A09634 Summary:

BILL NOA09634
 
SAME ASSAME AS S06985
 
SPONSORRodriguez
 
COSPNSRArroyo, Benedetto, Pichardo, Perry, Linares, Cook, Crespo, Hyndman, Rivera, Dilan, Tenney
 
MLTSPNSRAbbate, Farrell
 
Amd Bank L, generally; amd 2, Chap 591 of 2001; amd 170.05, 170.10 & 170.20, Pen L
 
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: A9634
 
SPONSOR: Rodriguez
  TITLE OF BILL: An act to amend the banking law and the penal law, in relation to enact- ing the "community financial services access and modernization act of 2016"; and to amend chapter 591 of the laws of 2001 amending the banking law relating to limiting the check cashing exemption for national banks and other regulated entities, in relation to the effectiveness 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 credit 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 pursue and expand business opportu- nities. Regrettably, the current law governing the licensed check cash- ing industry prohibits these licensed operators to provide any credit products. Small businesses and consumers are, therefore denied the abil- ity to access credit in their communities from check cashers, who are licensed, regulated financial service providers. This bill would allow for regulated and accountable entities to provide a credit product to New Yorkers and prevent them from entering into unfair loan agreements with rogue lenders. This bill will also update, modernize and improve the regulatory framework between these small busi- ness operators and the Department of Financial Services. It will author- ize and expand electronic filing by licensees with the Department, and reduce waste in the application process.   PRIOR LEGISLATIVE HISTORY: New bill   FISCAL IMPLICATIONS FOR STATE & LOCAL GOVERNMENTS: To be determined   EFFECTIVE DATE: This act will take effect on the one hundred eightieth day after it shall have become a law; provided however, that effective immediately, any rules and regulations necessary to implement the provisions of this act on its effective date shall be added, amended and/or repealed on or before such date.
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A09634 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9634
 
                   IN ASSEMBLY
 
                                     March 23, 2016
                                       ___________
 
        Introduced  by  M.  of  A.  RODRIGUEZ  --  read once and referred to the
          Committee on Banks
 
        AN ACT to amend the banking law and the penal law, in relation to enact-
          ing the "community financial services access and modernization act  of
          2016"; and to amend chapter 591 of the laws of 2001 amending the bank-
          ing  law relating to limiting the check cashing exemption for national
          banks and other regulated entities, in relation to  the  effectiveness
          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
    23  licensed by the superintendent of financial services to engage in  busi-
    24  ness pursuant to the provisions of this article.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14451-01-6

        A. 9634                             2
 
     1    2.  The  term  "licensee"  means  a person licensed [casher of checks,
     2  drafts and/or money orders] to provide financial services  regulated  by
     3  this article.
     4    3.  The  term  ["mobile  unit"] "limited station" means any vehicle or
     5  other movable means from which the business of [cashing  checks,  drafts
     6  or  money orders] providing financial services regulated by this article
     7  is to be conducted.
     8    4. The term "person" means  any  individual  or  other  legal  entity,
     9  including any corporation, partnership, association or limited liability
    10  company.
    11    5. The term "conduit services" means any activity permitted by the law
    12  of the state of New York offered by a licensee under this article to its
    13  customers in collaboration with a bank, credit union, or other financial
    14  institution  or licensee authorized to do business in this state by this
    15  chapter or by federal law.
    16    6. The term "financial services" means offering or  providing  any  of
    17  the following financial products or services: (a) the cashing of checks,
    18  drafts and/or money orders,
    19    (b)  money  transmission  services as defined in article thirteen-B of
    20  this chapter, provided, however, a licensed financial services  provider
    21  offering money transmission pursuant to article thirteen-B of this chap-
    22  ter,  other than as an agent of a licensee, shall first obtain a license
    23  under that article,
    24    (c) bill payment services,
    25    (d) such other loans and/or credit products as provided for herein  or
    26  as permitted by state law,
    27    (e) the sale of prepaid debit cards,
    28    (f) conduit services as defined in this article, and
    29    (g) any other financial service permitted in this state.
    30    7.  The term "master license" shall mean an original license issued by
    31  the superintendent that authorizes a person to engage in the business of
    32  cashing of checks and related financial services.
    33    8. The term "supplemental license" shall mean a license issued by  the
    34  superintendent  that  authorizes  a  person  having  a master license to
    35  engage in the business  of  cashing  of  checks  and  related  financial
    36  services at branch locations.
    37    §  5. Section 367 of the banking law, as amended by chapter 151 of the
    38  laws of 1945, subdivision 3 as amended by section 7 of part D-1 of chap-
    39  ter 109 of the laws of 2006, subdivision 4 as amended by chapter  96  of
    40  the laws of 1981, is amended to read as follows:
    41    § 367.   License  requirements;  fees;  capital  requirements.  1.  No
    42  person[, partnership, association or corporation] shall  engage  in  the
    43  business  of  cashing checks, drafts or money orders for a consideration
    44  without first obtaining a license from the superintendent.
    45    2. Application for such license shall be in writing, under  oath,  and
    46  in  the  form  prescribed  by  the superintendent, and shall contain the
    47  name, and the address both of the residence and place  of  business,  of
    48  the  applicant,  and  if the applicant is a co-partnership [or], associ-
    49  ation or limited liability company, of every member thereof,  and  if  a
    50  corporation, of each officer and director thereof; also, if the business
    51  is to be conducted at a specific address, the address at which the busi-
    52  ness  is  to be conducted, and if the business is to be conducted from a
    53  [mobile unit] limited station, the New York state registration number or
    54  other identification of such [mobile unit] limited station and the  area
    55  in  which  the  applicant proposes to operate such [mobile unit] limited

