  a
    15  master  license  shall  be  in  writing,  under  oath,  and  in the form
    16  prescribed by the superintendent and shall contain such  information  as
    17  the  superintendent may require by regulation. The application shall set
    18  forth all of the locations at which the applicant seeks to conduct busi-
    19  ness hereunder.  At the time of making  the  application  for  a  master
    20  license, an existing licensee under this article shall pay to the super-
    21  intendent  the  sum  of  two  hundred  fifty  dollars  for each proposed
    22  location as a fee for investigating the application. An  applicant  that
    23  does  not  currently  hold  a  license under this article at the time of
    24  application shall pay  to  the  superintendent  an  application  fee  as
    25  provided in this chapter for initial applications. Any licensee request-
    26  ing  a  change of address, shall at the time of making such request, pay
    27  to the superintendent a fee as prescribed pursuant to section eighteen-a
    28  of this chapter for investigating the new  address;  provided,  however,
    29  that the superintendent may, in his or her discretion, waive such inves-
    30  tigation  fee  if  warranted, and provided further, that no fee shall be
    31  payable for the relocation of a limited station.
    32    4. Every applicant shall prove, in form  satisfactory  to  the  super-
    33  intendent  that  he  or it has available for the operation of such busi-
    34  ness, for each location and for each [mobile unit] limited station spec-
    35  ified in the  application,  liquid  assets  of  at  least  ten  thousand
    36  dollars,  and  every licensee shall continuously maintain for the opera-
    37  tion of such business for each  location  and  for  each  [mobile  unit]
    38  limited station liquid assets of at least ten thousand dollars. Notwith-
    39  standing  the  foregoing provisions of this subdivision, the superinten-
    40  dent, upon application by an applicant and for  good  cause  shown,  may
    41  permit a reduction from ten thousand dollars to not less than five thou-
    42  sand dollars of minimum liquid assets required for each location.
    43    §  6. Section 369 of the banking law, as amended by chapter 151 of the
    44  laws of 1945, subdivision 1 as amended by chapter 233  of  the  laws  of
    45  2005,  subdivisions  4  and  5  as amended by chapter 132 of the laws of
    46  1969, subdivision 6 as amended by chapter 164 of the laws of 2003, para-
    47  graph (b) of subdivision 6 as amended by section 6 of part LL of chapter
    48  56 of the laws of 2010, and subdivision 7 as added by chapter 485 of the
    49  laws of 1947, is amended to read as follows:
    50    § 369. Conditions precedent to issuing license; issuance and filing of
    51  license; posting license. 1. If the superintendent shall find  that  the
    52  financial  responsibility, experience, character, and general fitness of
    53  the applicant, and of the members thereof if the applicant be a co-part-
    54  nership [or], association or limited liability company, and of the offi-
    55  cers and directors thereof if the applicant be a corporation,  are  such
    56  as to command the confidence of the community and to warrant belief that

