Source: https://www.nysenate.gov/legislation/bills/2019/s6688
Timestamp: 2020-03-31 20:56:56
Document Index: 633190404

Matched Legal Cases: ['Art 9', 'Art 9', 'Art 9', '§363', '§22', '§10', '§ 363', '§ 363', '§ 363', '§  363', '§ 363', '§  363', '§  363', '§ 363', '§ 363', '§ 363', '§  363', 'ART-\n3', '§ 363', '§  363', '§  363', '§ 363', '§ 2', '§ 3', '§  4', '§ 5']

NY State Senate Bill S6688
senate Bill S6688
Relates to regulating commercial finance licensing
Current Bill Status - In Senate Committee Banks Committee
Get Status Alerts for S6688
S6688 (ACTIVE) - Details
Ren Art 9-A to be Art 9-B, add Art 9-A §§363 - 363-n, amd §§22, 635 & 652-b, Bank L; amd §10-136, NYC Ad Cd
S6688 (ACTIVE) - Summary
Relates to regulating commercial finance licensing and making conforming technical changes relating thereto.
S6688 (ACTIVE) - Sponsor Memo
BILL NUMBER: S6688
TITLE OF BILL:  An act to amend the banking law and the administrative
code of the city of New York, in relation to regulating commercial
finance licensing and making conforming technical changes relating ther-
This bill would require persons or entities engaging in the business of
making or soliciting commercial financing products in the New York state
to obtain ,a license from the superintendent.
SUMMARY OF PROVISIONS AND STATEMENT IN SUPPORT:
Section 363. Requires persons or entities engaging in the business of
making soliciting commercial financing products in the New York state to
obtain a license from the superintendent.
Commercial financing product means any advance of funds to a commercial
or business enterprise made for the purpose of assisting the business
with its needs.
Making or soliciting means providing commercial financing products to
small businesses; marketing commercial financing products for providers
of commercial financing products; receiving any compensation from a
provider of commercial financing products based on the value of the
commercial financing product provided in exchange for a referral of
small business or its owner; any entity that partners with federal or
state banking organization In which the federal or state banking organ-
ization originates the commercial financing product.
363-b. writes already licensed by DFS or entities making five or fewer
commercial financing products in a year are exempt.
363-c. Sets forth the application process for a license including fees,
capitalization requirements, approval for opening a second location.
363-d. License applicants must have financial responsibility, experi-
ence, ,character, and general fitness to command the confidence of the
community and to warrant belief that the business will operate honestly,
fairly, and efficiently.  License is valid until, it is surrendered by
licensee or revoked/suspended by superintendent.
363-e. License must have address of business, name of licensee, date and
place of incorporation. Every location used to conduct business must be
Identified in the application and approved by superintendent.
363-f. Superintendent must approve a change of control of the licensed
363-g. Grounds for suspension or revocation of a license include:  fail-
ure to pay any sum of money lawfully demanded by the superintendent,
failure to company with. any demand, ruling or requirement of the super-
intendent, violation of this article, or upon finding that a fact or
condition exists that would warrant to superintendent to refuse to issue
a license if the fact or condition had exited at the time of the
363-h. Superintendent may investigate the business and examine the books
for the purpose of discovering violations or securing information
lawfully required.  363-i. Licensee must keep and use books in compli-
ance with the applicable laws. Licensee must preserve records for at
least 2 years after last payment. Licensee must give annual report to
363-j. Licensee cannot advertise information that is false, misleading
363-k. No licensee can take a confession of judgement. No instrument can
be left blank to fill in after execution.
363-l. Commercial financing product made by entity not licensed under
this article is void and there is no right to collect from the borrower.
Violation this article is a misdemeanor.
363-m. Superintendent may make rules and regulations as necessary.
Currently, non-traditional commercial lenders are allowed to operate
without being licensed. Unlicensed lenders are not regulated. This bill
would require lenders operating in New York state to obtain a license
and be subject to the oversight by the DFS,
Established licensing fees are anticipated to cover administrative costs
S6688 (ACTIVE) - Bill Text download pdf
AN ACT to amend the banking law and the administrative code of the  city
of  New  York,  in relation to regulating commercial finance licensing
and making conforming technical changes relating thereto
Section  1.  Article  9-A of the banking law is renumbered article 9-B
and a new article 9-A is added to read as follows:
COMMERCIAL FINANCE LICENSING
SECTION 363.   DOING BUSINESS WITHOUT LICENSE PROHIBITED.
363-A. DEFINITIONS.
363-B. EXEMPTIONS.
363-C. APPLICATION FOR LICENSE.
363-D. CONDITIONS FOR ISSUANCE OF A LICENSE.
363-E. LOCATIONS; CHANGE OF ADDRESS.
363-F. CHANGES IN CONTROL.
363-G. GROUNDS FOR SUSPENSION OR REVOCATION.
363-H. EXAMINATIONS.
363-I. BOOKS AND RECORDS.
363-J. ADVERTISING.
363-K. PROHIBITED PRACTICES OF LICENSEES.
363-L. PENALTIES.
363-M. REGULATIONS.
363-N. SEVERABILITY.
§ 363. DOING BUSINESS WITHOUT LICENSE  PROHIBITED.  1.  NO  PERSON  OR
OTHER  ENTITY  SHALL  ENGAGE  IN  THE  BUSINESS  OF MAKING OR SOLICITING
COMMERCIAL FINANCING PRODUCTS TO BUSINESSES LOCATED IN  NEW  YORK  STATE
LBD13542-01-9
S. 6688                             2
EXCEPT  AS  AUTHORIZED  BY  THIS  ARTICLE  AND WITHOUT FIRST OBTAINING A
LICENSE FROM THE SUPERINTENDENT.
