Add Art 14-B 735 - 749, amd 36, 37, 39, 42 & 44, Bank L
Provides for the regulation of buy-now-pay-later lenders; requires such lenders to be licensed; establishes prohibited acts, limitations on loans, and consumer protections.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9588A
SPONSOR: Hunter TITLE OF BILL:
An act to amend the banking law, in relation to the regulation of buy-
now-pay-later lenders
PURPOSE OR GENERAL IDEA OF BILL:
This bill was originally proposed in the Governor's 2024 Executive Budg-
et, it authorizes the Department of Financial Services (DFS) to regulate
lenders offering "Buy Now, Pay Later" (BNPL) loans. This aligns with the
Governor's efforts to safeguard consumers who utilize BNPL. It proposes
amendments to the Banking Law, granting DFS licensing and regulatory
powers over BNPL loans and providers. The focus is on enhancing consumer
protections by enforcing clearer disclosure standards, improving dispute
resolution processes, prohibiting late fees and interest rates, prohib-
iting credit reporting norms, and safeguarding consumer data privacy.
Additionally, DFS would evaluate guidelines to mitigate practices such
as dark patterns, excessive debt accumulation, and overextension.
SUMMARY OF PROVISIONS:
Section 736: Explains the Definitions. This section states that BNPL
loan means credit provided to the consumer at the time of purchase to be
repaid by such consumer in installments.
Section 737: Requires that BNPL loans register with DFS.
Section 738: Clarifies that an application for a license is reviewed for
financial responsibility, experience, character, and general fitness.
Superintendent may refuse to issue a license and retain the fee if
criteria are not met. Regulations may be issued regarding capital
requirements for solvency and financial integrity.
Section 739: A license must state licensee details such as the name,
address, whether the licensee is a partnership or association, names of
members- and be posted on the licensee's platform. If the licensee is a
corporation, then they state`the date and place of its incorporation.
License is to be posted on a mobile app, website, or any consumer inter-
face. The license is not transferable or assignable.
Section 740: No change in control of a licensee's business is allowed
without prior approval from the superintendent. The person seeking
control must apply to DFS, including any prescribed information and an
investigation fee. For a period of six months plus amount of time DFS
deems necessary, provisions one and two regarding the transfer of
control would not apply to a legal representative. A party that buys 10%
of lenders shares is "in control" of the voting stock of the lender.
Section 741: States that grounds for revocation or suspension include
violations of laws or regulations, license refusal, or failure to comply
with superintendent demands such as:
*Failure to pay any fees required by DFS.
*Misleading information on the initial application.
*Failure to abide by any requirement, ruling, demand from DFS. Licen-
sees may surrender licerises, effective upon acceptance, without affect-
ing any criminal or civil penalties committed prior to surrendering
their license.
Superintendent may suspend a license for 30 days for a good cause- mean-
ing that the licensee has likely engaged or has engaged in deceitful and
unfair practices prohibited by this bill purposes pending an investi-
gation.
Superintendent may reinstate suspended licenses.
Section 742: Specifies that the superintendent has the power to investi-
gate buy-now-pay-later lenders for potential violations. Examinations
may include books, records, accounts, and documents used by licensees.
Individuals may appear in person under oath for any hearing called by
DFS.
Section 743:Buy-now-pay-later lenders must keep and use books, accounts,
and records for at least six years. Annual reports, subscribed and
affirmed by licensees, must be filed with the superintendent. Super-
intendent may require additional reports as needed; these reports must
remain accurate lest licensee incur penalties of perjury.
Section 744: Prohibits confession of judgment or power of attorney for
judgment is prohibited. False, misleading, or deceptive advertisements
for buy-now-pay-later loans is also prohibited.
Section 745: Prohibits BNPL lenders from charging consumers interest or
fees such as late fees on BNPL loans.
Section 746: Creates consumer protections such as: Requiring BNPL lend-
ers disclose loan terms, including costs, repayment schedule, and other
material conditions.
Requiring lenders to make a reasonable determination of the consumer's
ability to repay before providing a loan. Prohibiting lenders from
reporting consumer transactions to credit bureaus. Requiring BNPL lend-
ers to provide refunds or credit to consumers upon request as necessary.
BNPL lenders a consumer may request a refund, and such procedure shall
not be unduly burdensome to the consumer.
Providing a method for consumers to bring about disputes to BNPL lenders
and have a protocol for dealing with these disputes. Giving consumers
the choice to opt into having their data shared by BNPL lenders.
Section 747: Authorizes he superintendent to create rules and regu-
lations to implement the provisions of the article. The superintendent
has the authority to make specific rulings, demands, and findings as
necessary for the proper conduct of business and enforcement of the
article.
Section 748: Specifies penalties for violations for member, officer,
director, or employee of a BNPL loan, including fines and imprisonment
for individuals involved in violations such as intentional misleading
information (such as reports, statements etc.), any violation of this
provision, omitting important information. Penalties may include a fine
of $500 and or a 6-month prison sentence. Authorizes the superintendent
to impose penalties on violators, even if they are not licensees or
exempt organizations.
