Bill Text: NY S07317 | 2009-2010 | General Assembly | Introduced
Bill Title: Establishes the uniform debt-management services act.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-06-07 - RECOMMIT, ENACTING CLAUSE STRICKEN [S07317 Detail]
Download: New_York-2009-S07317-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
7317
I N S E N A T E
March 29, 2010
___________
Introduced by Sen. PERALTA -- read twice and ordered printed, and when
printed to be committed to the Committee on Banks
AN ACT to amend the general business law, in relation to debt management
services; and to amend the banking law, in relation to the uniform
debt-management services act; and repealing certain provisions of such
laws relating thereto
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. The article heading of article 28-B of the general business
2 law, as added by chapter 1031 of the laws of 1965, is amended to read as
3 follows:
4 [BUDGET PLANNING] DEBT-MANAGEMENT SERVICES
5 S 2. Section 455 of the general business law is REPEALED and a new
6 section 455 is added to read as follows:
7 S 455. DEFINITIONS. DEBT-MANAGEMENT SERVICES, AS USED IN THIS ARTICLE,
8 MEANS THE MAKING OF A CONTRACT BETWEEN A PERSON OR ENTITY ENGAGED IN THE
9 BUSINESS OF PROVIDING DEBT-MANAGEMENT SERVICES AS DEFINED IN ARTICLE
10 TWELVE-C OF THE BANKING LAW.
11 S 3. Section 456 of the general business law, as amended by chapter
12 456 of the laws of 2006, is amended to read as follows:
13 S 456. [Budget planning] DEBT-MANAGEMENT prohibited. No person or
14 entity shall engage in the business of [budget planning] PROVIDING
15 DEBT-MANAGEMENT SERVICES as defined in section four hundred fifty-five
16 of this article, except as authorized in article twelve-C of the banking
17 law.
18 S 4. Article 12-C of the banking law is REPEALED and a new article
19 12-C is added to read as follows:
20 ARTICLE 12-C
21 UNIFORM DEBT-MANAGEMENT SERVICES ACT
22 SECTION 579. SHORT TITLE.
23 579-A. DEFINITIONS.
24 579-B. EXEMPT AGREEMENTS AND PERSONS.
25 579-C. REGISTRATION AND NOT-FOR-PROFIT STATUS REQUIRED.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10740-02-9
S. 7317 2
1 580. APPLICATION FOR REGISTRATION; FORM, FEE, AND ACCOMPANYING
2 DOCUMENTS.
3 580-A. APPLICATION FOR REGISTRATION; REQUIRED INFORMATION.
4 580-B. APPLICATION FOR REGISTRATION; OBLIGATION TO UPDATE.
5 580-C. APPLICATION FOR REGISTRATION; PUBLIC INFORMATION.
6 581. CERTIFICATE OF REGISTRATION; ISSUANCE OR DENIAL.
7 581-A. CERTIFICATE OF REGISTRATION; TIMING.
8 581-B. RENEWAL OF REGISTRATION.
9 581-C. REGISTRATION IN ANOTHER STATE.
10 582. BOND REQUIRED.
11 582-A. BOND REQUIRED; SUBSTITUTE.
12 582-B. REQUIREMENT OF GOOD FAITH.
13 582-C. CUSTOMER SERVICE.
14 583. PREREQUISITES FOR PROVIDING DEBT-MANAGEMENT SERVICES.
15 583-A. COMMUNICATION BY ELECTRONIC OR OTHER MEANS.
16 583-B. FORM AND CONTENTS OF AGREEMENT.
17 583-C. CANCELLATION OF AGREEMENT; WAIVER.
18 584. REQUIRED LANGUAGE.
19 584-A. TRUST ACCOUNT.
20 584-B. FEES AND OTHER CHARGES.
21 584-C. VOLUNTARY CONTRIBUTIONS.
22 585. VOIDABLE AGREEMENTS.
23 585-A. TERMINATION OF AGREEMENT.
24 585-B. PERIODIC REPORTS AND RETENTION OF RECORDS.
25 585-C. PROHIBITED ACTS AND PRACTICES.
26 586. NOTICE OF LITIGATION.
27 586-A. ADVERTISING.
28 586-B. LIABILITY FOR THE CONDUCT OF OTHER PERSONS.
29 586-C. POWERS OF SUPERINTENDENT.
30 587. ADMINISTRATIVE REMEDIES.
31 587-A. SUSPENSION, REVOCATION, OR NONRENEWAL OF REGISTRATION.
32 587-B. PRIVATE ENFORCEMENT.
33 587-C. VIOLATION OF THE GENERAL BUSINESS LAW.
34 588. STATUTE OF LIMITATIONS.
35 588-A. UNIFORMITY OF APPLICATION AND CONSTRUCTION.
36 588-B. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL
37 COMMERCE ACT.
38 588-C. TRANSITIONAL PROVISIONS; APPLICATION TO EXISTING TRANS-
39 ACTIONS.
40 S 579. SHORT TITLE. THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE
41 "UNIFORM DEBT-MANAGEMENT SERVICES ACT".
42 S 579-A. DEFINITIONS. IN THIS ARTICLE:
43 1. "SUPERINTENDENT" MEANS THE SUPERINTENDENT OF BANKS.
44 2. "AFFILIATE":
45 (A) WITH RESPECT TO AN INDIVIDUAL, MEANS:
46 (I) THE SPOUSE OF THE INDIVIDUAL;
47 (II) A SIBLING OF THE INDIVIDUAL OR THE SPOUSE OF A SIBLING;
48 (III) AN INDIVIDUAL OR THE SPOUSE OF AN INDIVIDUAL WHO IS A LINEAL
49 ANCESTOR OR LINEAL DESCENDANT OF THE INDIVIDUAL OR THE INDIVIDUAL'S
50 SPOUSE;
51 (IV) AN AUNT, UNCLE, GREAT AUNT, GREAT UNCLE, FIRST COUSIN, NIECE,
52 NEPHEW, GRANDNIECE, OR GRANDNEPHEW, WHETHER RELATED BY WHOLE OR HALF
53 BLOOD OR ADOPTION, OR THE SPOUSE OF ANY OF THEM; OR
54 (V) ANY OTHER INDIVIDUAL OCCUPYING THE RESIDENCE OF THE INDIVIDUAL;
55 AND
56 (B) WITH RESPECT TO AN ENTITY, MEANS:
S. 7317 3
1 (I) A PERSON THAT DIRECTLY OR INDIRECTLY CONTROLS, IS CONTROLLED BY,
2 OR IS UNDER COMMON CONTROL WITH THE ENTITY;
3 (II) AN OFFICER OF, OR AN INDIVIDUAL PERFORMING SIMILAR FUNCTIONS WITH
4 RESPECT TO, THE ENTITY;
5 (III) A DIRECTOR OF, OR AN INDIVIDUAL PERFORMING SIMILAR FUNCTIONS
6 WITH RESPECT TO, THE ENTITY;
7 (IV) SUBJECT TO ADJUSTMENT OF THE DOLLAR AMOUNT PURSUANT TO SUBDIVI-
8 SION SIX OF SECTION FIVE HUNDRED EIGHTY-SIX-C OF THIS ARTICLE, A PERSON
9 THAT RECEIVES OR RECEIVED MORE THAN TWENTY-FIVE THOUSAND DOLLARS FROM
10 THE ENTITY IN EITHER THE CURRENT YEAR OR THE PRECEDING YEAR OR A PERSON
11 THAT OWNS MORE THAN TEN PERCENT OF, OR AN INDIVIDUAL WHO IS EMPLOYED BY
12 OR IS A DIRECTOR OF, A PERSON THAT RECEIVES OR RECEIVED MORE THAN TWEN-
13 TY-FIVE THOUSAND DOLLARS FROM THE ENTITY IN EITHER THE CURRENT YEAR OR
14 THE PRECEDING YEAR;
15 (V) AN OFFICER OR DIRECTOR OF, OR AN INDIVIDUAL PERFORMING SIMILAR
16 FUNCTIONS WITH RESPECT TO, A PERSON DESCRIBED IN SUBPARAGRAPH (I) OF
17 THIS PARAGRAPH;
18 (VI) THE SPOUSE OF, OR AN INDIVIDUAL OCCUPYING THE RESIDENCE OF, AN
19 INDIVIDUAL DESCRIBED IN SUBPARAGRAPHS (I) THROUGH (V) OF THIS PARAGRAPH;
20 OR
21 (VII) AN INDIVIDUAL WHO HAS THE RELATIONSHIP SPECIFIED IN SUBPARAGRAPH
22 (IV) OF PARAGRAPH (A) OF THIS SUBDIVISION TO AN INDIVIDUAL OR THE SPOUSE
23 OF AN INDIVIDUAL DESCRIBED IN SUBPARAGRAPHS (I) THROUGH (V) OF THIS
24 PARAGRAPH.
25 3. "AGREEMENT" MEANS AN AGREEMENT BETWEEN A PROVIDER AND AN INDIVIDUAL
26 FOR THE PERFORMANCE OF DEBT-MANAGEMENT SERVICES.
27 4. "BANK" MEANS A FINANCIAL INSTITUTION, INCLUDING A COMMERCIAL BANK,
28 SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, AND TRUST
29 COMPANY, ENGAGED IN THE BUSINESS OF BANKING, CHARTERED UNDER FEDERAL OR
30 STATE LAW, AND REGULATED BY A FEDERAL OR STATE BANKING REGULATORY
31 AUTHORITY.
32 5. "BUSINESS ADDRESS" MEANS THE PHYSICAL LOCATION OF A BUSINESS,
33 INCLUDING THE NAME AND NUMBER OF A STREET.
34 6. (A) "CERTIFIED COUNSELOR" MEANS AN INDIVIDUAL CERTIFIED BY A TRAIN-
35 ING PROGRAM OR CERTIFYING ORGANIZATION, APPROVED BY THE SUPERINTENDENT,
36 THAT AUTHENTICATES THE COMPETENCE OF INDIVIDUALS PROVIDING EDUCATION AND
37 ASSISTANCE TO OTHER INDIVIDUALS IN CONNECTION WITH DEBT-MANAGEMENT
38 SERVICES IN WHICH AN AGREEMENT CONTEMPLATES THAT CREDITORS WILL REDUCE
39 FINANCE CHARGES OR FEES FOR LATE PAYMENT, DEFAULT, OR DELINQUENCY.
40 (B) "CERTIFIED DEBT SPECIALIST" MEANS AN INDIVIDUAL CERTIFIED BY A
41 TRAINING PROGRAM OR CERTIFYING ORGANIZATION, APPROVED BY THE SUPERINTEN-
42 DENT, THAT AUTHENTICATES THE COMPETENCE OF INDIVIDUALS PROVIDING EDUCA-
43 TION AND ASSISTANCE TO OTHER INDIVIDUALS IN CONNECTION WITH DEBT-MANAGE-
44 MENT SERVICES IN WHICH AN AGREEMENT CONTEMPLATES THAT CREDITORS WILL
45 SETTLE DEBTS FOR LESS THAN THE FULL PRINCIPAL AMOUNT OF DEBT OWED.
46 7. "CONCESSIONS" MEANS ASSENT TO REPAYMENT OF A DEBT ON TERMS MORE
47 FAVORABLE TO AN INDIVIDUAL THAN THE TERMS OF THE CONTRACT BETWEEN THE
48 INDIVIDUAL AND A CREDITOR.
49 8. "DAY" MEANS CALENDAR DAY.
50 9. "DEBT-MANAGEMENT SERVICES" MEANS SERVICES AS AN INTERMEDIARY
51 BETWEEN AN INDIVIDUAL AND ONE OR MORE CREDITORS OF THE INDIVIDUAL FOR
52 THE PURPOSE OF OBTAINING CONCESSIONS, BUT DOES NOT INCLUDE:
53 (A) LEGAL SERVICES PROVIDED IN AN ATTORNEY-CLIENT RELATIONSHIP BY AN
54 ATTORNEY LICENSED OR OTHERWISE AUTHORIZED TO PRACTICE LAW IN THIS STATE;
S. 7317 4
1 (B) ACCOUNTING SERVICES PROVIDED IN AN ACCOUNTANT-CLIENT RELATIONSHIP
2 BY A CERTIFIED PUBLIC ACCOUNTANT LICENSED TO PROVIDE ACCOUNTING SERVICES
3 IN THIS STATE; OR
4 (C) FINANCIAL-PLANNING SERVICES PROVIDED IN A FINANCIAL PLANNER-CLIENT
5 RELATIONSHIP BY A MEMBER OF A FINANCIAL-PLANNING PROFESSION WHOSE
6 MEMBERS THE SUPERINTENDENT, BY RULE, DETERMINES ARE:
7 (I) LICENSED BY THIS STATE;
8 (II) SUBJECT TO A DISCIPLINARY MECHANISM;
9 (III) SUBJECT TO A CODE OF PROFESSIONAL RESPONSIBILITY; AND
10 (IV) SUBJECT TO A CONTINUING-EDUCATION REQUIREMENT.
11 10. "ENTITY" MEANS A PERSON OTHER THAN AN INDIVIDUAL.
12 11. "GOOD FAITH" MEANS HONESTY IN FACT AND THE OBSERVANCE OF REASON-
13 ABLE STANDARDS OF FAIR DEALING.
14 12. "PERSON" MEANS AN INDIVIDUAL, CORPORATION, BUSINESS TRUST, ESTATE,
15 TRUST, PARTNERSHIP, LIMITED LIABILITY COMPANY, ASSOCIATION, JOINT
16 VENTURE, OR ANY OTHER LEGAL OR COMMERCIAL ENTITY. THE TERM DOES NOT
17 INCLUDE A PUBLIC CORPORATION, GOVERNMENT, OR GOVERNMENTAL SUBDIVISION,
18 AGENCY, OR INSTRUMENTALITY.
19 13. "PLAN" MEANS A PROGRAM OR STRATEGY IN WHICH A PROVIDER FURNISHES
20 DEBT-MANAGEMENT SERVICES TO AN INDIVIDUAL AND WHICH INCLUDES A SCHEDULE
21 OF PAYMENTS TO BE MADE BY OR ON BEHALF OF THE INDIVIDUAL AND USED TO PAY
22 DEBTS OWED BY THE INDIVIDUAL.
23 14. "PRINCIPAL AMOUNT OF THE DEBT" MEANS THE AMOUNT OF A DEBT AT THE
24 TIME OF AN AGREEMENT.
25 15. "PROVIDER" MEANS A PERSON THAT PROVIDES, OFFERS TO PROVIDE, OR
26 AGREES TO PROVIDE DEBT-MANAGEMENT SERVICES DIRECTLY OR THROUGH OTHERS.
27 16. "RECORD" MEANS INFORMATION THAT IS INSCRIBED ON A TANGIBLE MEDIUM
28 OR THAT IS STORED IN AN ELECTRONIC OR OTHER MEDIUM AND IS RETRIEVABLE IN
29 PERCEIVABLE FORM.
30 17. "SETTLEMENT FEE" MEANS A CHARGE IMPOSED ON OR PAID BY AN INDIVID-
31 UAL IN CONNECTION WITH A CREDITOR'S ASSENT TO ACCEPT IN FULL SATISFAC-
32 TION OF A DEBT AN AMOUNT LESS THAN THE PRINCIPAL AMOUNT OF THE DEBT.
33 18. "SIGN" MEANS, WITH PRESENT INTENT TO AUTHENTICATE OR ADOPT A
34 RECORD:
35 (A) TO EXECUTE OR ADOPT A TANGIBLE SYMBOL; OR
36 (B) TO ATTACH TO OR LOGICALLY ASSOCIATE WITH THE RECORD AN ELECTRONIC
37 SOUND, SYMBOL, OR PROCESS.
38 19. "STATE" MEANS A STATE OF THE UNITED STATES, THE DISTRICT OF COLUM-
39 BIA, PUERTO RICO, THE UNITED STATES VIRGIN ISLANDS, OR ANY TERRITORY OR
40 INSULAR POSSESSION SUBJECT TO THE JURISDICTION OF THE UNITED STATES.
41 20. "TRUST ACCOUNT" MEANS AN ACCOUNT HELD BY A PROVIDER THAT IS:
42 (A) ESTABLISHED IN AN INSURED BANK;
43 (B) SEPARATE FROM OTHER ACCOUNTS OF THE PROVIDER OR ITS DESIGNEE;
