Bill Text: NY S07043 | 2009-2010 | General Assembly | Introduced
Bill Title: Enacts the "short-term financial services loan act"; authorize licensed cashers of checks to provide short-term loans under certain circumstances.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Introduced - Dead) 2010-06-25 - ORDERED TO THIRD READING CAL.1229 [S07043 Detail]
Download: New_York-2009-S07043-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
7043
I N S E N A T E
March 9, 2010
___________
Introduced by Sens. KLEIN, FOLEY, FARLEY -- read twice and ordered
printed, and when printed to be committed to the Committee on Banks
AN ACT to amend the banking law, in relation to enacting the "short-term
financial services loan act"
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 and may be cited as
2 the "short-term financial services loan act".
3 S 2. Subdivision 2 of section 17 of the banking law, as amended by
4 section 2 of part O of chapter 59 of the laws of 2006, is amended to
5 read as follows:
6 2. All general expenses, including in addition to the direct costs of
7 personal service, the cost of maintenance and operation, the cost of
8 retirement contributions made and workers' compensation premiums paid by
9 the state for or on account of personnel, rentals for space occupied in
10 state owned or state leased buildings and all other direct or indirect
11 costs, incurred in connection with the supervision of any person or
12 entity licensed, registered, or incorporated or otherwise formed pursu-
13 ant to this chapter shall be charged to and paid by them in such
14 proportions as the superintendent shall deem just and reasonable. The
15 provisions of this subdivision shall not be applicable to a bank holding
16 company, as that term is defined in article three-A of this chapter.
17 ALL EXPENSES OF THE DEPARTMENT FOR THE OPERATION OF THE BORROWER DATA-
18 BASE ESTABLISHED PURSUANT TO SECTION THREE HUNDRED SEVENTY-THREE-D OF
19 THIS CHAPTER SHALL BE CHARGED AND ALLOCATED AMONG ALL LICENSED CASHERS
20 OF CHECKS WHICH ENGAGE IN SHORT-TERM FINANCIAL SERVICES LOAN TRANS-
21 ACTIONS.
22 The superintendent shall require that partial payments of the charges
23 for expenses of each fiscal year commencing on or after April first,
24 nineteen hundred eighty-three shall be paid on March tenth of the
25 preceding fiscal year and on June tenth, September tenth and December
26 tenth of the fiscal year, or on such other dates as the superintendent
27 may prescribe. Each such payment shall be equal to twenty-five per
28 centum of the charges, or such other per centum or per centums as the
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15559-02-0
S. 7043 2
1 superintendent may prescribe, for the fiscal year as estimated by the
2 superintendent. The balance of the expenses shall be charged and paid
3 upon the determination of the actual amount due. An overpayment of
4 charges resulting from the requirements of this subdivision shall be
5 refunded or at the option of the assessed shall be applied as a credit
6 against the charges for the succeeding fiscal year. As an alternative,
7 if the estimated annual charge for the fiscal year is equal to or less
8 than the annual minimum assessment set by the superintendent, the super-
9 intendent may require full payment to be made on or before September
10 thirtieth or such other date of the fiscal year as the superintendent
11 may determine.
12 S 3. Subdivision 4 of section 18-a of the banking law, as added by
13 section 1 of part D-1 of chapter 109 of the laws of 2006, is amended to
14 read as follows:
15 4. The fee which shall be imposed for any application for an initial
16 license, registration, incorporation or for the formation of any other
17 entity pursuant to this chapter, or for a merger, acquisition, purchase
18 or sale of assets, change of control, or for any other application
19 requiring the approval of the superintendent or the banking board that
20 may necessitate, as determined by the superintendent, a determination
21 regarding the character or fitness and/or the safety and soundness of
22 such applicant or a similar investigative undertaking by the department,
23 shall be:
24 (a) twelve thousand five hundred dollars when such application relates
25 to a banking organization, bank holding company or, except as provided
26 in paragraph (b) of this subdivision, a foreign banking corporation;
27 (b) seven thousand five hundred dollars when such application relates
28 to licensing a branch, agency or representative office of a foreign
29 banking corporation;
30 (c) one thousand five hundred dollars when the application relates to
31 a mortgage broker; [or]
32 (d) THREE THOUSAND FIVE HUNDRED DOLLARS WHEN THE APPLICATION RELATES
33 TO LICENSING A CASHER OF CHECKS WHEN THE APPLICANT INTENDS TO ENGAGE IN
34 SHORT-TERM FINANCIAL SERVICES LOAN TRANSACTIONS. FIVE HUNDRED DOLLARS
35 OF SUCH FEE SHALL BE RETAINED BY THE DEPARTMENT TO BE USED SOLELY FOR
36 THE PURPOSE OF OPERATING THE BORROWER DATABASE ESTABLISHED PURSUANT TO
37 SECTION THREE HUNDRED SEVENTY-THREE-D OF THIS CHAPTER; OR
38 (E) three thousand dollars for all other such applications.