Prohibits false representations by buy-now-pay-later lenders regarding
their licensing status under the banking law.
Section 749: Severability:
If any provision of the article is held invalid, it will not affect
other provisions that can be given effect without the invalid part.
EFFECTIVE DATE:
This act will take effect one year after becoming law.
STATE OF NEW YORK
________________________________________________________________________
9588--A
IN ASSEMBLY
March 22, 2024
___________
Introduced by M. of A. HUNTER, WEPRIN, BURDICK, CUNNINGHAM -- read once
and referred to the Committee on Banks -- reported and referred to the
Committee on Codes -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the banking law, in relation to the regulation of buy-
now-pay-later lenders
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The banking law is amended by adding a new article 14-B to
2 read as follows:
3 ARTICLE XIV-B
4 BUY-NOW-PAY-LATER LENDERS
5 Section 735. Short title.
6 736. Definitions.
7 737. License.
8 738. Conditions precedent to issuing a license; procedure where
9 application is denied.
10 739. License provisions and posting.
11 740. Application for acquisition of control of buy-now-pay-later
12 lender by purchase of stock.
13 741. Ground for revocation or suspension of license; procedure.
14 742. Superintendent authorized to examine.
15 743. Licensee's books and records; reports.
16 744. Acts prohibited.
17 745. Limitation on charges on buy-now-pay-later loans.
18 746. Consumer protections.
19 747. Authority of superintendent.
20 748. Penalties.
21 749. Severability.
22 § 735. Short title. This article shall be known and may be cited as
23 the "Buy Now Pay Later act".
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15022-02-4
A. 9588--A 2
1 § 736. Definitions. As used in this article, the following terms shall
2 have the following meanings:
3 1. "Consumer" means an individual who is a resident of the state of
4 New York.
5 2. "Buy-now-pay-later loan" means credit provided to a consumer at the
6 time of purchase in connection with such consumer's particular purchase
7 of goods or services, other than a motor vehicle as defined under
8 section one hundred twenty-five of the vehicle and traffic law, to be
9 repaid by the consumer in installments.
10 3. "Buy-now-pay-later lender" means a person who offers buy-now-pay-
11 later loans in this state. For purposes of the preceding sentence,
12 "offer" means offering to make a buy-now-pay-later loan by extending
13 credit directly to a consumer or operating a platform, software or
14 system with which a consumer interacts and the primary purpose of which
15 is to allow third parties to offer buy-now-pay-later loans, or both. A
16 person who sells goods or services to a consumer and extends credit to
17 such consumer in connection with such consumer's particular purchase of
18 such goods or services shall not be considered a buy-now-pay-later lend-
19 er with respect to such transactions. A person shall not be considered a
20 buy-now-pay-later lender on the basis of isolated, incidental or occa-
21 sional transactions which otherwise meet the definitions of this
22 section.
23 4. "Exempt organization" means any banking organization or foreign
24 banking corporation licensed by the superintendent or the comptroller of
25 the currency to transact business in this state, national bank, federal
26 savings bank, federal savings and loan association, or federal credit
27 union. Subject to such regulations as may be promulgated by the super-
28 intendent, "exempt organization" may also include any subsidiary of such
29 entities.
30 5. "Licensee" means a person who has been issued a license pursuant to
31 this article.
32 6. "Person" means an individual, partnership, corporation, association
33 or any other business organization.
34 § 737. License. 1. No person or other entity, except an exempt organ-
35 ization as defined in this article, shall act as a buy-now-pay-later
36 lender without first obtaining a license from the superintendent.
37 2. An application for a license shall be in writing, under oath, and
38 in the form and containing such information as the superintendent may
39 require.
40 3. At the time of filing an application for a license, the applicant
41 shall pay to the superintendent a fee as prescribed pursuant to section
42 eighteen-a of this chapter.
43 4. A license granted pursuant to this article shall be valid unless
44 revoked or suspended by the superintendent or unless surrendered by the
45 licensee and accepted by the superintendent.
46 5. In connection with an application for a license, the applicant
47 shall submit an affidavit of financial solvency noting such capitaliza-
48 tion requirements and access to such credit as may be prescribed by the
49 regulations of the superintendent.
50 § 738. Conditions precedent to issuing a license; procedure where
51 application is denied. 1. After the filing of an application for a
52 license accompanied by payment of the fee pursuant to subdivision three
53 of section seven hundred thirty-seven of this article, it shall be
54 substantively reviewed. After the application is deemed sufficient and
55 complete, if the superintendent finds that the financial responsibility,
56 including meeting any capital requirements as established pursuant to
A. 9588--A 3
1 subdivision three of this section, experience, character and general
2 fitness of the applicant or any person associated with the applicant are
3 such as to command the confidence of the community and to warrant the
4 belief that the business will be conducted honestly, fairly and effi-
5 ciently within the purposes and intent of this article, the superinten-
6 dent shall issue the license. For the purpose of this subdivision, the
7 applicant shall be deemed to include all the members of the applicant if
8 it is a partnership or unincorporated association or organization, and
9 all the stockholders, officers and directors of the applicant if it is a
10 corporation.