44 (C) DESIGNATED AS A TRUST ACCOUNT OR OTHER ACCOUNT DESIGNATED TO INDI-
45 CATE THAT THE MONEY IN THE ACCOUNT IS NOT THE MONEY OF THE PROVIDER OR
46 ITS DESIGNEE; AND
47 (D) USED TO HOLD MONEY OF ONE OR MORE INDIVIDUALS FOR DISBURSEMENT TO
48 CREDITORS OF THE INDIVIDUALS.
49 S 579-B. EXEMPT AGREEMENTS AND PERSONS. 1. THIS ARTICLE DOES NOT APPLY
50 TO AN AGREEMENT WITH AN INDIVIDUAL WHO THE PROVIDER HAS NO REASON TO
51 KNOW RESIDES IN THIS STATE AT THE TIME OF THE AGREEMENT.
52 2. THIS ARTICLE DOES NOT APPLY TO A PROVIDER TO THE EXTENT THAT THE
53 PROVIDER:
54 (A) PROVIDES OR AGREES TO PROVIDE DEBT-MANAGEMENT, EDUCATIONAL, OR
55 COUNSELING SERVICES TO AN INDIVIDUAL WHO THE PROVIDER HAS NO REASON TO
S. 7317 5
1 KNOW RESIDES IN THIS STATE AT THE TIME THE PROVIDER AGREES TO PROVIDE
2 THE SERVICES; OR
3 (B) RECEIVES NO COMPENSATION FOR DEBT-MANAGEMENT SERVICES FROM OR ON
4 BEHALF OF THE INDIVIDUALS TO WHOM IT PROVIDES THE SERVICES OR FROM THEIR
5 CREDITORS.
6 3. THIS ARTICLE DOES NOT APPLY TO THE FOLLOWING PERSONS OR THEIR
7 EMPLOYEES WHEN THE PERSON OR THE EMPLOYEE IS ENGAGED IN THE REGULAR
8 COURSE OF THE PERSON'S BUSINESS OR PROFESSION:
9 (A) A JUDICIAL OFFICER, A PERSON ACTING UNDER AN ORDER OF A COURT OR
10 AN ADMINISTRATIVE AGENCY, OR AN ASSIGNEE FOR THE BENEFIT OF CREDITORS;
11 (B) A BANK;
12 (C) AN AFFILIATE OF A BANK IF THE AFFILIATE IS REGULATED BY A FEDERAL
13 OR STATE BANKING REGULATORY AUTHORITY; OR
14 (D) A TITLE INSURER, ESCROW COMPANY, OR OTHER PERSON THAT PROVIDES
15 BILL-PAYING SERVICES IF THE PROVISION OF DEBT-MANAGEMENT SERVICES IS
16 INCIDENTAL TO THE BILL-PAYING SERVICES.
17 S 579-C. REGISTRATION AND NOT-FOR-PROFIT STATUS REQUIRED. 1. EXCEPT AS
18 OTHERWISE PROVIDED IN SUBDIVISION TWO OF THIS SECTION, A PROVIDER MAY
19 NOT PROVIDE DEBT-MANAGEMENT SERVICES TO AN INDIVIDUAL WHO IT REASONABLY
20 SHOULD KNOW RESIDES IN THIS STATE AT THE TIME IT AGREES TO PROVIDE THE
21 SERVICES, UNLESS THE PROVIDER IS REGISTERED UNDER THIS ARTICLE.
22 2. IF A PROVIDER IS REGISTERED UNDER THIS ARTICLE, SUBDIVISION ONE OF
23 THIS SECTION DOES NOT APPLY TO AN EMPLOYEE OR AGENT OF THE PROVIDER.
24 3. THE SUPERINTENDENT SHALL MAINTAIN AND PUBLICIZE A LIST OF THE NAMES
25 OF ALL REGISTERED PROVIDERS.
26 4. A PROVIDER MAY BE REGISTERED ONLY IF IT IS:
27 (A) ORGANIZED AND PROPERLY OPERATING AS A NOT-FOR-PROFIT ENTITY UNDER
28 THE LAW OF THE STATE IN WHICH IT WAS FORMED; AND
29 (B) EXEMPT FROM TAXATION UNDER THE INTERNAL REVENUE CODE, 26 U.S.C.
30 SECTION 501, AS AMENDED.
31 S 580. APPLICATION FOR REGISTRATION; FORM, FEE, AND ACCOMPANYING DOCU-
32 MENTS. 1. AN APPLICATION FOR REGISTRATION AS A PROVIDER MUST BE IN A
33 FORM PRESCRIBED BY THE SUPERINTENDENT.
34 2. SUBJECT TO ADJUSTMENT OF DOLLAR AMOUNTS PURSUANT TO SUBDIVISION SIX
35 OF SECTION FIVE HUNDRED EIGHTY-SIX-C OF THIS ARTICLE, AN APPLICATION FOR
36 REGISTRATION AS A PROVIDER MUST BE ACCOMPANIED BY:
37 (A) THE FEE ESTABLISHED BY THE SUPERINTENDENT;
38 (B) THE BOND REQUIRED BY SECTION FIVE HUNDRED EIGHTY-TWO OF THIS ARTI-
39 CLE;
40 (C) IDENTIFICATION OF ALL TRUST ACCOUNTS REQUIRED BY SECTION FIVE
41 HUNDRED EIGHTY-FOUR-A OF THIS ARTICLE AND AN IRREVOCABLE CONSENT AUTHOR-
42 IZING THE SUPERINTENDENT TO REVIEW AND EXAMINE THE TRUST ACCOUNTS;
43 (D) EVIDENCE OF INSURANCE IN THE AMOUNT OF TWO HUNDRED FIFTY THOUSAND
44 DOLLARS:
45 (I) AGAINST THE RISKS OF DISHONESTY, FRAUD, THEFT, AND OTHER MISCON-
46 DUCT ON THE PART OF THE APPLICANT OR A DIRECTOR, EMPLOYEE, OR AGENT OF
47 THE APPLICANT;
48 (II) ISSUED BY AN INSURANCE COMPANY AUTHORIZED TO DO BUSINESS IN THIS
49 STATE AND RATED AT LEAST A OR EQUIVALENT BY A NATIONALLY RECOGNIZED
50 RATING ORGANIZATION APPROVED BY THE SUPERINTENDENT;
51 (III) WITH A DEDUCTIBLE NOT EXCEEDING FIVE THOUSAND DOLLARS;
52 (IV) PAYABLE FOR THE BENEFIT OF THE APPLICANT, THIS STATE, AND INDI-
53 VIDUALS WHO ARE RESIDENTS OF THIS STATE, AS THEIR INTERESTS MAY APPEAR;
54 AND
55 (V) NOT SUBJECT TO CANCELLATION BY THE APPLICANT OR THE INSURER UNTIL
56 SIXTY DAYS AFTER WRITTEN NOTICE HAS BEEN GIVEN TO THE SUPERINTENDENT;
S. 7317 6
1 (E) A RECORD CONSENTING TO THE JURISDICTION OF THIS STATE CONTAINING:
2 (I) THE NAME, BUSINESS ADDRESS, AND OTHER CONTACT INFORMATION OF ITS
3 REGISTERED AGENT IN THIS STATE FOR PURPOSES OF SERVICE OF PROCESS; OR
4 (II) THE APPOINTMENT OF THE SUPERINTENDENT AS AGENT OF THE PROVIDER
5 FOR PURPOSES OF SERVICE OF PROCESS; AND
6 (F) EVIDENCE OF TAX-EXEMPT STATUS APPLICABLE TO THE APPLICANT UNDER
7 THE INTERNAL REVENUE CODE, 26 U.S.C. SECTION 501, AS AMENDED.
8 S 580-A. APPLICATION FOR REGISTRATION; REQUIRED INFORMATION. AN APPLI-
9 CATION FOR REGISTRATION MUST BE SIGNED UNDER OATH AND INCLUDE:
10 1. THE APPLICANT'S NAME, PRINCIPAL BUSINESS ADDRESS AND TELEPHONE
11 NUMBER, AND ALL OTHER BUSINESS ADDRESSES IN THIS STATE, ELECTRONIC-MAIL
12 ADDRESSES, AND INTERNET WEBSITE ADDRESSES;
13 2. ALL NAMES UNDER WHICH THE APPLICANT CONDUCTS BUSINESS;