39 S 4. Paragraph (b) of subdivision 5 of section 18-a of the banking
40 law, as added by section 1 of part D-1 of chapter 109 of the laws of
41 2006, is amended to read as follows:
42 (b) two thousand dollars when the application relates to the licensing
43 of an additional location or change of location or the licensing of a
44 mobile unit of a licensed casher of checks. AN ADDITIONAL FEE OF TWO
45 HUNDRED FIFTY DOLLARS SHALL BE IMPOSED UPON A LICENSED CASHER OF CHECKS
46 IF IT ENGAGES IN SHORT-TERM FINANCIAL SERVICES LOAN TRANSACTIONS. SUCH
47 ADDITIONAL FEE SHALL BE RETAINED BY THE DEPARTMENT TO BE USED SOLELY FOR
48 THE PURPOSE OF OPERATING THE BORROWER DATABASE ESTABLISHED PURSUANT TO
49 SECTION THREE HUNDRED SEVENTY-THREE-D OF THIS CHAPTER; or
50 S 5. The closing paragraph of section 340 of the banking law, as added
51 by chapter 22 of the laws of 1990, is amended to read as follows:
52 Nothing in this article shall apply to licensed collateral loan
53 brokers OR LICENSED CASHERS OF CHECKS.
54 S 6. Subdivision 1 of section 373 of the banking law, as amended by
55 chapter 432 of the laws of 2004, is amended to read as follows:
S. 7043 3
1 1. [No] EXCEPT AS OTHERWISE AUTHORIZED BY THE PROVISIONS OF THIS ARTI-
2 CLE, NO licensee shall engage in the business of making loans of money,
3 credit, goods or things or discounting of notes, bills of exchange,
4 checks, or other evidences of debt pursuant to the provisions of article
5 nine of this chapter, nor shall a loan business or the negotiation of
6 loans or the discounting of notes, bills of exchange, checks or other
7 evidences of debt be conducted on the same premises where the licensee
8 is conducting business pursuant to the provisions of this article,
9 UNLESS SUCH ACTIVITY IS SPECIFICALLY AUTHORIZED BY THE PROVISIONS OF
10 THIS ARTICLE. Except as otherwise provided by regulation of the super-
11 intendent, all checks, drafts and money orders shall be deposited in the
12 licensee's bank account not later than the first business day following
13 the day on which they were cashed. No licensee shall at any time cash or
14 advance any moneys on a post-dated check or draft or engage in the busi-
15 ness of transmitting money or receiving money for transmission;
16 provided, however, that a licensee may cash a check payable on the first
17 banking business day following the date of cashing (a) if such check is
18 drawn by the United States, the state of New York, or any political
19 subdivision of the state of New York, or by any department, bureau,
20 agency, authority, instrumentality or officer, acting in his official
21 capacity, of the United States or of the state of New York or of any
22 political subdivision of the state of New York, or (b) if such check is
23 a payroll check drawn by an employer to the order of its employee in
24 payment for services performed by such employee. No licensee shall cash
25 any check, draft or money order if the face amount for which it is drawn
26 is in excess of fifteen thousand dollars; provided, however, that this
27 restriction shall not apply to the cashing of checks, drafts or money
28 orders drawn by the United States, any state thereof or any political
29 subdivision of any such state, or by any department, bureau, agency,
30 authority, instrumentality or officer, acting in his official capacity,
31 of the United States, any state thereof or any political subdivision of
32 any such state, or any banking institution, or to any check or draft
33 drawn by any insurance company, any broker or dealer registered with the
34 securities and exchange commission, or any attorney for the settlement
35 of claims, or to any check which has been certified by the banking
36 institution on which it has been drawn; provided further, however, that
37 any such restriction upon the maximum face amount that may be cashed by
38 a licensee shall not apply to the cashing of checks, drafts or money
39 orders by licensees for payees of such checks, drafts or money orders
40 that are other than natural persons. For purposes of this subdivision,
41 "banking institution" means any bank, trust company, savings bank,
42 savings and loan association or credit union which is incorporated,
43 chartered or organized under the laws of this state or any other state
44 or the United States.
