Bill Text: NY A08063 | 2021-2022 | General Assembly | Introduced
Bill Title: Relates to civil penalties associated with financial frauds; redefines financial product or service to include warranties sold or provided to a consumer or small business or any guaranty or suretyship provided by a consumer.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2021-09-15 - enacting clause stricken [A08063 Detail]
Download: New_York-2021-A08063-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 8063 2021-2022 Regular Sessions IN ASSEMBLY June 11, 2021 ___________ Introduced by M. of A. PICHARDO -- read once and referred to the Commit- tee on Banks AN ACT to amend the financial services law, in relation to civil penal- ties for financial fraud The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 408 of the financial services law is amended to 2 read as follows: 3 § 408. Civil penalty. [(a)] In addition to any civil or criminal 4 liability provided by law, the superintendent may, after notice and 5 hearing, levy a civil penalty: 6 [(1)] (a) not to exceed five thousand dollars per offense, for: 7 [(A)] (1) any [intentional] fraud [or intentional], misrepresentation 8 [of a material fact], or unfair, deceptive, or abusive act or practice 9 with respect to a financial product or service or involving any person 10 offering to provide or providing financial products or services or 11 involving any service provider utilized by any person offering to 12 provide or providing financial products or services; or 13 [(B)] (2) any violation of state or federal fair debt collection prac- 14 tices or federal or state fair lending laws; and 15 [(2)] (b) not to exceed one thousand dollars for any other violation 16 of this chapter or the regulations issued thereunder, provided that 17 there shall be no civil penalty under this section for violations of 18 article five of this chapter or the regulations issued thereunder; and 19 [(3)] (c) provided, however, that: 20 [(A)] (1) penalties for regulated persons under the banking law shall 21 be as provided for in the banking law and penalties for regulated 22 persons under the insurance law shall be as provided for in the insur- 23 ance law; and EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10233-01-1A. 8063 2 1 [(B)] (2) the superintendent shall not impose or collect any penalty 2 under this section in addition to any penalty or fine for the same act 3 or omission that is imposed under the insurance law or banking law; and 4 [(C)] (3) nothing in this section shall affect the construction or 5 interpretation of the term "fraud" as it is used in any other provision 6 of the consolidated or unconsolidated law. 7 [(b) Civil penalties received by the superintendent pursuant to this8section shall be applied on an annual basis as follows: funds shall be9applied first to reduce the assessments charged on persons regulated10under the insurance law and the banking law pursuant to section two11hundred six of this chapter up to the full amount paid by persons regu-12lated under the insurance law and banking law for the operating expenses13of the financial frauds and consumer protection unit not attributable to14regulation under the insurance or banking law for the fiscal year in15which such penalties are received, such amount shall be applied to any16assessment in the following year, and any remaining funds shall be paid17to the general fund. The superintendent shall have discretion to deter-18mine how operating expenses which are not solely attributable to regu-19lating persons under either the insurance law or the banking law shall20be allocated.] 21 § 2. Paragraph 2 of subsection (a) of section 104 of the financial 22 services law is amended to read as follows: 23 (2) "Financial product or service" shall mean: (A) any financial prod- 24 uct or financial service offered or provided by any person regulated or 25 required to be regulated by the superintendent pursuant to the banking 26 law or the insurance law or any other financial product or service 27 offered or sold to consumers except financial products or services: (i) 28 regulated under the exclusive jurisdiction of a federal agency or 29 authority, (ii) regulated for the purpose of consumer or investor 30 protection by any other state agency, state department or state public 31 authority, or (iii) where rules or regulations promulgated by the super- 32 intendent on such financial product or service would be preempted by 33 federal law; [and] or 34 (B) ["Financial product or service" shall also not include the follow-35ing, when offered or provided by a provider of consumer goods or36services: (i) the extension of credit directly to a consumer exclusive-37ly for the purpose of enabling that consumer to purchase such consumer38good or service directly from the seller, (ii) the collection of debt39arising from such credit, or (iii) the sale or conveyance of such debt40that is delinquent or otherwise in default] any warranty sold or 41 provided to a consumer or small business or any guaranty or suretyship 42 provided by a consumer. 43 § 3. This act shall take effect immediately.