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

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

        A. 9634                             5
 
     1  in the case of a [mobile unit] limited station, upon such [mobile  unit]
     2  limited station.  Such license shall not be transferable or assignable.
     3    4.  Such  license  shall  remain  in full force and effect until it is
     4  surrendered by the licensee or revoked or suspended as provided in  this
     5  article.  In the case of a change of control of a location or a business
     6  licensed hereunder, the licensee approved to  acquire  the  business  or
     7  location  may  utilize  a  true copy of the existing license pending the
     8  issuance of a new license by the superintendent.
     9    5. If the superintendent shall find that the applicant fails  to  meet
    10  any  of  the conditions set forth in subdivision one of this section, he
    11  shall not issue such license, and he shall notify the applicant  of  the
    12  denial.    If  an application is denied or withdrawn, the superintendent
    13  shall retain the investigation fee to cover the costs  of  investigating
    14  the application and return the license fee to the applicant.
    15    6.  The  superintendent may refuse to issue a license pursuant to this
    16  article if he shall find that the applicant, or  any  person  who  is  a
    17  director,  officer,  partner, agent, employee or substantial stockholder
    18  of the applicant, (a) has been convicted of a crime in any  jurisdiction
    19  or  (b) is associating or consorting with any person who has, or persons
    20  who have, been convicted of a crime or crimes  in  any  jurisdiction  or
    21  jurisdictions;  provided,  however,  that  the  superintendent shall not
    22  issue such a license if he shall find that the applicant, or any  person
    23  who  is  a  director,  officer,  partner, agent, employee or substantial
    24  stockholder of the applicant, has been convicted  of  a  felony  in  any
    25  jurisdiction  or of a crime which, if committed within this state, would
    26  constitute a felony under the laws thereof. For  the  purposes  of  this
    27  article,  a  person shall be deemed to have been convicted of a crime if
    28  such person shall have pleaded guilty to a charge thereof before a court
    29  or magistrate, or shall have been found guilty thereof by  the  decision
    30  or  judgment of a court or magistrate or by the verdict of a jury, irre-
    31  spective of the pronouncement of sentence  or  the  suspension  thereof,
    32  unless such plea of guilty, or such decision, judgment or verdict, shall
    33  have  been set aside, reversed or otherwise abrogated by lawful judicial
    34  process or unless the person convicted of the crime shall have  received
    35  a  pardon therefor from the president of the United States or the gover-
    36  nor  or  other  pardoning  authority  in  the  jurisdiction  where   the
    37  conviction  was had, or shall have received a certificate of relief from
    38  disabilities or a certificate of good conduct pursuant to article  twen-
    39  ty-three of the correction law to remove the disability under this arti-
    40  cle  because  of such conviction. The term "substantial stockholder," as
    41  used in this subdivision, shall be deemed to refer to a person owning or
    42  controlling ten per centum or more of the total outstanding stock of the
    43  corporation in which such person is a stockholder. In making a  determi-
    44  nation  pursuant  to  this subdivision, the superintendent shall require
    45  fingerprinting of the applicant. Such fingerprints shall be submitted to
    46  the division of criminal justice services for a state  criminal  history
    47  record  check,  as  defined in subdivision one of section three thousand
    48  thirty-five of the education law, and may be submitted  to  the  federal
    49  bureau of investigation for a national criminal history record check.
    50    7.  No  license pursuant to this article shall be issued to any appli-
    51  cant to do business at the place specified in  the  application  as  the
    52  place where the business is to be conducted if, within the twelve months
    53  preceding  such application, a license to engage in business pursuant to
    54  this article at such place shall have been revoked.
    55    § 7. Section 370 of the banking law, as amended by chapter 151 of  the
    56  laws  of 1945, subdivision 2 as amended by section 38 of part O of chap-