45 S 7. The banking law is amended by adding seven new sections 373-a,
46 373-b, 373-c, 373-d, 373-e, 373-f and 373-g to read as follows:
47 S 373-A. SHORT-TERM FINANCIAL SERVICES LOAN TRANSACTIONS. NOTWITH-
48 STANDING ANY PROVISION OF SECTION THREE HUNDRED SEVENTY-THREE OF THIS
49 ARTICLE TO THE CONTRARY, A LICENSEE MAY ENGAGE IN SHORT-TERM FINANCIAL
50 SERVICES LOAN TRANSACTIONS AT THE LICENSEE'S PLACE OF BUSINESS, PROVIDED
51 THAT SUCH TRANSACTIONS ARE CONDUCTED PURSUANT TO THE PROVISIONS OF THIS
52 ARTICLE.
53 S 373-B. TERMS OF SHORT-TERM FINANCIAL SERVICES LOAN TRANSACTIONS. 1.
54 NO LICENSEE SHALL ENGAGE IN THE BUSINESS OF OFFERING SHORT-TERM FINAN-
55 CIAL SERVICES LOANS IN AMOUNTS OF LESS THAN THREE HUNDRED DOLLARS NOR
56 MORE THAN TWO THOUSAND DOLLARS, OR MORE THAN TWENTY-FIVE PERCENT OF THE
S. 7043 4
1 BORROWER'S GROSS MONTHLY INCOME, WHICHEVER SHALL BE LESS. A LICENSED
2 CASHER OF CHECKS SHALL NOT CONTRACT FOR, EXACT OR RECEIVE, DIRECTLY OR
3 INDIRECTLY, ON OR IN CONNECTION WITH ANY LOAN, ANY CHARGES WHETHER FOR
4 INTEREST, COMPENSATION, CONSIDERATION, EXPENSE OR ANY OTHER PURPOSE,
5 WHICH IN THE AGGREGATE ARE GREATER THAN AUTHORIZED IN THIS ARTICLE.
6 2. THE TERM OF A SHORT-TERM FINANCIAL SERVICES LOAN SHALL BE NOT LESS
7 THAN NINETY DAYS NOR MORE THAN ONE HUNDRED EIGHTY DAYS. A LICENSEE WHICH
8 MAKES A SHORT-TERM FINANCIAL SERVICES LOAN SHALL OFFER THE BORROWER THE
9 OPPORTUNITY TO PAY THE PRINCIPAL, FEES AND INTEREST AUTHORIZED BY THIS
10 ARTICLE IN SUBSTANTIALLY EQUAL INSTALLMENTS OVER THE TERM OF THE LOAN
11 WITH THE EXCEPTION OF THE FIRST PAYMENT. SUCH INSTALLMENTS SHALL BE DUE
12 NOT MORE THAN TWO DAYS AFTER THE DATE ON WHICH THE BORROWER RECEIVES A
13 REGULARLY SCHEDULED INCOME PAYMENT; PROVIDED, HOWEVER, THAT THERE SHALL
14 BE AT LEAST A THIRTEEN DAY PERIOD BETWEEN EACH INSTALLMENT. FURTHER-
15 MORE, THE FIRST INSTALLMENT SHALL NOT BE DUE BEFORE THE BORROWER'S NEXT
16 PAY DATE THAT IS AT LEAST THIRTEEN DAYS AFTER THE SHORT-TERM FINANCIAL
17 SERVICES LOAN TRANSACTION IS CONSUMMATED. EVERY SHORT-TERM FINANCIAL
18 SERVICES LOAN SHALL HAVE NOT LESS THAN TWO SCHEDULED INSTALLMENTS. NO
19 SCHEDULED INSTALLMENT PAYMENT SHALL EXCEED TEN PERCENT OF THE BORROWER'S