2.  FOR  THE  PURPOSES  OF  THIS  ARTICLE, A PERSON OR ENTITY SHALL BE
CONSIDERED AS ENGAGING IN THE BUSINESS OF  MAKING  COMMERCIAL  FINANCING
PRODUCTS  TO  BUSINESSES  LOCATED  IN  NEW  YORK STATE IF IT SOLICITS OR
CONSUMMATES COMMERCIAL FINANCING PRODUCTS TO ANY BUSINESS OR  COMMERCIAL
ENTERPRISE LOCATED IN NEW YORK STATE.
§ 363-A. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE:
1.  "COMMERCIAL  FINANCING  PRODUCT"  MEANS  ANY ADVANCE OF FUNDS TO A
COMMERCIAL OR BUSINESS ENTERPRISE MADE FOR THE PURPOSE OF ASSISTING  THE
BUSINESS WITH ITS CAPITAL NEEDS, INCLUDING BUT NOT LIMITED TO:
(A)  LOANS  OR LINES OF CREDIT MADE TO A BUSINESS OR COMMERCIAL ENTER-
PRISE IN A PRINCIPAL AMOUNT OF FIVE HUNDRED THOUSAND  DOLLARS  OR  LESS,
WHETHER SECURED OR UNSECURED;
(B)  PURCHASE TRANSACTIONS WHERE AN ENTITY PURCHASES ACCOUNTS, RECEIV-
ABLES, INTANGIBLES, REVENUE OR OTHER ACTUAL OR PERCEIVED ASSETS  OF  THE
BUSINESS  IF ANY SINGLE PAYMENT OR ADVANCE OF THE PURCHASE PRICE FOR THE
PURCHASED ACCOUNTS, RECEIVABLES, INTANGIBLES, REVENUE OR OTHER ACTUAL OR
PERCEIVED ASSETS OF THE BUSINESS IS IN THE AMOUNT OF FIVE HUNDRED  THOU-
SAND DOLLARS OR LESS; OR
(C)  ANY LEASING TRANSACTION WHERE ANY FUNDS ARE PROVIDED TO THE BUSI-
NESS OR COMMERCIAL ENTERPRISE BY THE LEASING BUSINESS OR  ANY  AFFILIATE
OF  THE  LEASING BUSINESS IN THE AMOUNT OF FIVE HUNDRED THOUSAND DOLLARS
2. "MAKING OR SOLICITING" MEANS  (A)  PROVIDING  COMMERCIAL  FINANCING
PRODUCTS   TO  SMALL  BUSINESSES;  (B)  MARKETING  COMMERCIAL  FINANCING
PRODUCTS FOR PROVIDERS OF COMMERCIAL FINANCING PRODUCTS;  (C)  RECEIVING
ANY  COMPENSATION FROM A PROVIDER OF COMMERCIAL FINANCING PRODUCTS BASED
ON THE VALUE OF THE COMMERCIAL FINANCING PRODUCT  PROVIDED  IN  EXCHANGE
FOR  A  REFERRAL OF SMALL BUSINESS OR ITS OWNER; AND (D) ANY ENTITY THAT
PARTNERS WITH FEDERAL OR STATE BANKING ORGANIZATION IN WHICH THE FEDERAL
OR STATE BANKING ORGANIZATION ORIGINATES THE COMMERCIAL FINANCING  PROD-
UCT  AND THE ENTITY ACQUIRES A PARTICIPATION OR SYNDICATION INTEREST, IN
PART OR WHOLE, OF THE COMMERCIAL FINANCING PRODUCT AND  THE  (I)  ENTITY
RECEIVES  COMPENSATION  FOR  MARKETING OR SERVICING THE TRANSACTION FROM
THE FEDERAL OR STATE BANKING ORGANIZATION, OR COLLECTS ANY PAYMENTS  DUE
UNDER  THE  COMMERCIAL FINANCING PRODUCT; OR (II) PROVIDES ANY INDEMNITY
OR LOSS PROTECTION TO THE FEDERAL  OR  STATE  BANKING  ORGANIZATION  FOR
LOSSES  THE  FEDERAL OR STATE BANKING ORGANIZATION MAY INCUR AS A RESULT
OF PERFORMANCE OF THE COMMERCIAL FINANCING PRODUCT.
§ 363-B. EXEMPTIONS. THE FOLLOWING SHALL BE EXEMPT FROM THE PROVISIONS
1. ANY PERSON WHO MAKES OR SOLICITS FIVE OR FEWER COMMERCIAL FINANCING
PRODUCTS WITHIN ANY TWELVE MONTH PERIOD;
2. ANY BANKING ORGANIZATION,  AS  DEFINED  IN  SUBDIVISION  ELEVEN  OF
SECTION TWO OF THIS CHAPTER;
3. ANY FEDERAL CREDIT UNION;
4. ANY INSURANCE COMPANY;
5.  ANY  PERSON IF AND TO THE EXTENT THAT SUCH PERSON IS LENDING MONEY
AND LICENSED IN ACCORDANCE WITH, AND AS AUTHORIZED BY, ANY OTHER  APPLI-
CABLE  LAW  OF  THE STATE OF NEW YORK; PROVIDED, HOWEVER, SUCH EXEMPTION
SHALL APPLY ONLY TO THOSE TRANSACTIONS  SUBJECT  TO  REQUIREMENTS  UNDER
ARTICLE  NINE-B  OF  THIS  CHAPTER AND SUCH EXEMPTION SHALL NOT APPLY TO
TRANSACTIONS SUBJECT TO THE PROVISIONS OF  THIS  ARTICLE  THAT  ARE  NOT
EXPRESSLY REGULATED BY ARTICLE NINE-B OF THIS CHAPTER; OR
S. 6688                             3
6. ANY TRANSACTION THAT IS INTENDED TO BE A PURCHASE OF THE OWNERSHIP,
IN WHOLE OR PART, OF A BUSINESS OR COMMERCIAL ENTERPRISE.