11 2. If the superintendent refuses to issue a license, the superinten-
12 dent shall notify the applicant of the denial and retain the fee paid
13 pursuant to subdivision three of section seven hundred thirty-seven of
14 this article.
15 3. The superintendent may issue regulations setting capital require-
16 ments to ensure the solvency and financial integrity of licensees and
17 their ongoing operations, taking into account the risks, volume of busi-
18 ness, complexity, and other relevant factors regarding such licensees.
19 Further, the superintendent may issue rules and regulations prescribing
20 a methodology to calculate capital requirements with respect to licen-
21 sees or categories thereof.
22 § 739. License provisions and posting. 1. A license issued under this
23 article shall state the name and address of the licensee, and if the
24 licensee be a co-partnership or association, the names of the members
25 thereof, and if a corporation the date and place of its incorporation.
26 2. Such license shall be kept conspicuously posted on the mobile
27 application, website, or other consumer interface of the licensee, as
28 well as listed in the terms and conditions of any buy-now-pay-later loan
29 offered or entered into by the licensee. The superintendent may provide
30 by regulation an alternative form of notice of licensure.
31 3. A license issued under this article shall not be transferable or
32 assignable.
33 § 740. Application for acquisition of control of buy-now-pay-later
34 lender by purchase of stock. 1. It shall be unlawful except with the
35 prior approval of the superintendent for any action to be taken which
36 results in a change of control of the business of a licensee. Prior to
37 any change of control, the person desirous of acquiring control of the
38 business of a licensee shall make written application to the superinten-
39 dent and pay an investigation fee as prescribed pursuant to section
40 eighteen-a of this chapter to the superintendent. The application shall
41 contain such information as the superintendent, by regulation, may
42 prescribe as necessary or appropriate for the purpose of making the
43 determination required by subdivision two of this section.
44 2. The superintendent shall approve or disapprove the proposed change
45 of control of a licensee in accordance with the provisions of section
46 seven hundred thirty-eight of this article.
47 3. For a period of six months from the date of qualification thereof
48 and for such additional period of time as the superintendent may
49 prescribe, in writing, the provisions of subdivisions one and two of
50 this section shall not apply to a transfer of control by operation of
51 law to the legal representative, as hereinafter defined, of one who has
52 control of a licensee. Thereafter, such legal representative shall
53 comply with the provisions of subdivisions one and two of this section.
54 The provisions of subdivisions one and two of this section shall be
55 applicable to an application made under such section by a legal repre-
56 sentative.
A. 9588--A 4
1 4. The term "legal representative," for the purposes of this section,
2 shall mean one duly appointed by a court of competent jurisdiction to
3 act as executor, administrator, trustee, committee, conservator or
4 receiver, including one who succeeds a legal representative and one
5 acting in an ancillary capacity thereto in accordance with the
6 provisions of such court appointment.
7 5. As used in this section, the term "control" means the possession,
8 directly or indirectly, of the power to direct or cause the direction of
9 the management and policies of a licensee, whether through the ownership
10 of voting stock of such licensee, the ownership of voting stock of any
11 person which possesses such power or otherwise. Control shall be
12 presumed to exist if any person, directly or indirectly, owns, controls
13 or holds with power to vote ten per centum or more of the voting stock
14 of any licensee or of any person which owns, controls or holds with
15 power to vote ten per centum or more of the voting stock of any licen-
16 see, but no person shall be deemed to control a licensee solely by
17 reason of being an officer or director of such licensee or person. The
18 superintendent may in the superintendent's discretion, upon the applica-
19 tion of a licensee or any person who, directly or indirectly, owns,
20 controls or holds with power to vote or seeks to own, control or hold
21 with power to vote any voting stock of such licensee, determine whether
22 or not the ownership, control or holding of such voting stock consti-
23 tutes or would constitute control of such licensee for purposes of this
24 section.
25 § 741. Ground for revocation or suspension of license; procedure. 1. A
26 license granted pursuant to this section may be revoked or suspended by
27 the superintendent upon a finding that:
28 (a) The licensee has violated any applicable law or regulation;
29 (b) Any fact or condition exists which, if it had existed at the time
30 of the original application for such license, clearly would have
31 warranted the superintendent's refusal to issue such license; or
32 (c) The licensee has failed to pay any sum of money lawfully demanded
33 by the superintendent or to comply with any demand, ruling or require-
34 ment of the superintendent.
35 2. Any licensee may surrender any license by delivering to the super-
36 intendent written notice that the licensee thereby surrenders such
37 license. Such surrender shall be effective upon its acceptance by the
38 superintendent, and shall not affect such licensee's civil or criminal
39 liability for acts committed prior to such surrender.