20 GROSS MONTHLY INCOME.
21 3. A LICENSEE MAY PROVIDE THE PROCEEDS OF A SHORT-TERM FINANCIAL
22 SERVICES LOAN TO THE BORROWER IN THE FORM OF A NEGOTIABLE INSTRUMENT,
23 MONEY ORDER, CASH OR REASONABLE ELECTRONIC PAYMENT METHOD. NO ADDITIONAL
24 FEE MAY BE CHARGED TO A BORROWER BY THE LICENSEE MAKING THE LOAN IN
25 ORDER FOR THE BORROWER TO GAIN ACCESS TO THE PROCEEDS OF SUCH A LOAN.
26 4. SHORT-TERM FINANCIAL SERVICES LOANS, WHETHER IN SCHEDULED INSTALL-
27 MENTS OR IN WHOLE, MAY BE REPAID BY THE BORROWER IN CASH, ELECTRONIC
28 FUNDS TRANSFER FROM THE BORROWER'S BANK ACCOUNT OR ANY OTHER REASONABLE
29 PAYMENT MECHANISM. IF AN ELECTRONIC FUNDS TRANSFER OR OTHER REASONABLE
30 PAYMENT MECHANISM IS ELECTED AS THE METHOD FOR REPAYING A SHORT-TERM
31 FINANCIAL SERVICES LOAN, THE BORROWER MAY MAKE ANY SCHEDULED PAYMENT TO
32 THE LICENSEE AT ANY TIME, IN WHOLE OR IN PART, OF ANY PAYMENT INSTALL-
33 MENT. EVERY LICENSEE SHALL PROVIDE A BORROWER WITH A DATED RECEIPT
34 SHOWING THE AMOUNT PAID AND THE BALANCE DUE ON THE LOAN AFTER EACH
35 PAYMENT.
36 5. NO SHORT-TERM FINANCIAL SERVICES LOAN SHALL BE PROVIDED TO ANY
37 PERSON, UNTIL THE LICENSEE SHALL HAVE PROVIDED SUCH PERSON WITH A COPY
38 OF A WRITTEN AGREEMENT RELATING TO SUCH LOAN, WHICH SHALL BE SIGNED BY
39 THE LICENSEE AND THE BORROWER, AND WHICH SHALL INCLUDE:
40 (A) THE NAME AND ADDRESS OF THE BORROWER;
41 (B) THE NAME, ADDRESS AND TELEPHONE NUMBER OF THE LICENSEE, AND THE
42 NAME AND TITLE OF THE AGENT OF THE LICENSEE WHO SIGNS THE AGREEMENT ON
43 BEHALF OF THE LICENSEE;
44 (C) THE DATE OF THE AGREEMENT;
45 (D) A SCHEDULE OR DESCRIPTION OF REQUIRED INSTALLMENT PAYMENTS,
46 INCLUDING THE PRINCIPAL AMOUNT OF THE LOAN, APPLICABLE INTEREST RATES,
47 FEES CHARGED AND METHOD OF PAYMENT;
48 (E) NOTICE THAT THE BORROWER SHALL HAVE THE RIGHT TO PREPAY THE LOAN
49 PRIOR TO MATURITY BY PAYING THE LICENSEE THE PRINCIPAL AMOUNT AND ALL
50 ACCRUED AND UNPAID INTEREST, FEES AND CHARGES;
51 (F) NOTICE THAT THE BORROWER HAS THE RIGHT TO RESCIND THE SHORT-TERM
52 FINANCIAL SERVICES LOAN PURSUANT TO SUBDIVISION SEVEN OF THIS SECTION;
53 AND
54 (G) THE FOLLOWING STATEMENT IN AT LEAST FOURTEEN POINT BOLD FACE TYPE:
55 "(I) CREDIT COUNSELING AVAILABILITY. YOU, THE BORROWER, SHOULD CONSID-
56 ER CONTACTING AN INDEPENDENT, NOT-FOR-PROFIT CREDIT COUNSELING AGENCY
S. 7043 5
1 APPROVED BY THE SUPERINTENDENT OF BANKS. THE STATE BANKING DEPARTMENT
2 MAY, BY RULE AND REGULATION, PROMULGATE THE CONTACT INFORMATION AND
3 OTHER DISCLOSURES TO BE PROVIDED IN SUCH NOTICE.
4 (II) NO CRIMINAL PROSECUTION OR SECURITY INTEREST. YOU CANNOT BE PROS-
5 ECUTED IN CRIMINAL COURT TO COLLECT ANY OUTSTANDING DEBT ON THIS LOAN,
6 AND THE LENDER MAY NOT TAKE OR ATTEMPT TO TAKE AN INTEREST IN ANY OF
7 YOUR REAL OR PERSONAL PROPERTY TO SECURE THIS LOAN."
8 6. EVERY LICENSEE SHALL MAKE READILY AVAILABLE TO EACH BORROWER, IN A
9 FORM PRESCRIBED BY THE SUPERINTENDENT, A FULL AND ACCURATE SCHEDULE OF
10 CHARGES ON ALL SHORT-TERM FINANCIAL SERVICES LOANS.
11 7. A BORROWER MAY RESCIND A SHORT-TERM FINANCIAL SERVICES LOAN TRANS-
12 ACTION FOR ANY REASON, NOT LATER THAN THE CLOSE OF BUSINESS ON THE BUSI-
13 NESS DAY NEXT SUCCEEDING THE DAY ON WHICH SUCH TRANSACTION WAS ENTERED
14 INTO, BY INFORMING THE LICENSEE IN WRITING THAT SUCH BORROWER WANTS TO
15 RESCIND THE TRANSACTION AND DELIVERING THE FULL AMOUNT OF THE PROCEEDS
16 OF SUCH TRANSACTION TO THE LICENSEE. UPON THE DELIVERY OF THE PROCEEDS
17 OF A LOAN TO THE BORROWER PURSUANT TO THIS SUBDIVISION, ALL FEES AND
18 CHARGES IMPOSED BY THE LICENSEE UPON THE BORROWER SHALL BE REFUNDED. THE
19 LICENSEE SHALL PROVIDE THE BORROWER WITH A RECEIPT AS PROOF THAT THE
20 TRANSACTION HAS BEEN RESCINDED.
21 8. UPON THE COMPLETION OF ALL SCHEDULED PAYMENTS ON A SHORT-TERM
22 FINANCIAL SERVICES LOAN BY A BORROWER, ANY LICENSEE MAY ENTER INTO A NEW
23 SHORT-TERM FINANCIAL SERVICES LOAN TRANSACTION WITH SUCH BORROWER.
24 9. A BORROWER MAY REFINANCE A SHORT-TERM FINANCIAL SERVICES LOAN A
25 SINGLE TIME PRIOR TO THE MATURITY OF SUCH LOAN IF THE BORROWER HAS MADE
26 NOT LESS THAN THREE CONSECUTIVE INSTALLMENT PAYMENTS THEREON IN A TIMELY
27 MANNER. A BORROWER WHO HAS REFINANCED A SHORT-TERM FINANCIAL SERVICES
28 LOAN SHALL NOT BE ELIGIBLE FOR A NEW OR ADDITIONAL CREDIT ADVANCE FROM
29 ANY LICENSEE UNTIL SUCH LOAN IS PAID IN FULL.
30 S 373-C. FEES AND CHARGES. 1. THE SUPERINTENDENT SHALL BY RULE ESTAB-
31 LISH, AFTER CONDUCTING PUBLIC HEARINGS THEREON, THE MAXIMUM RATE OF
32 INTEREST AND FEES THAT MAY BE IMPOSED UPON SHORT-TERM FINANCIAL SERVICES
33 LOANS, INCLUDING, BUT NOT LIMITED TO, LOAN ORIGINATION, MONTHLY MAINTE-
34 NANCE AND LATE FEES.
35 2. THE SUPERINTENDENT MAY ANNUALLY AMEND THE MAXIMUM RATES AND FEES
36 ESTABLISHED PURSUANT TO SUBDIVISION ONE OF THIS SECTION; PROVIDED,
37 HOWEVER, THAT NO SUCH AMENDMENT SHALL OCCUR UNTIL THE SUPERINTENDENT