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

        A. 9634                             7
 
     1  licensee or, in the case of a [mobile unit]  limited  station,  the  new
     2  area in which such [mobile unit] limited station may be operated.
     3    §  8. Section 370-a of the banking law, as added by chapter 142 of the
     4  laws of 1992, subdivision 1 as amended by section 39 of part O of  chap-
     5  ter 59 of the laws of 2006, is amended to read as follows:
     6    § 370-a.  Changes  in control. 1. It shall be unlawful except with the
     7  prior approval of the superintendent for any action to  be  taken  which
     8  results  in a change of control of the business of a licensee.  Prior to
     9  any change of control, the person desirous of acquiring control  of  the
    10  business  of  a licensee, if such person is not already a licensee under
    11  this article, shall make written application to the  superintendent  and
    12  pay an investigation fee as prescribed pursuant to section eighteen-a of
    13  this  chapter  to the superintendent. The application shall contain such
    14  information as the superintendent, by rule or regulation, may  prescribe
    15  as  necessary or appropriate, and in the case where the acquiring person
    16  currently holds a master license to operate a business established under
    17  this article, and in the case of a limited station license,  the  super-
    18  intendent shall streamline and reduce the information required from such
    19  applicant,  for  the  purpose  of  making  the determination required by
    20  subdivision two of this section.
    21    2. The superintendent shall approve or disapprove the proposed  change
    22  of  control  of a licensee in accordance with the provisions of subdivi-
    23  sions one and six of section three hundred sixty-nine of  this  article.
    24  The  superintendent shall approve or disapprove the application in writ-
    25  ing within ninety days after the date the application is filed with  the
    26  superintendent.
    27    3.  For  a period of six months from the date of qualification thereof
    28  and for such  additional  period  of  time  as  the  superintendent  may
    29  prescribe,  in  writing,  the  provisions of subdivisions one and two of
    30  this section shall not apply to a transfer of control  by  operation  of
    31  law  to the legal representative, as hereinafter defined, of one who has
    32  control of a  licensee.  Thereafter,  such  legal  representative  shall
    33  comply  with the provisions of subdivisions one and two of this section.
    34  The provisions of subdivisions one and two  of  this  section  shall  be
    35  applicable  to  an application made under such section by a legal repre-
    36  sentative.
    37    The term "legal representative", for the  purposes  of  this  section,
    38  shall  mean  one  duly appointed by a court of competent jurisdiction to
    39  act as  executor,  administrator,  trustee,  committee,  conservator  or
    40  receiver,  including  one  who  succeeds  a legal representative and one
    41  acting  in  an  ancillary  capacity  thereto  in  accordance  with   the
    42  provisions of such court appointment.
    43    4. As used in this section: (a) the term "person" includes an individ-
    44  ual,  partnership,  corporation, association, limited liability company,
    45  or any  other  organization,  and  (b)  the  term  "control"  means  the
    46  possession,  directly or indirectly, of the power to direct or cause the
    47  direction of the management and policies of a licensee, whether  through
    48  the  ownership of voting stock of such licensee, the ownership of voting
    49  stock of any person which possesses such  power  or  otherwise.  Control
    50  shall  be presumed to exist if any person, directly or indirectly, owns,
    51  controls or holds with power to vote ten  per  centum  or  more  of  the
    52  voting  stock  of  any licensee or of any person which owns, controls or
    53  holds with power to vote ten per centum or more of the voting  stock  of
    54  any licensee, but no person shall be deemed to control a licensee solely
    55  by  reason  of  being an officer or director of such licensee or person.
    56  The superintendent may in his discretion,  upon  the  application  of  a