        A. 9634--A                          4
 
     1  the  business  will be operated honestly, fairly, and efficiently within
     2  the purposes of this article, and if the superintendent shall find  that
     3  the granting of such application will promote the convenience and advan-
     4  tage  of  the area in which such business is to be conducted, and if the
     5  superintendent shall find that the applicant has available for the oper-
     6  ation of such business for each location  and  for  each  [mobile  unit]
     7  limited  station  specified in the application liquid assets of at least
     8  ten thousand dollars,  the  superintendent  shall  thereupon  execute  a
     9  master  license  and  if applicable one or more supplemental licenses in
    10  duplicate to permit the [cashing of checks,  drafts  and  money  orders]
    11  delivery of financial services in accordance with the provisions of this
    12  article  at  the location or locations or in the area or areas specified
    13  in such application. In finding whether the application will promote the
    14  convenience and advantage to the public, the superintendent shall deter-
    15  mine whether there is a  community  need  for  a  new  licensee  in  the
    16  proposed  area  or  areas to be served. No license shall be issued to an
    17  applicant for a license, at a location to be licensed  which  is  closer
    18  than one thousand five hundred eighty-four feet (three-tenths of a mile)
    19  from  an  existing  licensee,  except  with  the written consent of such
    20  existing licensee or pursuant to  subdivision  three  of  section  three
    21  hundred seventy of this article, subject to any restriction or condition
    22  as  the  superintendent may promulgate by regulation; provided, however,
    23  the superintendent may permit a location to be licensed that  is  closer
    24  than  three-tenths  of  a  mile  from an existing licensee provided such
    25  applicant engages in the cashing of checks, drafts or money orders  only
    26  for  payees  of  such checks, drafts or money orders that are other than
    27  natural persons at the location to be licensed and  such  applicant  was
    28  engaged in the cashing of such checks, drafts or money orders for payees
    29  that  are  other  than natural persons at such location on or before the
    30  fourteenth day of July, two thousand four,  and  provided  further  that
    31  upon  licensing any such location by the superintendent, such license as
    32  it pertains solely to such location shall not be affected thereafter  by
    33  any  change of control of such license pursuant to section three hundred
    34  seventy-a of this article, provided that the licensee  continues  there-
    35  after  to  engage  at  that location in the cashing of checks, drafts or
    36  money orders only for payees that are other  than  natural  persons  and
    37  provided further that such license shall bear a legend stating that such
    38  location  is restricted to the cashing of checks, drafts or money orders
    39  only for payees that are other than natural persons. The three-tenths of
    40  a mile distance requirement as set forth in this section shall not apply
    41  in cases where the existing licensee is a restricted location as author-
    42  ized in the preceding sentence, or is any other licensed  location  that
    43  engages solely in the cashing of checks, drafts or money orders only for
    44  payees  that  are  other  than  natural  persons.  For  purposes of this
    45  section, such distance shall be measured on a straight  line  along  the
    46  street  between the nearest point of the store fronts of the check cash-
    47  ing facilities. The primary business of the licensee, at the location to
    48  be licensed, shall be financial services. The superintendent shall tran-
    49  smit one copy of such license to the applicant and file another  in  the
    50  office  of  the  department. Notwithstanding the foregoing provisions of
    51  this subdivision, the superintendent, upon application by  an  applicant
    52  and  for  good  cause  shown,  may  permit a reduction from ten thousand
    53  dollars to not less than five thousand dollars of minimum liquid  assets
    54  required for each location.
    55    2.  Such  license  shall  state  the  name of the licensee; and if the
    56  licensee is a co-partnership [or],  association,  or  limited  liability