38 RECEIVES A PETITION FOR THE AMENDMENT FROM NOT LESS THAN TWENTY-FIVE
39 PERCENT OF THE LICENSEES IN THE STATE OR FROM AN ASSOCIATION REPRESENT-
40 ING NOT LESS THAN TWENTY-FIVE PERCENT OF THE LICENSEES IN THE STATE.
41 UPON THE RECEIPT OF ANY SUCH PETITION, THE SUPERINTENDENT SHALL MAKE A
42 DETERMINATION THEREON WITHIN ONE HUNDRED TWENTY DAYS. THE PETITION MAY
43 BE ACCEPTED OR DENIED, OR THE SUPERINTENDENT MAY OTHERWISE MODIFY THE
44 MAXIMUM RATES AND FEES, AFTER CONDUCTING PUBLIC HEARINGS THEREON.
45 3. IN THE EVENT THERE ARE INSUFFICIENT FUNDS TO HONOR ANY NEGOTIABLE
46 INSTRUMENT, ELECTRONIC FUNDS TRANSFER DEBIT OR OTHER REASONABLE ELEC-
47 TRONIC PAYMENT MECHANISM PROVIDED TO A LICENSEE FOR A SCHEDULED PAYMENT
48 ON BEHALF OF A BORROWER, SUCH LICENSEE MAY IMPOSE A PROCESSING FEE UPON
49 THE BORROWER PURSUANT TO SECTION 5-328 OF THE GENERAL OBLIGATIONS LAW.
50 ONLY ONE SUCH FEE MAY BE IMPOSED WITH RESPECT TO EACH DISHONORED NEGOTI-
51 ABLE INSTRUMENT, ELECTRONIC FUNDS TRANSFER DEBIT OR OTHER REASONABLE
52 ELECTRONIC PAYMENT MECHANISM.
53 4. IN THE ESTABLISHMENT OF THE MAXIMUM RATE OF INTEREST AND FEES
54 PURSUANT TO SUBDIVISIONS ONE AND TWO OF THIS SECTION, THE SUPERINTENDENT
55 SHALL CONSIDER, AMONG OTHER THINGS:
S. 7043 6
1 (A) THE INCOME, COSTS AND EXPENSES OF THE OPERATION OF LICENSEES'
2 BUSINESSES, INCLUDING LOSS AND DEFAULT RATES;
3 (B) THE INTEREST RATES AND FEES IMPOSED BY LENDERS IN OTHER STATES FOR
4 THE SAME OR SIMILAR SERVICES, AND THE FACTORS UPON WHICH SUCH RATES ARE
5 BASED;
6 (C) FOR THE PURPOSES OF SUBDIVISION TWO OF THIS SECTION, THE RATES AND
7 FEES AUTHORIZED TO BE IMPOSED IN PREVIOUS YEARS;
8 (D) THE REASONABLE PROFIT FOR LICENSEES FROM THE OFFERING AND
9 PROVISION OF SHORT-TERM FINANCIAL SERVICES LOANS; AND
10 (E) THE RATE OF RETURN ON INVESTMENT OR SUCH OTHER RISK ADJUSTED PROF-
11 ITABILITY STANDARD AS THE SUPERINTENDENT MAY DETERMINE TO BE NECESSARY
12 TO INDUCE THE PROVISION OF SHORT-TERM FINANCIAL SERVICES LOANS THROUGH-
13 OUT THE STATE.
14 5. THE PROVISIONS OF SECTION 5-501 OF THE GENERAL OBLIGATIONS LAW AND
15 SECTIONS 190.40, 190.42 AND 190.45 OF THE PENAL LAW SHALL NOT APPLY TO
16 THE PROVISION OF SHORT-TERM FINANCIAL SERVICES LOANS PURSUANT TO THIS
17 ARTICLE.
18 6. INTEREST ON SHORT-TERM FINANCIAL SERVICES LOANS SHALL NOT BE PAID,
19 DEDUCTED OR RECEIVED IN ADVANCE. NOR SHALL INTEREST THEREON BE
20 COMPOUNDED, HOWEVER INTEREST ON AN EXTENSION OF CREDIT SHALL:
21 (A) BE COMPUTED AND PAID ONLY AS A PERCENTAGE OF THE UNPAID PRINCIPAL
22 BALANCE OR PORTION OF THE UNPAID PRINCIPAL BALANCE; AND
23 (B) BE COMPUTED ON THE BASIS OF THE NUMBER OF DAYS ACTUALLY ELAPSED.
