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A00480 Summary:

BILL NOA00480
 
SAME ASSAME AS S03237
 
SPONSORCruz
 
COSPNSRCook, Hevesi, Ramos, Dickens, Burgos, Sayegh, Stern, Dilan, Zinerman, Davila
 
MLTSPNSR
 
Amd Bank L, generally
 
Enacts the "community financial services access and modernization act"; modernizes existing statute to reflect the full scope of financial services available at neighborhood "check cashing" establishments; provides for a comprehensive regulatory framework for the delivery of the expanded financial services currently being offered.
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A00480 Actions:

BILL NOA00480
 
01/09/2023referred to banks
01/03/2024referred to banks
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A00480 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A480
 
SPONSOR: Cruz
  TITLE OF BILL: An act to amend the banking law, in relation to enacting the "community financial services access and modernization act of 2023"; 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.   SUMMARY OF SPECIFIC PROVISIONS: This amended version of this bill seeks to: -Increase the dollar amount of checks permitted to be cashed from $15,000 to $20,000. This cap has not been increased for more than a decade. With a higher cap, more New Yorkers will have a licensed and regulated location at which to cash these checks within the limit imposed by the State of NY. Modestly expanding the types of checks that can be cashed at licensed check cashing locations, in order to once again provide protections to New Yorkers who choose to use these services. -Allow check cashers, under very limited circumstances, to cash checks dated after the date received by beneficiaries, like the millions of stimulus checks distributed by the U.S. Treasury. As a result, recipi- ents will be able to immediately access these critical funds. It will also authorize DFS to study its current system of licensing, including the costs and burdens on DFS and the industry for new check cashing locations, changes in control, or relocation. Under this good government measure, DFS will explore ways to eliminate burdensome and redundant requirements and to create new efficiencies in the licensing process. -Codify modern marketing standards allowing for advertising via elec- tronic means, which will permit financial service providers to communi- cate with customers more effectively.   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 casting 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 activ- ity: 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   PRIOR LEGISLATIVE HISTORY: A.7705B of 2017-18: Referred to Codes A. 5423 of 2019-20: Referred to Banks   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: This act shall take effect on the 118th day after it shall become law.
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A00480 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                           480
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                     January 9, 2023
                                       ___________
 
        Introduced by M. of A. CRUZ, COOK, HEVESI, RAMOS, FALL, DICKENS, BURGOS,
          SAYEGH,  STERN,  DILAN  --  read once and referred to the Committee on
          Banks
 
        AN ACT to amend the banking law, in relation to enacting the  "community
          financial  services access and modernization act of 2023"; 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 2023".
     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; or
     9    § 3. Section 366 of the banking law, as amended by chapter 49  of  the
    10  laws  of  1961,  subdivision  1 as amended by chapter 849 of the laws of
    11  1964 and as further amended by section 104 of part A of  chapter  62  of
    12  the  laws of 2011, and subdivisions 2 and 3 as renumbered by chapter 132
    13  of the laws of 1969, is amended to read as follows:
    14    § 366. Definitions. When used in this article. 1. The  term  "licensed
    15  casher  of  checks"  means  any [individual, partnership, unincorporated
    16  association or corporation] person duly licensed by  the  superintendent
    17  of  financial  services to engage in business pursuant to the provisions
    18  of this article.
    19    2. The term "licensee" means  a  licensed  casher  of  checks,  drafts
    20  and/or money orders.
    21    3.  The  term  ["mobile  unit"] "limited station" means any vehicle or
    22  other movable means from which the business of cashing checks, drafts or
    23  money orders is to be conducted.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02291-01-3