40 3. Every license issued hereunder shall remain in force and effect
41 until the same shall have been surrendered, revoked or suspended, in
42 accordance with the provisions of this article, but the superintendent
43 shall have authority to reinstate suspended licenses or to issue a new
44 license to a licensee whose license has been revoked if no fact or
45 condition then exists which clearly would have warranted the superinten-
46 dent's refusal to issue such license.
47 4. Whenever the superintendent shall revoke or suspend a license
48 issued pursuant to this article, the superintendent shall forthwith
49 execute a written order to that effect, which order may be reviewed in
50 the manner provided by article seventy-eight of the civil practice law
51 and rules. Such special proceeding for review as authorized by this
52 section must be commenced within thirty days from the date of such order
53 of suspension or revocation.
54 5. The superintendent may, for good cause, without notice and a hear-
55 ing, suspend any license issued pursuant to this article for a period
56 not exceeding thirty days, pending investigation. "Good cause," as used
A. 9588--A 5
1 in this subdivision, shall exist only when the licensee has engaged in
2 or is likely to engage in a practice prohibited by this article or the
3 regulations promulgated thereunder or engages in dishonest or inequita-
4 ble practices which may cause substantial harm to the public.
5 § 742. Superintendent authorized to examine. 1. The superintendent
6 shall have the power to make such investigations as the superintendent
7 shall deem necessary to determine whether any buy-now-pay-later lender
8 or any other person has violated any of the provisions of this article
9 or any other applicable law, or whether any licensee has conducted
10 itself in such manner as would justify the revocation of its license,
11 and to the extent necessary therefor, the superintendent may require the
12 attendance of and examine any person under oath, and shall have the
13 power to compel the production of all relevant books, records, accounts,
14 and documents.
15 2. The superintendent shall have the power to make such examinations
16 of the books, records, accounts and documents used in the business of
17 any licensee as the superintendent shall deem necessary to determine
18 whether any such licensee has violated any of the provisions of this
19 chapter or any other applicable law or to secure information lawfully
20 required by the superintendent.
21 § 743. Licensee's books and records; reports. 1. A buy-now-pay-later
22 lender shall keep and use in its business such books, accounts and
23 records as will enable the superintendent to determine whether such
24 buy-now-pay-later lender is complying with the provisions of this arti-
25 cle and with the rules and regulations lawfully made by the superinten-
26 dent hereunder. Every buy-now-pay-later lender shall preserve such
27 books, accounts and records for at least six years after making the
28 final entry in respect to any buy-now-pay-later loan recorded therein;
29 provided, however, the preservation of photographic or digital reprod-
30 uctions thereof or records in photographic or digital form shall consti-
31 tute compliance with this requirement.
32 2. By a date to be set by the superintendent, each licensee shall
33 annually file a report with the superintendent giving such information
34 as the superintendent may require concerning the licensee's business and
35 operations during the preceding calendar year within the state under the
36 authority of this article. Such report shall be subscribed and affirmed
37 as true by the licensee under the penalties of perjury and be in the
38 form prescribed by the superintendent. In addition to such annual
39 reports, the superintendent may require of licensees such additional
40 regular or special reports as the superintendent may deem necessary to
41 the proper supervision of licensees under this article. Such additional
42 reports shall be in the form prescribed by the superintendent and shall
43 be subscribed and affirmed as true under the penalties of perjury.
44 § 744. Acts prohibited. 1. No buy-now-pay-later lender shall take or
45 cause to be taken any confession of judgment or any power of attorney to
46 confess judgment or to appear for the consumer in a judicial proceeding.
47 2. No buy-now-pay-later lender shall make or cause to be made an
48 advertisement for a buy-now-pay-later loan that is false, misleading, or
49 deceptive.
50 § 745. Limitation on charges on buy-now-pay-later loans. Notwith-
51 standing any other provision of law to the contrary, no buy-now-pay-la-
52 ter lender shall charge, contract for, or otherwise receive from a
53 consumer any interest, penalty, late fee, discount or other consider-
54 ation in connection to a buy-now-pay-later loan, whether directly or
55 indirectly.
A. 9588--A 6
1 § 746. Consumer protections. 1. Disclosures. A buy-now-pay-later lend-
2 er shall disclose or cause to be disclosed to consumers the terms of
3 buy-now-pay-later loans, including the cost, repayment schedule, and
4 other material conditions, in a clear and conspicuous manner.
5 2. Ability to repay. Subject to regulations to be promulgated by the
6 superintendent, a buy-now-pay-later lender shall, before providing or
7 causing to be provided a buy-now-pay-later loan to a consumer, make, or
8 cause to be made, a reasonable determination that such consumer has the
9 ability to repay the buy-now-pay-later loan.
10 3. Credit reporting prohibition. A buy-now-pay-later lender shall not
11 report any consumer data obtained through a buy-now-pay-later loan to
12 any credit reporting agency.
