Section 491. Definitions. 492. License. 492-a. Changes in control. 493. Action by superintendent on application. 494. License form; posting; limitations. 495. Revocation, suspension or surrender of licenses. 496. Judicial review. 497. Investigations and examinations. 498. Complaints. 498-a. Hearings and investigations; subpoena. 498-b. Regulations and rulings. 499. Violations and penalties. 501. Repeal of inconsistent acts. 502. Severability. S 491. Definitions. In this article, unless the context or subject matter otherwise requires: 1. "Goods" means all chattels personal, but not including money and things in action. 2. "Motor vehicle" or "vehicle" means any device propelled or drawn by any power other than muscular power, upon or by which any person or property is or may be transported or drawn upon a public highway, road or street. Unless otherwise specified, "motor vehicle" or "vehicle" also means a "mobile home" or "manufactured home". "Mobile home" or "manufactured home" means a structure, transportable in one or more sections, which in the traveling mode, is eight body feet or more in width or forty body feet or more in length, or when erected on site, is three hundred twenty or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to required utilities, and includes the plumbing, heating, air-conditioning and electrical systems contained therein. 3. "Instalment buyer" or "buyer" or "retail buyer" means a person who buys goods from a retail seller and who executes a retail instalment contract in connection therewith. 4. "Instalment seller" or "seller" or "retail seller" means a person who sells goods to a retail buyer under or subject to a retail instalment contract. 5. "Retail instalment sale" or "sale" means a sale, other than for a commercial or business use or for the purpose of resale, of goods by a retail seller to a retail buyer for a time sale price payable in two or more instalments, payment of which is secured by a retail instalment contract. 6. "Retail instalment contract" or "contract" means an agreement, entered into in this state, pursuant to which the title to, the property or a security interest in or a lien upon the goods, which are the subject matter of a retail instalment sale, is retained or taken by a retail seller from a retail buyer as security, in whole or in part, for the buyer`s obligation. The term includes such an agreement wherever entered into if executed by the buyer in this state and if solicited in person by a salesman or other person acting on his own behalf or that of the seller. The term also includes a contract whereby a security interest in favor of the seller is created or retained and a contract for the bailment or leasing of goods by which the bailee or lessee contracts to pay as compensation for their use a sum substantially equivalent to or in excess of their value and by which it is agreed that the bailee or lessee is bound to become, or for no other or for a nominal consideration has the option of becoming, the owner of the goods upon full compliance with the terms of the contract. 6-a. "Retail instalment obligation" or "obligation" means an agreement, entered into in this state, pursuant to which the buyer promises to pay, in instalments, the time sale price or prices of goods and/or services, or any part thereof. The term does not include (a) a retail instalment contract, (b) a retail instalment credit agreement or (c) an obligation which is intended to be and is ultimately insured or guaranteed under title three of the act of Congress entitled "Servicemen`s Readjustment Act of 1944". 6-b. "Retail instalment credit agreement" or "credit agreement" means an agreement entered into in this state, pursuant to which the buyer promises to pay, in instalments, his outstanding indebtedness from time to time to a retail seller, not evidenced by a retail instalment contract or obligation, for one or more items of goods or services, whenever purchased or obtained, which provides for a service charge and under which instalment payments apply to his outstanding indebtedness from time to time. 7. "Sales finance company" means a person engaged, in whole or in part, directly or indirectly, in the business of purchasing or otherwise acquiring retail instalment contracts, obligations or credit agreements made by and between other parties, or any interest therein. The term includes a retail seller of motor vehicles engaged, in whole or in part, in the business of holding retail instalment contracts acquired from retail buyers, which have aggregate unpaid time balances of twenty-five thousand dollars or more at any one time, exclusive of contracts repurchased from a sales finance company or financing agency, under an agreement to repurchase in case of default entered into as an incident to the bona fide sale thereof to a sales finance company or financing agency. The term does not include the pledgee of an aggregate number of contracts to secure a bona fide loan thereon. The term includes a person engaged, in whole or in part, directly or indirectly, in the business of entering into retail instalment credit agreements with retail buyers pursuant to subdivision eleven of section four hundred thirteen of the personal property law. 8. "Superintendent" means the superintendent of banking. 9. "Person" means an individual, partnership, corporation, association or other group, however organized. 10. Words in the singular include the plural and vice versa. S 492. License. 1. No person, except a bank, savings bank, savings and loan association, trust company, private banker or investment company, organized under the banking law of this state and authorized to accept deposits, or licensed lender conducting business pursuant to the provisions of article nine of this chapter, shall engage in the business of a sales finance company in this state without a license therefor obtained from the superintendent, as provided in this article. 1-a. Subdivision one of this section does not apply to corporations subject to the insurance law and corporations and private bankers subject to the banking law in exercising the powers granted to them by chapter eight hundred ninety-seven of the laws of nineteen hundred thirty-four as heretofore or hereafter enacted. 