        A. 9634--A                          5
 
     1  company,  the  names  of  the  members thereof; and if the licensee is a
     2  corporation, the date of its incorporation; and if the business is to be
     3  conducted at a specific address, the address at which such  business  is
     4  to  be conducted; and if the business is to be conducted through the use
     5  of a [mobile unit] limited station,  the  New  York  state  registration
     6  number or other identification of such [mobile unit] limited station and
     7  the area in which such [mobile unit] limited station is authorized to do
     8  business.
     9    3.  [Such  license] All licenses issued by the superintendent shall be
    10  kept conspicuously posted in the place of business of the  licensee  or,
    11  in  the case of a [mobile unit] limited station, upon such [mobile unit]
    12  limited station.  Such license shall not be transferable or assignable.
    13    4. Such license shall remain in full force  and  effect  until  it  is
    14  surrendered  by the licensee or revoked or suspended as provided in this
    15  article. In the case of a change of control of a location or a  business
    16  licensed  hereunder,  the  licensee  approved to acquire the business or
    17  location may utilize a true copy of the  existing  license  pending  the
    18  issuance of a new license by the superintendent.
    19    5.  If  the superintendent shall find that the applicant fails to meet
    20  any of the conditions set forth in subdivision one of this  section,  he
    21  shall  not  issue such license, and he shall notify the applicant of the
    22  denial.  If an application is denied or  withdrawn,  the  superintendent
    23  shall  retain  the investigation fee to cover the costs of investigating
    24  the application and return the license fee to the applicant.
    25    6. The superintendent may refuse to issue a license pursuant  to  this
    26  article  if  he  shall  find  that the applicant, or any person who is a
    27  director, officer, partner, agent, employee or  substantial  stockholder
    28  of  the applicant, (a) has been convicted of a crime in any jurisdiction
    29  or (b) is associating or consorting with any person who has, or  persons
    30  who  have,  been  convicted  of a crime or crimes in any jurisdiction or
    31  jurisdictions; provided, however,  that  the  superintendent  shall  not
    32  issue  such a license if he shall find that the applicant, or any person
    33  who is a director, officer,  partner,  agent,  employee  or  substantial
    34  stockholder  of  the  applicant,  has  been convicted of a felony in any
    35  jurisdiction or of a crime which, if committed within this state,  would
    36  constitute  a  felony  under  the laws thereof. For the purposes of this
    37  article, a person shall be deemed to have been convicted of a  crime  if
    38  such person shall have pleaded guilty to a charge thereof before a court
    39  or  magistrate,  or shall have been found guilty thereof by the decision
    40  or judgment of a court or magistrate or by the verdict of a jury,  irre-
    41  spective  of  the  pronouncement  of sentence or the suspension thereof,
    42  unless such plea of guilty, or such decision, judgment or verdict, shall
    43  have been set aside, reversed or otherwise abrogated by lawful  judicial
    44  process  or unless the person convicted of the crime shall have received
    45  a pardon therefor from the president of the United States or the  gover-
    46  nor   or  other  pardoning  authority  in  the  jurisdiction  where  the
    47  conviction was had, or shall have received a certificate of relief  from
    48  disabilities  or a certificate of good conduct pursuant to article twen-
    49  ty-three of the correction law to remove the disability under this arti-
    50  cle because of such conviction. The term "substantial  stockholder,"  as
    51  used in this subdivision, shall be deemed to refer to a person owning or
    52  controlling ten per centum or more of the total outstanding stock of the
    53  corporation  in which such person is a stockholder. In making a determi-
    54  nation pursuant to this subdivision, the  superintendent  shall  require
    55  fingerprinting of the applicant. Such fingerprints shall be submitted to
    56  the  division  of criminal justice services for a state criminal history