14 3. THE ADDRESS OF EACH LOCATION IN THIS STATE AT WHICH THE APPLICANT
15 WILL PROVIDE DEBT-MANAGEMENT SERVICES OR A STATEMENT THAT THE APPLICANT
16 WILL HAVE NO SUCH LOCATION;
17 4. THE NAME AND HOME ADDRESS OF EACH OFFICER AND DIRECTOR OF THE
18 APPLICANT AND EACH PERSON THAT OWNS AT LEAST TEN PERCENT OF THE APPLI-
19 CANT;
20 5. IDENTIFICATION OF EVERY JURISDICTION IN WHICH, DURING THE FIVE
21 YEARS IMMEDIATELY PRECEDING THE APPLICATION:
22 (A) THE APPLICANT OR ANY OF ITS OFFICERS OR DIRECTORS HAS BEEN
23 LICENSED OR REGISTERED TO PROVIDE DEBT-MANAGEMENT SERVICES; OR
24 (B) INDIVIDUALS HAVE RESIDED WHEN THEY RECEIVED DEBT-MANAGEMENT
25 SERVICES FROM THE APPLICANT;
26 6. A STATEMENT DESCRIBING, TO THE EXTENT IT IS KNOWN OR SHOULD BE
27 KNOWN BY THE APPLICANT, ANY MATERIAL CIVIL OR CRIMINAL JUDGMENT OR LITI-
28 GATION AND ANY MATERIAL ADMINISTRATIVE OR ENFORCEMENT ACTION BY A
29 GOVERNMENTAL AGENCY IN ANY JURISDICTION AGAINST THE APPLICANT, ANY OF
30 ITS OFFICERS, DIRECTORS, OWNERS, OR AGENTS, OR ANY PERSON WHO IS AUTHOR-
31 IZED TO HAVE ACCESS TO THE TRUST ACCOUNT REQUIRED BY SECTION FIVE
32 HUNDRED EIGHTY-FOUR-A OF THIS ARTICLE;
33 7. THE APPLICANT'S FINANCIAL STATEMENTS, AUDITED BY AN ACCOUNTANT
34 LICENSED TO CONDUCT AUDITS, FOR EACH OF THE TWO YEARS IMMEDIATELY
35 PRECEDING THE APPLICATION OR, IF IT HAS NOT BEEN IN OPERATION FOR THE
36 TWO YEARS PRECEDING THE APPLICATION, FOR THE PERIOD OF ITS EXISTENCE;
37 8. EVIDENCE OF ACCREDITATION BY AN INDEPENDENT ACCREDITING ORGANIZA-
38 TION APPROVED BY THE SUPERINTENDENT;
39 9. EVIDENCE THAT, WITHIN TWELVE MONTHS AFTER INITIAL EMPLOYMENT, EACH
40 OF THE APPLICANT'S COUNSELORS BECOMES CERTIFIED AS A CERTIFIED COUNSELOR
41 OR CERTIFIED DEBT SPECIALIST;
42 10. A DESCRIPTION OF THE THREE MOST COMMONLY USED EDUCATIONAL PROGRAMS
43 THAT THE APPLICANT PROVIDES OR INTENDS TO PROVIDE TO INDIVIDUALS WHO
44 RESIDE IN THIS STATE AND A COPY OF ANY MATERIALS USED OR TO BE USED IN
45 THOSE PROGRAMS;
46 11. A DESCRIPTION OF THE APPLICANT'S FINANCIAL ANALYSIS AND INITIAL
47 BUDGET PLAN, INCLUDING ANY FORM OR ELECTRONIC MODEL, USED TO EVALUATE
48 THE FINANCIAL CONDITION OF INDIVIDUALS;
49 12. A COPY OF EACH FORM OF AGREEMENT THAT THE APPLICANT WILL USE WITH
50 INDIVIDUALS WHO RESIDE IN THIS STATE;
51 13. THE SCHEDULE OF FEES AND CHARGES THAT THE APPLICANT WILL USE WITH
52 INDIVIDUALS WHO RESIDE IN THIS STATE;
53 14. AT THE APPLICANT'S EXPENSE, THE RESULTS OF A CRIMINAL-RECORDS
54 CHECK, INCLUDING FINGERPRINTS, CONDUCTED WITHIN THE IMMEDIATELY PRECED-
55 ING TWELVE MONTHS, COVERING EVERY OFFICER OF THE APPLICANT AND EVERY
56 EMPLOYEE OR AGENT OF THE APPLICANT WHO IS AUTHORIZED TO HAVE ACCESS TO
S. 7317 7
1 THE TRUST ACCOUNT REQUIRED BY SECTION FIVE HUNDRED EIGHTY-FOUR-A OF THIS
2 ARTICLE;
3 15. THE NAMES AND ADDRESSES OF ALL EMPLOYERS OF EACH DIRECTOR DURING
4 THE TEN YEARS IMMEDIATELY PRECEDING THE APPLICATION;
5 16. A DESCRIPTION OF ANY OWNERSHIP INTEREST OF AT LEAST TEN PERCENT BY
6 A DIRECTOR, OWNER, OR EMPLOYEE OF THE APPLICANT IN:
7 (A) ANY AFFILIATE OF THE APPLICANT; OR
8 (B) ANY ENTITY THAT PROVIDES PRODUCTS OR SERVICES TO THE APPLICANT OR
9 ANY INDIVIDUAL RELATING TO THE APPLICANT'S DEBT-MANAGEMENT SERVICES;
10 17. A STATEMENT OF THE AMOUNT OF COMPENSATION OF THE APPLICANT'S FIVE
11 MOST HIGHLY COMPENSATED EMPLOYEES FOR EACH OF THE THREE YEARS IMMEDIATE-
12 LY PRECEDING THE APPLICATION OR, IF IT HAS NOT BEEN IN OPERATION FOR THE
13 THREE YEARS PRECEDING THE APPLICATION, FOR THE PERIOD OF ITS EXISTENCE;
14 18. THE IDENTITY OF EACH DIRECTOR WHO IS AN AFFILIATE OF THE APPLI-
15 CANT; AND
16 19. ANY OTHER INFORMATION THAT THE SUPERINTENDENT REASONABLY REQUIRES
17 TO PERFORM THE SUPERINTENDENT'S DUTIES UNDER SECTION FIVE HUNDRED EIGHT-
18 Y-ONE OF THIS ARTICLE.
19 S 580-B. APPLICATION FOR REGISTRATION; OBLIGATION TO UPDATE. AN APPLI-
20 CANT OR REGISTERED PROVIDER SHALL NOTIFY THE SUPERINTENDENT WITHIN TEN
21 DAYS AFTER A CHANGE IN THE INFORMATION SPECIFIED IN SECTION FIVE HUNDRED
22 EIGHTY OF THIS ARTICLE.
23 S 580-C. APPLICATION FOR REGISTRATION; PUBLIC INFORMATION. EXCEPT FOR
24 THE INFORMATION REQUIRED BY SECTION FIVE HUNDRED EIGHTY-A OF THIS ARTI-
25 CLE AND THE ADDRESSES REQUIRED BY SUBDIVISION FOUR OF SUCH SECTION, THE
26 SUPERINTENDENT SHALL MAKE THE INFORMATION IN AN APPLICATION FOR REGIS-
27 TRATION AS A PROVIDER AVAILABLE TO THE PUBLIC.
28 S 581. CERTIFICATE OF REGISTRATION; ISSUANCE OR DENIAL. 1. EXCEPT AS
29 OTHERWISE PROVIDED IN SUBDIVISIONS THREE AND FOUR OF THIS SECTION, THE
30 SUPERINTENDENT SHALL ISSUE A CERTIFICATE OF REGISTRATION AS A PROVIDER
31 TO A PERSON THAT COMPLIES WITH SECTIONS FIVE HUNDRED EIGHTY AND FIVE
32 HUNDRED EIGHTY-A OF THIS ARTICLE.
33 2. IF AN APPLICANT HAS OTHERWISE COMPLIED WITH SECTIONS FIVE HUNDRED
34 EIGHTY AND FIVE HUNDRED EIGHTY-A OF THIS ARTICLE, INCLUDING A TIMELY
35 EFFORT TO OBTAIN THE INFORMATION REQUIRED BY SUBDIVISION FOURTEEN OF
36 SECTION FIVE HUNDRED EIGHTY-A OF THIS ARTICLE BUT THE INFORMATION HAS
37 NOT BEEN RECEIVED, THE SUPERINTENDENT MAY ISSUE A TEMPORARY CERTIFICATE
38 OF REGISTRATION. THE TEMPORARY CERTIFICATE SHALL EXPIRE NO LATER THAN
39 ONE HUNDRED EIGHTY DAYS AFTER ISSUANCE.
40 3. THE SUPERINTENDENT MAY DENY REGISTRATION IF:
41 (A) THE APPLICATION CONTAINS INFORMATION THAT IS MATERIALLY ERRONEOUS
42 OR INCOMPLETE;
43 (B) AN OFFICER OR DIRECTOR OF THE APPLICANT HAS BEEN CONVICTED OF A
44 CRIME, OR SUFFERED A CIVIL JUDGMENT, INVOLVING DISHONESTY OR THE
45 VIOLATION OF STATE OR FEDERAL SECURITIES LAWS;
46 (C) THE APPLICANT OR ANY OF ITS OFFICERS OR DIRECTORS HAS DEFAULTED IN
47 THE PAYMENT OF MONEY COLLECTED FOR OTHERS; OR
48 (D) THE SUPERINTENDENT FINDS THAT THE FINANCIAL RESPONSIBILITY, EXPE-
49 RIENCE, CHARACTER, OR GENERAL FITNESS OF THE APPLICANT OR ITS DIRECTORS,
50 EMPLOYEES, OR AGENTS DOES NOT WARRANT BELIEF THAT THE BUSINESS WILL BE
51 OPERATED IN COMPLIANCE WITH THIS ARTICLE.
52 4. THE SUPERINTENDENT SHALL DENY REGISTRATION IF, WITH RESPECT TO AN
53 APPLICANT THAT IS ORGANIZED AS A NOT-FOR-PROFIT ENTITY OR HAS OBTAINED
54 TAX-EXEMPT STATUS UNDER THE INTERNAL REVENUE CODE, 26 U.S.C. SECTION
55 501, AS AMENDED, THE APPLICANT'S BOARD OF DIRECTORS IS NOT INDEPENDENT
56 OF THE APPLICANT'S EMPLOYEES AND AGENTS.
S. 7317 8
1 5. SUBJECT TO ADJUSTMENT OF THE DOLLAR AMOUNT PURSUANT TO SUBDIVISION
2 SIX OF SECTION FIVE HUNDRED EIGHTY-SIX-C OF THIS ARTICLE, A BOARD OF
3 DIRECTORS IS NOT INDEPENDENT FOR PURPOSES OF SUBDIVISION FOUR OF THIS
4 SECTION IF MORE THAN ONE-FOURTH OF ITS MEMBERS:
5 (A) ARE AFFILIATES OF THE APPLICANT; OR
6 (B) AFTER THE DATE TEN YEARS BEFORE FIRST BECOMING A DIRECTOR OF THE
7 APPLICANT, WERE EMPLOYED BY OR DIRECTORS OF A PERSON THAT RECEIVED FROM
8 THE APPLICANT MORE THAN TWENTY-FIVE THOUSAND DOLLARS IN EITHER THE
9 CURRENT YEAR OR THE PRECEDING YEAR.
10 S 581-A. CERTIFICATE OF REGISTRATION; TIMING. 1. THE SUPERINTENDENT
11 SHALL APPROVE OR DENY AN INITIAL REGISTRATION AS A PROVIDER WITHIN ONE
12 HUNDRED TWENTY DAYS AFTER AN APPLICATION IS FILED. IN CONNECTION WITH A
13 REQUEST PURSUANT TO SUBDIVISION NINETEEN OF SECTION FIVE HUNDRED EIGHT-
14 Y-A OF THIS ARTICLE FOR ADDITIONAL INFORMATION, THE SUPERINTENDENT MAY
15 EXTEND THE ONE HUNDRED TWENTY-DAY PERIOD FOR NOT MORE THAN SIXTY DAYS.
16 WITHIN SEVEN DAYS AFTER DENYING AN APPLICATION, THE SUPERINTENDENT, IN A
17 RECORD, SHALL INFORM THE APPLICANT OF THE REASONS FOR THE DENIAL.
18 2. IF THE SUPERINTENDENT DENIES AN APPLICATION FOR REGISTRATION AS A
19 PROVIDER OR DOES NOT ACT ON AN APPLICATION WITHIN THE TIME PRESCRIBED IN
20 SUBDIVISION ONE OF THIS SECTION, THE APPLICANT MAY APPEAL AND REQUEST A
21 HEARING PURSUANT TO THE STATE ADMINISTRATIVE PROCEDURE ACT.
22 3. SUBJECT TO SUBDIVISION FOUR OF SECTION FIVE HUNDRED EIGHTY-ONE-B
23 AND SECTION FIVE HUNDRED EIGHT-SEVEN-A OF THIS ARTICLE, A REGISTRATION
24 AS A PROVIDER IS VALID FOR ONE YEAR.
25 S 581-B. RENEWAL OF REGISTRATION. 1. A PROVIDER MUST OBTAIN A RENEWAL
26 OF ITS REGISTRATION ANNUALLY.
27 2. AN APPLICATION FOR RENEWAL OF REGISTRATION AS A PROVIDER MUST BE IN
28 A FORM PRESCRIBED BY THE SUPERINTENDENT, SIGNED UNDER OATH, AND:
29 (A) BE FILED NO FEWER THAN THIRTY AND NO MORE THAN SIXTY DAYS BEFORE
30 THE REGISTRATION EXPIRES;
31 (B) BE ACCOMPANIED BY THE FEE ESTABLISHED BY THE SUPERINTENDENT AND
32 THE BOND REQUIRED BY SECTION FIVE HUNDRED EIGHTY-TWO OF THIS ARTICLE;
33 (C) CONTAIN THE MATTER REQUIRED FOR INITIAL REGISTRATION AS A PROVIDER
34 BY SUBDIVISIONS EIGHT AND NINE OF SECTION FIVE HUNDRED EIGHTY-A OF THIS
35 ARTICLE AND A FINANCIAL STATEMENT, AUDITED BY AN ACCOUNTANT LICENSED TO
36 CONDUCT AUDITS, FOR THE APPLICANT'S FISCAL YEAR IMMEDIATELY PRECEDING
37 THE APPLICATION;
38 (D) DISCLOSE ANY CHANGES IN THE INFORMATION CONTAINED IN THE APPLI-
39 CANT'S APPLICATION FOR REGISTRATION OR ITS IMMEDIATELY PREVIOUS APPLICA-
40 TION FOR RENEWAL, AS APPLICABLE. IF AN APPLICATION IS OTHERWISE COMPLETE
41 AND THE APPLICANT HAS MADE A TIMELY EFFORT TO OBTAIN THE INFORMATION
42 REQUIRED BY SUBDIVISION FOURTEEN OF SECTION FIVE HUNDRED EIGHTY-A OF
43 THIS ARTICLE BUT THE INFORMATION HAS NOT BEEN RECEIVED, THE SUPERINTEN-
44 DENT MAY ISSUE A TEMPORARY RENEWAL OF REGISTRATION. THE TEMPORARY
45 RENEWAL SHALL EXPIRE NO LATER THAN ONE HUNDRED EIGHTY DAYS AFTER ISSU-
46 ANCE;
47 (E) SUPPLY EVIDENCE OF INSURANCE IN AN AMOUNT EQUAL TO THE LARGER OF
48 TWO HUNDRED FIFTY THOUSAND DOLLARS OR THE HIGHEST DAILY BALANCE IN THE
49 TRUST ACCOUNT REQUIRED BY SECTION FIVE HUNDRED EIGHTY-FOUR-A OF THIS
50 ARTICLE DURING THE SIX-MONTH PERIOD IMMEDIATELY PRECEDING THE APPLICA-
51 TION:
52 (I) AGAINST RISKS OF DISHONESTY, FRAUD, THEFT, AND OTHER MISCONDUCT ON
53 THE PART OF THE APPLICANT OR A DIRECTOR, EMPLOYEE, OR AGENT OF THE
54 APPLICANT;
S. 7317 9
1 (II) ISSUED BY AN INSURANCE COMPANY AUTHORIZED TO DO BUSINESS IN THIS
2 STATE AND RATED AT LEAST A OR EQUIVALENT BY A NATIONALLY RECOGNIZED
3 RATING ORGANIZATION APPROVED BY THE SUPERINTENDENT;
4 (III) WITH A DEDUCTIBLE NOT EXCEEDING FIVE THOUSAND DOLLARS;