24 ALL SUCH INTEREST SHALL BE PAID BEFORE SUCH A LOAN MAY BE PAID IN FULL.
25 S 373-D. BORROWER DATABASE. 1. THE SUPERINTENDENT SHALL ESTABLISH AND
26 MAINTAIN A DATABASE WHICH SHALL BE ACCESSIBLE BY LICENSEES BY TELEPHONE
27 AND THE INTERNET. THE PURPOSE OF SUCH DATABASE SHALL BE TO ENABLE LICEN-
28 SEES TO VERIFY WHETHER ANY PERSON HAS AN OUTSTANDING SHORT-TERM FINAN-
29 CIAL SERVICES LOAN. EACH LICENSEE SHALL SUBMIT TO THE SUPERINTENDENT,
30 PRIOR TO ENTERING INTO ANY SHORT-TERM FINANCIAL SERVICES LOAN TRANS-
31 ACTION, DATA RELATING TO SUCH TRANSACTION, IN SUCH FORMAT AS THE SUPER-
32 INTENDENT SHALL DETERMINE, WHICH SHALL INCLUDE, BUT NOT BE LIMITED TO,
33 THE BORROWER'S NAME, EMPLOYMENT AUTHORIZATION ALIEN NUMBER, ADDRESS,
34 DRIVER'S LICENSE NUMBER, AMOUNT OF LOAN, DATE OF LOAN TRANSACTION, THE
35 SCHEDULE OF INSTALLMENT PAYMENTS AND THE DATE THAT THE TRANSACTION WILL
36 BE CLOSED. EVERY LICENSEE MAY RELY ON THE INFORMATION IN THE BORROWER
37 DATABASE AS ACCURATE AND NOT SUBJECT TO ANY ADMINISTRATIVE PENALTY OR
38 CIVIL LIABILITY AS THE RESULT OF RELYING UPON INACCURATE INFORMATION
39 CONTAINED IN SUCH DATABASE.
40 2. PRIOR TO ENTERING INTO ANY SHORT-TERM FINANCIAL SERVICES LOAN TRAN-
41 SACTION, A LICENSEE SHALL QUERY THE BORROWER DATABASE AND SHALL RETAIN
42 EVIDENCE OF SUCH QUERY FOR REVIEW BY THE SUPERINTENDENT FOR A PERIOD OF
43 FIVE YEARS. SUCH DATABASE SHALL ONLY AUTHORIZE A LICENSEE TO ENTER INTO
44 A SHORT-TERM FINANCIAL SERVICES LOAN TRANSACTION IF THE TRANSACTION IS
45 AUTHORIZED PURSUANT TO THIS ARTICLE. DURING ANY PERIOD OF TIME THAT THE
46 INFORMATION ON THE BORROWER DATABASE IS UNAVAILABLE FOR ANY REASON, A
47 LICENSEE MAY RELY ON THE APPLICANT'S WRITTEN REPRESENTATIONS TO VERIFY
48 THAT ENTERING INTO A SHORT-TERM FINANCIAL SERVICES LOAN TRANSACTION WITH
49 THE APPLICANT IS PERMISSIBLE.
50 3. THE SUPERINTENDENT AND DEPARTMENT SHALL MAINTAIN THE BORROWER DATA-
51 BASE AND TAKE ALL ACTIONS NECESSARY TO PROTECT THE CONFIDENTIALITY AND
52 SECURITY OF THE INFORMATION AND DATA CONTAINED THEREIN. SUCH DATABASE
53 MAY BE UTILIZED BY THE DEPARTMENT FOR THE PURPOSE OF ENFORCING THE
54 PROVISIONS OF THIS ARTICLE. INFORMATION AND DATA IN THE BORROWERS DATA-
55 BASE SHALL NOT BE DISTRIBUTED TO ANY PERSON OR ENTITY FOR PROFIT NOR
56 SOLD TO ANY PARTY OR ENTITY.
S. 7043 7
1 4. UPON A LICENSEE'S QUERY OF THE BORROWERS DATABASE, SUCH DATABASE
2 SHALL INDICATE WHETHER AN APPLICANT FOR A SHORT-TERM FINANCIAL SERVICES
3 LOAN IS ELIGIBLE FOR SUCH A LOAN AND, IF THE APPLICANT IS INELIGIBLE,
4 THE REASON FOR SUCH INELIGIBILITY. IF SUCH DATABASE INDICATES THAT AN
5 APPLICANT IS INELIGIBLE, THEN THE APPLICANT SHALL DIRECT ANY FURTHER
6 INQUIRY RELATING THERETO TO THE DEPARTMENT AND NOT TO THE LICENSEE. THE