        A. 9634--A                          6
 
     1  record check, as defined in subdivision one of  section  three  thousand
     2  thirty-five  of  the  education law, and may be submitted to the federal
     3  bureau of investigation for a national criminal history record check.
     4    7.  No  license pursuant to this article shall be issued to any appli-
     5  cant to do business at the place specified in  the  application  as  the
     6  place where the business is to be conducted if, within the twelve months
     7  preceding  such application, a license to engage in business pursuant to
     8  this article at such place shall have been revoked.
     9    § 7. Section 370 of the banking law, as amended by chapter 151 of  the
    10  laws  of 1945, subdivision 2 as amended by section 38 of part O of chap-
    11  ter 59 of the laws of 2006 and subdivision 3 as amended by  chapter  703
    12  of the laws of 2006, is amended to read as follows:
    13    § 370.  Restrictions as to place or area of doing business; establish-
    14  ment of stations; change of location. 1. No more than one place of busi-
    15  ness or one [mobile unit] limited station shall be maintained under  the
    16  same  license;  provided,  however,  that  more  than one license may be
    17  issued to the same licensee [upon compliance with the provisions of this
    18  article for each new license] and if the superintendent determines  that
    19  an  existing  licensee  is  in  good standing and in compliance with the
    20  provisions of this article, a subsequent application  for  a  second  or
    21  multiple  supplemental  licenses  at  different, separate and additional
    22  locations shall be expedited by the superintendent provided the  minimum
    23  liquidity  requirements and community need criteria set forth in section
    24  three hundred sixty-nine of this article have been demonstrated  in  the
    25  application for the additional location or locations.
    26    2.  Any  licensed  [casher  of checks] financial services provider may
    27  open and maintain, within this state, one or more limited  stations  for
    28  the purpose of cashing checks, drafts or money orders for the particular
    29  group  or groups specified in the license authorizing each such station.
    30  Such stations shall be licensed pursuant to and be subject  to  all  the
    31  provisions  of  this  chapter  applicable to licensed cashers of checks,
    32  except that (a) [such station shall not be subject to the distance limi-
    33  tation set forth in subdivision one of section three hundred  sixty-nine
    34  of  this  article,  (b)] the fee for investigating the application for a
    35  station shall be as prescribed pursuant to section  eighteen-a  of  this
    36  chapter,  and  [(c)]  (b)  where  such a station is at the premises of a
    37  specified employer for the purpose of cashing checks, drafts  and  money
    38  orders  for  the  employees  of  such employer, the fees and charges for
    39  cashing such checks, drafts or money orders shall not be subject to  the
    40  limitations  of  subdivision one of section three hundred seventy-two of
    41  this article if such fees and charges are paid by such employer.
    42    3. A licensee may make a written application to the superintendent for
    43  leave to change his or her place of  business,  or  in  the  case  of  a
    44  [mobile unit] limited station, the area in which such unit is authorized
    45  to  be operated, stating the reasons for such proposed change and in the
    46  case where the applicant currently holds a master license to  operate  a
    47  business  established  under  this  article,  the  superintendent  shall
    48  streamline and reduce the information required from such applicant. Such
    49  application may be approved for relocation from  a  site  within  three-
    50  tenths of a mile of another licensee to another site within three-tenths
    51  of  a mile of such other licensee provided that such new site is farther
    52  from such existing licensee than the site from which permission to relo-
    53  cate is sought. Only in situations in which a licensee seeks  to  change
    54  its  place  of  business  due  to extraordinary circumstances, as may be
    55  determined by the superintendent pursuant to regulations, may the super-
    56  intendent, in his or her discretion, determine that an  application  may