§  363-C.  APPLICATION  FOR  LICENSE.  1. AN APPLICATION FOR A LICENSE
SHALL BE IN WRITING, UNDER OATH, AND  IN  THE  FORM  PRESCRIBED  BY  THE
SUPERINTENDENT  AND SHALL CONTAIN SUCH INFORMATION AS THE SUPERINTENDENT
MAY REQUIRE BY REGULATION. THE APPLICATION SHALL SET FORTH  ALL  OF  THE
LOCATIONS  AT  WHICH THE APPLICANT SEEKS TO CONDUCT BUSINESS PURSUANT TO
THIS ARTICLE. AT THE TIME OF MAKING THE APPLICATION FOR A  LICENSE,  THE
APPLICANT  SHALL  PAY TO THE SUPERINTENDENT A FEE AS PRESCRIBED BY REGU-
LATION FOR EACH PROPOSED LOCATION FOR INVESTIGATING THE APPLICATION.
2. IN CONNECTION WITH AN APPLICATION  FOR  A  LICENSE,  THE  APPLICANT
SHALL  SUBMIT AN AFFIDAVIT OF FINANCIAL SOLVENCY NOTING SUCH CAPITALIZA-
TION REQUIREMENTS AND ACCESS TO SUCH CREDIT AS MAY BE PRESCRIBED BY  THE
REGULATIONS PROMULGATED BY THE SUPERINTENDENT.
3.  THE APPLICANT SHALL ALSO PROVE, IN FORM SATISFACTORY TO THE SUPER-
INTENDENT, THAT THE APPLICANT HAS AVAILABLE FOR THE  OPERATION  OF  SUCH
BUSINESS  AT  THE  LOCATION  OR  LOCATIONS  SPECIFIED IN THE APPLICATION
LIQUID ASSETS OF AT LEAST FIFTY THOUSAND DOLLARS. THIS AMOUNT  SHALL  BE
MAINTAINED FOR THE PERIOD WITHIN WHICH THE LICENSEE IS LICENSED.
4.  IF  A  PERSON  OR  ENTITY  HOLDING A LICENSE SEEKS TO OPEN ANOTHER
LOCATION FOR THE CONDUCT OF ACTIVITIES LICENSABLE  UNDER  THIS  ARTICLE,
THE LICENSEE SHALL FIRST SUBMIT WRITTEN NOTIFICATION OF THIS FACT TO THE
SUPERINTENDENT.  THE  NOTIFICATION  SHALL CONTAIN THE ADDRESS OF THE NEW
LOCATION AND THE LICENSE NUMBER. AN INVESTIGATION FEE AS  PRESCRIBED  IN
REGULATIONS  SHALL  BE PAID FOR EACH ADDITIONAL LOCATION. THE ADDITIONAL
LOCATION SHALL BE AUTHORIZED UPON WRITTEN APPROVAL BY THE SUPERINTENDENT
OR AFTER NINETY DAYS HAVE PASSED SINCE THE NOTIFICATION WAS PROVIDED AND
INVESTIGATION FEE WAS PAID UNLESS THE SUPERINTENDENT DENIES THE  REQUEST
FOR  AN  ADDITIONAL LOCATION PRIOR TO THE EXPIRATION OF THE NINETY DAYS.
THE SUPERINTENDENT MAY DENY A REQUEST FOR AN ADDITIONAL LOCATION IF  THE
NEW  LOCATION  BY  THE  LICENSEE IS NOT IN THE PUBLIC INTEREST, IN WHICH
CASE, THE SUPERINTENDENT SHALL SEND A WRITTEN DENIAL TO THE LICENSEE.