5 (IV) PAYABLE FOR THE BENEFIT OF THE APPLICANT, THIS STATE, AND INDI-
6 VIDUALS WHO ARE RESIDENTS OF THIS STATE, AS THEIR INTERESTS MAY APPEAR;
7 AND
8 (V) NOT SUBJECT TO CANCELLATION BY THE APPLICANT OR THE INSURER UNTIL
9 SIXTY DAYS AFTER WRITTEN NOTICE HAS BEEN GIVEN TO THE SUPERINTENDENT;
10 (VI) DISCLOSE THE TOTAL AMOUNT OF MONEY RECEIVED BY THE APPLICANT
11 PURSUANT TO PLANS DURING THE PRECEDING TWELVE MONTHS FROM OR ON BEHALF
12 OF INDIVIDUALS WHO RESIDE IN THIS STATE AND THE TOTAL AMOUNT OF MONEY
13 DISTRIBUTED TO CREDITORS OF THOSE INDIVIDUALS DURING THAT PERIOD;
14 (VII) DISCLOSE, TO THE BEST OF THE APPLICANT'S KNOWLEDGE, THE GROSS
15 AMOUNT OF MONEY ACCUMULATED DURING THE PRECEDING TWELVE MONTHS PURSUANT
16 TO PLANS BY OR ON BEHALF OF INDIVIDUALS WHO RESIDE IN THIS STATE AND
17 WITH WHOM THE APPLICANT HAS AGREEMENTS; AND
18 (VIII) PROVIDE ANY OTHER INFORMATION THAT THE SUPERINTENDENT REASON-
19 ABLY REQUIRES TO PERFORM THE SUPERINTENDENT'S DUTIES UNDER THIS SECTION.
20 3. EXCEPT FOR THE INFORMATION REQUIRED BY SUBDIVISIONS SEVEN, FOURTEEN
21 AND SEVENTEEN OF SECTION FIVE HUNDRED EIGHTY-A OF THIS ARTICLE AND THE
22 ADDRESSES REQUIRED BY SUBDIVISION FOUR OF SECTION FIVE HUNDRED EIGHTY-A
23 OF THIS ARTICLE, THE SUPERINTENDENT SHALL MAKE THE INFORMATION IN AN
24 APPLICATION FOR RENEWAL OF REGISTRATION AS A PROVIDER AVAILABLE TO THE
25 PUBLIC.
26 4. IF A REGISTERED PROVIDER FILES A TIMELY AND COMPLETE APPLICATION
27 FOR RENEWAL OF REGISTRATION, THE REGISTRATION REMAINS EFFECTIVE UNTIL
28 THE SUPERINTENDENT, IN A RECORD, NOTIFIES THE APPLICANT OF A DENIAL AND
29 STATES THE REASONS FOR THE DENIAL.
30 5. IF THE SUPERINTENDENT DENIES AN APPLICATION FOR RENEWAL OF REGIS-
31 TRATION AS A PROVIDER, THE APPLICANT, WITHIN THIRTY DAYS AFTER RECEIVING
32 NOTICE OF THE DENIAL, MAY APPEAL AND REQUEST A HEARING PURSUANT TO THE
33 STATE ADMINISTRATIVE PROCEDURE ACT. SUBJECT TO SECTION FIVE HUNDRED
34 EIGHTY-SEVEN-A OF THIS ARTICLE, WHILE THE APPEAL IS PENDING THE APPLI-
35 CANT SHALL CONTINUE TO PROVIDE DEBT-MANAGEMENT SERVICES TO INDIVIDUALS
36 WITH WHOM IT HAS AGREEMENTS. IF THE DENIAL IS AFFIRMED, SUBJECT TO THE
37 SUPERINTENDENT'S ORDER AND SECTION FIVE HUNDRED EIGHTY-SEVEN-A OF THIS
38 ARTICLE, THE APPLICANT SHALL CONTINUE TO PROVIDE DEBT-MANAGEMENT
39 SERVICES TO INDIVIDUALS WITH WHOM IT HAS AGREEMENTS UNTIL, WITH THE
40 APPROVAL OF THE SUPERINTENDENT, IT TRANSFERS THE AGREEMENTS TO ANOTHER
41 REGISTERED PROVIDER OR RETURNS TO THE INDIVIDUALS ALL UNEXPENDED MONEY
42 THAT IS UNDER THE APPLICANT'S CONTROL.
43 S 581-C. REGISTRATION IN ANOTHER STATE. IF A PROVIDER HOLDS A LICENSE
44 OR CERTIFICATE OF REGISTRATION IN ANOTHER STATE AUTHORIZING IT TO
45 PROVIDE DEBT-MANAGEMENT SERVICES, THE PROVIDER MAY SUBMIT A COPY OF THAT
46 LICENSE OR CERTIFICATE AND THE APPLICATION FOR IT INSTEAD OF AN APPLICA-
47 TION IN THE FORM PRESCRIBED BY SECTION FIVE HUNDRED EIGHTY OF THIS ARTI-
48 CLE. THE SUPERINTENDENT SHALL ACCEPT THE APPLICATION AND THE LICENSE OR
49 CERTIFICATE FROM THE OTHER STATE AS AN APPLICATION FOR REGISTRATION AS A
50 PROVIDER OR FOR RENEWAL OF REGISTRATION AS A PROVIDER, AS APPROPRIATE,
51 IN THIS STATE IF:
52 1. THE APPLICATION IN THE OTHER STATE CONTAINS INFORMATION SUBSTAN-
53 TIALLY SIMILAR TO OR MORE COMPREHENSIVE THAN THAT REQUIRED IN AN APPLI-
54 CATION SUBMITTED IN THIS STATE;
55 2. THE APPLICANT PROVIDES THE INFORMATION REQUIRED BY SECTION FIVE
56 HUNDRED EIGHTY-A OF THIS ARTICLE; AND
S. 7317 10
1 3. THE APPLICANT, UNDER OATH, CERTIFIES THAT THE INFORMATION CONTAINED
2 IN THE APPLICATION IS CURRENT OR, TO THE EXTENT IT IS NOT CURRENT,
3 SUPPLEMENTS THE APPLICATION TO MAKE THE INFORMATION CURRENT.
4 S 582. BOND REQUIRED. 1. EXCEPT AS OTHERWISE PROVIDED IN SECTION FIVE
5 HUNDRED EIGHTY-TWO-A OF THIS ARTICLE, A PROVIDER THAT IS REQUIRED TO BE
6 REGISTERED UNDER THIS ARTICLE SHALL FILE A SURETY BOND WITH THE SUPER-
7 INTENDENT, WHICH MUST:
8 (A) BE IN EFFECT DURING THE PERIOD OF REGISTRATION AND FOR TWO YEARS
9 AFTER THE PROVIDER CEASES PROVIDING DEBT-MANAGEMENT SERVICES TO INDIVID-
10 UALS IN THIS STATE; AND
11 (B) RUN TO THIS STATE FOR THE BENEFIT OF THIS STATE AND OF INDIVIDUALS
12 WHO RESIDE IN THIS STATE WHEN THEY AGREE TO RECEIVE DEBT-MANAGEMENT
13 SERVICES FROM THE PROVIDER, AS THEIR INTERESTS MAY APPEAR.
14 2. SUBJECT TO ADJUSTMENT OF THE DOLLAR AMOUNT PURSUANT TO SUBDIVISION
15 SIX OF SECTION FIVE HUNDRED EIGHTY-SIX-C OF THIS ARTICLE, A SURETY BOND
16 FILED PURSUANT TO SUBDIVISION ONE MUST:
17 (A) BE IN THE AMOUNT OF FIFTY THOUSAND DOLLARS OR OTHER LARGER OR
18 SMALLER AMOUNT THAT THE SUPERINTENDENT DETERMINES IS WARRANTED BY THE
19 FINANCIAL CONDITION AND BUSINESS EXPERIENCE OF THE PROVIDER, THE HISTORY
20 OF THE PROVIDER IN PERFORMING DEBT-MANAGEMENT SERVICES, THE RISK TO
21 INDIVIDUALS, AND ANY OTHER FACTOR THE SUPERINTENDENT CONSIDERS APPROPRI-
22 ATE;
23 (B) BE ISSUED BY A BONDING, SURETY, OR INSURANCE COMPANY AUTHORIZED TO
24 DO BUSINESS IN THIS STATE AND RATED AT LEAST A BY A NATIONALLY RECOG-
25 NIZED RATING ORGANIZATION; AND
26 (C) HAVE PAYMENT CONDITIONED UPON NONCOMPLIANCE OF THE PROVIDER OR ITS
27 AGENT WITH THIS ARTICLE.
28 3. IF THE PRINCIPAL AMOUNT OF A SURETY BOND IS REDUCED BY PAYMENT OF A
29 CLAIM OR A JUDGMENT, THE PROVIDER SHALL IMMEDIATELY NOTIFY THE SUPER-
30 INTENDENT AND, WITHIN THIRTY DAYS AFTER NOTICE BY THE SUPERINTENDENT,
31 FILE A NEW OR ADDITIONAL SURETY BOND IN AN AMOUNT SET BY THE SUPERINTEN-
32 DENT. THE AMOUNT OF THE NEW OR ADDITIONAL BOND MUST BE AT LEAST THE
33 AMOUNT OF THE BOND IMMEDIATELY BEFORE PAYMENT OF THE CLAIM OR JUDGMENT.
34 IF FOR ANY REASON A SURETY TERMINATES A BOND, THE PROVIDER SHALL IMME-
35 DIATELY FILE A NEW SURETY BOND IN THE AMOUNT OF FIFTY THOUSAND DOLLARS
36 OR OTHER AMOUNT DETERMINED PURSUANT TO SUBDIVISION TWO OF THIS SECTION.
37 4. THE SUPERINTENDENT OR AN INDIVIDUAL MAY OBTAIN SATISFACTION OUT OF
38 THE SURETY BOND PROCURED PURSUANT TO THIS SECTION IF:
39 (A) THE SUPERINTENDENT ASSESSES EXPENSES UNDER PARAGRAPH (B) OF SUBDI-
40 VISION TWO OF SECTION FIVE HUNDRED EIGHTY-SIX-C OF THIS ARTICLE, ISSUES
41 A FINAL ORDER UNDER PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION FIVE
42 HUNDRED EIGHTY-SEVEN OF THIS ARTICLE, OR RECOVERS A FINAL JUDGMENT UNDER
43 PARAGRAPH (D) OR (E) OF SUBDIVISION ONE OR SUBDIVISION FOUR OF SECTION
44 FIVE HUNDRED EIGHTY-SEVEN OF THIS ARTICLE; OR
45 (B) AN INDIVIDUAL RECOVERS A FINAL JUDGMENT PURSUANT TO SUBDIVISION
46 ONE OR TWO OR PARAGRAPH (A), (B) OR (D) OF SUBDIVISION THREE OF SECTION
47 FIVE HUNDRED EIGHTY-SEVEN-B OF THIS ARTICLE.
48 5. IF CLAIMS AGAINST A SURETY BOND EXCEED OR ARE REASONABLY EXPECTED
49 TO EXCEED THE AMOUNT OF THE BOND, THE SUPERINTENDENT, ON THE INITIATIVE
50 OF THE SUPERINTENDENT OR ON PETITION OF THE SURETY, SHALL, UNLESS THE
51 PROCEEDS ARE ADEQUATE TO PAY ALL COSTS, JUDGMENTS, AND CLAIMS, DISTRIB-
52 UTE THE PROCEEDS IN THE FOLLOWING ORDER:
53 (A) TO SATISFACTION OF A FINAL ORDER OR JUDGMENT UNDER PARAGRAPH (B),
54 (D) OR (E) OF SUBDIVISION ONE OR SUBDIVISION FOUR OF SECTION FIVE
55 HUNDRED EIGHTY-SEVEN OF THIS ARTICLE;
S. 7317 11
1 (B) TO FINAL JUDGMENTS RECOVERED BY INDIVIDUALS PURSUANT TO SUBDIVI-
2 SION ONE OR TWO OR PARAGRAPH (A), (B) OR (D) OF SUBDIVISION THREE OF
3 SECTION FIVE HUNDRED EIGHTY-SEVEN-B OF THIS ARTICLE, PRO RATA;
4 (C) TO CLAIMS OF INDIVIDUALS ESTABLISHED TO THE SATISFACTION OF THE
5 SUPERINTENDENT, PRO RATA; AND
6 (D) IF A FINAL ORDER OR JUDGMENT IS ISSUED UNDER SUBDIVISION ONE OF
7 SECTION FIVE HUNDRED EIGHTY-SEVEN OF THIS ARTICLE, TO THE EXPENSES
8 CHARGED PURSUANT TO PARAGRAPH (A) OF SUBDIVISION TWO OF SECTION FIVE
9 HUNDRED EIGHTY-SIX-C OF THIS ARTICLE.
10 S 582-A. BOND REQUIRED; SUBSTITUTE. 1. INSTEAD OF THE SURETY BOND
11 REQUIRED BY SECTION FIVE HUNDRED EIGHTY-TWO OF THIS ARTICLE, A PROVIDER
12 MAY DELIVER TO THE SUPERINTENDENT, IN THE AMOUNT REQUIRED BY SUBDIVISION
13 TWO OF SECTION FIVE HUNDRED EIGHTY-TWO OF THIS ARTICLE, AND, EXCEPT AS
14 OTHERWISE PROVIDED IN SUBPARAGRAPH (I) OF PARAGRAPH (B) OF THIS SUBDIVI-
15 SION, PAYABLE OR AVAILABLE TO THIS STATE AND TO INDIVIDUALS WHO RESIDE
16 IN THIS STATE WHEN THEY AGREE TO RECEIVE DEBT-MANAGEMENT SERVICES FROM
17 THE PROVIDER, AS THEIR INTERESTS MAY APPEAR, IF THE PROVIDER OR ITS
18 AGENT DOES NOT COMPLY WITH THIS ARTICLE:
19 (A) A CERTIFICATE OF INSURANCE
20 (I) ISSUED BY AN INSURANCE COMPANY AUTHORIZED TO DO BUSINESS IN THIS
21 STATE AND RATED AT LEAST A OR EQUIVALENT BY A NATIONALLY RECOGNIZED
22 RATING ORGANIZATION APPROVED BY THE SUPERINTENDENT; AND
23 (II) WITH NO DEDUCTIBLE, OR IF THE PROVIDER SUPPLIES A BOND IN THE
24 AMOUNT OF FIVE THOUSAND DOLLARS, A DEDUCTIBLE NOT EXCEEDING FIVE THOU-
25 SAND DOLLARS; OR
26 (B) WITH THE APPROVAL OF THE SUPERINTENDENT:
27 (I) AN IRREVOCABLE LETTER OF CREDIT, ISSUED OR CONFIRMED BY A BANK
28 APPROVED BY THE SUPERINTENDENT, PAYABLE UPON PRESENTATION OF A CERTIF-
29 ICATE BY THE SUPERINTENDENT STATING THAT THE PROVIDER OR ITS AGENT HAS
30 NOT COMPLIED WITH THIS ARTICLE; OR
31 (II) BONDS OR OTHER OBLIGATIONS OF THE UNITED STATES OR GUARANTEED BY
32 THE UNITED STATES OR BONDS OR OTHER OBLIGATIONS OF THIS STATE OR A POLI-
33 TICAL SUBDIVISION OF THIS STATE, TO BE DEPOSITED AND MAINTAINED WITH A
34 BANK APPROVED BY THE SUPERINTENDENT FOR THIS PURPOSE.
35 2. IF A PROVIDER FURNISHES A SUBSTITUTE PURSUANT TO SUBDIVISION ONE OF
36 THIS SECTION, THE PROVISIONS OF SUBDIVISIONS ONE, THREE, FOUR AND FIVE
37 OF SECTION FIVE HUNDRED EIGHTY-TWO OF THIS ARTICLE SHALL APPLY TO THE
38 SUBSTITUTE.
39 S 582-B. REQUIREMENT OF GOOD FAITH. A PROVIDER SHALL ACT IN GOOD FAITH
40 IN ALL MATTERS UNDER THIS ARTICLE.
41 S 582-C. CUSTOMER SERVICE. A PROVIDER THAT IS REQUIRED TO BE REGIS-
42 TERED UNDER THIS ARTICLE SHALL MAINTAIN A TOLL-FREE COMMUNICATION
43 SYSTEM, STAFFED AT A LEVEL THAT REASONABLY PERMITS AN INDIVIDUAL TO
44 SPEAK TO A CERTIFIED COUNSELOR, CERTIFIED DEBT SPECIALIST, OR CUSTOMER-
45 SERVICE REPRESENTATIVE, AS APPROPRIATE, DURING ORDINARY BUSINESS HOURS.
46 S 583. PREREQUISITES FOR PROVIDING DEBT-MANAGEMENT SERVICES. 1. BEFORE
47 PROVIDING DEBT-MANAGEMENT SERVICES, A REGISTERED PROVIDER SHALL GIVE THE
48 INDIVIDUAL AN ITEMIZED LIST OF GOODS AND SERVICES AND THE CHARGES FOR
49 EACH. THE LIST MUST BE CLEAR AND CONSPICUOUS, BE IN A RECORD THE INDI-
50 VIDUAL MAY KEEP WHETHER OR NOT THE INDIVIDUAL ASSENTS TO AN AGREEMENT,
51 AND DESCRIBE THE GOODS AND SERVICES THE PROVIDER OFFERS:
52 (A) FREE OF ADDITIONAL CHARGE IF THE INDIVIDUAL ENTERS INTO AN AGREE-
53 MENT;
54 (B) FOR A CHARGE IF THE INDIVIDUAL DOES NOT ENTER INTO AN AGREEMENT;
55 AND
S. 7317 12
1 (C) FOR A CHARGE IF THE INDIVIDUAL ENTERS INTO AN AGREEMENT, USING THE
2 FOLLOWING TERMINOLOGY, AS APPLICABLE, AND FORMAT:
3 SET-UP FEE ____________________________________________________________
4 DOLLAR AMOUNT OF FEE
5 MONTHLY SERVICE FEE ___________________________________________________
6 DOLLAR AMOUNT OF FEE OR METHOD OF DETERMINING AMOUN
7 SETTLEMENT FEE ________________________________________________________
8 DOLLAR AMOUNT OF FEE OR METHOD OF DETERMINING AMOUN
9 GOODS AND SERVICES IN ADDITION TO THOSE PROVIDED IN CONNECTION WITH A
10 PLAN:
11 ________________________________________________________________________
12 (ITEM) DOLLAR AMOUNT OR METHOD OF DETERMINING AMOUNT
13 ________________________________________________________________________
14 (ITEM) DOLLAR AMOUNT OR METHOD OF DETERMINING AMOUNT.
15 2. A PROVIDER MAY NOT FURNISH DEBT-MANAGEMENT SERVICES UNLESS THE
16 PROVIDER, THROUGH THE SERVICES OF A CERTIFIED COUNSELOR OR CERTIFIED
17 DEBT SPECIALIST:
18 (A) PROVIDES THE INDIVIDUAL WITH REASONABLE EDUCATION ABOUT THE
19 MANAGEMENT OF PERSONAL FINANCE;
20 (B) HAS PREPARED A FINANCIAL ANALYSIS; AND
21 (C) IF THE INDIVIDUAL IS TO MAKE REGULAR, PERIODIC PAYMENTS:
22 (I) HAS PREPARED A PLAN FOR THE INDIVIDUAL;
23 (II) HAS MADE A DETERMINATION, BASED ON THE PROVIDER'S ANALYSIS OF THE
24 INFORMATION PROVIDED BY THE INDIVIDUAL AND OTHERWISE AVAILABLE TO IT,
25 THAT THE PLAN IS SUITABLE FOR THE INDIVIDUAL AND THE INDIVIDUAL WILL BE
26 ABLE TO MEET THE PAYMENT OBLIGATIONS UNDER THE PLAN; AND
27 (III) BELIEVES THAT EACH CREDITOR OF THE INDIVIDUAL LISTED AS A
28 PARTICIPATING CREDITOR IN THE PLAN WILL ACCEPT PAYMENT OF THE INDIVID-
29 UAL'S DEBTS AS PROVIDED IN THE PLAN.
30 3. BEFORE AN INDIVIDUAL ASSENTS TO AN AGREEMENT TO ENGAGE IN A PLAN, A
31 PROVIDER SHALL:
32 (A) PROVIDE THE INDIVIDUAL WITH A COPY OF THE ANALYSIS AND PLAN
33 REQUIRED BY SUBDIVISION TWO OF THIS SECTION IN A RECORD THAT IDENTIFIES
34 THE PROVIDER AND THAT THE INDIVIDUAL MAY KEEP WHETHER OR NOT THE INDI-
35 VIDUAL ASSENTS TO THE AGREEMENT;
36 (B) INFORM THE INDIVIDUAL OF THE AVAILABILITY, AT THE INDIVIDUAL'S
37 OPTION, OF ASSISTANCE BY A TOLL-FREE COMMUNICATION SYSTEM OR IN PERSON
38 TO DISCUSS THE FINANCIAL ANALYSIS AND PLAN REQUIRED BY SUBDIVISION TWO
39 OF THIS SECTION; AND
40 (C) WITH RESPECT TO ALL CREDITORS IDENTIFIED BY THE INDIVIDUAL OR
41 OTHERWISE KNOWN BY THE PROVIDER TO BE CREDITORS OF THE INDIVIDUAL,
42 PROVIDE THE INDIVIDUAL WITH A LIST OF:
43 (I) CREDITORS THAT THE PROVIDER EXPECTS TO PARTICIPATE IN THE PLAN AND
44 GRANT CONCESSIONS:
45 (II) CREDITORS THAT THE PROVIDER EXPECTS TO PARTICIPATE IN THE PLAN
46 BUT NOT GRANT CONCESSIONS;
47 (III) CREDITORS THAT THE PROVIDER EXPECTS NOT TO PARTICIPATE IN THE
48 PLAN; AND
49 (IV) ALL OTHER CREDITORS.
50 4. BEFORE AN INDIVIDUAL ASSENTS TO AN AGREEMENT, THE PROVIDER SHALL
51 INFORM THE INDIVIDUAL, IN A RECORD THAT CONTAINS NOTHING ELSE, THAT IS
52 GIVEN SEPARATELY, AND THAT THE INDIVIDUAL MAY KEEP WHETHER OR NOT THE
53 INDIVIDUAL ASSENTS TO THE AGREEMENTS:
54 (A) OF THE NAME AND BUSINESS ADDRESS OF THE PROVIDER;
S. 7317 13
1 (B) THAT PLANS ARE NOT SUITABLE FOR ALL INDIVIDUALS AND THE INDIVIDUAL
2 MAY ASK THE PROVIDER ABOUT OTHER WAYS, INCLUDING BANKRUPTCY, TO DEAL
3 WITH INDEBTEDNESS;
4 (C) THAT ESTABLISHMENT OF A PLAN MAY ADVERSELY AFFECT THE INDIVIDUAL'S
5 CREDIT RATING OR CREDIT SCORES;
6 (D) THAT NONPAYMENT OF DEBT MAY LEAD CREDITORS TO INCREASE FINANCE AND
7 OTHER CHARGES OR UNDERTAKE COLLECTION ACTIVITY, INCLUDING LITIGATION;
8 (E) UNLESS IT IS NOT TRUE, THAT THE PROVIDER MAY RECEIVE COMPENSATION
9 FROM THE CREDITORS OF THE INDIVIDUAL; AND
10 (F) THAT, UNLESS THE INDIVIDUAL IS INSOLVENT, IF A CREDITOR SETTLES
11 FOR LESS THAN THE FULL AMOUNT OF THE DEBT, THE PLAN MAY RESULT IN THE
12 CREATION OF TAXABLE INCOME TO THE INDIVIDUAL, EVEN THOUGH THE INDIVIDUAL
13 DOES NOT RECEIVE ANY MONEY.
14 5. IF A PROVIDER MAY RECEIVE PAYMENTS FROM AN INDIVIDUAL'S CREDITORS
15 AND THE PLAN CONTEMPLATES THAT THE INDIVIDUAL'S CREDITORS WILL REDUCE
16 FINANCE CHARGES OR FEES FOR LATE PAYMENT, DEFAULT, OR DELINQUENCY, THE
17 PROVIDER MAY COMPLY WITH SUBDIVISION FOUR OF THIS SECTION BY PROVIDING
18 THE FOLLOWING DISCLOSURE, SURROUNDED BY BLACK LINES:
19 IMPORTANT INFORMATION FOR YOU TO CONSIDER
20 (A) DEBT-MANAGEMENT PLANS ARE NOT RIGHT FOR ALL INDIVIDUALS, AND YOU
21 MAY ASK US TO PROVIDE INFORMATION ABOUT OTHER WAYS, INCLUDING BANKRUPT-
22 CY, TO DEAL WITH YOUR DEBTS.
23 (B) USING A DEBT-MANAGEMENT PLAN MAY MAKE IT HARDER FOR YOU TO OBTAIN
24 CREDIT.
25 (C) WE MAY RECEIVE COMPENSATION FOR OUR SERVICES FROM YOUR CREDITORS.