        A. 9634--A                          7
 
     1  be  approved for relocation from a site within three-tenths of a mile of
     2  another licensee to a new site which is closer to such existing licensee
     3  than the site from which permission to relocate is sought. Notwithstand-
     4  ing  any  other  provision  of this subdivision, a licensee may relocate
     5  from any location to a location that is within three-tenths  of  a  mile
     6  from another licensee with the written consent of the other licensee. If
     7  the superintendent approves such application he or she shall issue a new
     8  license  in duplicate in accordance with the provisions of section three
     9  hundred sixty-nine of this article, stating the  new  location  of  such
    10  licensee  or,  in  the  case of a [mobile unit] limited station, the new
    11  area in which such [mobile unit] limited station may be operated.
    12    § 8. Section 370-a of the banking law, as added by chapter 142 of  the
    13  laws  of 1992, subdivision 1 as amended by section 39 of part O of chap-
    14  ter 59 of the laws of 2006, is amended to read as follows:
    15    § 370-a. Changes in control. 1. It shall be unlawful except  with  the
    16  prior  approval  of  the superintendent for any action to be taken which
    17  results in a change of control of the business of a licensee.  Prior  to
    18  any  change  of control, the person desirous of acquiring control of the
    19  business of a licensee, if such person is not already a  licensee  under
    20  this  article,  shall make written application to the superintendent and
    21  pay an investigation fee as prescribed pursuant to section eighteen-a of
    22  this chapter to the superintendent. The application shall  contain  such
    23  information  as the superintendent, by rule or regulation, may prescribe
    24  as necessary or appropriate, and in the case where the acquiring  person
    25  currently holds a master license to operate a business established under
    26  this  article,  and in the case of a limited station license, the super-
    27  intendent shall streamline and reduce the information required from such
    28  applicant, for the purpose  of  making  the  determination  required  by
    29  subdivision two of this section.
    30    2.  The superintendent shall approve or disapprove the proposed change
    31  of control of a licensee in accordance with the provisions  of  subdivi-
    32  sions  one  and six of section three hundred sixty-nine of this article.
    33  The superintendent shall approve or disapprove the application in  writ-
    34  ing  within ninety days after the date the application is filed with the
    35  superintendent.
    36    3. For a period of six months from the date of  qualification  thereof
    37  and  for  such  additional  period  of  time  as  the superintendent may
    38  prescribe, in writing, the provisions of subdivisions  one  and  two  of
    39  this  section  shall  not apply to a transfer of control by operation of
    40  law to the legal representative, as hereinafter defined, of one who  has
    41  control  of  a  licensee.  Thereafter,  such  legal representative shall
    42  comply with the provisions of subdivisions one and two of this  section.
    43  The  provisions  of  subdivisions  one  and two of this section shall be
    44  applicable to an application made under such section by a  legal  repre-
    45  sentative.
    46    The  term  "legal  representative",  for the purposes of this section,
    47  shall mean one duly appointed by a court of  competent  jurisdiction  to
    48  act  as  executor,  administrator,  trustee,  committee,  conservator or
    49  receiver, including one who succeeds  a  legal  representative  and  one
    50  acting   in  an  ancillary  capacity  thereto  in  accordance  with  the
    51  provisions of such court appointment.
    52    4. As used in this section: (a) the term "person" includes an individ-
    53  ual, partnership, corporation, association, limited  liability  company,
    54  or  any  other  organization,  and  (b)  the  term  "control"  means the
    55  possession, directly or indirectly, of the power to direct or cause  the
    56  direction  of the management and policies of a licensee, whether through

        A. 9634--A                          8
 
     1  the ownership of voting stock of such licensee, the ownership of  voting
     2  stock  of  any  person  which possesses such power or otherwise. Control
     3  shall be presumed to exist if any person, directly or indirectly,  owns,
     4  controls  or  holds  with  power  to  vote ten per centum or more of the
     5  voting stock of any licensee or of any person which  owns,  controls  or
     6  holds  with  power to vote ten per centum or more of the voting stock of
     7  any licensee, but no person shall be deemed to control a licensee solely
     8  by reason of being an officer or director of such  licensee  or  person.
     9  The  superintendent  may  in  his  discretion, upon the application of a
    10  licensee or any person who, directly or indirectly,  owns,  controls  or
    11  holds  with power to vote or seeks to own, control or hold with power to
    12  vote any voting stock of such licensee, determine  whether  or  not  the
    13  ownership,  control or holding of such voting stock constitutes or would
    14  constitute control of such licensee for purposes of this section.
    15    § 9. Section 371 of the banking law, as added by chapter  151  of  the
    16  laws of 1945, is amended to read as follows:
    17    § 371.  Regulations.  The  superintendent  is  hereby  authorized  and
    18  empowered to make such rules and regulations, and such  specific  neces-
    19  sary  rulings, demands, and findings as he or she may deem necessary for
    20  the proper conduct of the business authorized and licensed under and for
    21  the enforcement of this article, in addition hereto and not inconsistent
    22  herewith.
    23    § 10. Section 372 of the banking law, as amended by chapter 151 of the
    24  laws of 1945, the section heading  and  subdivision  1  as  amended  and
    25  subdivision  7 as added by chapter 432 of the laws of 2004, subdivisions
    26  2, 3, and 4 as added and subdivisions 5 and 6 as renumbered  by  chapter
    27  263  of  the  laws of 1983, and subdivision 6 as added by chapter 485 of
    28  the laws of 1947, is amended to read as follows:
    29    § 372. Fees and charges; posting schedule; records and reports. 1. The
    30  superintendent shall, by regulation, establish the  maximum  fees  which
    31  may  be charged by licensees for cashing a check, draft, or money order.
    32  No licensee shall charge or collect any sum for cashing a check,  draft,
    33  or  money  order  in  excess of that established by the superintendent's
    34  regulations; provided, however, that no maximum fee shall apply  to  the
    35  charging of fees by licensees for the cashing of checks, drafts or money
    36  orders  for payees of such checks, drafts or money orders that are other
    37  than natural persons. The licensee shall pay to every customer tendering
    38  any check, draft or money order to be cashed, the entire face amount  of
    39  such  instrument,  less  any charges permitted by the superintendent, in
    40  such form and by such means as agreed upon by the customer on  the  same
    41  date upon which such instrument is presented.
    42    2. The schedule of fees and charges permitted under this section shall
    43  be  conspicuously  and  continuously posted in every location and [mobil
    44  unit] limited station licensed under this article. Whenever  a  licensee
    45  hereunder  is  authorized  under  this  article to offer other financial
    46  services, the posting and signage requirements thereunder  shall  super-
    47  sede other signage requirements under this article.
    48    3.  No  change in fees shall become effective earlier than thirty days
    49  after the superintendent shall notify the majority leader of the senate,
    50  the speaker of the assembly, and the chairmen of  both  the  senate  and
    51  assembly committees on banks of his intention to change fees.
    52    4.  The fees in effect immediately prior to the effective date of this
    53  subdivision shall continue  to  be  the  maximum  allowable  fees  until
    54  revised by the superintendent's regulations.
    55    5.  Each  licensee  shall  keep  and  use  in its business such books,
    56  accounts, and records as the superintendent may require  to  carry  into