§ 363-D. CONDITIONS FOR ISSUANCE OF A LICENSE. UPON THE FILING OF SUCH
APPLICATION AND THE PAYMENT OF SUCH FEES, IF  THE  SUPERINTENDENT  SHALL
FIND  THAT  THE  FINANCIAL  RESPONSIBILITY,  EXPERIENCE,  CHARACTER, AND
GENERAL FITNESS OF THE APPLICANT, AND OF  THE  MEMBERS  THEREOF  IF  THE
APPLICANT  BE  A  PARTNERSHIP  OR  ASSOCIATION,  AND OF THE OFFICERS AND
DIRECTORS THEREOF IF THE APPLICANT BE A  CORPORATION,  ARE  SUCH  AS  TO
COMMAND  THE  CONFIDENCE OF THE COMMUNITY AND TO WARRANT BELIEF THAT THE
BUSINESS WILL BE OPERATED HONESTLY, FAIRLY, AND EFFICIENTLY  WITHIN  THE
PURPOSES  OF THIS ARTICLE, AND IF THE SUPERINTENDENT SHALL FIND THAT THE
APPLICANT HAS AVAILABLE FOR THE OPERATION OF SUCH BUSINESS AT EACH SPEC-
IFIED LOCATION LIQUID ASSETS OF AT LEAST  FIFTY  THOUSAND  DOLLARS,  THE
SUPERINTENDENT  SHALL  THEREUPON  EXECUTE  A  LICENSE AT THE LOCATION OR
LOCATIONS SPECIFIED IN THE SAID APPLICATION.  THE  SUPERINTENDENT  SHALL
TRANSMIT  ONE COPY OF SUCH LICENSE OR LICENSES TO THE APPLICANT AND FILE
THE SAME IN THE OFFICE OF THE DEPARTMENT. EACH SUCH LICENSE SHALL REMAIN
IN FULL FORCE AND EFFECT UNTIL IT IS  SURRENDERED  BY  THE  LICENSEE  OR
REVOKED  OR  SUSPENDED  AS  HEREINAFTER  PROVIDED; IF THE SUPERINTENDENT
SHALL NOT SO FIND, A LICENSE SHALL NOT BE ISSUED AND THE  SUPERINTENDENT
SHALL NOTIFY THE APPLICANT OF THE DENIAL. IF AN APPLICATION IS DENIED OR
WITHDRAWN  THE SUPERINTENDENT SHALL RETURN TO THE APPLICANT THE SUM PAID
BY THE APPLICANT AS A LICENSE FEE, RETAINING THE  INVESTIGATION  FEE  TO
COVER  THE  COSTS  OF INVESTIGATING SUCH APPLICATION. THE SUPERINTENDENT
SHALL APPROVE OR DENY EVERY APPLICATION FOR A MASTER LICENSE UNDER  THIS
S. 6688                             4
ARTICLE  WITHIN  NINETY DAYS FROM THE FILING THEREOF WITH THE APPLICABLE
§  363-E.  LOCATIONS;  CHANGE OF ADDRESS. 1. A LICENSE SHALL STATE THE
ADDRESS AT WHICH THE BUSINESS IS TO BE CONDUCTED AND SHALL  STATE  FULLY
THE  NAME OF THE LICENSEE, AND IF THE LICENSEE IS A PARTNERSHIP OR ASSO-
CIATION, THE NAMES OF THE MEMBERS THEREOF, AND  IF  A  CORPORATION,  THE
DATE AND PLACE OF ITS INCORPORATION. NO LICENSE SHALL BE TRANSFERABLE OR
2.  EVERY  LOCATION  USED  BY THE LICENSEE TO CONDUCT BUSINESS MUST BE
IDENTIFIED IN THE APPLICATION AND APPROVED BY THE SUPERINTENDENT.  AFTER
A  LICENSE  HAS  BEEN ISSUED, ANY APPLICATION FOR A CHANGE IN ADDRESS OR
NEW LOCATION MUST BE SUBMITTED WITHIN FORTY-FIVE DAYS OF  SUCH  PROPOSED
CHANGE  OR ADDITION.  THE LICENSEE SHALL PAY TO THE SUPERINTENDENT A FEE
AS PRESCRIBED BY REGULATION  FOR  EACH  CHANGE  OR  ADDITION  AND  SHALL
PROVIDE  ANY  INFORMATION  WHICH  MAY  BE  REQUIRED  REGARDING  SUCH NEW
LOCATION. IF THE SUPERINTENDENT IS NOT SATISFIED  THAT  SUCH  CHANGE  OR
ADDITION  IS IN ACCORDANCE WITH THE PURPOSES OF THIS ARTICLE, THE SUPER-
INTENDENT SHALL REFUSE SUCH CHANGE OF LOCATION  OR  ADDITIONAL  LOCATION
AND NOTIFY THE LICENSEE OF SUCH DETERMINATION.
§  363-F.  CHANGES IN CONTROL. 1. IT SHALL BE UNLAWFUL EXCEPT WITH THE
PRIOR APPROVAL OF THE SUPERINTENDENT FOR ANY ACTION TO  BE  TAKEN  WHICH
RESULTS  IN  A CHANGE OF CONTROL OF THE BUSINESS OF A LICENSEE. PRIOR TO
ANY CHANGE OF CONTROL, THE PERSON DESIROUS OF ACQUIRING CONTROL  OF  THE
BUSINESS OF A LICENSEE SHALL MAKE WRITTEN APPLICATION TO THE SUPERINTEN-
DENT  AND  PAY  AN  INVESTIGATION  FEE  AS PRESCRIBED BY REGULATION. THE
APPLICATION SHALL CONTAIN SUCH INFORMATION  AS  THE  SUPERINTENDENT,  BY
RULE  OR  REGULATION,  MAY PRESCRIBE AS NECESSARY OR APPROPRIATE FOR THE
PURPOSE OF MAKING THE DETERMINATION REQUIRED BY SUBDIVISION TWO OF  THIS
2.  THE SUPERINTENDENT SHALL APPROVE OR DISAPPROVE THE PROPOSED CHANGE
OF CONTROL OF A LICENSEE IN ACCORDANCE WITH THE PROVISIONS  OF  SECTIONS
THREE  HUNDRED  SIXTY-THREE-C  AND  THREE  HUNDRED SIXTY-THREE-D OF THIS
ARTICLE. THE SUPERINTENDENT SHALL APPROVE OR DISAPPROVE THE  APPLICATION
IN  WRITING  WITHIN  NINETY DAYS AFTER THE DATE THE APPLICATION IS FILED
3. FOR A PERIOD OF SIX MONTHS FROM THE DATE OF  QUALIFICATION  THEREOF
AND  FOR  SUCH  ADDITIONAL  PERIOD  OF  TIME  AS  THE SUPERINTENDENT MAY
PRESCRIBE, IN WRITING, THE PROVISIONS OF SUBDIVISIONS  ONE  AND  TWO  OF
THIS  SECTION  SHALL  NOT APPLY TO A TRANSFER OF CONTROL BY OPERATION OF
LAW TO THE LEGAL REPRESENTATIVE, AS DEFINED IN SUBDIVISION FOUR OF  THIS
SECTION,  OF  ONE  WHO HAS CONTROL OF A LICENSEE. THEREAFTER, SUCH LEGAL
REPRESENTATIVE SHALL COMPLY WITH THE PROVISIONS OF SUBDIVISIONS ONE  AND
4.  THE TERM "LEGAL REPRESENTATIVE", FOR THE PURPOSES OF THIS SECTION,
SHALL MEAN ONE DULY APPOINTED BY A COURT OF  COMPETENT  JURISDICTION  TO
ACT  AS  EXECUTOR,  ADMINISTRATOR,  TRUSTEE,  COMMITTEE,  CONSERVATOR OR
RECEIVER, INCLUDING ONE WHO SUCCEEDS  A  LEGAL  REPRESENTATIVE  AND  ONE
ACTING   IN  AN  ANCILLARY  CAPACITY  THERETO  IN  ACCORDANCE  WITH  THE
PROVISIONS OF SUCH COURT APPOINTMENT.