7 BORROWER DATABASE SHALL BE DEEMED CONFIDENTIAL AND NOT SUBJECT TO THE
8 PROVISIONS OF ARTICLE SIX OF THE PUBLIC OFFICERS LAW.
9 S 373-E. PROHIBITED ACTS. 1. NO LICENSEE SHALL CAUSE A BORROWER TO BE
10 OBLIGATED ON MORE THAN ONE SHORT-TERM FINANCIAL SERVICES LOAN AT ANY
11 SINGLE TIME.
12 2. NO LICENSEE SHALL TAKE AN ASSIGNMENT OF THE EARNINGS OF A BORROWER
13 FOR THE PAYMENT OR AS SECURITY FOR THE PAYMENT OF ANY SHORT-TERM FINAN-
14 CIAL SERVICES LOAN. EVERY ASSIGNMENT OF EARNINGS IN VIOLATION OF THIS
15 SUBDIVISION SHALL BE VOID AND UNENFORCEABLE BY THE ASSIGNEE.
16 3. NO LICENSEE SHALL RENEW OR EXTEND ANY SHORT-TERM FINANCIAL SERVICES
17 LOAN FOR A FEE, EXCEPT AS PROVIDED IN SUBDIVISION NINE OF SECTION THREE
18 HUNDRED SEVENTY-THREE-B OF THIS ARTICLE.
19 4. NO LICENSEE SHALL THREATEN OR CAUSE TO BE FILED ANY CRIMINAL
20 COMPLAINT AGAINST A BORROWER WHO FAILS TO MAKE ANY SCHEDULED PAYMENT.
21 5. A SHORT-TERM FINANCIAL SERVICES LOAN AGREEMENT SHALL ONLY BE
22 ENFORCEABLE, WITH REGARD TO A DEFAULT BY THE BORROWER, TO THE EXTENT
23 THAT THE BORROWER FAILS TO MAKE A SCHEDULED PAYMENT PURSUANT TO SUCH
24 AGREEMENT.
25 6. NO SHORT-TERM FINANCIAL SERVICES LOAN AGREEMENT SHALL PROVIDE FOR
26 THE PAYMENT BY THE BORROWER OF THE LICENSEE'S ATTORNEYS FEES.
27 7. NO LICENSEE SHALL REQUIRE THE BORROWER TO AGREE TO OR EXECUTE ANY
28 CONFESSION OF JUDGMENT OR POWER OF ATTORNEY IN FAVOR OF ANY LICENSEE OR
29 IN FAVOR OF ANY OTHER PERSON, AND SUCH CONFESSION SHALL BE VOID AND
30 UNENFORCEABLE.
31 8. NO SHORT-TERM FINANCIAL SERVICES LOAN SHALL IN ANY MANNER BE
32 SECURED BY PERSONAL OR REAL PROPERTY.
33 9. NO LICENSEE SHALL ADVERTISE, DISPLAY, DISTRIBUTE, TELECAST OR
34 BROADCAST, OR CAUSE OR PERMIT TO BE ADVERTISED, DISPLAYED, DISTRIBUTED,
35 TELECAST OR BROADCAST, IN ANY MANNER WHATSOEVER, ANY FALSE, MISLEADING
36 OR DECEPTIVE STATEMENT WITH REGARD TO THE RATES, TERMS, FEES OR CONDI-
37 TIONS FOR SHORT-TERM FINANCIAL SERVICES LOAN TRANSACTIONS.
38 S 373-F. LICENSEE BOOKS AND RECORDS. EVERY LICENSEE SHALL MAINTAIN ALL
39 SUCH BOOKS, ACCOUNTS AND RECORDS AS WILL ENABLE THE SUPERINTENDENT TO
40 ENFORCE THE PROVISIONS OF THIS ARTICLE.
41 S 373-G. EXAMINATION OF SHORT-TERM FINANCIAL SERVICES TRANSACTIONS.
42 THE SUPERINTENDENT, OR HIS OR HER DESIGNEE, MAY FROM TIME TO TIME INVES-
43 TIGATE THE SHORT-TERM FINANCIAL SERVICES TRANSACTIONS AND BUSINESS, AND
44 EXAMINE THE BOOKS, ACCOUNTS AND RECORDS RELATING THERETO OF EVERY LICEN-
45 SEE.
46 S 8. This act shall take effect on the one hundred eightieth day after
47 it shall have become a law; provided that, effective immediately, any
48 rules and regulations necessary to implement the provisions of this act
49 on its effective date shall be added, amended and/or repealed on or
50 before such date.