        A. 480                              2
 
     1    4. The term "person"  means   any individual or  other  legal  entity,
     2  including any corporation, partnership, association or limited liability
     3  company.
     4    §  4. Section 367 of the banking law, as amended by chapter 151 of the
     5  laws of 1945, subdivision 3 as amended by section 7 of part D-1 of chap-
     6  ter 109 of the laws of 2006, and subdivision 4 as amended by chapter  96
     7  of the laws of 1981, is amended to read as follows:
     8    § 367.   License  requirements;  fees;  capital  requirements.  1.  No
     9  person[, partnership, association or corporation] shall  engage  in  the
    10  business  of  cashing checks, drafts or money orders for a consideration
    11  without first obtaining a license from the superintendent.
    12    2. Application for such license shall be in writing, under  oath,  and
    13  in  the  form  prescribed  by  the superintendent, and shall contain the
    14  name, and the address both of the residence and place  of  business,  of
    15  the  applicant,  and  if the applicant is a co-partnership [or], associ-
    16  ation or limited liability company, of every member thereof,  and  if  a
    17  corporation, of each officer and director thereof; also, if the business
    18  is to be conducted at a specific address, the address at which the busi-
    19  ness  is  to be conducted, and if the business is to be conducted from a
    20  [mobile unit] limited station, the New York state registration number or
    21  other identification of such [mobile unit] limited station and the  area
    22  in  which  the  applicant proposes to operate such [mobile unit] limited
    23  station; and also such further information  as  the  superintendent  may
    24  require.
    25    3.  Such applicant at the time of making such application shall pay to
    26  the superintendent a fee as prescribed pursuant to section eighteen-a of
    27  this chapter for investigating the application.  Any licensee requesting
    28  a change of address, shall at the time of making such  request,  pay  to
    29  the superintendent a fee as prescribed pursuant to section eighteen-a of
    30  this  chapter for investigating the new address; provided, however, that
    31  the superintendent may, in his or her discretion,  waive  such  investi-
    32  gation  fee  if  warranted,  and  provided further, that no fee shall be
    33  payable for the relocation of a limited station.
    34    4. Every applicant shall prove, in form  satisfactory  to  the  super-
    35  intendent  that  he  or it has available for the operation of such busi-
    36  ness, for each location and for each [mobile unit] limited station spec-
    37  ified in the  application,  liquid  assets  of  at  least  ten  thousand
    38  dollars,  and  every licensee shall continuously maintain for the opera-
    39  tion of such business for each  location  and  for  each  [mobile  unit]
    40  limited station liquid assets of at least ten thousand dollars. Notwith-
    41  standing  the  foregoing provisions of this subdivision, the superinten-
    42  dent, upon application by an applicant and for  good  cause  shown,  may
    43  permit a reduction from ten thousand dollars to not less than five thou-
    44  sand dollars of minimum liquid assets required for each location.
    45    §  5. Section 369 of the banking law, as amended by chapter 151 of the
    46  laws of 1945, subdivision 1 as amended by chapter 233  of  the  laws  of
    47  2005,  subdivisions  4  and  5  as amended by chapter 132 of the laws of
    48  1969, subdivision 6 as amended by section 1 of subpart A of part  II  of
    49  chapter  55  of  the laws of 2019, and subdivision 7 as added by chapter
    50  485 of the laws of 1947, is amended to read as follows:
    51    § 369. Conditions precedent to issuing license; issuance and filing of
    52  license; posting license. 1. If the superintendent shall find  that  the
    53  financial  responsibility, experience, character, and general fitness of
    54  the applicant, and of the members thereof if the applicant be a co-part-
    55  nership [or], association or limited liability company, and of the offi-
    56  cers and directors thereof if the applicant be a corporation,  are  such