5. AS USED IN THIS SECTION: (A) THE TERM "PERSON" INCLUDES AN INDIVID-
UAL, PARTNERSHIP, CORPORATION, ASSOCIATION OR  ANY  OTHER  ORGANIZATION;
AND (B) THE TERM "CONTROL" MEANS THE POSSESSION, DIRECTLY OR INDIRECTLY,
OF  THE  POWER  TO  DIRECT  OR CAUSE THE DIRECTION OF THE MANAGEMENT AND
POLICIES OF A LICENSEE, WHETHER THROUGH THE OWNERSHIP OF VOTING STOCK OF
SUCH LICENSEE, THE  OWNERSHIP  OF  VOTING  STOCK  OF  ANY  PERSON  WHICH
POSSESSES SUCH POWER OR OTHERWISE. CONTROL SHALL BE PRESUMED TO EXIST IF
S. 6688                             5
ANY  PERSON,  DIRECTLY OR INDIRECTLY, OWNS, CONTROLS OR HOLDS WITH POWER
TO VOTE TEN PER CENTUM OR MORE OF THE VOTING STOCK OF ANY LICENSEE OR OF
ANY PERSON WHICH OWNS, CONTROLS OR HOLDS WITH  POWER  TO  VOTE  TEN  PER
CENTUM  OR MORE OF THE VOTING STOCK OF ANY LICENSEE, BUT NO PERSON SHALL
BE DEEMED TO CONTROL A LICENSEE SOLELY BY REASON OF BEING AN OFFICER  OR
DIRECTOR  OF  SUCH  LICENSEE  OR PERSON.   THE SUPERINTENDENT MAY IN HIS
DISCRETION, UPON THE APPLICATION  OF  A  LICENSEE  OR  ANY  PERSON  WHO,
DIRECTLY  OR  INDIRECTLY,  OWNS, CONTROLS OR HOLDS WITH POWER TO VOTE OR
SEEKS TO OWN, CONTROL OR HOLD WITH POWER TO VOTE  ANY  VOTING  STOCK  OF
SUCH  LICENSEE, DETERMINE WHETHER OR NOT THE OWNERSHIP, CONTROL OR HOLD-
ING OF SUCH VOTING STOCK CONSTITUTES OR WOULD CONSTITUTE CONTROL OF SUCH
LICENSEE FOR PURPOSES OF THIS SECTION.
§ 363-G. GROUNDS FOR SUSPENSION OR REVOCATION. 1.  THE  SUPERINTENDENT
MAY  SUSPEND  OR  REVOKE  ANY  LICENSE  ISSUED UNDER THIS ARTICLE IF THE
SUPERINTENDENT SHALL FIND THAT:
(A) THE LICENSEE HAS FAILED TO PAY ANY SUM OF MONEY LAWFULLY  DEMANDED
BY  THE SUPERINTENDENT OR TO COMPLY WITH ANY DEMAND, RULING, OR REQUIRE-
MENT OF THE SUPERINTENDENT WITHIN A REASONABLE PERIOD OF TIME;
(B) THE LICENSEE HAS VIOLATED ANY PROVISIONS OF THIS ARTICLE; OR
(C) ANY FACT OR CONDITION EXISTS WHICH, IF IT HAD EXISTED AT THE  TIME
OF  THE  ORIGINAL  APPLICATION  FOR  SUCH  LICENSE,  CLEARLY  WOULD HAVE
WARRANTED THE  SUPERINTENDENT  IN  REFUSING  ORIGINALLY  TO  ISSUE  SUCH
2. THE SUPERINTENDENT MAY ON GOOD CAUSE SHOWN, WITHOUT NOTICE OR HEAR-
ING, SUSPEND ANY LICENSE FOR A PERIOD NOT EXCEEDING THIRTY DAYS, PENDING
3.  ANY LICENSEE MAY SURRENDER ANY LICENSE BY DELIVERING TO THE SUPER-
INTENDENT WRITTEN NOTICE  THAT  THE  LICENSEE  THEREBY  SURRENDERS  SUCH
LICENSE,  BUT  SUCH  SURRENDER SHALL NOT AFFECT SUCH LICENSEE'S CIVIL OR
CRIMINAL LIABILITY FOR ACTS COMMITTED PRIOR TO SUCH SURRENDER.