26 ______________________________________________________________________
27 NAME AND BUSINESS ADDRESS OF PROVIDER
28 6. IF A PROVIDER WILL NOT RECEIVE PAYMENTS FROM AN INDIVIDUAL'S CREDI-
29 TORS AND THE PLAN CONTEMPLATES THAT THE INDIVIDUAL'S CREDITORS WILL
30 REDUCE FINANCE CHARGES OR FEES FOR LATE PAYMENT, DEFAULT, OR DELINQUEN-
31 CY, A PROVIDER MAY COMPLY WITH SUBDIVISION FOUR OF THIS SECTION BY
32 PROVIDING THE FOLLOWING DISCLOSURE, SURROUNDED BY BLACK LINES:
33 IMPORTANT INFORMATION FOR YOU TO CONSIDER
34 (A) DEBT-MANAGEMENT PLANS ARE NOT RIGHT FOR ALL INDIVIDUALS, AND YOU
35 MAY ASK US TO PROVIDE INFORMATION ABOUT OTHER WAYS, INCLUDING BANKRUPT-
36 CY, TO DEAL WITH YOUR DEBTS.
37 (B) USING A DEBT-MANAGEMENT PLAN MAY MAKE IT HARDER FOR YOU TO OBTAIN
38 CREDIT.
39 _______________________________________________________________________
40 NAME AND BUSINESS ADDRESS OF PROVIDER
41 7. IF AN AGREEMENT CONTEMPLATES THAT CREDITORS WILL SETTLE DEBTS FOR
42 LESS THAN THE FULL PRINCIPLE AMOUNT OF DEBT OWED, A PROVIDER MAY COMPLY
43 WITH SUBDIVISION FOUR OF THIS SECTION BY PROVIDING THE FOLLOWING DISCLO-
44 SURE, SURROUNDED BY BLACK LINES:
45 IMPORTANT INFORMATION FOR YOU TO CONSIDER
46 (A) OUR PROGRAM IS NOT RIGHT FOR ALL INDIVIDUALS, AND YOU MAY ASK US
47 TO PROVIDE INFORMATION ABOUT BANKRUPTCY AND OTHER WAYS TO DEAL WITH YOUR
48 DEBTS.
49 (B) NONPAYMENT OF YOUR DEBTS UNDER OUR PROGRAM MAY
50 (I) HURT YOUR CREDIT RATING OR CREDIT SCORES;
51 (II) LEAD YOUR CREDITORS TO INCREASE FINANCE AND OTHER CHARGES; AND
52 (III) LEAD YOUR CREDITORS TO UNDERTAKE ACTIVITY, INCLUDING LAWSUITS,
53 TO COLLECT THE DEBTS.
54 (C) REDUCTION OF DEBT UNDER OUR PROGRAM MAY RESULT IN TAXABLE INCOME
55 TO YOU, EVEN THOUGH YOU WILL NOT ACTUALLY RECEIVE ANY MONEY.
56 ________________________________________________________________________
S. 7317 14
1 NAME AND BUSINESS ADDRESS OF PROVIDER
2 S 583-A. COMMUNICATION BY ELECTRONIC OR OTHER MEANS. 1. IN THIS
3 SECTION:
4 (A) "FEDERAL ACT" MEANS THE ELECTRONIC SIGNATURES IN GLOBAL AND
5 NATIONAL COMMERCE ACT, 15 U.S.C. SECTION 7001 ET SEQ., AS AMENDED.
6 (B) "CONSUMER" MEANS AN INDIVIDUAL WHO SEEKS OR OBTAINS GOODS OR
7 SERVICES THAT ARE USED PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD
8 PURPOSES.
9 2. A PROVIDER MAY SATISFY THE REQUIREMENTS OF SECTION FIVE HUNDRED
10 EIGHTY-THREE BY MEANS OF THE INTERNET OR OTHER ELECTRONIC MEANS IF THE
11 PROVIDER OBTAINS A CONSUMER'S CONSENT IN THE MANNER PROVIDED BY SECTION
12 101(C)(1) OF THE FEDERAL ACT.
13 3. THE DISCLOSURES AND MATERIALS REQUIRED BY SECTION FIVE HUNDRED
14 EIGHTY-THREE-B, OR FIVE HUNDRED EIGHTY-FIVE-B OF THIS ARTICLE SHALL BE
15 PRESENTED IN A FORM THAT IS CAPABLE OF BEING ACCURATELY REPRODUCED FOR
16 LATER REFERENCE.
17 4. WITH RESPECT TO DISCLOSURE BY MEANS OF AN INTERNET WEBSITE, THE
18 DISCLOSURE OF THE INFORMATION REQUIRED BY SUBDIVISION FOUR OF SECTION
19 FIVE HUNDRED EIGHTY-THREE OF THIS ARTICLE MUST APPEAR ON ONE OR MORE
20 SCREENS THAT:
21 (A) CONTAIN NO OTHER INFORMATION; AND
22 (B) THE INDIVIDUAL MUST SEE BEFORE PROCEEDING TO ASSENT TO FORMATION
23 OF AN AGREEMENT.
24 5. AT THE TIME OF PROVIDING THE MATERIALS AND AGREEMENT REQUIRED BY
25 SUBDIVISION THREE OF SECTION FIVE HUNDRED EIGHTY-THREE, SUBDIVISION FOUR
26 OF SECTION FIVE HUNDRED EIGHTY-THREE-B OR SECTION FIVE HUNDRED
27 EIGHTY-FIVE-B OF THIS ARTICLE, A PROVIDER SHALL INFORM THE INDIVIDUAL
28 THAT UPON ELECTRONIC, TELEPHONIC, OR WRITTEN REQUEST, IT WILL SEND THE
29 INDIVIDUAL A WRITTEN COPY OF THE MATERIALS, AND SHALL COMPLY WITH A
30 REQUEST AS PROVIDED IN SUBDIVISION SIX OF THIS SECTION.
31 6. IF A PROVIDER IS REQUESTED, BEFORE THE EXPIRATION OF NINETY DAYS
32 AFTER AN AGREEMENT IS COMPLETED OR TERMINATED, TO SEND A WRITTEN COPY OF
33 THE MATERIALS REQUIRED BY SUBDIVISION THREE OF SECTION FIVE HUNDRED
34 EIGHTY-THREE, SUBDIVISION FOUR OF SECTION FIVE HUNDRED EIGHTY-THREE-B OR
35 SECTION FIVE HUNDRED EIGHTY-FIVE-B OF THIS ARTICLE, THE PROVIDER SHALL
36 SEND THEM AT NO CHARGE WITHIN THREE BUSINESS DAYS AFTER THE REQUEST IS
37 RECEIVED, BUT THE PROVIDER NEED NOT COMPLY WITH A REQUEST MORE THAN ONCE
38 PER CALENDAR MONTH OR IF IT REASONABLY BELIEVES THE REQUEST IS MADE FOR
39 PURPOSES OF HARASSMENT. IF A REQUEST IS MADE MORE THAN NINETY DAYS
40 AFTER AN AGREEMENT IS COMPLETED OR TERMINATED, THE PROVIDER SHALL SEND
41 WITHIN A REASONABLE TIME A WRITTEN COPY OF THE MATERIALS REQUESTED.
42 7. A PROVIDER THAT MAINTAINS AN INTERNET WEBSITE SHALL DISCLOSE ON THE
43 HOME PAGE OF ITS WEBSITE OR ON A PAGE THAT IS CLEARLY AND CONSPICUOUSLY
44 CONNECTED TO THE HOME PAGE BY A LINK THAT CLEARLY REVEALS ITS CONTENTS:
45 (A) ITS NAME AND ALL NAMES UNDER WHICH IT DOES BUSINESS;
46 (B) ITS PRINCIPAL BUSINESS ADDRESS, TELEPHONE NUMBER, AND ELECTRONIC-
47 MAIL ADDRESS, IF ANY; AND
48 (C) THE NAMES OF ITS PRINCIPAL OFFICERS.
49 8. SUBJECT TO SUBDIVISION NINE OF THIS SECTION, IF A CONSUMER WHO HAS
50 CONSENTED TO ELECTRONIC COMMUNICATION IN THE MANNER PROVIDED BY SECTION
51 101 OF THE FEDERAL ACT WITHDRAWS CONSENT AS PROVIDED IN THE FEDERAL ACT,
52 A PROVIDER MAY TERMINATE ITS AGREEMENT WITH THE CONSUMER.
53 9. IF A PROVIDER WISHES TO TERMINATE AN AGREEMENT WITH A CONSUMER
54 PURSUANT TO SUBDIVISION EIGHT OF THIS SECTION, IT SHALL NOTIFY THE
55 CONSUMER THAT IT WILL TERMINATE THE AGREEMENT UNLESS THE CONSUMER, WITH-
56 IN THIRTY DAYS AFTER RECEIVING THE NOTIFICATION, CONSENTS TO ELECTRONIC
S. 7317 15
1 COMMUNICATION IN THE MANNER PROVIDED IN SECTION 101(C) OF THE FEDERAL
2 ACT. IF THE CONSUMER CONSENTS, THE PROVIDER MAY TERMINATE THE AGREEMENT
3 ONLY AS PERMITTED BY SUBDIVISION ONE OF SECTION FIVE HUNDRED
4 EIGHTY-THREE-B OF THIS ARTICLE.
5 S 583-B. FORM AND CONTENTS OF AGREEMENT. 1. AN AGREEMENT MUST:
6 (A) BE IN A RECORD;
7 (B) BE DATED AND SIGNED BY THE PROVIDER AND THE INDIVIDUAL;
8 (C) INCLUDE THE NAME OF THE INDIVIDUAL AND THE ADDRESS WHERE THE INDI-
9 VIDUAL RESIDES;
10 (D) INCLUDE THE NAME, BUSINESS ADDRESS, AND TELEPHONE NUMBER OF THE
11 PROVIDER;
12 (E) BE DELIVERED TO THE INDIVIDUAL IMMEDIATELY UPON FORMATION OF THE
13 AGREEMENT; AND
14 (F) DISCLOSE:
15 (I) THE SERVICES TO BE PROVIDED;
16 (II) THE AMOUNT, OR METHOD OF DETERMINING THE AMOUNT, OF ALL FEES,
17 INDIVIDUALLY ITEMIZED, TO BE PAID BY THE INDIVIDUAL;
18 (III) THE SCHEDULE OF PAYMENTS TO BE MADE BY OR ON BEHALF OF THE INDI-
19 VIDUAL, INCLUDING THE AMOUNT OF EACH PAYMENT, THE DATE ON WHICH EACH
20 PAYMENT IS DUE, AND AN ESTIMATE OF THE DATE OF THE FINAL PAYMENT;
21 (IV) IF A PLAN PROVIDES FOR REGULAR PERIODIC PAYMENTS TO CREDITORS:
22 (A) EACH CREDITOR OF THE INDIVIDUAL TO WHICH PAYMENT WILL BE MADE, THE
23 AMOUNT OWED TO EACH CREDITOR, AND ANY CONCESSIONS THE PROVIDER REASON-
24 ABLY BELIEVES EACH CREDITOR WILL OFFER; AND
25 (B) THE SCHEDULE OF EXPECTED PAYMENTS TO EACH CREDITOR, INCLUDING THE
26 AMOUNT OF EACH PAYMENT AND THE DATE ON WHICH IT WILL BE MADE;
27 (V) EACH CREDITOR THAT THE PROVIDER BELIEVES WILL NOT PARTICIPATE IN
28 THE PLAN AND TO WHICH THE PROVIDER WILL NOT DIRECT PAYMENT;
29 (VI) HOW THE PROVIDER WILL COMPLY WITH ITS OBLIGATIONS UNDER SUBDIVI-
30 SION ONE OF SECTION FIVE HUNDRED EIGHTY-FIVE-B OF THIS ARTICLE;
31 (VII) THAT THE PROVIDER MAY TERMINATE THE AGREEMENT FOR GOOD CAUSE,
32 UPON RETURN OF UNEXPENDED MONEY OF THE INDIVIDUAL;
33 (VIII) THAT THE INDIVIDUAL MAY CANCEL THE AGREEMENT AS PROVIDED IN
34 SECTION FIVE HUNDRED EIGHTY-THREE-C OF THIS ARTICLE;
35 (IX) THAT THE INDIVIDUAL MAY CONTACT THE SUPERINTENDENT WITH ANY QUES-
36 TIONS OR COMPLAINTS REGARDING THE PROVIDER; AND
37 (X) THE ADDRESS, TELEPHONE NUMBER, AND INTERNET ADDRESS OR WEBSITE OF
38 THE SUPERINTENDENT.
39 2. FOR PURPOSES OF PARAGRAPH (E) OF SUBDIVISION ONE OF THIS SECTION,
40 DELIVERY OF AN ELECTRONIC RECORD OCCURS WHEN IT IS MADE AVAILABLE IN A
41 FORMAT IN WHICH THE INDIVIDUAL MAY RETRIEVE, SAVE, AND PRINT IT AND THE
42 INDIVIDUAL IS NOTIFIED THAT IT IS AVAILABLE.
43 3. IF THE SUPERINTENDENT SUPPLIES THE PROVIDER WITH ANY INFORMATION
44 REQUIRED UNDER SUBPARAGRAPH (X) OF PARAGRAPH (F) OF SUBDIVISION ONE OF
45 THIS SECTION, THE PROVIDER MAY COMPLY WITH THAT REQUIREMENT ONLY BY
46 DISCLOSING THE INFORMATION SUPPLIED BY THE SUPERINTENDENT.
47 4. AN AGREEMENT MUST PROVIDE THAT:
48 (A) THE INDIVIDUAL HAS A RIGHT TO TERMINATE THE AGREEMENT AT ANY TIME,
49 WITHOUT PENALTY OR OBLIGATION, BY GIVING THE PROVIDER WRITTEN OR ELEC-
50 TRONIC NOTICE, IN WHICH EVENT:
51 (I) THE PROVIDER WILL REFUND ALL UNEXPENDED MONEY THAT THE PROVIDER OR
52 ITS AGENT HAS RECEIVED FROM OR ON BEHALF OF THE INDIVIDUAL FOR THE
53 REDUCTION OR SATISFACTION OF THE INDIVIDUAL'S DEBT;
54 (II) WITH RESPECT TO AN AGREEMENT THAT CONTEMPLATES THAT CREDITORS
55 WILL SETTLE DEBTS FOR LESS THAN THE PRINCIPAL AMOUNT OF DEBT, THE
S. 7317 16
1 PROVIDER WILL REFUND SIXTY-FIVE PERCENT OF ANY PORTION OF THE SET-UP FEE
2 THAT HAS NOT BEEN CREDITED AGAINST THE SETTLEMENT FEE; AND
3 (III) ALL POWERS OF ATTORNEY GRANTED BY THE INDIVIDUAL TO THE PROVIDER
4 ARE REVOKED AND INEFFECTIVE;
5 (B) THE INDIVIDUAL AUTHORIZES ANY BANK IN WHICH THE PROVIDER OR ITS
6 AGENT HAS ESTABLISHED A TRUST ACCOUNT TO DISCLOSE TO THE SUPERINTENDENT
7 ANY FINANCIAL RECORDS RELATING TO THE TRUST ACCOUNT; AND
8 (C) THE PROVIDER WILL NOTIFY THE INDIVIDUAL WITHIN FIVE DAYS AFTER
9 LEARNING OF A CREDITOR'S FINAL DECISION TO REJECT OR WITHDRAW FROM A
10 PLAN AND THAT THIS NOTICE WILL INCLUDE:
11 (I) THE IDENTITY OF THE CREDITOR; AND
12 (II) THE RIGHT OF THE INDIVIDUAL TO MODIFY OR TERMINATE THE AGREEMENT.