        A. 480                              3
 
     1  as to command the confidence of the community and to warrant belief that
     2  the  business  will be operated honestly, fairly, and efficiently within
     3  the purposes of this article, and if the superintendent shall find  that
     4  the granting of such application will promote the convenience and advan-
     5  tage  of  the area in which such business is to be conducted, and if the
     6  superintendent shall find that the applicant has available for the oper-
     7  ation of such business for each location  and  for  each  [mobile  unit]
     8  limited  station  specified in the application liquid assets of at least
     9  ten thousand dollars,  the  superintendent  shall  thereupon  execute  a
    10  license  in  duplicate to permit the cashing of checks, drafts and money
    11  orders in accordance with the provisions of this article at the location
    12  or in the area specified in such application.  In  finding  whether  the
    13  application  will  promote  the convenience and advantage to the public,
    14  the superintendent shall determine whether there is a community need for
    15  a new licensee in the proposed area to be served. No  license  shall  be
    16  issued to an applicant for a license, at a location to be licensed which
    17  is  closer than one thousand five hundred eighty-four feet (three-tenths
    18  of a mile) from an existing licensee, except with the written consent of
    19  such existing licensee or pursuant to subdivision three of section three
    20  hundred seventy of this article, subject to any restriction or condition
    21  as the superintendent may promulgate by regulation;  provided,  however,
    22  the  superintendent  may permit a location to be licensed that is closer
    23  than three-tenths of a mile from  an  existing  licensee  provided  such
    24  applicant  engages in the cashing of checks, drafts or money orders only
    25  for payees of such checks, drafts or money orders that  are  other  than
    26  natural  persons  at  the location to be licensed and such applicant was
    27  engaged in the cashing of such checks, drafts or money orders for payees
    28  that are other than natural persons at such location on  or  before  the
    29  fourteenth  day  of  July,  two thousand four, and provided further that
    30  upon licensing any such location by the superintendent, such license  as
    31  it  pertains solely to such location shall not be affected thereafter by
    32  any change of control of such license pursuant to section three  hundred
    33  seventy-a  of  this article, provided that the licensee continues there-
    34  after to engage at that location in the cashing  of  checks,  drafts  or
    35  money  orders  only  for  payees that are other than natural persons and
    36  provided further that such license shall bear a legend stating that such
    37  location is restricted to the cashing of checks, drafts or money  orders
    38  only for payees that are other than natural persons. The three-tenths of
    39  a mile distance requirement as set forth in this section shall not apply
    40  in cases where the existing licensee is a restricted location as author-
    41  ized  in  the preceding sentence, or is any other licensed location that
    42  engages solely in the cashing of checks, drafts or money orders only for
    43  payees that are  other  than  natural  persons.  For  purposes  of  this
    44  section,  such  distance  shall be measured on a straight line along the
    45  street between the nearest point of the store fronts of the check  cash-
    46  ing facilities. The primary business of the licensee, at the location to
    47  be licensed, shall be financial services. The superintendent shall tran-
    48  smit  one  copy of such license to the applicant and file another in the
    49  office of the department. Notwithstanding the  foregoing  provisions  of
    50  this  subdivision,  the superintendent, upon application by an applicant
    51  and for good cause shown, may  permit  a  reduction  from  ten  thousand
    52  dollars  to not less than five thousand dollars of minimum liquid assets
    53  required for each location.
    54    2. Such license shall state the name  of  the  licensee;  and  if  the
    55  licensee  is  a  co-partnership  [or],  association or limited liability
    56  company, the names of the members thereof; and  if  the  licensee  is  a