4. NO REVOCATION OR SUSPENSION  OR  SURRENDER  OF  ANY  LICENSE  SHALL
IMPAIR  OR  AFFECT  THE  OBLIGATION  OF ANY PRE-EXISTING LAWFUL CONTRACT
BETWEEN THE LICENSEE AND ANY BORROWER.
5. EVERY LICENSE ISSUED PURSUANT TO THIS ARTICLE SHALL REMAIN IN FORCE
AND EFFECT UNTIL IT SHALL HAVE BEEN SURRENDERED, REVOKED,  OR  SUSPENDED
IN  ACCORDANCE  WITH THE PROVISIONS OF THIS ARTICLE, BUT THE SUPERINTEN-
DENT SHALL HAVE AUTHORITY TO REINSTATE SUSPENDED LICENSES  OR  TO  ISSUE
NEW  LICENSES  TO  A  LICENSEE WHOSE LICENSE OR LICENSES SHALL HAVE BEEN
REVOKED IF NO FACT OR CONDITION THEN EXISTS  WHICH  CLEARLY  WOULD  HAVE
WARRANTED  THE  SUPERINTENDENT  IN  REFUSING  ORIGINALLY  TO  ISSUE SUCH
6. WHENEVER THE SUPERINTENDENT  SHALL  REVOKE  OR  SUSPEND  A  LICENSE
ISSUED  PURSUANT  TO  THIS  ARTICLE,  THE SUPERINTENDENT SHALL EXECUTE A
WRITTEN ORDER TO THAT EFFECT. THE SUPERINTENDENT SHALL FILE ONE COPY  OF
SUCH  ORDER  IN  THE  OFFICE OF THE DEPARTMENT AND SERVE A COPY UPON THE
LICENSEE, SUCH ORDER MAY BE REVIEWED IN THE MANNER PROVIDED  BY  ARTICLE
SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES. SUCH SPECIAL PROCEED-
ING  FOR  REVIEW  AS AUTHORIZED BY THIS SECTION MUST BE COMMENCED WITHIN
THIRTY DAYS FROM THE DATE OF SUCH ORDER OF SUSPENSION OR REVOCATION.
§ 363-H. EXAMINATIONS. FOR THE PURPOSE OF  DISCOVERING  VIOLATIONS  OF
THIS  ARTICLE OR SECURING INFORMATION LAWFULLY REQUIRED UNDER THIS ARTI-
CLE, THE SUPERINTENDENT MAY AT ANY TIME, AND AS OFTEN AS MAY  BE  DETER-
MINED,  EITHER  PERSONALLY  OR BY A PERSON DULY DESIGNATED BY THE SUPER-
INTENDENT, INVESTIGATE THE BUSINESS AND  EXAMINE  THE  BOOKS,  ACCOUNTS,
RECORDS, AND FILES USED THEREIN OF EVERY LICENSEE IN CONNECTION WITH THE
ACTIVITY COVERED UNDER THIS ARTICLE. FOR THAT PURPOSE THE SUPERINTENDENT
S. 6688                             6
AND  DULY  DESIGNATED  REPRESENTATIVES  SHALL  HAVE  FREE  ACCESS TO THE
OFFICES AND PLACE OF BUSINESS, BOOKS, ACCOUNTS, PAPERS, RECORDS,  FILES,
SAFES  AND  VAULTS  OF ALL SUCH LICENSEES. THE SUPERINTENDENT SHALL HAVE
AUTHORITY  TO  REQUIRE  THE  ATTENDANCE OF AND TO EXAMINE UNDER OATH ALL
PERSONS WHOSE TESTIMONY MAY BE REQUIRED RELATIVE TO SUCH BUSINESS.