        A. 9634--A                          9
 
     1  effect the provisions of this article and the rules and regulations made
     2  by  the  superintendent  hereunder.  Every  licensee shall preserve such
     3  books, accounts and records for at least two years.  A licensee shall be
     4  deemed  to  be in compliance with this requirement if the licensee main-
     5  tains all information related to  the  financial  services  transactions
     6  conducted by said licensee in electronic format readily available to the
     7  superintendent upon reasonable notice.
     8    6.  Before  a licensee shall deposit with any banking organization, or
     9  with any organization engaged in the business of banking, a check, draft
    10  or money order cashed by such licensee, the same must be  endorsed  with
    11  the  actual  name  under  which such licensee is doing business and must
    12  have the words "licensed [casher of checks] financial services provider"
    13  legibly written or stamped immediately after or below such name.
    14    7. Every licensee shall submit to the superintendent, or  such  person
    15  as the superintendent may designate, such suspicious activity reports or
    16  currency  transaction reports as are required to be submitted to federal
    17  authorities pursuant to provisions of the Bank Secrecy  Act  (subchapter
    18  11, chapter 53, title 31, United States code) and regulations and admin-
    19  istrative orders related thereto, as amended, within the periods of time
    20  as required by such act and regulations. A licensee may submit a copy of
    21  any such report to the superintendent, or such person as the superinten-
    22  dent  may  designate,  that  is filed with such federal authorities. The
    23  superintendent may adopt such regulations  or  require  such  additional
    24  reports as he or she deems necessary to insure the effective enforcement
    25  of this subdivision.
    26    § 11. Section 372-a of the banking law, as added by chapter 432 of the
    27  laws of 2004, is amended to read as follows:
    28    §  372-a.  Superintendent authorized to examine. 1. For the purpose of
    29  discovering violations of this article or securing information  lawfully
    30  required  in  this  section,  the superintendent may at any time, and as
    31  often as may be determined, either personally or by a person duly desig-
    32  nated by the superintendent,  investigate  the  [cashing  of  checks  by
    33  licensees] business practices of a licensee rendering financial services
    34  authorized by this article and examine the books, accounts, records, and
    35  files used therein of every licensee.
    36    2. For the purpose established in subdivision one of this section, the
    37  superintendent and his or her duly designated representatives shall have
    38  free  access  to  the  offices  and places of business, books, accounts,
    39  papers, records, files, safes and vaults  of  all  such  licensees.  The
    40  superintendent  shall have authority to require the attendance of and to
    41  examine under oath all persons whose testimony may be required  relative
    42  to such cashing of checks or such business.
    43    § 12. Subdivisions 1 and 2 of section 373 of the banking law, subdivi-
    44  sion  1  as amended by chapter 432 of the laws of 2004 and subdivision 2
    45  as amended by chapter 132 of the laws of 1969, are amended  to  read  as
    46  follows:
    47    1. [No licensee shall engage in the business of making loans of money,
    48  credit,  goods  or  things  or  discounting of notes, bills of exchange,
    49  checks, or other evidences of debt pursuant to the provisions of article
    50  nine of this chapter, nor shall a loan business or  the  negotiation  of
    51  loans  or  the  discounting of notes, bills of exchange, checks or other
    52  evidences of debt be conducted on the same premises where  the  licensee
    53  is  conducting  business  pursuant to the provisions of this article.] A
    54  licensee may engage in the business of making  business  and  commercial
    55  loans  pursuant to this article provided the licensee has first obtained
    56  a license from the superintendent pursuant to article nine of this chap-