13 4. Refunds and credits. A buy-now-pay-later lender shall provide or
14 cause to be provided refunds or credits for goods or services purchased
15 in connection with a buy-now-pay-later loan, upon consumer request, as
16 necessary. A buy-now-pay-later lender shall maintain or cause to be
17 maintained policies and procedures to provide such refunds or credits.
18 Such policies and procedures shall be fair, transparent, and not unduly
19 burdensome to the consumer. A buy-now-pay-later lender shall disclose
20 or cause to be disclosed, in a clear and conspicuous manner, such poli-
21 cies and procedures.
22 5. Consumer disputes. A buy-now-pay-later lender shall resolve or
23 cause to be resolved disputes in a manner that is fair and transparent
24 to consumers. A buy-now-pay-later lender shall create or cause to be
25 created a readily available and prominently disclosed method for consum-
26 ers to bring a dispute to the buy-now-pay-later lender. A buy-now-pay-
27 later lender shall maintain policies and procedures for handling consum-
28 er disputes.
29 6. Use of consumer data. A buy-now-pay-later lender shall clearly and
30 conspicuously disclose or cause to be disclosed to a consumer to which
31 it provides a loan how such consumer's data may be used by the buy-now-
32 pay-later lender. The buy-now-pay-later lender shall provide the consum-
33 er the opportunity to provide consent to such collection and use of
34 consumer data, provided that without such consent the buy-now-pay-later
35 lender shall not collect or use such consumer data. The superintendent,
36 in their discretion, may by regulation prohibit certain uses of consumer
37 data if such use poses an undue risk to consumers.
38 7. Unauthorized use. The superintendent may issue rules and regu-
39 lations regarding treatment of unauthorized use, so that consumers are
40 liable for use of buy-now-pay-later loans in their name only under
41 circumstances where such liability would be fair and reasonable.
42 8. Void buy-now-pay-later loans. Any buy-now-pay-later loan made by a
43 person not licensed under this article, other than an exempt organiza-
44 tion, shall be void, and such person shall have no right to collect or
45 receive any principal, interest or charge whatsoever.
46 § 747. Authority of superintendent. The superintendent is authorized
47 to promulgate such general rules and regulations as may be appropriate,
48 in their sole discretion, to implement the provisions of this article,
49 protect consumers, and ensure the solvency and financial integrity of
50 buy-now-pay-later lenders. The superintendent is further authorized to
51 make such specific rulings, demands, and findings as may be necessary
52 for the proper conduct of the business authorized and licensed under and
53 for the enforcement of this article, in addition hereto and not incon-
54 sistent herewith.
55 § 748. Penalties. 1. Any person, including any member, officer, direc-
56 tor or employee of a buy-now-pay-later lender, who violates or partic-
A. 9588--A 7
1 ipates in the violation of section seven hundred thirty-seven of this
2 article, or who knowingly makes any incorrect statement of a material
3 fact in any application, report or statement filed pursuant to this
4 article, or who knowingly omits to state any material fact necessary to
5 give the superintendent any information lawfully required by the super-
6 intendent or refuses to permit any lawful investigation or examination,
7 shall be guilty of a misdemeanor and, upon conviction, shall be fined
8 not more than five hundred dollars or imprisoned for not more than six
9 months or both, in the discretion of the court.
10 2. Without limiting any power granted to the superintendent under any
11 other provision of this chapter, the superintendent may, in a proceeding
12 after notice and a hearing require a buy-now-pay-later lender, whether
13 or not a licensee, to pay to the people of this state a penalty for any
14 violation of this chapter, any regulation promulgated thereunder, any
15 final or temporary order issued pursuant to section thirty-nine of this
16 chapter, any condition imposed in writing by the superintendent in
17 connection with the grant of any application or request, or any written
18 agreement entered into with the superintendent, and for knowingly making
19 any incorrect statement of a material fact in any application, report or
20 statement filed pursuant to this article, or knowingly omitting to state
21 any material fact necessary to give the superintendent any information
22 lawfully required by the superintendent or refusing to permit any lawful
23 investigation or examination. As to any buy-now-pay-later lender that is
24 not a licensee or an exempt organization, the superintendent is author-
25 ized to impose a penalty in the same amount authorized in section
26 forty-four of this chapter for a violation of this chapter by any person
27 licensed, certified, registered, authorized, chartered, accredited,
28 incorporated or otherwise approved by the superintendent pursuant to
29 this chapter.
30 3. No buy-now-pay-later lender shall make, directly or indirectly,
31 orally or in writing, or by any method, practice or device, a represen-
32 tation that such buy-now-pay-later lender is licensed under the banking
33 law except that a licensee under this chapter may make a representation
34 that the licensee is licensed as a buy-now-pay-later lender under this
35 chapter.
36 § 749. Severability. If any provision of this article or the applica-
37 tion thereof to any person or circumstances is held to be invalid, such
38 invalidity shall not affect other provisions or applications of this
39 article which can be given effect without the invalid provision or
40 application, and to this end the provisions of this article are severa-
41 ble.