        A. 480                              4
 
     1  corporation, the date of its incorporation; and if the business is to be
     2  conducted  at  a specific address, the address at which such business is
     3  to be conducted; and if the business is to be conducted through the  use
     4  of  a  [mobile  unit]  limited  station, the New York state registration
     5  number or other identification of such [mobile unit] limited station and
     6  the area in which such [mobile unit] limited station is authorized to do
     7  business.
     8    3. Such license shall be kept conspicuously posted  in  the  place  of
     9  business  of  the  licensee  or,  in the case of a [mobile unit] limited
    10  station, upon such [mobile unit] limited station.   Such  license  shall
    11  not be transferable or assignable.
    12    4.  Such  license  shall  remain  in full force and effect until it is
    13  surrendered by the licensee or revoked or suspended as provided in  this
    14  article.
    15    5.  If  the superintendent shall find that the applicant fails to meet
    16  any of the conditions set forth in subdivision one of this  section,  he
    17  or  she  shall  not  issue  such license, and he or she shall notify the
    18  applicant of the denial.  If an application is denied or withdrawn,  the
    19  superintendent  shall retain the investigation fee to cover the costs of
    20  investigating the application and return the license fee to  the  appli-
    21  cant.
    22    6.  The  superintendent may, consistent with article twenty-three-A of
    23  the correction law, refuse to issue a license pursuant to  this  article
    24  if  he  or  she  shall  find  that the applicant, or any person who is a
    25  director, officer, partner, agent, employee or  substantial  stockholder
    26  of  the applicant, (a) has been convicted of a crime in any jurisdiction
    27  or (b) is associating or consorting with any person who has, or  persons
    28  who  have,  been  convicted  of a crime or crimes in any jurisdiction or
    29  jurisdictions. For the purposes of  this  article,  a  person  shall  be
    30  deemed  to  have  been  convicted  of  a crime if such person shall have
    31  pleaded guilty to a charge thereof before  a  court  or  magistrate,  or
    32  shall  have  been  found guilty thereof by the decision or judgment of a
    33  court or magistrate or by the verdict of a  jury,  irrespective  of  the
    34  pronouncement  of sentence or the suspension thereof. The term "substan-
    35  tial stockholder," as used in this subdivision, shall be deemed to refer
    36  to a person owning or controlling ten per centum or more  of  the  total
    37  outstanding  stock  of  the corporation in which such person is a stock-
    38  holder. In making a determination  pursuant  to  this  subdivision,  the
    39  superintendent shall require fingerprinting of the applicant. Such fing-
    40  erprints shall be submitted to the division of criminal justice services
    41  for a state criminal history record check, as defined in subdivision one
    42  of  section  three thousand thirty-five of the education law, and may be
    43  submitted to the federal bureau of investigation for a national criminal
    44  history record check.
    45    7. No license pursuant to this article shall be issued to  any  appli-
    46  cant  to  do  business  at the place specified in the application as the
    47  place where the business is to be conducted if, within the twelve months
    48  preceding such application, a license to engage in business pursuant  to
    49  this article at such place shall have been revoked.
    50    §  6. Section 370 of the banking law, as amended by chapter 151 of the
    51  laws of 1945, subdivision 2 as amended by section 38 of part O of  chap-
    52  ter  59  of the laws of 2006 and subdivision 3 as amended by chapter 703
    53  of the laws of 2006, is amended to read as follows:
    54    § 370. Restrictions as to place or area of doing business;  establish-
    55  ment of stations; change of location. 1. No more than one place of busi-
    56  ness  or one [mobile unit] limited station shall be maintained under the

        A. 480                              5
 
     1  same license; provided, however, that  more  than  one  license  may  be
     2  issued  to the same licensee upon compliance with the provisions of this
     3  article for each new license.
     4    2.  Any  licensed  casher of checks may open and maintain, within this
     5  state, one or more limited stations for the purpose of  cashing  checks,
     6  drafts  or  money orders for the particular group or groups specified in
     7  the license authorizing  each  such  station.  Such  stations  shall  be
     8  licensed  pursuant to and be subject to all the provisions of this chap-
     9  ter applicable to licensed cashers  of  checks,  except  that  (a)  such
    10  station  shall  not  be  subject to the distance limitation set forth in
    11  subdivision one of section three hundred sixty-nine of this article, (b)
    12  the fee for investigating the application for  a  station  shall  be  as
    13  prescribed pursuant to section eighteen-a of this chapter, and (c) where
    14  such  a  station  is  at  the  premises  of a specified employer for the
    15  purpose of cashing checks, drafts and money orders for the employees  of
    16  such  employer,  the fees and charges for cashing such checks, drafts or
    17  money orders shall not be subject to the limitations of subdivision  one
    18  of  section  three  hundred seventy-two of this article if such fees and
    19  charges are paid by such employer.
    20    3. A licensee may make a written application to the superintendent for
    21  leave to change his or her place of  business,  or  in  the  case  of  a
    22  [mobile unit] limited station, the area in which such unit is authorized
    23  to  be  operated,  stating  the  reasons for such proposed change.  Such
    24  application may be approved for relocation from  a  site  within  three-
    25  tenths of a mile of another licensee to another site within three-tenths
    26  of  a mile of such other licensee provided that such new site is farther
    27  from such existing licensee than the site from which permission to relo-
    28  cate is sought. Only in situations in which a licensee seeks  to  change
    29  its  place  of  business  due  to extraordinary circumstances, as may be
    30  determined by the superintendent pursuant to regulations, may the super-
    31  intendent, in his or her discretion, determine that an  application  may
    32  be  approved for relocation from a site within three-tenths of a mile of
    33  another licensee to a new site which is closer to such existing licensee
    34  than the site from which permission to relocate is sought. Notwithstand-
    35  ing any other provision of this subdivision,  a  licensee  may  relocate
    36  from  any  location  to a location that is within three-tenths of a mile
    37  from another licensee with the written consent of the other licensee. If
    38  the superintendent approves such application he or she shall issue a new
    39  license in duplicate in accordance with the provisions of section  three
    40  hundred  sixty-nine  of  this  article, stating the new location of such
    41  licensee or, in the case of a [mobile unit]  limited  station,  the  new
    42  area in which such [mobile unit] limited station may be operated.
    43    §  7.  Subdivision  4 of section 370-a of the banking law, as added by
    44  chapter 142 of the laws of 1992, is amended to read as follows:
    45    4. As used in this section[: (a) the term "person" includes  an  indi-
    46  vidual, partnership, corporation, association or any other organization,
    47  and (b)], the term "control" means the possession, directly or indirect-
    48  ly,  of the power to direct or cause the direction of the management and
    49  policies of a licensee, whether through the ownership of voting stock of
    50  such licensee, the  ownership  of  voting  stock  of  any  person  which
    51  possesses such power or otherwise. Control shall be presumed to exist if
    52  any  person,  directly or indirectly, owns, controls or holds with power
    53  to vote ten per centum or more of the voting stock of any licensee or of
    54  any person which owns, controls or holds with  power  to  vote  ten  per
    55  centum  or more of the voting stock of any licensee, but no person shall
    56  be deemed to control a licensee solely by reason of being an officer  or