§ 363-I. BOOKS AND RECORDS. 1. THE LICENSEE SHALL KEEP AND USE IN  ITS
BUSINESS  SUCH  BOOKS,  ACCOUNTS,  AND RECORDS AS WILL ENABLE THE SUPER-
INTENDENT TO DETERMINE WHETHER  SUCH  LICENSEE  IS  COMPLYING  WITH  THE
PROVISIONS  OF  THIS ARTICLE AND WITH THE RULES AND REGULATIONS LAWFULLY
MADE BY THE SUPERINTENDENT PURSUANT  TO  THIS  ARTICLE.  EVERY  LICENSEE
SHALL  PRESERVE SUCH BOOKS, ACCOUNTS, AND RECORDS FOR AT LEAST TWO YEARS
AFTER THE LAST PAYMENT ON ANY ACCOUNT WAS MADE OR  TWO  YEARS  AFTER  AN
ACCOUNT  IS  WRITTEN OFF AS A LOSS. PRESERVATION OF PHOTOGRAPHIC REPROD-
UCTION THEREOF OR RECORDS IN PHOTOGRAPHIC  FORM,  INCLUDING  AN  OPTICAL
DISK  STORAGE SYSTEM AND THE USE OF ELECTRONIC DATA PROCESSING EQUIPMENT
THAT PROVIDES COMPARABLE RECORDS TO THOSE OTHERWISE REQUIRED  AND  WHICH
ARE  AVAILABLE  FOR EXAMINATION UPON REQUEST SHALL CONSTITUTE COMPLIANCE
2. EACH LICENSEE SHALL ANNUALLY ON OR BEFORE THE FIRST  DAY  OF  APRIL
FILE  A  REPORT  WITH  THE SUPERINTENDENT GIVING SUCH INFORMATION AS THE
SUPERINTENDENT MAY REQUIRE CONCERNING THE BUSINESS AND OPERATIONS DURING
THE PRECEDING CALENDAR YEAR OF EACH LICENSED PLACE OF BUSINESS CONDUCTED
BY SUCH LICENSEE WITHIN THE STATE UNDER AUTHORITY OF THIS ARTICLE.  SUCH
REPORT  SHALL  BE  SUBSCRIBED AND AFFIRMED AS TRUE BY THE LICENSEE UNDER
THE PENALTIES OF PERJURY AND SHALL BE IN  THE  FORM  PRESCRIBED  BY  THE
SUPERINTENDENT WHO SHALL MAKE AND PUBLISH ANNUALLY A CONSOLIDATED STATE-
MENT  OF  CONDITION  SHOWING  THE COMBINED ASSETS AND LIABILITIES OF ALL
LICENSED LENDERS. SUCH CONSOLIDATED  STATEMENT  OF  CONDITION  SHALL  BE
BASED  UPON  THE  INFORMATION  CONTAINED IN SUCH REPORTS. IN ADDITION TO
ANNUAL REPORTS, THE SUPERINTENDENT MAY REQUIRE SUCH  ADDITIONAL  REGULAR
OR  SPECIAL REPORTS AS MAY BE DEEMED NECESSARY TO THE PROPER SUPERVISION
OF LICENSEES UNDER THIS ARTICLE. SUCH ADDITIONAL REPORTS SHALL BE IN THE
FORM PRESCRIBED BY  THE  SUPERINTENDENT  AND  SHALL  BE  SUBSCRIBED  AND
AFFIRMED AS TRUE UNDER THE PENALTIES OF PERJURY.
§  363-J. ADVERTISING. 1. NO LICENSEE SHALL ADVERTISE, PRINT, DISPLAY,
PUBLISH, DISTRIBUTE, OR BROADCAST OR CAUSE OR PERMIT TO  BE  ADVERTISED,
PRINTED,  DISPLAYED,  PUBLISHED,  DISTRIBUTED,  OR  BROADCASTED,  IN ANY
MANNER WHATSOEVER ANY STATEMENT OR REPRESENTATION  WITH  REGARD  TO  THE
RATES,  TERMS,  COSTS  OR  CONDITIONS FOR A COMMERCIAL FINANCING PRODUCT
WHICH IS FALSE, MISLEADING OR DECEPTIVE.
2. NO LICENSEE SHALL MAKE, DIRECTLY OR INDIRECTLY, ORALLY OR IN  WRIT-
ING,  BY  ANY  METHOD, PRACTICE OR DEVICE, ANY REPRESENTATION THAT IT IS
LICENSED UNDER THIS ARTICLE, EXCEPT A REPRESENTATION THAT SUCH  LICENSEE
IS  LICENSED  AS A LICENSED COMMERCIAL FINANCING PROVIDER BY THE DEPART-
3. NO LICENSEE SHALL TRANSACT ANY BUSINESS  SUBJECT  TO  THIS  ARTICLE
UNDER  ANY  OTHER NAME OR AT ANY OTHER PLACE OF BUSINESS THAN THAT NAMED
IN THE LICENSE, EXCEPT AS MAY BE AUTHORIZED BY THE SUPERINTENDENT.
§ 363-K. PROHIBITED PRACTICES OF LICENSEES. 1. NO LICENSEE SHALL  TAKE
ANY  CONFESSION  OF JUDGMENT OR ANY POWER OF ATTORNEY RUNNING TO HIMSELF
OR TO ANY THIRD PERSON TO CONFESS JUDGMENT OR TO APPEAR FOR THE BORROWER
2. NO LICENSEE SHALL TAKE ANY INSTRUMENT IN WHICH BLANKS ARE  LEFT  TO
BE FILLED IN AFTER EXECUTION.
§  363-L.  PENALTIES.  1.  ANY  COMMERCIAL FINANCING PRODUCT MADE BY A
PERSON NOT LICENSED UNDER THIS ARTICLE, AND NOT EXEMPT, TO A BUSINESS OR
S. 6688                             7
COMMERCIAL ENTERPRISE LOCATED IN THIS  STATE  SHALL  BE  VOID,  AND  THE
PROVIDER SHALL HAVE NO RIGHT TO COLLECT OR RECEIVE ANY PRINCIPAL, INTER-
EST, FEES OR CHARGES WHATSOEVER. NO ACTION TO ENFORCE A TRANSACTION MADE
IN VIOLATION OF THIS SUBDIVISION MAY BE MAINTAINED.
2.  ANY  PERSON  OR  OTHER  ENTITY  INCLUDING THE OFFICERS, DIRECTORS,
AGENTS, AND EMPLOYEES THEREOF, WHICH SHALL VIOLATE OR PARTICIPATE IN THE
VIOLATION OF ANY OF THE PROVISIONS OF SECTION THREE HUNDRED  SIXTY-THREE
OF THIS ARTICLE SHALL BE GUILTY OF A MISDEMEANOR.