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

        A. 9634                             9

     1  the  actual  name  under  which such licensee is doing business and must
     2  have the words "licensed [casher of checks] financial services provider"
     3  legibly written or stamped immediately after or below such name.
     4    7.  Every  licensee shall submit to the superintendent, or such person
     5  as the superintendent may designate, such suspicious activity reports or
     6  currency transaction reports as are required to be submitted to  federal
     7  authorities  pursuant  to provisions of the Bank Secrecy Act (subchapter
     8  11, chapter 53, title 31, United States code) and regulations and admin-
     9  istrative orders related thereto, as amended, within the periods of time
    10  as required by such act and regulations. A licensee may submit a copy of
    11  any such report to the superintendent, or such person as the superinten-
    12  dent may designate, that is filed with  such  federal  authorities.  The
    13  superintendent  may  adopt  such  regulations or require such additional
    14  reports as he or she deems necessary to insure the effective enforcement
    15  of this subdivision.
    16    § 11. Section 372-a of the banking law, as added by chapter 432 of the
    17  laws of 2004, is amended to read as follows:
    18    § 372-a. Superintendent authorized to examine. 1. For the  purpose  of
    19  discovering  violations of this article or securing information lawfully
    20  required in this section, the superintendent may at  any  time,  and  as
    21  often as may be determined, either personally or by a person duly desig-
    22  nated  by  the  superintendent,  investigate  the  [cashing of checks by
    23  licensees] business practices of a licensee rendering financial services
    24  authorized by this article and examine the books, accounts, records, and
    25  files used therein of every licensee.
    26    2. For the purpose established in subdivision one of this section, the
    27  superintendent and his or her duly designated representatives shall have
    28  free access to the offices and  places  of  business,  books,  accounts,
    29  papers,  records,  files,  safes  and  vaults of all such licensees. The
    30  superintendent shall have authority to require the attendance of and  to
    31  examine  under oath all persons whose testimony may be required relative
    32  to such cashing of checks or such business.
    33    § 12. Subdivisions 1 and 2 of section 373 of the banking law, subdivi-
    34  sion 1 as amended by chapter 432 of the laws of 2004 and  subdivision  2
    35  as  amended  by  chapter 132 of the laws of 1969, are amended to read as
    36  follows:
    37    1. [No licensee shall engage in the business of making loans of money,
    38  credit, goods or things or discounting  of  notes,  bills  of  exchange,
    39  checks, or other evidences of debt pursuant to the provisions of article
    40  nine  of  this  chapter, nor shall a loan business or the negotiation of
    41  loans or the discounting of notes, bills of exchange,  checks  or  other
    42  evidences  of  debt be conducted on the same premises where the licensee
    43  is conducting business pursuant to the provisions of  this  article.]  A
    44  licensee  may engage in the business of making loans pursuant to article
    45  nine of this chapter, or as otherwise permitted by state  law,  provided
    46  the licensee has first obtained a license from the superintendent pursu-
    47  ant  to  article  nine  of this chapter. Except as otherwise provided by
    48  regulation of the superintendent, all checks, drafts  and  money  orders
    49  shall  be  deposited  in  the licensee's bank account not later than the
    50  first business day following the day  on  which  they  were  cashed.  No
    51  licensee  shall  at  any time cash or advance any moneys on a post-dated
    52  check or draft or engage  in  the  business  of  transmitting  money  or
    53  receiving money for transmission; provided, however, that a licensee may
    54  cash  a  check  [payable on the first banking business day following the
    55  date of cashing (a) if such check is drawn by  the  United  States,  the
    56  state  of  New  York,  or  any political subdivision of the state of New