2. Application for a license required under this article shall be in writing, under oath, and in the form prescribed by the superintendent, and shall contain the following: (a) The exact name of the applicant and date of incorporation, if incorporated; (b) The complete address where the business is to be conducted, showing the street and number, if any, the office building and room number, if any, and the municipality and county; (c) If the applicant has one or more branches, subsidiaries or affiliates operating in this state, the complete address of each such place of business; and (d) The name and resident address of the owner or partners of the applicant or, if a corporation or association, of the directors, trustees and principal officers, and of any stockholder owning twenty per centum or more of its stock; and (e) Such other pertinent information as the superintendent may require. 3. Where an applicant operates several places of business, separate applications for license shall be made for each such place of business. 4. (a) At the time of filing an application for license, the applicant shall pay to the superintendent the license fee and, upon original application or upon the application subsequent to denial of application, or revocation, suspension or surrender of a license, an investigation fee. (b) The license fee for each calendar year or part thereof shall be three hundred dollars for each place of business, payable on or before the fifteenth day of December for the next succeeding calendar year, except that if a license is issued after June thirtieth in any year such fee shall be one hundred fifty dollars for that year. (c) The investigation fee, when required by this section, shall be one hundred fifty dollars, except that, when an applicant files applications for licenses for three or more places of business at the same time, the total investigation fee for all the applications shall be four hundred fifty dollars. S 492-a. Changes in control. 1. It shall be unlawful except with the prior approval of the superintendent for any action to be taken which results in a change of control of the business of a licensee. Prior to any change of control, the person desirous of acquiring control of the business of a licensee shall make written application to the superintendent and pay an investigation fee of one hundred fifty dollars to the superintendent. The application shall contain such information as the superintendent, by rule or regulation, may prescribe as necessary or appropriate for the purpose of making the determination required by subdivision two of this section. 2. The superintendent shall approve or disapprove the proposed change of control of a licensee in accordance with the provisions of subdivision one of section four hundred ninety-three of this article. The superintendent shall approve or disapprove the application in writing within ninety days after the date the application is filed with the superintendent. 3. For a period of six months from the date of qualification thereof and for such additional period of time as the superintendent may prescribe, in writing, the provisions of subdivisions one and two of this section shall not apply to a transfer of control by operation of law to the legal representative, as hereinafter defined, of one who has control of a licensee. Thereafter, such legal representative shall comply with the provisions of subdivisions one and two of this section. The provisions of subdivisions one and two of this section shall be applicable to an application made under such section by a legal representative. The term "legal representative", for the purposes of this section, shall mean one duly appointed by a court of competent jurisdiction to act as executor, administrator, trustee, committee, conservator or receiver, including one who succeeds a legal representative and one acting in an ancillary capacity thereto in accordance with the provisions of such court appointment. 4. As used in this section: (a) the term "person" includes an individual, partnership, corporation, association or any other organization, and (b) the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a licensee, whether through the ownership of voting stock of such licensee, the ownership of voting stock of any person which possesses such power or otherwise. Control shall be presumed to exist if any person, directly or indirectly, owns, controls or holds with power to vote ten per centum or more of the voting stock of any licensee or of any person which owns, controls or holds with power to vote ten per centum or more of the voting stock of any licensee, but no person shall be deemed to control a licensee solely by reason of being an officer or director of such licensee or person. The superintendent may in his discretion, upon the application of a licensee or any person who, directly or indirectly, owns, controls or holds with power to vote or seeks to own, control or hold with power to vote any voting stock of such licensee, determine whether or not the ownership, control or holding of such voting stock constitutes or would constitute control of such licensee for purposes of this section. S 493. Action by superintendent on application. 1. Upon the filing of an application for a sales finance company`s license, and the payment of the fees for license and investigation, the superintendent (a) May refuse to issue the license if he finds that the applicant, or any person who at the time of filing such application is an owner, director, officer, member, partner, employee, agent, or spouse of the applicant, has duly suffered a revocation of license under this article, or has been found guilty of a violation of any of the provisions of this article, or of any other law regulating retail instalment sales contracts, obligations or credit agreements, or has been responsible for any act or omission in consequence of which a license issued under this article to any person was duly revoked. The superintendent may likewise refuse to issue the license if he shall find that the experience, character and general fitness of the applicant are not such as to command the confidence of the community and to warrant the belief that the business will be conducted honestly and fairly within the purposes and intent of this article. For the purpose of this subdivision, the applicant shall be deemed to include all the members of the applicant if it is a partnership or unincorporated association, and all the stockholders, officers and directors of the applicant if it is a corporation; or (b) Shall issue and deliver to the applicant a license to engage in business as a sales finance company in accordance with the provisions of this article at the location specified in said application. 2. The superintendent shall approve or deny every original application for a license hereunder within ninety days from the filing thereof with the said fees.