42 § 2. Subdivision 1 of section 36 of the banking law, as amended by
43 chapter 146 of the laws of 1961, is amended to read as follows:
44 1. The superintendent shall have the power to examine every banking
45 organization, every bank holding company and any non-banking subsidiary
46 thereof (as such terms "bank holding company" and "non-banking subsid-
47 iary" are defined in article three-A of this chapter) and every licensed
48 lender and licensed buy-now-pay-later lender at any time prior to its
49 dissolution whenever in his judgment such examination is necessary or
50 advisable.
51 § 3. Subdivision 10 of section 36 of the banking law, as amended by
52 section 2 of part L of chapter 58 of the laws of 2019, is amended to
53 read as follows:
54 10. All reports of examinations and investigations, correspondence and
55 memoranda concerning or arising out of such examination and investi-
56 gations, including any duly authenticated copy or copies thereof in the
A. 9588--A 8
1 possession of any banking organization, bank holding company or any
2 subsidiary thereof (as such terms "bank holding company" and "subsid-
3 iary" are defined in article three-A of this chapter), any corporation
4 or any other entity affiliated with a banking organization within the
5 meaning of subdivision six of this section and any non-banking subsid-
6 iary of a corporation or any other entity which is an affiliate of a
7 banking organization within the meaning of subdivision six-a of this
8 section, foreign banking corporation, licensed lender, licensed buy-now-
9 pay-later lender, licensed casher of checks, licensed mortgage banker,
10 registered mortgage broker, licensed mortgage loan originator, licensed
11 sales finance company, registered mortgage loan servicer, licensed
12 student loan servicer, licensed insurance premium finance agency,
13 licensed transmitter of money, licensed budget planner, any other person
14 or entity subject to supervision under this chapter, or the department,
15 shall be confidential communications, shall not be subject to subpoena
16 and shall not be made public unless, in the judgment of the superinten-
17 dent, the ends of justice and the public advantage will be subserved by
18 the publication thereof, in which event the superintendent may publish
19 or authorize the publication of a copy of any such report or any part
20 thereof in such manner as may be deemed proper or unless such laws
21 specifically authorize such disclosure. For the purposes of this subdi-
22 vision, "reports of examinations and investigations, and any correspond-
23 ence and memoranda concerning or arising out of such examinations and
24 investigations", includes any such materials of a bank, insurance or
25 securities regulatory agency or any unit of the federal government or
26 that of this state any other state or that of any foreign government
27 which are considered confidential by such agency or unit and which are
28 in the possession of the department or which are otherwise confidential
29 materials that have been shared by the department with any such agency
30 or unit and are in the possession of such agency or unit.
31 § 4. Subdivisions 3 and 5 of section 37 of the banking law, as amended
32 by chapter 360 of the laws of 1984, are amended to read as follows:
33 3. In addition to any reports expressly required by this chapter to be
34 made, the superintendent may require any banking organization, licensed
35 lender, licensed buy-now-pay-later lender, licensed casher of checks,
36 licensed mortgage banker, foreign banking corporation licensed by the
37 superintendent to do business in this state, bank holding company and
38 any non-banking subsidiary thereof, corporate affiliate of a corporate
39 banking organization within the meaning of subdivision six of section
40 thirty-six of this article and any non-banking subsidiary of a corpo-
41 ration which is an affiliate of a corporate banking organization within
42 the meaning of subdivision six-a of section thirty-six of this article
43 to make special reports to him at such times as he may prescribe.
44 5. The superintendent may extend at his discretion the time within
45 which a banking organization, foreign banking corporation licensed by
46 the superintendent to do business in this state, bank holding company or
47 any non-banking subsidiary thereof, licensed casher of checks, licensed
48 mortgage banker, private banker, licensed buy-now-pay-later lender or
49 licensed lender is required to make and file any report to the super-
50 intendent.
51 § 5. Section 39 of the banking law, as amended by section 3 of part L
52 of chapter 58 of the laws of 2019, is amended to read as follows:
53 § 39. Orders of superintendent. 1. To appear and explain an apparent
54 violation. Whenever it shall appear to the superintendent that any bank-
55 ing organization, bank holding company, registered mortgage broker,
56 licensed mortgage banker, licensed student loan servicer, registered
A. 9588--A 9
1 mortgage loan servicer, licensed mortgage loan originator, licensed
2 lender, licensed buy-now-pay-later lender, licensed casher of checks,
3 licensed sales finance company, licensed insurance premium finance agen-
4 cy, licensed transmitter of money, licensed budget planner, out-of-state
5 state bank that maintains a branch or branches or representative or
6 other offices in this state, or foreign banking corporation licensed by
7 the superintendent to do business or maintain a representative office in
8 this state has violated any law or regulation, he or she may, in his or
9 her discretion, issue an order describing such apparent violation and
10 requiring such banking organization, bank holding company, registered
11 mortgage broker, licensed mortgage banker, licensed student loan servi-
12 cer, licensed mortgage loan originator, licensed lender, licensed buy-
13 now-pay-later lender, licensed casher of checks, licensed sales finance
14 company, licensed insurance premium finance agency, licensed transmitter
15 of money, licensed budget planner, out-of-state state bank that main-
16 tains a branch or branches or representative or other offices in this
17 state, or foreign banking corporation to appear before him or her, at a
18 time and place fixed in said order, to present an explanation of such
19 apparent violation.