        A. 9634--A                         10
 
     1  ter; provided, however, no licensee shall make any loans to  individuals
     2  for personal, family, household or investment purposes. Except as other-
     3  wise  provided  by  regulation of the superintendent, all checks, drafts
     4  and  money  orders shall be deposited in the licensee's bank account not
     5  later than the first business day following the day on which  they  were
     6  cashed.  No  licensee  shall at any time cash or advance any moneys on a
     7  post-dated check or draft or engage  in  the  business  of  transmitting
     8  money  or  receiving  money  for transmission; provided, however, that a
     9  licensee may cash a check [payable on the  first  banking  business  day
    10  following  the  date of cashing (a) if such check is drawn by the United
    11  States, the state of New York, or any political subdivision of the state
    12  of New York, or by any department, bureau, agency, authority, instrumen-
    13  tality or officer, acting in his official capacity, of the United States
    14  or of the state of New York or of any political subdivision of the state
    15  of New York, or (b) if such check is a payroll check drawn by an employ-
    16  er to the order of its employee in payment  for  services  performed  by
    17  such employee] without regard to the date imprinted on the check as long
    18  as  the check is deposited in the licensee's bank account not later than
    19  the first business day following the day on  which  it  was  cashed.  No
    20  licensee  shall  cash any check, draft or money order if the face amount
    21  for which it is drawn is in excess  of  [fifteen]  twenty-five  thousand
    22  dollars; provided, however, that this restriction shall not apply to the
    23  cashing  of  checks,  drafts or money orders drawn by the United States,
    24  any state thereof or any political subdivision of any such state, or  by
    25  any  department,  bureau, agency, authority, instrumentality or officer,
    26  acting in his official capacity, of the United States, any state thereof
    27  or any political subdivision of any such state, or any banking  institu-
    28  tion,  or  to  any  check  or  draft drawn by any insurance company, any
    29  broker or dealer registered with the securities and exchange commission,
    30  or any attorney for the settlement of claims, or to any check issued  as
    31  an advance to a lawsuit or as part of a structured settlement, or to any
    32  check  which  has  been certified by the banking institution on which it
    33  has been drawn, or if such check  is  drawn  on  a  bona  fide  workers'
    34  compensation  fund  issued  by  a third-party payor, or if such check is
    35  drawn by an employer from a pension or profit sharing fund, or  if  such
    36  check  is  drawn  by  a  union  from a pension or benefit fund; provided
    37  further, however, that any such restriction upon the maximum face amount
    38  that may be cashed by a licensee shall  not  apply  to  the  cashing  of
    39  checks,  drafts  or money orders by licensees for payees of such checks,
    40  drafts or money orders that are other than natural persons. For purposes
    41  of this subdivision, "banking institution" means any bank, trust  compa-
    42  ny,  savings bank, savings and loan association or credit union which is
    43  incorporated, chartered or organized under the laws of this state or any
    44  other state or the United States.
    45    2. The superintendent may suspend or revoke any  license  or  licenses
    46  issued pursuant to this article if, after notice and a hearing, he shall
    47  find  that  the  licensee  (a)  has  committed any fraud, engaged in any
    48  dishonest activities or made any misrepresentation; or (b) has  violated
    49  any  provisions  of  the  banking  law or any regulation issued pursuant
    50  thereto, or has violated any other law in the course of its or his deal-
    51  ings as a [licensed casher of checks] licensee delivering check  cashing
    52  and  related  financial services to the public pursuant to this article;
    53  or (c) has made a false statement in the application for such license or
    54  failed to give a true reply to a question in such  application;  or  (d)
    55  has  demonstrated his or its incompetency or untrustworthiness to act as
    56  a [licensed casher of checks] licensee delivering financial services  to