13 5. AN AGREEMENT MAY CONFER ON A PROVIDER A POWER OF ATTORNEY TO SETTLE
14 THE INDIVIDUAL'S DEBT FOR NO MORE THAN FIFTY PERCENT OF THE PRINCIPAL
15 AMOUNT OF THE DEBT. AN AGREEMENT MAY NOT CONFER A POWER OF ATTORNEY TO
16 SETTLE A DEBT FOR MORE THAN FIFTY PERCENT OF THAT AMOUNT, BUT MAY CONFER
17 A POWER OF ATTORNEY TO NEGOTIATE WITH CREDITORS OF THE INDIVIDUAL ON
18 BEHALF OF THE INDIVIDUAL. AN AGREEMENT MUST PROVIDE THAT THE PROVIDER
19 WILL OBTAIN THE ASSENT OF THE INDIVIDUAL AFTER A CREDITOR HAS ASSENTED
20 TO A SETTLEMENT FOR MORE THAN FIFTY PERCENT OF THE PRINCIPAL AMOUNT OF
21 THE DEBT.
22 6. AN AGREEMENT MAY NOT:
23 (A) PROVIDE FOR APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN
24 THE UNITED STATES AND THIS STATE;
25 (B) EXCEPT AS PERMITTED BY SECTION 2 OF THE FEDERAL ARBITRATION ACT, 9
26 U.S.C. SECTION 2, AS AMENDED, OR ARTICLE SEVENTY-FIVE OF THE CIVIL PRAC-
27 TICE LAW AND RULES CONTAIN A PROVISION THAT MODIFIES OR LIMITS OTHERWISE
28 AVAILABLE FORUMS OR PROCEDURAL RIGHTS, INCLUDING THE RIGHT TO TRIAL BY
29 JURY, THAT ARE GENERALLY AVAILABLE TO THE INDIVIDUAL UNDER LAW OTHER
30 THAN THIS ARTICLE;
31 (C) CONTAIN A PROVISION THAT RESTRICTS THE INDIVIDUAL'S REMEDIES UNDER
32 THIS ARTICLE OR LAW OTHER THAN THIS ARTICLE; OR
33 (D) CONTAIN A PROVISION THAT:
34 (I) LIMITS OR RELEASES THE LIABILITY OF ANY PERSON FOR NOT PERFORMING
35 THE AGREEMENT OR FOR VIOLATING THIS ARTICLE; OR
36 (II) INDEMNIFIES ANY PERSON FOR LIABILITY ARISING UNDER THE AGREEMENT
37 OR THIS ARTICLE.
38 7. ALL RIGHTS AND OBLIGATIONS SPECIFIED IN SUBDIVISION FOUR OF THIS
39 SECTION AND SECTION FIVE HUNDRED EIGHTY-THREE-C OF THIS ARTICLE EXIST
40 EVEN IF NOT PROVIDED IN THE AGREEMENT. A PROVISION IN AN AGREEMENT WHICH
41 VIOLATES SUBDIVISION FOUR, FIVE OR SIX OF THIS SECTION IS VOID.
42 S 583-C. CANCELLATION OF AGREEMENT; WAIVER. 1. AN INDIVIDUAL MAY
43 CANCEL AN AGREEMENT BEFORE MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE
44 INDIVIDUAL ASSENTS TO IT, UNLESS THE AGREEMENT DOES NOT COMPLY WITH
45 SUBDIVISION TWO OF THIS SECTION OR SECTION FIVE HUNDRED EIGHTY-THREE-B
46 OR FIVE HUNDRED EIGHTY-FIVE-C OF THIS ARTICLE, IN WHICH EVENT THE INDI-
47 VIDUAL MAY CANCEL THE AGREEMENT WITHIN THIRTY DAYS AFTER THE INDIVIDUAL
48 ASSENTS TO IT. TO EXERCISE THE RIGHT TO CANCEL, THE INDIVIDUAL MUST GIVE
49 NOTICE IN A RECORD TO THE PROVIDER. NOTICE BY MAIL IS GIVEN WHEN MAILED.
50 2. AN AGREEMENT MUST BE ACCOMPANIED BY A FORM THAT CONTAINS IN
51 BOLD-FACE TYPE, SURROUNDED BY BOLD BLACK LINES:
52 NOTICE OF RIGHT TO CANCEL
S. 7317 17
1 YOU MAY CANCEL THIS AGREEMENT, WITHOUT ANY PENALTY OR OBLIGATION, AT
2 ANY TIME BEFORE MIDNIGHT OF THE THIRD BUSINESS DAY THAT BEGINS THE DAY
3 AFTER YOU AGREE TO IT BY ELECTRONIC COMMUNICATION OR BY SIGNING IT.
4 TO CANCEL THIS AGREEMENT DURING THIS PERIOD, SEND AN E-MAIL TO
5 ___________________________ OR MAIL OR DELIVER A SIGNED, DATED COPY OF
6 THIS
7 E-MAIL ADDRESS OF PROVIDER
8 NOTICE, OR ANY OTHER WRITTEN NOTICE TO
9 ___________________
10 NAME OF PROVIDER
11 AT ______________________________________________ BEFORE MIDNIGHT ON
12 ___________________________.
13 ADDRESS OF PROVIDER DATE
14 IF YOU CANCEL THIS AGREEMENT WITHIN THE 3-DAY PERIOD, WE WILL REFUND
15 ALL MONEY YOU ALREADY HAVE PAID US.
16 YOU ALSO MAY TERMINATE THIS AGREEMENT AT ANY LATER TIME, BUT WE MAY
17 NOT BE REQUIRED TO REFUND FEES YOU HAVE PAID US.
18 I CANCEL THIS AGREEMENT,
19 ____________________________________________
20 PRINT YOUR NAME
21 ____________________________________________
22 SIGNATURE
23 ____________________________________________
24 DATE
25 3. IF A PERSONAL FINANCIAL EMERGENCY NECESSITATES THE DISBURSEMENT OF
26 AN INDIVIDUAL'S MONEY TO ONE OR MORE OF THE INDIVIDUAL'S CREDITORS
27 BEFORE THE EXPIRATION OF THREE DAYS AFTER AN AGREEMENT IS SIGNED, AN
28 INDIVIDUAL MAY WAIVE THE RIGHT TO CANCEL. TO WAIVE THE RIGHT, THE INDI-
29 VIDUAL MUST SEND OR DELIVER A SIGNED, DATED STATEMENT IN THE INDIVID-
30 UAL'S OWN WORDS DESCRIBING THE CIRCUMSTANCES THAT NECESSITATE A WAIVER.
31 THE WAIVER MUST EXPLICITLY WAIVE THE RIGHT TO CANCEL. A WAIVER BY MEANS
32 OF A STANDARD-FORM RECORD IS VOID.
33 S 584. REQUIRED LANGUAGE. UNLESS THE SUPERINTENDENT, BY RULE, PROVIDES
34 OTHERWISE, THE DISCLOSURES AND DOCUMENTS REQUIRED BY THIS ARTICLE MUST
35 BE IN ENGLISH. IF A PROVIDER COMMUNICATES WITH AN INDIVIDUAL PRIMARILY
36 IN A LANGUAGE OTHER THAN ENGLISH, THE PROVIDER MUST FURNISH A TRANS-
37 LATION INTO THE OTHER LANGUAGE OF THE DISCLOSURES AND DOCUMENTS REQUIRED
38 BY THIS ARTICLE.
39 S 584-A. TRUST ACCOUNT. 1. ALL MONEY PAID TO A PROVIDER BY OR ON
40 BEHALF OF AN INDIVIDUAL FOR DISTRIBUTION TO CREDITORS PURSUANT TO A PLAN
41 IS HELD IN TRUST. WITHIN TWO BUSINESS DAYS AFTER RECEIPT, THE PROVIDER
42 SHALL DEPOSIT THE MONEY IN A TRUST ACCOUNT ESTABLISHED FOR THE BENEFIT
43 OF INDIVIDUALS TO WHOM THE PROVIDER IS FURNISHING DEBT-MANAGEMENT
44 SERVICES.
45 2. MONEY HELD IN TRUST BY A PROVIDER IS NOT PROPERTY OF THE PROVIDER
46 OR ITS DESIGNEE. THE MONEY IS NOT AVAILABLE TO CREDITORS OF THE PROVIDER
47 OR DESIGNEE, EXCEPT AN INDIVIDUAL FROM WHOM OR ON WHOSE BEHALF THE
48 PROVIDER RECEIVED MONEY, TO THE EXTENT THAT THE MONEY HAS NOT BEEN
49 DISBURSED TO CREDITORS OF THE INDIVIDUAL.
50 3. A PROVIDER SHALL:
51 (A) MAINTAIN SEPARATE RECORDS OF ACCOUNT FOR EACH INDIVIDUAL TO WHOM
52 THE PROVIDER IS FURNISHING DEBT-MANAGEMENT SERVICES;
53 (B) DISBURSE MONEY PAID BY OR ON BEHALF OF THE INDIVIDUAL TO CREDITORS
54 OF THE INDIVIDUAL AS DISCLOSED IN THE AGREEMENT, EXCEPT THAT:
55 (I) THE PROVIDER MAY DELAY PAYMENT TO THE EXTENT THAT A PAYMENT BY THE
56 INDIVIDUAL IS NOT FINAL; AND
S. 7317 18
1 (II) IF A PLAN PROVIDES FOR REGULAR PERIODIC PAYMENTS TO CREDITORS,
2 THE DISBURSEMENT MUST COMPLY WITH THE DUE DATES ESTABLISHED BY EACH
3 CREDITOR; AND
4 (C) PROMPTLY CORRECT ANY PAYMENTS THAT ARE NOT MADE OR THAT ARE MISDI-
5 RECTED AS A RESULT OF AN ERROR BY THE PROVIDER OR OTHER PERSON IN
6 CONTROL OF THE TRUST ACCOUNT AND REIMBURSE THE INDIVIDUAL FOR ANY COSTS
7 OR FEES IMPOSED BY A CREDITOR AS A RESULT OF THE FAILURE TO PAY OR
8 MISDIRECTION.
9 4. A PROVIDER MAY NOT COMMINGLE MONEY IN A TRUST ACCOUNT ESTABLISHED
10 FOR THE BENEFIT OF INDIVIDUALS TO WHOM THE PROVIDER IS FURNISHING DEBT-
11 MANAGEMENT SERVICES WITH MONEY OF OTHER PERSONS.
12 5. A TRUST ACCOUNT MUST AT ALL TIMES HAVE A CASH BALANCE EQUAL TO THE
13 SUM OF THE BALANCES OF EACH INDIVIDUAL'S ACCOUNT.
14 6. IF A PROVIDER HAS ESTABLISHED A TRUST ACCOUNT PURSUANT TO SUBDIVI-
15 SION ONE OF THIS SECTION, THE PROVIDER SHALL RECONCILE THE TRUST ACCOUNT
16 AT LEAST ONCE A MONTH. THE RECONCILIATION MUST COMPARE THE CASH BALANCE
17 IN THE TRUST ACCOUNT WITH THE SUM OF THE BALANCES IN EACH INDIVIDUAL'S
18 ACCOUNT. IF THE PROVIDER OR ITS DESIGNEE HAS MORE THAN ONE TRUST
19 ACCOUNT, EACH TRUST ACCOUNT MUST BE INDIVIDUALLY RECONCILED.
20 7. IF A PROVIDER DISCOVERS, OR HAS A REASONABLE SUSPICION OF, EMBEZ-
21 ZLEMENT OR OTHER UNLAWFUL APPROPRIATION OF MONEY HELD IN TRUST, THE
22 PROVIDER IMMEDIATELY SHALL NOTIFY THE SUPERINTENDENT BY A METHOD
23 APPROVED BY THE SUPERINTENDENT. UNLESS THE SUPERINTENDENT BY RULE
24 PROVIDES OTHERWISE, WITHIN FIVE DAYS THEREAFTER, THE PROVIDER SHALL GIVE
25 NOTICE TO THE SUPERINTENDENT DESCRIBING THE REMEDIAL ACTION TAKEN OR TO
26 BE TAKEN.
27 8. IF AN INDIVIDUAL TERMINATES AN AGREEMENT OR IT BECOMES REASONABLY
28 APPARENT TO A PROVIDER THAT A PLAN HAS FAILED, THE PROVIDER SHALL
29 PROMPTLY REFUND TO THE INDIVIDUAL ALL MONEY PAID BY OR ON BEHALF OF THE
30 INDIVIDUAL WHICH HAS NOT BEEN PAID TO CREDITORS, LESS FEES THAT ARE
31 PAYABLE TO THE PROVIDER UNDER SECTION FIVE HUNDRED EIGHTY-FOUR-B OF THIS
32 ARTICLE.
33 9. BEFORE RELOCATING A TRUST ACCOUNT FROM ONE BANK TO ANOTHER, A
34 PROVIDER SHALL INFORM THE SUPERINTENDENT OF THE NAME, BUSINESS ADDRESS,
35 AND TELEPHONE NUMBER OF THE NEW BANK. AS SOON AS PRACTICABLE, THE
36 PROVIDER SHALL INFORM THE SUPERINTENDENT OF THE ACCOUNT NUMBER OF THE
37 TRUST ACCOUNT AT THE NEW BANK.
38 S 584-B. FEES AND OTHER CHARGES. 1. A PROVIDER MAY NOT IMPOSE DIRECTLY
39 OR INDIRECTLY A FEE OR OTHER CHARGE ON AN INDIVIDUAL OR RECEIVE MONEY
40 FROM OR ON BEHALF OF AN INDIVIDUAL FOR DEBT-MANAGEMENT SERVICES EXCEPT
41 AS PERMITTED BY THIS SECTION.
42 2. A PROVIDER MAY NOT IMPOSE CHARGES OR RECEIVE PAYMENT FOR DEBT-MAN-
43 AGEMENT SERVICES UNTIL THE PROVIDER AND THE INDIVIDUAL HAS SIGNED AN
44 AGREEMENT THAT COMPLIES WITH SECTIONS FIVE HUNDRED EIGHTY-THREE-B AND
45 FIVE HUNDRED EIGHTY-FIVE-B OF THIS ARTICLE.
46 3. IF AN INDIVIDUAL ASSENTS TO AN AGREEMENT, A PROVIDER MAY NOT IMPOSE
47 A FEE OR OTHER CHARGE FOR EDUCATIONAL OR COUNSELING SERVICES, OR THE
48 LIKE, EXCEPT AS OTHERWISE PROVIDED IN THIS SUBDIVISION AND SUBDIVISION
49 FOUR OF THIS SECTION. THE SUPERINTENDENT MAY AUTHORIZE A PROVIDER TO
50 CHARGE A FEE BASED ON THE NATURE AND EXTENT OF THE EDUCATIONAL OR COUN-
51 SELING SERVICES FURNISHED BY THE PROVIDER.
52 4. SUBJECT TO ADJUSTMENT OF DOLLAR AMOUNTS PURSUANT TO SUBDIVISION SIX
53 OF SECTION FIVE HUNDRED EIGHTY-SIX-C OF THIS ARTICLE, THE FOLLOWING
54 RULES APPLY:
S. 7317 19
1 (A) IF AN INDIVIDUAL ASSENTS TO A PLAN THAT CONTEMPLATES THAT CREDI-
2 TORS WILL REDUCE FINANCE CHARGES OR FEES FOR LATE PAYMENT, DEFAULT, OR
3 DELINQUENCY, THE PROVIDER MAY CHARGE:
4 (I) A FEE NOT EXCEEDING FIFTY DOLLARS FOR CONSULTATION, OBTAINING A
5 CREDIT REPORT, SETTING UP AN ACCOUNT, AND THE LIKE; AND
6 (II) A MONTHLY SERVICE FEE, NOT TO EXCEED TEN DOLLARS TIMES THE NUMBER
7 OF CREDITORS REMAINING IN A PLAN AT THE TIME THE FEE IS ASSESSED, BUT
8 NOT MORE THAN FIFTY DOLLARS IN ANY MONTH.
9 (B) IF AN INDIVIDUAL ASSENTS TO AN AGREEMENT THAT CONTEMPLATES THAT
10 CREDITORS WILL SETTLE DEBTS FOR LESS THAN THE PRINCIPAL AMOUNT OF THE
11 DEBT, A PROVIDER MAY CHARGE:
12 (I) SUBJECT TO SUBDIVISION FOUR OF SECTION FIVE HUNDRED EIGHTY-THREE-B
13 OF THIS ARTICLE, A FEE FOR CONSULTATION, OBTAINING A CREDIT REPORT,
14 SETTING UP AN ACCOUNT, AND THE LIKE, IN AN AMOUNT NOT EXCEEDING THE
15 LESSER OF FOUR HUNDRED DOLLARS AND FOUR PERCENT OF THE DEBT IN THE PLAN
16 AT THE INCEPTION OF THE PLAN; AND
17 (II) A MONTHLY SERVICE FEE, NOT TO EXCEED TEN DOLLARS TIMES THE NUMBER
18 OF CREDITORS REMAINING IN A PLAN AT THE TIME THE FEE IS ASSESSED, BUT
19 NOT MORE THAN FIFTY DOLLARS IN ANY MONTH.
20 (C) A PROVIDER MAY NOT IMPOSE OR RECEIVE FEES UNDER BOTH PARAGRAPHS
21 (A) AND (B) OF THIS SUBDIVISION.