§  363-M.  REGULATIONS.  THE  SUPERINTENDENT  IS HEREBY AUTHORIZED AND
EMPOWERED TO MAKE SUCH GENERAL RULES AND REGULATIONS, AND SUCH  SPECIFIC
RULINGS,  DEMANDS,  AND  FINDINGS  AS  MAY  BE  NECESSARY FOR THE PROPER
CONDUCT OF THE BUSINESS  AUTHORIZED  AND  LICENSED  UNDER  AND  FOR  THE
ENFORCEMENT  OF  THIS  ARTICLE,  IN ADDITION HERETO AND NOT INCONSISTENT
§ 363-N. SEVERABILITY. IF ANY PROVISION OF THIS ARTICLE OR THE  APPLI-
CATION  THEREOF  TO  ANY  PERSON OR CIRCUMSTANCES IS HELD TO BE INVALID,
SUCH INVALIDITY SHALL NOT AFFECT OTHER  PROVISIONS  OR  APPLICATIONS  OF
THIS  ARTICLE WHICH CAN BE GIVEN EFFECT WITHOUT THE INVALID PROVISION OR
APPLICATION, AND TO THIS END THE PROVISIONS OF THIS ARTICLE ARE  SEVERA-
§ 2. Paragraph 5 of subdivision a of section 10-136 of the administra-
tive  code  of  the city of New York, as added by local law number 80 of
the city of New York for the year 1996, is amended to read as follows:
(5) "Check cashing business" shall mean any person  duly  licensed  by
the superintendent of banks to engage in the business of cashing checks,
drafts  or  money orders for consideration pursuant to the provisions of
article [9-A] 9-B of the banking law.
§ 3. Subdivision (a) of section 22 of the banking law, as  amended  by
chapter 553 of the laws of 2007, is amended to read as follows:
(a)  Notwithstanding any other provision of law, every applicant for a
license, authorization or  registration  under  articles  nine,  nine-A,
NINE-B,  eleven-B, twelve-B, twelve-C, twelve-D, twelve-E and thirteen-B
of this chapter and every applicant filing  an  application  to  acquire
control  of  any  licensee or registrant, as the case may be, under such
articles shall submit simultaneously with an  application,  his  or  her
fingerprints  in  such form and in such manner as specified by the divi-
sion of criminal justice services, but in any event, no  less  than  two
digit imprints. The superintendent shall submit such fingerprints to the
division  of  criminal  justice services for the purpose of conducting a
criminal history search and returning a  report  thereon  in  accordance
with  the procedures and requirements established by the division pursu-
ant to the provisions of article thirty-five of the executive law, which
shall include the payment of the prescribed processing fees. The  super-
intendent  shall  request  that the division submit such fingerprints to
the federal bureau of investigation, together with the  processing  fees
prescribed  by  such  bureau,  for  the purpose of conducting a criminal
history search and returning a report thereon. An applicant shall not be
required to submit his or her fingerprints as required by this  subdivi-
sion  if  such  applicant  (i)  is  already subject to regulation by the
department and the applicant has  submitted  such  fingerprints  to  the
department,  such  fingerprints  have  been submitted to the division of
criminal justice services for  the  purpose  of  conducting  a  criminal
history  search,  and  a  report of such search has been received by the
department from such division; or (ii) is subject  to  regulation  by  a
federal  bank  regulatory  agency and has submitted such fingerprints to
such agency which has had a criminal history search  conducted  of  such
S. 6688                             8
individual  and has shared such information or its determination result-
ing from such search with the department; or  (iii)  is  an  officer  or
stockholder  of  a corporation whose common or preferred stock is regis-
tered  on  a  national  securities  exchange,  as  provided in an act of
congress of the United States entitled the "Securities Exchange  Act  of
1934", approved June sixth, nineteen hundred thirty-four, as amended, or
such other exchange or market system as the superintendent shall approve
by  regulation,  and has submitted such fingerprints to such exchange or
market system which has had a criminal history search conducted of  such
ing from such search with the department; provided,  however,  that  the
superintendent  may subsequently require such applicant to submit his or
her fingerprints if the superintendent has a reasonable basis for updat-
ing the information or determination resulting from the  report  of  the
criminal history search conducted at the request of such federal banking
agency, exchange or market system.
§  4.  Subdivision  2 of section 635 of the banking law, as amended by
chapter 146 of the laws of 2003, is amended to read as follows:
2. "License" when used in this article means any license  duly  issued
by  the  superintendent  pursuant  to  the  provisions  of article nine,
nine-A, NINE-B, eleven-B, twelve-B, twelve-C, twelve-D or thirteen-B  of
this  chapter  or any registration certificate issued by the superinten-
dent pursuant to the provisions of article twelve-D of this chapter.
§ 5. Subdivision 1 of section 652-b of the banking law,  as  added  by
chapter 374 of the laws of 1979, is amended to read as follows:
1.  It shall be unlawful for any transmitter of money or its officers,
affiliates or subsidiaries to enter into an agreement with a check cash-
er, licensed pursuant to the provisions of article  [nine-A]  NINE-B  of
this chapter, whereby credit is extended to the check casher at the same
time as, and on the condition that, the transmitter of money enters into
an  agreement  with  the  check casher whereby the check casher will (1)
sell only the New York instruments or New York traveler's checks of  the
transmitter  of  money  or  (2) agree to the exclusive use of any of the
other services of the transmitter of money.    This  section  shall  not
apply  to  the  issuance by a transmitter of money of a guarantee of any
indebtedness of a check casher licensed pursuant to  the  provisions  of
article [nine-A] NINE-B of this chapter.
it  shall have become a law.  Effective immediately, any rules and regu-
tive  date  are authorized to be amended, promulgated and/or repealed on