        A. 9634                            10

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

        A. 9634                            11

     1    § 13. Subdivision 5 of section 373 of the banking  law,  as  added  by
     2  chapter 235 of the laws of 2008, is amended to read as follows:
     3    5. Notwithstanding the provisions of subdivision four of this section,
     4  any  person,  partnership,  association  or  corporation and the several
     5  members, officers, directors, agents and  employees  thereof  who  shall
     6  violate  the  provisions  of  subdivision  one  of section three hundred
     7  sixty-seven of this article shall be guilty of a class [A misdemeanor] E
     8  felony and shall be punishable by a fine of two  thousand  five  hundred
     9  dollars for each transaction made in violation of such subdivision.
    10    §  14.  Subdivision 1 of section 374 of the banking law, as amended by
    11  chapter 582 of the laws of 2000, is amended to read as follows:
    12    1. The provisions of this article shall not apply when checks,  drafts
    13  or  money orders are cashed, other than by a licensee, without a consid-
    14  eration or charge; nor when checks, drafts or money orders  are  cashed,
    15  other  than  by  a  licensee, as an incident to the conduct of any other
    16  lawful business where not more than one dollar is  charged  for  cashing
    17  each  check,  draft  or  money order provided, however, in the case of a
    18  retail business establishment, the proceeds from the cashed check, draft
    19  or money order is expended on a contemporaneous purchase at  the  retail
    20  business cashing such instrument; nor shall the provisions of this arti-
    21  cle  apply to any national bank, federal reserve bank, or to any person,
    22  partnership, association, corporation or other organization doing  busi-
    23  ness  under  or  pursuant  to  the  provisions of this chapter, except a
    24  licensee under this article.
    25    (a) Any lawful business permitted to  cash  checks,  drafts  or  money
    26  orders  as  an  incident to the conduct of its business and as permitted
    27  under section one of this article, shall be  prohibited  from  promoting
    28  that  practice  in  any  advertising  for such business and any exterior
    29  signage informing the general public of the check, draft or money  order
    30  cashing service shall also be prohibited.
    31    (b)  Any  lawful  business  permitted  to cash checks, drafts or money
    32  orders as an incident to the conduct of its business  and  as  permitted
    33  under  section  one of this article, shall upon the demand of the super-
    34  intendent or at least semi-annually, submit proof to the  superintendent
    35  of  their  compliance with the terms and conditions of the provisions of
    36  this article in the provision of services  to  the  public  and  of  its
    37  compliance with the provisions of Article 31 of the United States Code.
    38    § 15. Section 2 of chapter 591 of the laws of 2001, amending the bank-
    39  ing  law  relating  to limiting the check cashing exemption for national
    40  banks and other regulated entities, as amended by chapter 33 of the laws
    41  of 2013, is amended to read as follows:
    42    § 2. This act shall take effect immediately [and shall expire  and  be
    43  deemed repealed August 1, 2018].
    44    §  16. The first undesignated paragraph of section 170.05 of the penal
    45  law is amended to read as follows:
    46    A person is guilty of forgery in the third degree when, with intent to
    47  defraud, deceive or injure  another,  he  falsely  makes,  completes  or
    48  alters a written instrument, including but not limited to checks, drafts
    49  and money orders.
    50    §  17.  Subdivision 3 of section 170.10 of the penal law is amended to
    51  read as follows:
    52    3. A written instrument, including but not limited to  checks,  drafts
    53  and money orders officially issued or created by a public office, public
    54  servant or governmental instrumentality; or
    55    §  18. The first undesignated paragraph of section 170.20 of the penal
    56  law is amended to read as follows:

        A. 9634                            12
 
     1    A person is guilty of criminal possession of a  forged  instrument  in
     2  the  third degree when, with knowledge that it is forged and with intent
     3  to defraud, deceive or injure another, he utters or possesses  a  forged
     4  instrument,  including  but  not  limited  to,  checks, drafts and money
     5  orders.
     6    §  19.  This  act  shall  take effect on the one hundred eightieth day
     7  after it shall have become a  law;  provided,  however,  that  effective
     8  immediately,  any  rules  and  regulations  necessary  to  implement the
     9  provisions of this act on its effective date  shall  be  added,  amended
    10  and/or repealed on or before such date.
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