        A. 9634--A                         11
 
     1  the  public  pursuant  to  this  article; or (e) is not doing sufficient
     2  business pursuant to this article to  justify  the  continuance  of  the
     3  license,  or  if  he  shall  find that any ground or grounds exist which
     4  would  require or warrant the refusal of an application for the issuance
     5  of the license if such an application were then before him. Such a hear-
     6  ing shall be held  in  the  manner  and  upon  such  notice  as  may  be
     7  prescribed  by the superintendent. Pending an investigation or a hearing
     8  for the suspension or revocation  of  any  license  or  licenses  issued
     9  pursuant  to  this  article,  the superintendent may temporarily suspend
    10  such license or licenses  for  a  period  not  to  exceed  ninety  days,
    11  provided  the superintendent shall find that such a temporary suspension
    12  is in the public interest.
    13    § 13. The banking law is amended by adding a new section 373-a to read
    14  as follows:
    15    § 373-a. Report of lending activity. 1. Any licensee who issues  busi-
    16  ness  or  commercial  loans pursuant to the authority granted in section
    17  three hundred seventy-three of this article shall submit information  to
    18  the  superintendent annually beginning January first, two thousand eigh-
    19  teen regarding the following:
    20    (a) the number of loans issued the previous year;
    21    (b) the default rate, if any, with respect to such loans;
    22    (c) the average cost of such loans, including fees and interest  rates
    23  charged; and
    24    (d) such other information as the superintendent deems relevant.
    25    2. The superintendent shall thereafter issue a report to the governor,
    26  temporary  president  of the senate and speaker of the assembly on April
    27  first, two thousand  eighteen  and  annually  thereafter  compiling  and
    28  analyzing  the  information received pursuant to subdivision one of this
    29  section.
    30    § 14. This act shall take effect on  the  one  hundred  eightieth  day
    31  after it shall have become a law; provided, however, that:
    32    (a)  effective  immediately,  any  rules  and regulations necessary to
    33  implement the provisions of this act on  its  effective  date  shall  be
    34  added, amended and/or repealed on or before such date;
    35    (b)  the  amendments to section 373 of the banking law made by section
    36  twelve of this act shall expire and be deemed repealed on June 30, 2021;
    37    (c) section 373-a of the banking law as added by section  thirteen  of
    38  this act shall expire and be deemed repealed on June 30, 2021; and
    39    (d)  any  contract,  instrument,  argument or other written obligation
    40  entered into by a financial service provider  authorized  under  section
    41  373  of the banking law prior to June 30, 2021 shall be deemed valid and
    42  enforceable after such date.
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