20 2. To discontinue unauthorized or unsafe and unsound practices. When-
21 ever it shall appear to the superintendent that any banking organiza-
22 tion, bank holding company, registered mortgage broker, licensed mort-
23 gage banker, licensed student loan servicer, registered mortgage loan
24 servicer, licensed mortgage loan originator, licensed lender, licensed
25 buy-now-pay-later lender, licensed casher of checks, licensed sales
26 finance company, licensed insurance premium finance agency, licensed
27 transmitter of money, licensed budget planner, out-of-state state bank
28 that maintains a branch or branches or representative or other offices
29 in this state, or foreign banking corporation licensed by the super-
30 intendent to do business in this state is conducting business in an
31 unauthorized or unsafe and unsound manner, he or she may, in his or her
32 discretion, issue an order directing the discontinuance of such unau-
33 thorized or unsafe and unsound practices, and fixing a time and place at
34 which such banking organization, bank holding company, registered mort-
35 gage broker, licensed mortgage banker, licensed student loan servicer,
36 registered mortgage loan servicer, licensed mortgage loan originator,
37 licensed lender, licensed buy-now-pay-later lender, licensed casher of
38 checks, licensed sales finance company, licensed insurance premium
39 finance agency, licensed transmitter of money, licensed budget planner,
40 out-of-state state bank that maintains a branch or branches or represen-
41 tative or other offices in this state, or foreign banking corporation
42 may voluntarily appear before him or her to present any explanation in
43 defense of the practices directed in said order to be discontinued.
44 3. To make good impairment of capital or to ensure compliance with
45 financial requirements. Whenever it shall appear to the superintendent
46 that the capital or capital stock of any banking organization, bank
47 holding company or any subsidiary thereof which is organized, licensed
48 or registered pursuant to this chapter, is impaired, or the financial
49 requirements imposed by subdivision one of section two hundred two-b of
50 this chapter or any regulation of the superintendent on any branch or
51 agency of a foreign banking corporation or the financial requirements
52 imposed by this chapter or any regulation of the superintendent on any
53 licensed lender, licensed buy-now-pay-later lender, registered mortgage
54 broker, licensed mortgage banker, licensed student loan servicer,
55 licensed casher of checks, licensed sales finance company, licensed
56 insurance premium finance agency, licensed transmitter of money,
A. 9588--A 10
1 licensed budget planner or private banker are not satisfied, the super-
2 intendent may, in the superintendent's discretion, issue an order
3 directing that such banking organization, bank holding company, branch
4 or agency of a foreign banking corporation, registered mortgage broker,
5 licensed mortgage banker, licensed student loan servicer, licensed lend-
6 er, licensed buy-now-pay-later lender, licensed casher of checks,
7 licensed sales finance company, licensed insurance premium finance agen-
8 cy, licensed transmitter of money, licensed budget planner, or private
9 banker make good such deficiency forthwith or within a time specified in
10 such order.
11 4. To make good encroachments on reserves. Whenever it shall appear to
12 the superintendent that either the total reserves or reserves on hand of
13 any banking organization, branch or agency of a foreign banking corpo-
14 ration are below the amount required by or pursuant to this chapter or
15 any other applicable provision of law or regulation to be maintained, or
16 that such banking organization, branch or agency of a foreign banking
17 corporation is not keeping its reserves on hand as required by this
18 chapter or any other applicable provision of law or regulation, he or
19 she may, in his or her discretion, issue an order directing that such
20 banking organization, branch or agency of a foreign banking corporation
21 make good such reserves forthwith or within a time specified in such
22 order, or that it keep its reserves on hand as required by this chapter.
23 5. To keep books and accounts as prescribed. Whenever it shall appear
24 to the superintendent that any banking organization, bank holding compa-
25 ny, registered mortgage broker, licensed mortgage banker, licensed
26 student loan servicer, registered mortgage loan servicer, licensed mort-
27 gage loan originator, licensed lender, licensed buy-now-pay-later lend-
28 er, licensed casher of checks, licensed sales finance company, licensed
29 insurance premium finance agency, licensed transmitter of money,
30 licensed budget planner, agency or branch of a foreign banking corpo-
31 ration licensed by the superintendent to do business in this state, does
32 not keep its books and accounts in such manner as to enable him or her
33 to readily ascertain its true condition, he or she may, in his or her
34 discretion, issue an order requiring such banking organization, bank
35 holding company, registered mortgage broker, licensed mortgage banker,
36 licensed student loan servicer, registered mortgage loan servicer,
37 licensed mortgage loan originator, licensed lender, licensed buy-now-
38 pay-later lender, licensed casher of checks, licensed sales finance
39 company, licensed insurance premium finance agency, licensed transmitter
40 of money, licensed budget planner, or foreign banking corporation, or
41 the officers or agents thereof, or any of them, to open and keep such
42 books or accounts as he or she may, in his or her discretion, determine
43 and prescribe for the purpose of keeping accurate and convenient records
44 of its transactions and accounts.