        A. 480                              6
 
     1  director  of  such  licensee or person. The superintendent may in his or
     2  her discretion, upon the application of a licensee or  any  person  who,
     3  directly  or  indirectly,  owns, controls or holds with power to vote or
     4  seeks  to  own,  control  or hold with power to vote any voting stock of
     5  such licensee, determine whether or not the ownership, control or  hold-
     6  ing of such voting stock constitutes or would constitute control of such
     7  licensee for purposes of this section.
     8    §  8.  Section  371 of the banking law, as added by chapter 151 of the
     9  laws of 1945, is amended to read as follows:
    10    § 371.  Regulations.  The  superintendent  is  hereby  authorized  and
    11  empowered to make such rules and regulations, and such specific rulings,
    12  demands,  and  findings  as  he or she may deem necessary for the proper
    13  conduct of the business  authorized  and  licensed  under  and  for  the
    14  enforcement  of  this  article,  in addition hereto and not inconsistent
    15  herewith.
    16    § 9. Section 372 of the banking law, as amended by chapter 151 of  the
    17  laws  of  1945,  the  section  heading  and subdivision 1 as amended and
    18  subdivision 7 as added by chapter 432 of the laws of 2004,  subdivisions
    19  2,  3  and  4 as added and subdivisions 5 and 6 as renumbered by chapter
    20  263 of the laws of 1983, and subdivision 6 as added by  chapter  485  of
    21  the laws of 1947, is amended to read as follows:
    22    § 372. Fees and charges; posting schedule; records and reports. 1. The
    23  superintendent  shall,  by  regulation, establish the maximum fees which
    24  may be charged by licensees for cashing a check, draft, or money  order.
    25  No  licensee shall charge or collect any sum for cashing a check, draft,
    26  or money order in excess of that  established  by  the  superintendent's
    27  regulations;  provided,  however, that no maximum fee shall apply to the
    28  charging of fees by licensees for the cashing of checks, drafts or money
    29  orders for payees of such checks, drafts or money orders that are  other
    30  than natural persons.
    31    2. The schedule of fees and charges permitted under this section shall
    32  be  conspicuously  and  continuously posted in every location and [mobil
    33  unit] limited station licensed under this article.
    34    3. Only in the case of an internet, digital or other electronic adver-
    35  tisement or solicitation, a licensee shall be deemed to  have  fulfilled
    36  the  disclosure requirements required by law with respect to such inter-
    37  net, digital or other electronic advertisement or solicitation  only  by
    38  displaying  the disclosures on its website, so long as the advertisement
    39  or solicitation includes a link directly to such website,  and  provided
    40  this does not modify in-store disclosure requirements.
    41    4.  No  change in fees shall become effective earlier than thirty days
    42  after the superintendent shall notify the majority leader of the senate,
    43  the speaker of the assembly, and the chairmen of  both  the  senate  and
    44  assembly committees on banks of his or her intention to change fees.
    45    [4.]  5. The fees in effect immediately prior to the effective date of
    46  this subdivision shall continue to be the maximum allowable  fees  until
    47  revised by the superintendent's regulations.
    48    [5.]  6.  Each licensee shall keep and use in its business such books,
    49  accounts, and records as the superintendent may require  to  carry  into
    50  effect the provisions of this article and the rules and regulations made
    51  by  the  superintendent  hereunder.  Every  licensee shall preserve such
    52  books, accounts and records for at least two years.
    53    [6.] 7. Before a licensee shall deposit with any banking organization,
    54  or with any organization engaged in the business of  banking,  a  check,
    55  draft  or money order cashed by such licensee, the same must be endorsed
    56  with the actual name under which such licensee  is  doing  business  and