NY Banking Law Index
Civil Practice Law & Rules
Consolidated Laws
Statute of Limitations
3. If the superintendent refuses to issue a license, he (a) Shall notify the applicant of the denial, return the sum paid by the applicant as a license fee, but retain the investigation fee to cover the costs of investigating the applicant; and (b) Within twenty days thereafter shall file a written decision and findings containing the reasons supporting the denial, and shall forthwith serve a copy thereof upon the applicant. 4. Each license issued hereunder shall remain in full force and effect until it is surrendered by the licensee or revoked or suspended as provided in this article. 5. Only one place of business may be maintained under each license, but more than one license may be issued to the same licensee pursuant to this article. 6. No county, city, or other political subdivision of this state may require a licensee under this article to obtain a local license or pay a local fee for the privilege of engaging therein in the business of a sales finance company. 7. Any sales finance company in business on the date this act takes effect may continue in operation but must obtain a license within six months from said date in accordance with the provisions of this article. S 494. License form; posting; limitations. 1. Each license issued under this article shall state the address at which the licensed business is to be conducted and shall state fully the name of the licensee and, if the licensee is a copartnership or association, the names of the members thereof, and if a corporation, the date and place of its incorporation and the address of its principal place of business. Such license shall be kept conspicuously posted in the licensee`s specified place of business and shall not be transferable or assignable. 2. Whenever any licensee hereunder changes its place of business to another location, it shall give immediate written notice thereof to the superintendent, who shall without charge attach to the license or endorse on it in writing a record of the change and the date thereof, which shall be authority for the operation of the business under such license at such new location. 3. No person, except a licensee, may make any representation, directly or indirectly, orally or in writing, that he is licensed under this article, and a licensee may make such a representation only in connection with the licensee`s business as a sales finance company and in accordance with any rules and regulations of the superintendent. S 495. Revocation, suspension or surrender of licenses. 1. The superintendent may suspend or revoke any license issued under this article, if he shall find that: (a) the licensee, knowingly or without the exercise of due care to prevent such violation, has violated any provision of this article, the act of congress entitled "Truth in Lending Act" and the regulations thereunder, as such act and regulations may from time to time be amended, or of any other law regulating instalment sales agreements, or has failed to comply with any demand, or requirement, lawfully made by the superintendent under and within the authority of this article; or (b) there has been any material misstatement or failure to give a true reply to a question in the application for the license; or (c) the licensee has defrauded any retail buyer to the buyer`s damage; or wilfully failed to perform any written agreement with any retail buyer; or (d) Any fact or condition exists which, if it had existed at the time of the original application for such license, clearly would have warranted the superintendent of banks in refusing to issue such license originally. (e) in the case of a licensee other than a natural person. (1) any officer, director, trustee, or partner of such licensee has been guilty of any act or omission which would be cause for revoking or suspending a license of such party as an individual; or (2) any other agent or employee of such licensee has been guilty of such act or omission and the licensee has approved or had knowledge thereof or of acts or omission of like character and after such approval or knowledge has retained the benefit, proceeds, profit, or advantage of such act or omission or otherwise ratified it. 2. No license shall be suspended or revoked except after a hearing thereon. The superintendent shall give the licensee at least ten days` written notice of the time and place of such hearing by registered mail addressed to the principal place of business in this state of such licensee. Any order suspending or revoking such license shall recite the grounds upon which it is based and shall not be effective until ten days after written notice thereof has been sent by registered mail to the licensee at such principal place of business. 3. The superintendent in his discretion may revoke or suspend only the particular license with respect to which grounds for revocation or suspension may occur or exist; but if he finds that grounds for revocation or suspension are of general application to all places of business, or to more than one place of business, operated by such licensee, he shall revoke or suspend all of the licenses issued to said licensee or those licenses to which the grounds for revocation or suspension apply, as the case may be. 4. Any licensee may surrender any license by delivering to the superintendent written notice that such license is thereby surrendered, but such surrender shall not affect the licensee`s civil or criminal liability for acts committed prior thereto. 5. No suspension, revocation or surrender of any license shall impair or affect the obligation of any instalment contract, obligation or credit agreement lawfully acquired previously thereto by the licensee. 6. The superintendent shall establish rules as to the form of hearings, findings, and orders which shall be reasonable and in the public interest. 7. The superintendent may, on good cause shown, or where there is a substantial risk of public harm, suspend any license issued pursuant to this article for a period not exceeding thirty days, pending investigation. "Good cause", as used in this subdivision, shall exist only when the licensee has defaulted or is likely to default in performing its financial engagements or engages in dishonest or inequitable practices which may cause substantial harm to the persons afforded the protection of this article. S 496. Judicial review. The refusal, suspension or revocation of a license by the superintendent shall be subject to review in the manner provided by article seventy-eight of the civil practice law and rules. S 497. Investigations and examinations. 