45 6. As used in this section, "bank holding company" shall have the same
46 meaning as that term is defined in section one hundred forty-one of this
47 chapter.
48 § 6. Subdivision 1 of section 42 of the banking law, as amended by
49 chapter 65 of the laws of 1948, is amended to read as follows:
50 1. The name and the location of the principal office of every proposed
51 corporation, private banker, licensed lender, licensed buy-now-pay-later
52 lender and licensed casher of checks, the organization certificate,
53 private banker's certificate or application for license of which has
54 been filed for examination, and the date of such filing.
55 § 7. Subdivision 2 of section 42 of the banking law, as amended by
56 chapter 553 of the laws of 1960, is amended to read as follows:
A. 9588--A 11
1 2. The name and location of every licensed lender, licensed buy-now-
2 pay-later lender and licensed casher of checks, and the name, location,
3 amount of capital stock or permanent capital and amount of surplus of
4 every corporation and private banker and the minimum assets required of
5 every branch of a foreign banking corporation authorized to commence
6 business, and the date of authorization or licensing.
7 § 8. Subdivision 3 of section 42 of the banking law, as amended by
8 chapter 553 of the laws of 1960, is amended to read as follows:
9 3. The name of every proposed corporation, private banker, branch of a
10 foreign banking corporation, licensed lender, licensed buy-now-pay-later
11 lender and licensed casher of checks to which a certificate of authori-
12 zation or a license has been refused and the date of notice of refusal.
13 § 9. Subdivision 4 of section 42 of the banking law, as amended by
14 chapter 60 of the laws of 1957, is amended to read as follows:
15 4. The name and location of every private banker, licensed lender,
16 licensed casher of checks, sales finance company, licensed buy-now-pay-
17 later lender and foreign corporation the authorization certificate or
18 license of which has been revoked, and the date of such revocation.
19 § 10. Subdivision 5 of section 42 of the banking law, as amended by
20 chapter 249 of the laws of 1968, is amended to read as follows:
21 5. The name of every banking organization, licensed lender, licensed
22 casher of checks, licensed buy-now-pay-later lender and foreign corpo-
23 ration which has applied for leave to change its place or one of its
24 places of business and the places from and to which the change is
25 proposed to be made; the name of every banking organization which has
26 applied to change the designation of its principal office to a branch
27 office and to change the designation of one of its branch offices to its
28 principal office, and the location of the principal office which is
29 proposed to be redesignated as a branch office and of the branch office
30 which is proposed to be redesignated as the principal office.
31 § 11. Subdivision 6 of section 42 of the banking law, as amended by
32 chapter 249 of the laws of 1968, is amended to read as follows:
33 6. The name of every banking organization, licensed lender, licensed
34 casher of checks, licensed buy-now-pay-later lender and foreign corpo-
35 ration authorized to change its place or one of its places of business
36 and the date when and the places from and to which the change is author-
37 ized to be made; the name of every banking organization authorized to
38 change the designation of its principal office to a branch office and to
39 change the designation of a branch office to its principal office, the
40 location of the redesignated principal office and of the redesignated
41 branch office, and the date of such change.
42 § 12. Paragraph (a) of subdivision 1 of section 44 of the banking law,
43 as amended by section 4 of part L of chapter 58 of the laws of 2019, is
44 amended to read as follows:
45 (a) Without limiting any power granted to the superintendent under any
46 other provision of this chapter, the superintendent may, in a proceeding
47 after notice and a hearing, require any safe deposit company, licensed
48 lender, licensed buy-now-pay-later lender, licensed casher of checks,
49 licensed sales finance company, licensed insurance premium finance agen-
50 cy, licensed transmitter of money, licensed mortgage banker, licensed
51 student loan servicer, registered mortgage broker, licensed mortgage
52 loan originator, registered mortgage loan servicer or licensed budget
53 planner to pay to the people of this state a penalty for any violation
54 of this chapter, any regulation promulgated thereunder, any final or
55 temporary order issued pursuant to section thirty-nine of this article,
56 any condition imposed in writing by the superintendent in connection
A. 9588--A 12
1 with the grant of any application or request, or any written agreement
2 entered into with the superintendent.
3 § 13. This act shall take effect one year after it shall have become a
4 law. Effective immediately, the addition, amendment and/or repeal of
5 any rule or regulation authorized to be made by the superintendent
6 pursuant to this act is authorized to be made and completed on or before
7 such effective date.