        A. 480                              7
 
     1  must  have  the  words  "licensed  casher  of checks" legibly written or
     2  stamped immediately after or below such name.
     3    [7.]  8.  Every  licensee  shall submit to the superintendent, or such
     4  person as the superintendent may  designate,  such  suspicious  activity
     5  reports  or currency transaction reports as are required to be submitted
     6  to federal authorities pursuant to provisions of the  Bank  Secrecy  Act
     7  (subchapter  11,  chapter  53,  title  31, United States code) and regu-
     8  lations and administrative orders related thereto,  as  amended,  within
     9  the  periods of time as required by such act and regulations. A licensee
    10  may submit a copy of any such report  to  the  superintendent,  or  such
    11  person  as  the  superintendent  may  designate, that is filed with such
    12  federal authorities. The superintendent may adopt  such  regulations  or
    13  require  such  additional reports as he or she deems necessary to insure
    14  the effective enforcement of this subdivision.
    15    § 10. Section 372-a of the banking law, as added by chapter 432 of the
    16  laws of 2004, is amended to read as follows:
    17    § 372-a. Superintendent authorized to examine. 1. For the  purpose  of
    18  discovering  violations of this article or securing information lawfully
    19  required in this section, the superintendent may at  any  time,  and  as
    20  often as may be determined, either personally or by a person duly desig-
    21  nated  by  the  superintendent,  investigate  the [cashing of checks by]
    22  licensees and their business practices as authorized by this article and
    23  examine the books, accounts, records, and files used  therein  of  every
    24  licensee.
    25    2. For the purpose established in subdivision one of this section, the
    26  superintendent and his or her duly designated representatives shall have
    27  free  access  to  the  offices  and places of business, books, accounts,
    28  papers, records, files, safes and vaults  of  all  such  licensees.  The
    29  superintendent  shall have authority to require the attendance of and to
    30  examine under oath all persons whose testimony may be required  relative
    31  to such cashing of checks or such business.
    32    § 11. Subdivisions 1 and 2 of section 373 of the banking law, subdivi-
    33  sion  1  as amended by chapter 432 of the laws of 2004 and subdivision 2
    34  as amended by chapter 132 of the laws of 1969, are amended  to  read  as
    35  follows:
    36    1.  No licensee shall engage in the business of making loans of money,
    37  credit, goods or things or discounting  of  notes,  bills  of  exchange,
    38  checks, or other evidences of debt pursuant to the provisions of article
    39  nine  of  this  chapter, nor shall a loan business or the negotiation of
    40  loans or the discounting of notes, bills of exchange,  checks  or  other
    41  evidences  of  debt be conducted on the same premises where the licensee
    42  is conducting business pursuant  to  the  provisions  of  this  article.
    43  Except  as  otherwise  provided by regulation of the superintendent, all
    44  checks, drafts and money orders shall be  deposited  in  the  licensee's
    45  bank  account not later than the first business day following the day on
    46  which they were cashed. No licensee shall at any time  cash  or  advance
    47  any  moneys  on a post-dated check or draft or engage in the business of
    48  transmitting money or receiving money for transmission; provided, howev-
    49  er, that a licensee may cash a check [payable on the first banking busi-
    50  ness day following the date of cashing (a) if such check is drawn by the
    51  United States, the state of New York, or any  political  subdivision  of
    52  the  state of New York, or by any department, bureau, agency, authority,
    53  instrumentality or officer, acting in  his  official  capacity,  of  the
    54  United  States  or of the state of New York or of any political subdivi-
    55  sion of the state of New York, or (b) if such check is a  payroll  check
    56  drawn  by  an  employer  to  the  order  of  its employee in payment for