1. The superintendent shall have the power to make such investigations as he shall deem necessary to determine whether any licensee or any other person has violated any of the provisions of this article or any other law relating to retail instalment sales, contracts, obligations or credit agreements, and to the extent necessary for this purpose, he may require the attendance of and examine any person under oath, and shall have the power to compel the production of all relevant books, records, accounts, and documents. 2. The superintendent shall have the power to make such examinations of the books, records, accounts and documents used in the business of any licensee as he shall deem necessary to determine whether such licensee has violated any of the provisions of this article or any other law relating to retail instalment sales, contracts, obligations or credit agreements. 3. The expenses incurred in making any examination pursuant to subdivision two of this section four hundred ninety-seven shall be assessed against and paid by the licensee so examined, except that traveling and subsistence expenses so incurred shall be charged against and paid by licensees in such proportions as the superintendent shall deem just and reasonable, and such proportionate charges shall be added to the assessment of the other expenses incurred upon each examination. Upon written notice by the superintendent of the total amount of such assessment, the licensee shall become liable for and shall pay such assessment to the superintendent. 4. All reports of examinations and investigations, and all correspondence and memoranda concerning or arising out of such examinations or investigations, including any duly authenticated copy or copies thereof in the possession of any licensee or the banking department, shall be confidential communications, shall not be subject to subpoena and shall not be made public unless, in the judgment of the superintendent, the ends of justice and the public advantage will be subserved by the publication thereof, in which event he may publish or authorize the publication of a copy of any such report or other material referred to in this subdivision four, or any part thereof, in such manner, as he may deem proper. S 498. Complaints. 1. Any buyer having reason to believe that this article, or any other law regulating retail instalment sales, contracts, obligations or credit agreements, has been violated by any person may file with the superintendent a written complaint setting forth the details of such alleged violation. Upon receipt of such complaint, the superintendent, or any person duly designated by him, may inspect the pertinent books, records, letters and contracts of any licensee, and of any retail seller or other person involved, relating to such specific written complaint. 2. The superintendent or any person duly designated by him, shall have the power to hold hearings upon such complaints and to determine the time and place in this state, reasonably convenient to the parties involved, where they shall be held. 3. The superintendent shall make findings on any complaint on which a hearing has been held. The investigation, notice and hearing shall be in accordance with the provisions of this article and one copy of the findings shall be given to each such person involved in the complaint. 4. No licensee or other person shall be subject to examination or investigation by the superintendent except as provided in this article. The superintendent shall have only such powers as are expressly delegated to him by this article. S 498-a. Hearings and investigations; subpoena. In conducting any hearing or investigation pursuant to the provisions of this article, the superintendent, or any person duly designated by him, shall have the power at all times to subpoena witnesses; to take depositions of witnesses residing without the state, in the manner provided for in civil actions in courts of record; to pay such witnesses the fees and mileage for their attendance provided for witnesses in civil actions in courts of record; and to administer oaths. He shall also have the power to compel by order or subpoena the production of and to examine all relevant books, records, accounts and other documents. Any corporation, association, partnership or individual which fails to obey the command of the subpoena without reasonable excuse, or refuses without reasonable cause, to be served or to be examined or to answer a question or to produce a book or paper when ordered so to do, or fails to perform any act required hereunder to be performed, shall be guilty of a misdemeanor and shall also be subject to the compulsions provided by the civil practice law and rules and, if the person be licensed hereunder, the superintendent shall have the right to revoke the license. S 498-b. Regulations and rulings. The superintendent of banks is hereby authorized and empowered to make such general rules and regulations, and such specific rulings, demands and findings as may be necessary for the proper conduct of the business authorized and licensed under and for the enforcement of this article. S 499. Violations and penalties. Any person who violates or participates in the violation of any provision of this article, or who knowingly makes any incorrect statement of a material fact in any application, report or statement filed pursuant to this article, or who knowingly omits to state any material fact necessary to give the superintendent any information lawfully required by him or refuses to permit any lawful investigation or examination, shall be guilty of a misdemeanor and, upon conviction, shall be fined not more than five hundred dollars or imprisoned for not more than six months or both, in the discretion of the court. S 501. Repeal of inconsistent acts. All acts and parts of acts inconsistent with this article are hereby repealed to the extent of such inconsistency. S 502. Severability. If any provision of this article or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect the remainder of this article or the application of such provision to other persons or other circumstances.