        A. 480                              8

     1  services  performed  by  such  employee]  without  regard  to  the  date
     2  imprinted  on the check as long as the check is dated not more than five
     3  business days after the date of presentment and as long as the check  is
     4  deposited  in the licensee's bank account not later than the first busi-
     5  ness day following the day on which it was cashed that is:  (a)  payable
     6  no more than five banking business days following the date of cashing if
     7  such  check is drawn by the United States, the state of New York, or any
     8  political subdivision of the state of New York, or  by  any  department,
     9  bureau,  agency, authority, instrumentality or officer, acting in his or
    10  her official capacity, of the United States or of the state of New  York
    11  or of any political subdivision of the state of New York; (b) payable no
    12  more  than  five  banking business days following the date of cashing if
    13  such check is payable to a natural  person  and  is  in  an  amount  not
    14  exceeding  one  thousand  dollars;  or  (c) payable on the first banking
    15  business day following the date of cashing if such check  is  a  payroll
    16  check  drawn  by an employer to the order of its employee in payment for
    17  services performed by such employee. Any licensee who cashes  post-dated
    18  checks  pursuant to paragraph (a) or (b) of this subdivision shall do so
    19  subject to the  safety  and  soundness  requirements  of  this  article,
    20  including  establishment  of policies and procedures to implement robust
    21  due diligence, risk management, liquidity management, structured  trans-
    22  actions  and  fraud prevention.  No licensee shall cash any check, draft
    23  or money order if the face amount for which it is drawn is in excess  of
    24  [fifteen]   twenty   thousand  dollars;  provided,  however,  that  this
    25  restriction shall not apply to the cashing of checks,  drafts  or  money
    26  orders  drawn  by  the United States, any state thereof or any political
    27  subdivision of any such state, or by  any  department,  bureau,  agency,
    28  authority,  instrumentality  or  officer,  acting in his or her official
    29  capacity, of the United States,  any  state  thereof  or  any  political
    30  subdivision  of  any such state, or any [banking] financial institution,
    31  or to any check or draft drawn by or on account of any insurance  compa-
    32  ny,  attorney  for  the  settlement of claims, or to any check which has
    33  been certified or guaranteed by the [banking] financial  institution  on
    34  which  it has been drawn, or if such check is drawn on a bona fide work-
    35  ers' compensation fund issued by a third-party payor, or if  such  check
    36  is  drawn  by  an  employer from a pension or profit sharing fund, or if
    37  such check is drawn by a union from a pension or benefit fund or if such
    38  check is drawn by a union; provided  further,  however,  that  any  such
    39  restriction  upon the maximum face amount that may be cashed by a licen-
    40  see shall not apply to the cashing of checks, drafts or money orders  by
    41  licensees  for  payees  of  such checks, drafts or money orders that are
    42  other than natural persons. For purposes of this subdivision, "[banking]
    43  financial institution" means any  bank,  trust  company,  savings  bank,
    44  savings  and  loan  association  [or],  credit  union or other financial
    45  institution which is incorporated, chartered [or], organized or licensed
    46  under the laws of this state or any other state or the United States.
    47    2. The superintendent may suspend or revoke any  license  or  licenses
    48  issued  pursuant  to  this article if, after notice and a hearing, he or
    49  she shall find that the licensee (a) has committed any fraud, engaged in
    50  any dishonest activities or  made  any  misrepresentation;  or  (b)  has
    51  violated  any  provisions  of  the  banking law or any regulation issued
    52  pursuant thereto, or has violated any other law in the course of its  or
    53  his  or  her  dealings as a licensed casher of checks; or (c) has made a
    54  false statement in the application for such license or failed to give  a
    55  true  reply  to  a question in such application; or (d) has demonstrated
    56  his or its incompetency or untrustworthiness to act as a licensed casher

        A. 480                              9
 
     1  of checks; or (e) is not doing  sufficient  business  pursuant  to  this
     2  article to justify the continuance of the license, or if he or she shall
     3  find that any ground or grounds exist which would require or warrant the
     4  refusal  of  an  application  for the issuance of the license if such an
     5  application were then before him or her.  Such a hearing shall  be  held
     6  in  the  manner  and upon such notice as may be prescribed by the super-
     7  intendent. Pending an investigation or a hearing for the  suspension  or
     8  revocation  of  any license or licenses issued pursuant to this article,
     9  the superintendent may temporarily suspend such license or licenses  for
    10  a  period  not  to exceed ninety days, provided the superintendent shall
    11  find that such a temporary suspension is in the public interest.
    12    § 12.  Subdivision 3 of section 37 of the banking law, as  amended  by
    13  chapter 360 of the laws of 1984, is amended to read as follows:
    14    3. In addition to any reports expressly required by this chapter to be
    15  made,  the superintendent may require any banking organization, licensed
    16  lender, licensed casher of checks,  licensed  mortgage  banker,  foreign
    17  banking  corporation  licensed  by  the superintendent to do business in
    18  this state, bank holding company and any non-banking subsidiary thereof,
    19  corporate affiliate of a corporate banking organization within the mean-
    20  ing of subdivision six of section thirty-six of  this  article  and  any
    21  non-banking  subsidiary  of  a  corporation  which  is an affiliate of a
    22  corporate banking organization within the meaning of  subdivision  six-a
    23  of  section thirty-six of this article to make special reports to him or
    24  her at such times as he or she may prescribe.
    25    § 13.   Within ninety days of the effective  date  of  this  act,  the
    26  superintendent  of  financial  services  shall  commence a review of its
    27  current system of issuing licenses  for  check  cashing  licensees,  the
    28  establishment  of  new  check  cashing  locations, for the relocation of
    29  check cashing locations, and for changes of control  of  existing  check
    30  cashing licensees, and will issue a report to the governor, the chairman
    31  of  the  assembly  banks committee, and the chairman of the senate banks
    32  committee, regarding the costs (including application fees,  preparation
    33  fees,  and  other  costs)  incurred  by applicants to prepare and submit
    34  applications, the costs incurred by the department of financial services
    35  to review and process applications, the length of time required for  the
    36  review  and processing of applications by such department, and recommen-
    37  dations to improve the efficiency and lessen  the  costs,  burdens,  and
    38  length  of  such department's licensing processes. The superintendent of
    39  financial services shall report to the governor and  to  the  respective
    40  committee chairs within one hundred eighty days of the date of commence-
    41  ment  of  his  or  her  review. The superintendent of financial services
    42  shall consult with and receive input from check cashing licensees in the
    43  preparation of its analysis and report.
    44    § 14.  This act shall take effect on the  one  hundred  eightieth  day
    45  after it shall have become a law; provided, however, that:
    46    (a)  the  amendments to section 373 of the banking law made by section
    47  eleven of this act shall expire and be deemed repealed  June  30,  2028;
    48  and
    49    (b)  any  contract,  instrument, agreement or other written obligation
    50  entered into by a financial services provider authorized  under  section
    51  373  of the banking law prior to June 30, 2028 shall be deemed valid and
    52  enforceable after such date.
    53    Effective immediately the addition, amendment  and/or  repeal  of  any
    54  rule  or  regulation necessary for the implementation of this act on its
    55  effective date are authorized to be made and completed on or before such
    56  effective date.
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