22 (D) EXCEPT AS OTHERWISE PROVIDED IN THIS SUBDIVISION, IF AN INDIVIDUAL
23 DOES NOT ASSENT TO AN AGREEMENT, A PROVIDER MAY RECEIVE FOR EDUCATIONAL
24 AND COUNSELING SERVICES IT PROVIDES TO THE INDIVIDUAL A FEE NOT EXCEED-
25 ING ONE HUNDRED DOLLARS OR, WITH THE APPROVAL OF THE SUPERINTENDENT, A
26 LARGER FEE. THE SUPERINTENDENT MAY APPROVE A FEE LARGER THAN ONE HUNDRED
27 DOLLARS IF THE NATURE AND EXTENT OF THE EDUCATIONAL AND COUNSELING
28 SERVICES WARRANT THE LARGER FEE.
29 5. IF, BEFORE THE EXPIRATION OF NINETY DAYS AFTER THE COMPLETION OR
30 TERMINATION OF EDUCATIONAL OR COUNSELING SERVICES, AN INDIVIDUAL ASSENTS
31 TO AN AGREEMENT, THE PROVIDER SHALL REFUND TO THE INDIVIDUAL ANY FEE
32 PAID PURSUANT TO PARAGRAPH (D) OF SUBDIVISION FOUR OF THIS SECTION.
33 6. EXCEPT AS OTHERWISE PROVIDED IN SUBDIVISIONS THREE AND FOUR OF THIS
34 SECTION, IF AN AGREEMENT CONTEMPLATES THAT CREDITORS WILL SETTLE AN
35 INDIVIDUAL'S DEBTS FOR LESS THAN THE PRINCIPAL AMOUNT OF THE DEBT,
36 COMPENSATION FOR SERVICES IN CONNECTION WITH SETTLING A DEBT MAY NOT
37 EXCEED, WITH RESPECT TO EACH DEBT:
38 (A) THIRTY PERCENT OF THE EXCESS OF THE PRINCIPAL AMOUNT OF THE DEBT
39 OVER THE AMOUNT PAID THE CREDITOR PURSUANT TO THE AGREEMENT, OR
40 (B) TO THE EXTENT IT HAS NOT BEEN CREDITED AGAINST AN EARLIER SETTLE-
41 MENT FEE:
42 (I) THE FEE CHARGED PURSUANT TO SUBPARAGRAPH (I) OF PARAGRAPH (A) OF
43 SUBDIVISION FOUR OF THIS SECTION; AND
44 (II) THE AGGREGATE OF FEES CHARGED PURSUANT TO SUBPARAGRAPH (II) OF
45 PARAGRAPH (A) OF SUBDIVISION FOUR OF THIS SECTION.
46 7. SUBJECT TO ADJUSTMENT OF THE DOLLAR AMOUNT PURSUANT TO SUBDIVISION
47 SIX OF SECTION FIVE HUNDRED EIGHTY-SIX-C OF THIS ARTICLE, IF A PAYMENT
48 TO A PROVIDER BY AN INDIVIDUAL UNDER THIS ARTICLE IS DISHONORED, A
49 PROVIDER MAY IMPOSE A REASONABLE CHARGE ON THE INDIVIDUAL, NOT TO EXCEED
50 THE LESSER OF TWENTY-FIVE DOLLARS AND THE AMOUNT PERMITTED BY LAW OTHER
51 THAN THIS ARTICLE.
52 S 584-C. VOLUNTARY CONTRIBUTIONS. A PROVIDER MAY NOT SOLICIT A VOLUN-
53 TARY CONTRIBUTION FROM AN INDIVIDUAL OR AN AFFILIATE OF THE INDIVIDUAL
54 FOR ANY SERVICE PROVIDED TO THE INDIVIDUAL. A PROVIDER MAY ACCEPT VOLUN-
55 TARY CONTRIBUTIONS FROM AN INDIVIDUAL BUT, UNTIL THIRTY DAYS AFTER
56 COMPLETION OR TERMINATION OF A PLAN, THE AGGREGATE AMOUNT OF MONEY
S. 7317 20
1 RECEIVED FROM OR ON BEHALF OF THE INDIVIDUAL MAY NOT EXCEED THE TOTAL
2 AMOUNT THE PROVIDER MAY CHARGE THE INDIVIDUAL UNDER SECTION FIVE HUNDRED
3 EIGHTY-FOUR-B OF THIS ARTICLE.
4 S 585. VOIDABLE AGREEMENTS. 1. IF A PROVIDER IMPOSED A FEE OR OTHER
5 CHARGE OR RECEIVES MONEY OR OTHER PAYMENTS NOT AUTHORIZED BY SECTIONS
6 FIVE HUNDRED EIGHTY-FOUR-B OR FIVE HUNDRED EIGHTY-FOUR-C OF THIS ARTI-
7 CLE, THE INDIVIDUAL MAY VOID THE AGREEMENT AND RECOVER AS PROVIDED IN
8 SECTION FIVE HUNDRED EIGHTY-SEVEN-B OF THIS ARTICLE.
9 2. IF A PROVIDER IS NOT REGISTERED AS REQUIRED BY THIS ARTICLE WHEN AN
10 INDIVIDUAL ASSENTS TO AN AGREEMENT, THE AGREEMENT IS VOIDABLE BY THE
11 INDIVIDUAL.
12 3. IF AN INDIVIDUAL IS NOT REGISTERED UNDER SUBDIVISION THREE OF THIS
13 SECTION, THE PROVIDER DOES NOT HAVE A CLAIM AGAINST THE INDIVIDUAL FOR
14 BREACH OF CONTRACT OR FOR RESTITUTION.
15 S 585-A. TERMINATION OF AGREEMENT. 1. IF AN INDIVIDUAL WHO HAS ENTERED
16 INTO AN AGREEMENT FAILS FOR SIXTY DAYS TO MAKE PAYMENTS REQUIRED BY THE
17 AGREEMENT, A PROVIDER MAY TERMINATE THE AGREEMENT.
18 2. IF A PROVIDER OR AN INDIVIDUAL TERMINATES AN AGREEMENT, THE PROVID-
19 ER SHALL IMMEDIATELY RETURN TO THE INDIVIDUAL:
20 (A) ANY MONEY OF THE INDIVIDUAL HELD IN TRUST FOR THE BENEFIT OF THE
21 INDIVIDUAL; AND
22 (B) SIXTY-FIVE PERCENT OF ANY PORTION OF THE SET-UP FEE RECEIVED
23 PURSUANT TO PARAGRAPH (B) OF SUBDIVISION FOUR OF SECTION FIVE HUNDRED
24 EIGHT-FOUR-B WHICH HAS NOT BEEN CREDITED AGAINST SETTLEMENT FEES.
25 S 585-B. PERIODIC REPORTS AND RETENTION OF RECORDS. 1. A PROVIDER
26 SHALL PROVIDE THE ACCOUNTING REQUIRED BY SUBDIVISION TWO OF THIS
27 SECTION:
28 (A) UPON CANCELLATION OR TERMINATION OF AN AGREEMENT; AND
29 (B) BEFORE CANCELLATION OR TERMINATION OF ANY AGREEMENT:
30 (I) AT LEAST ONCE EACH MONTH; AND
31 (II) WITHIN FIVE BUSINESS DAYS AFTER A REQUEST BY AN INDIVIDUAL, BUT
32 THE PROVIDER NEED NOT COMPLY WITH MORE THAN ONE REQUEST IN ANY CALENDAR
33 MONTH.
34 2. A PROVIDER, IN A RECORD, SHALL PROVIDE EACH INDIVIDUAL FOR WHOM IT
35 HAS ESTABLISHED A PLAN AN ACCOUNTING OF THE FOLLOWING INFORMATION:
36 (A) THE AMOUNT OF MONEY RECEIVED FROM THE INDIVIDUAL SINCE THE LAST
37 REPORT;
38 (B) THE AMOUNTS AND DATES OF DISBURSEMENT MADE ON THE INDIVIDUAL'S
39 BEHALF, OR BY THE INDIVIDUAL UPON THE DIRECTION OF THE PROVIDER, SINCE
40 THE LAST REPORT TO EACH CREDITOR LISTED IN THE PLAN;
41 (C) THE AMOUNT DEDUCTED FROM THE AMOUNT RECEIVED FROM THE INDIVIDUAL;
42 (D) THE AMOUNT HELD IN RESERVE; AND
43 (E) IF, SINCE THE LAST REPORT, A CREDITOR HAS AGREED TO ACCEPT AS
44 PAYMENT IN FULL AN AMOUNT LESS THAN THE PRINCIPAL AMOUNT OF THE DEBT
45 OWED BY THE INDIVIDUAL:
46 (I) THE TOTAL AMOUNT AND TERMS OF THE SETTLEMENT;
47 (II) THE AMOUNT OF THE DEBT WHEN THE INDIVIDUAL ASSENTED TO THE PLAN;
48 (III) THE AMOUNT OF THE DEBT WHEN THE CREDITOR AGREED TO THE SETTLE-
49 MENT; AND
50 (IV) THE CALCULATION OF A SETTLEMENT FEE.
51 3. A PROVIDER SHALL MAINTAIN RECORDS FOR EACH INDIVIDUAL FOR WHOM IT
52 PROVIDES DEBT-MANAGEMENT SERVICES FOR FIVE YEARS AFTER THE FINAL PAYMENT
53 MADE BY THE INDIVIDUAL AND PRODUCE A COPY OF THEM TO THE INDIVIDUAL
54 WITHIN A REASONABLE TIME AFTER A REQUEST FOR THEM. THE PROVIDER MAY USE
55 ELECTRONIC OR OTHER MEANS OF STORAGE OF THE RECORDS.
S. 7317 21
1 S 585-C. PROHIBITED ACTS AND PRACTICES. 1. A PROVIDER MAY NOT, DIRECT-
2 LY OR INDIRECTLY:
3 (A) MISAPPROPRIATE OR MISAPPLY MONEY HELD IN TRUST;
4 (B) SETTLE A DEBT ON BEHALF OF AN INDIVIDUAL FOR MORE THAN FIFTY
5 PERCENT OF THE PRINCIPAL AMOUNT OF THE DEBT OWED A CREDITOR, UNLESS THE
6 INDIVIDUAL ASSENTS TO THE SETTLEMENT AFTER THE CREDITOR HAS ASSENTED;
7 (C) TAKE A POWER OF ATTORNEY THAT AUTHORIZES IT TO SETTLE A DEBT,
8 UNLESS THE POWER OF ATTORNEY EXPRESSLY LIMITS THE PROVIDER'S AUTHORITY
9 TO SETTLE DEBTS FOR NOT MORE THAN FIFTY PERCENT OF THE PRINCIPAL AMOUNT
10 OF THE DEBT OWED A CREDITOR;
11 (D) EXERCISE OR ATTEMPT TO EXERCISE A POWER OF ATTORNEY AFTER AN INDI-
12 VIDUAL HAS TERMINATED AN AGREEMENT;
13 (E) INITIATE A TRANSFER FROM AN INDIVIDUAL'S ACCOUNT AT A BANK OR WITH
14 ANOTHER PERSON UNLESS THE TRANSFER IS:
15 (I) A RETURN OF MONEY TO THE INDIVIDUAL; OR
16 (II) BEFORE TERMINATION OF AN AGREEMENT, PROPERLY AUTHORIZED BY THE
17 AGREEMENT AND THIS ARTICLE, AND FOR:
18 (A) PAYMENT TO ONE OR MORE CREDITORS PURSUANT TO AN AGREEMENT; OR
19 (B) PAYMENT OF A FEE;
20 (F) OFFER A GIFT OR BONUS, PREMIUM, REWARD, OR OTHER COMPENSATION TO
21 AN INDIVIDUAL FOR EXECUTING AN AGREEMENT;
22 (G) OFFER, PAY, OR GIVE A GIFT OR BONUS, PREMIUM, REWARD, OR OTHER
23 COMPENSATION TO A PERSON FOR REFERRING A PROSPECTIVE CUSTOMER, IF THE
24 PERSON MAKING THE REFERRAL HAS A FINANCIAL INTEREST IN THE OUTCOME OF
25 DEBT-MANAGEMENT SERVICES PROVIDED TO THE CUSTOMER, UNLESS NEITHER THE
26 PROVIDER NOR THE PERSON MAKING THE REFERRAL COMMUNICATES TO THE PROSPEC-
27 TIVE CUSTOMER THE IDENTITY OF THE SOURCE OF THE REFERRAL;
28 (H) RECEIVE A BONUS, COMMISSION, OR OTHER BENEFIT FOR REFERRING AN
29 INDIVIDUAL TO A PERSON;
30 (I) STRUCTURE A PLAN IN A MANNER THAT WOULD RESULT IN A NEGATIVE AMOR-
31 TIZATION OF ANY OF AN INDIVIDUAL'S DEBTS, UNLESS A CREDITOR THAT IS OWED
32 A NEGATIVELY AMORTIZING DEBT AGREES TO REFUND OR WAIVE THE FINANCE
33 CHARGE UPON PAYMENT OF THE PRINCIPAL AMOUNT OF THE DEBT;
34 (J) COMPENSATE ITS EMPLOYEES ON THE BASIS OF A FORMULA THAT INCORPO-
35 RATES THE NUMBER OF INDIVIDUALS THE EMPLOYEE INDUCES TO ENTER INTO
36 AGREEMENTS;
37 (K) SETTLE A DEBT OR LEAD AN INDIVIDUAL TO BELIEVE THAT A PAYMENT TO A
38 CREDITOR IS IN SETTLEMENT OF A DEBT TO THE CREDITOR UNLESS, AT THE TIME
39 OF SETTLEMENT, THE INDIVIDUAL RECEIVES A CERTIFICATION BY THE CREDITOR
40 THAT THE PAYMENT IS IN FULL SETTLEMENT OF THE DEBT;
41 (1) MAKE A REPRESENTATION THAT:
42 (I) THE PROVIDER WILL FURNISH MONEY TO PAY BILLS OR PREVENT ATTACH-
43 MENTS;
44 (II) PAYMENT OF A CERTAIN AMOUNT WILL PERMIT SATISFACTION OF A CERTAIN
45 AMOUNT OR RANGE OF INDEBTEDNESS; OR
46 (III) PARTICIPATION IN A PLAN WILL OR MAY PREVENT LITIGATION, GARNISH-
47 MENT, ATTACHMENT, REPOSSESSION, FORECLOSURE, EVICTION, OR LOSS OF
48 EMPLOYMENT;
49 (M) MISREPRESENT THAT IT IS AUTHORIZED OR COMPETENT TO FURNISH LEGAL
50 ADVICE OR PERFORM LEGAL SERVICES;
51 (N) REPRESENT IN ITS AGREEMENTS, DISCLOSURES REQUIRED BY THIS ARTICLE,
52 ADVERTISEMENTS, OR INTERNET WEBSITE THAT IT IS
53 (I) A NOT-FOR-PROFIT ENTITY UNLESS IT IS ORGANIZED AND PROPERLY OPER-
54 ATING AS A NOT-FOR-PROFIT ENTITY UNDER THE LAW OF THE STATE IN WHICH IT
55 WAS FORMED; OR
S. 7317 22
1 (II) A TAX-EXEMPT ENTITY UNLESS IT HAS RECEIVED CERTIFICATION OF TAX-
2 EXEMPT STATUS FROM THE INTERNAL REVENUE SERVICE AND IS PROPERLY OPERAT-
3 ING AS A NOT-FOR-PROFIT ENTITY UNDER THE LAW OF THE STATE IN WHICH IT
4 WAS FORMED;
5 (O) TAKE A CONFESSION OF JUDGMENT OR POWER OF ATTORNEY TO CONFESS
6 JUDGMENT AGAINST AN INDIVIDUAL; OR
7 (P) EMPLOY AN UNFAIR, UNCONSCIONABLE, OR DECEPTIVE ACT OR PRACTICE,
8 INCLUDING THE KNOWING OMISSION OF ANY MATERIAL INFORMATION.
9 2. IF A PROVIDER FURNISHES DEBT-MANAGEMENT SERVICES TO AN INDIVIDUAL,
10 THE PROVIDER MAY NOT, DIRECTLY OR INDIRECTLY:
11 (A) PURCHASE A DEBT OR OBLIGATION OF THE INDIVIDUAL;
12 (B) RECEIVE FROM OR ON BEHALF OF THE INDIVIDUAL:
13 (I) A PROMISSORY NOTE OR OTHER NEGOTIABLE INSTRUMENT OTHER THAN A
14 CHECK OR A DEMAND DRAFT; OR
15 (II) A POST-DATED CHECK OR DEMAND DRAFT;
16 (C) LEND MONEY OR PROVIDE CREDIT TO THE INDIVIDUAL, EXCEPT AS A DEFER-
17 RAL OF A SETTLEMENT FEE AT NO ADDITIONAL EXPENSE TO THE INDIVIDUAL;
18 (D) OBTAIN A MORTGAGE OR OTHER SECURITY INTEREST FROM ANY PERSON IN
19 CONNECTION WITH THE SERVICES PROVIDED TO THE INDIVIDUAL;
20 (E) EXCEPT AS PERMITTED BY FEDERAL LAW, DISCLOSE THE IDENTITY OR IDEN-
21 TIFYING INFORMATION OF THE INDIVIDUAL OR THE IDENTITY OF THE INDIVID-
22 UAL'S CREDITORS, EXCEPT TO:
23 (I) THE SUPERINTENDENT, UPON PROPER DEMAND;
24 (II) A CREDITOR OF THE INDIVIDUAL, TO THE EXTENT NECESSARY TO SECURE
25 THE COOPERATION OF THE CREDITOR IN A PLAN; OR
26 (III) THE EXTENT NECESSARY TO ADMINISTER THE PLAN;
27 (F) EXCEPT AS OTHERWISE PROVIDED IN SUBDIVISION SIX OF SECTION FIVE
28 HUNDRED EIGHTY-FOUR-B OF THIS ARTICLE, PROVIDE THE INDIVIDUAL LESS THAN
29 THE FULL BENEFIT OF A COMPROMISE OF A DEBT ARRANGED BY THE PROVIDER;
30 (G) CHARGE THE INDIVIDUAL FOR OR PROVIDE CREDIT OR OTHER INSURANCE,
31 COUPONS FOR GOODS OR SERVICES, MEMBERSHIP IN A CLUB, ACCESS TO COMPUTERS
32 OR THE INTERNET, OR ANY OTHER MATTER NOT DIRECTLY RELATED TO DEBT-MAN-
33 AGEMENT SERVICES OR EDUCATIONAL SERVICES CONCERNING PERSONAL FINANCE; OR
34 (H) FURNISH LEGAL ADVICE OR PERFORM LEGAL SERVICES, UNLESS THE PERSON
35 FURNISHING THAT ADVICE TO OR PERFORMING THOSE SERVICES FOR THE INDIVID-
36 UAL IS LICENSED TO PRACTICE LAW.
37 3. THIS ARTICLE DOES NOT AUTHORIZE ANY PERSON TO ENGAGE IN THE PRAC-
38 TICE OF LAW.
39 4. A PROVIDER MAY NOT RECEIVE A GIFT OR BONUS, PREMIUM, REWARD, OR
40 OTHER COMPENSATION, DIRECTLY OR INDIRECTLY, FOR ADVISING, ARRANGING, OR
41 ASSISTING AN INDIVIDUAL IN CONNECTION WITH OBTAINING, AN EXTENSION OF
42 CREDIT OR OTHER SERVICE FROM A LENDER OR SERVICE PROVIDER, EXCEPT FOR
43 EDUCATIONAL OR COUNSELING SERVICES REQUIRED IN CONNECTION WITH A GOVERN-
44 MENT-SPONSORED PROGRAM.
45 5. UNLESS A PERSON SUPPLIES GOODS, SERVICES, OR FACILITIES GENERALLY
46 AND SUPPLIES THEM TO THE PROVIDER AT A COST NO GREATER THAN THE COST THE
47 PERSON GENERALLY CHARGES TO OTHERS, A PROVIDER MAY NOT PURCHASE GOODS,
48 SERVICES, OR FACILITIES FROM THE PERSON IF AN EMPLOYEE OR A PERSON THAT
49 THE PROVIDER SHOULD REASONABLY KNOW IS AN AFFILIATE OF THE PROVIDER:
50 (A) OWNS MORE THAN TEN PERCENT OF THE PERSON; OR
51 (B) IS AN EMPLOYEE OR AFFILIATE OF THE PERSON.
52 S 586. NOTICE OF LITIGATION. NO LATER THAN THIRTY DAYS AFTER A PROVID-
53 ER HAS BEEN SERVED WITH NOTICE OF A CIVIL ACTION FOR VIOLATION OF THIS
54 ARTICLE BY OR ON BEHALF OF AN INDIVIDUAL WHO RESIDES IN THIS STATE AT
55 EITHER THE TIME OF AN AGREEMENT OR AT THE TIME THE NOTICE IS SERVED, THE
S. 7317 23
1 PROVIDER SHALL NOTIFY THE SUPERINTENDENT IN A RECORD THAT IT HAS BEEN
2 SUED.
3 S 586-A. ADVERTISING. 1. IF THE AGREEMENTS OF A PROVIDER CONTEMPLATE
4 THAT CREDITORS WILL REDUCE FINANCE CHARGES OR FEES FOR LATE PAYMENT,
5 DEFAULT, OR DELINQUENCY AND THE PROVIDER ADVERTISES DEBT-MANAGEMENT
6 SERVICES, IT SHALL DISCLOSE, IN AN EASILY COMPREHENSIBLE MANNER, THAT
7 USING A DEBT-MANAGEMENT PLAN MAY MAKE IT HARDER FOR THE INDIVIDUAL TO
8 OBTAIN CREDIT.
9 2. IF THE AGREEMENTS OF A PROVIDER CONTEMPLATE THAT CREDITORS WILL
10 SETTLE FOR LESS THAN THE FULL PRINCIPAL AMOUNT OF DEBT AND THE PROVIDER
11 ADVERTISES DEBT-MANAGEMENT SERVICES, IT SHALL DISCLOSE, IN AN EASILY
12 COMPREHENSIBLE MANNER, THE INFORMATION SPECIFIED IN PARAGRAPHS (C) AND
13 (D) OF SUBDIVISION FOUR OF SECTION FIVE HUNDRED EIGHTY-THREE OF THIS
14 ARTICLE.
15 S 586-B. LIABILITY FOR THE CONDUCT OF OTHER PERSONS. IF A PROVIDER
16 DELEGATES ANY OF ITS DUTIES OR OBLIGATIONS UNDER AN AGREEMENT OR THIS
17 ARTICLE TO ANOTHER PERSON, INCLUDING AN INDEPENDENT CONTRACTOR, THE
18 PROVIDER IS LIABLE FOR CONDUCT OF THE PERSON WHICH, IF DONE BY THE
19 PROVIDER, WOULD VIOLATE THE AGREEMENT OR THIS ARTICLE.
20 S 586-C. POWERS OF SUPERINTENDENT. 1. THE SUPERINTENDENT MAY ACT ON
21 HIS OR HER OWN INITIATIVE OR IN RESPONSE TO COMPLAINTS AND MAY RECEIVE
22 COMPLAINTS, TAKE ACTION TO OBTAIN VOLUNTARY COMPLIANCE WITH THIS ARTI-
23 CLE, REFER CASES TO THE ATTORNEY GENERAL, AND SEEK OR PROVIDE REMEDIES
24 AS PROVIDED IN THIS ARTICLE.
25 2. THE SUPERINTENDENT MAY INVESTIGATE AND EXAMINE, IN THIS STATE OR
26 ELSEWHERE, BY SUBPOENA OR OTHERWISE, THE ACTIVITIES, BOOKS, ACCOUNTS,
27 AND RECORDS OF A PERSON THAT PROVIDES OR OFFERS TO PROVIDE DEBT-MANAGE-
28 MENT SERVICES, OR A PERSON TO WHICH A PROVIDER HAS DELEGATED ITS OBLI-
29 GATIONS UNDER AN AGREEMENT OR THIS ARTICLE, TO DETERMINE COMPLIANCE WITH
30 THIS ARTICLE. INFORMATION THAT IDENTIFIES INDIVIDUALS WHO HAVE AGREE-
31 MENTS WITH THE PROVIDER SHALL NOT BE DISCLOSED TO THE PUBLIC. IN
32 CONNECTION WITH THE INVESTIGATION, THE SUPERINTENDENT MAY:
33 (A) CHARGE THE PERSON THE REASONABLE EXPENSES NECESSARILY INCURRED TO
34 CONDUCT THE EXAMINATION;
35 (B) REQUIRE OR PERMIT A PERSON TO FILE A STATEMENT UNDER OATH AS TO
36 ALL THE FACTS AND CIRCUMSTANCES OF A MATTER TO BE INVESTIGATED; AND
37 (C) SEEK A COURT ORDER AUTHORIZING SEIZURE FROM A BANK AT WHICH THE
38 PERSON MAINTAINS A TRUST ACCOUNT REQUIRED BY SECTION FIVE HUNDRED EIGHT-
39 Y-FOUR-A OF THIS ARTICLE, ANY OR ALL MONEY, BOOKS, RECORDS, ACCOUNTS,
40 AND OTHER PROPERTY OF THE PROVIDER THAT IS IN THE CONTROL OF THE BANK
41 AND RELATES TO INDIVIDUALS WHO RESIDE IN THIS STATE.
42 3. THE SUPERINTENDENT MAY ADOPT RULES TO IMPLEMENT THE PROVISIONS OF
43 THIS ARTICLE IN ACCORDANCE WITH THE STATE ADMINISTRATIVE PROCEDURE ACT.
44 4. THE SUPERINTENDENT MAY ENTER INTO COOPERATIVE ARRANGEMENTS WITH ANY
45 OTHER FEDERAL OR STATE AGENCY HAVING AUTHORITY OVER PROVIDERS AND MAY
46 EXCHANGE WITH ANY OF THOSE AGENCIES INFORMATION ABOUT A PROVIDER,
47 INCLUDING INFORMATION OBTAINED DURING AN EXAMINATION OF THE PROVIDER.
48 5. THE SUPERINTENDENT, BY RULE, SHALL ESTABLISH REASONABLE FEES TO BE
49 PAID BY PROVIDERS FOR THE EXPENSE OF ADMINISTERING THIS ARTICLE.
50 6. THE SUPERINTENDENT, BY RULE, SHALL ADOPT DOLLAR AMOUNTS INSTEAD OF
51 THOSE SPECIFIED IN SECTIONS FIVE HUNDRED SEVENTY-NINE-A, FIVE HUNDRED
52 EIGHTY, FIVE HUNDRED EIGHTY-ONE, FIVE HUNDRED EIGHTY-TWO, FIVE HUNDRED
53 EIGHTY-SEVEN, AND FIVE HUNDRED EIGHTY-SEVEN-B OF THIS ARTICLE TO REFLECT
54 INFLATION, AS MEASURED BY THE UNITED STATES BUREAU OF LABOR STATISTICS
55 CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS OR, IF THAT INDEX IS NOT
56 AVAILABLE, ANOTHER INDEX ADOPTED BY RULE BY THE SUPERINTENDENT. THE
S. 7317 24
1 SUPERINTENDENT SHALL ADOPT A BASE YEAR AND ADJUST THE DOLLAR AMOUNTS,
2 EFFECTIVE ON JULY FIRST OF EACH YEAR, IF THE CHANGE IN THE INDEX FROM
3 THE BASE YEAR, AS OF DECEMBER THIRTY-FIRST OF THE PRECEDING YEAR, IS AT
4 LEAST TEN PERCENT. THE DOLLAR AMOUNT MUST BE ROUNDED TO THE NEAREST ONE
5 HUNDRED DOLLARS, EXCEPT THAT THE AMOUNTS IN SECTION FIVE HUNDRED EIGHT-
6 Y-FOUR-B OF THIS ARTICLE MUST BE ROUNDED TO THE NEAREST DOLLAR.
7 7. THE SUPERINTENDENT SHALL NOTIFY REGISTERED PROVIDERS OF ANY CHANGE
8 IN DOLLAR AMOUNTS MADE PURSUANT TO SUBDIVISION SIX OF THIS SECTION AND
9 MAKE THAT INFORMATION AVAILABLE TO THE PUBLIC.
10 S 587. ADMINISTRATIVE REMEDIES. 1. THE SUPERINTENDENT MAY ENFORCE THIS
11 ARTICLE AND RULES ADOPTED UNDER THIS ARTICLE BY TAKING ONE OR MORE OF
12 THE FOLLOWING ACTIONS:
13 (A) ORDERING A PROVIDER OR A DIRECTOR, EMPLOYEE, OR OTHER AGENT OF A
14 PROVIDER TO CEASE AND DESIST FROM ANY VIOLATIONS;
15 (B) ORDERING A PROVIDER OR A PERSON THAT HAS CAUSED A VIOLATION TO
16 CORRECT THE VIOLATION, INCLUDING MAKING RESTITUTION OF MONEY OR PROPERTY
17 TO A PERSON AGGRIEVED BY A VIOLATION;
18 (C) SUBJECT TO ADJUSTMENT OF THE DOLLAR AMOUNT PURSUANT TO SUBDIVISION
19 SIX OF SECTION FIVE HUNDRED EIGHTY-SIX-C OF THIS ARTICLE, IMPOSING ON A
20 PROVIDER OR A PERSON THAT HAS CAUSED A VIOLATION A CIVIL PENALTY NOT
21 EXCEEDING TEN THOUSAND DOLLARS FOR EACH VIOLATION;
22 (D) PROSECUTING A CIVIL ACTION TO:
23 (I) ENFORCE AN ORDER;
24 (II) OBTAIN RESTITUTION OR AN INJUNCTION OR OTHER EQUITABLE RELIEF, OR
25 BOTH; OR
26 (E) INTERVENING IN AN ACTION BROUGHT UNDER SECTION FIVE HUNDRED EIGHT-
27 Y-SEVEN-B OF THIS ARTICLE.
28 2. SUBJECT TO ADJUSTMENT OF THE DOLLAR AMOUNT PURSUANT TO SUBDIVISION
29 SIX OF SECTION FIVE HUNDRED EIGHTY-SIX-C OF THIS ARTICLE, IF A PERSON
30 VIOLATES OR KNOWINGLY AUTHORIZES, DIRECTS, OR AIDS IN THE VIOLATION OF A
31 FINAL ORDER ISSUED UNDER PARAGRAPH (A) OR (B) OF SUBDIVISION ONE OF THIS
32 SECTION, THE SUPERINTENDENT MAY IMPOSE A CIVIL PENALTY NOT EXCEEDING
33 TWENTY THOUSAND DOLLARS FOR EACH VIOLATION.
34 3. THE SUPERINTENDENT MAY MAINTAIN AN ACTION TO ENFORCE THIS ARTICLE
35 IN ANY COUNTY.
36 4. THE SUPERINTENDENT MAY RECOVER THE REASONABLE COSTS OF ENFORCING
37 THIS ARTICLE UNDER SUBDIVISIONS ONE THROUGH THREE OF THIS SECTION,
38 INCLUDING ATTORNEY'S FEES BASED ON THE HOURS REASONABLY EXPENDED AND THE
39 HOURLY RATES FOR ATTORNEYS OF COMPARABLE EXPERIENCE IN THE COMMUNITY.
40 5. IN DETERMINING THE AMOUNT OF A CIVIL PENALTY TO IMPOSE UNDER SUBDI-
41 VISION ONE OR TWO OF THIS SECTION, THE SUPERINTENDENT SHALL CONSIDER THE
42 SERIOUSNESS OF THE VIOLATION, THE GOOD FAITH OF THE VIOLATOR, ANY PREVI-
43 OUS VIOLATIONS BY THE VIOLATOR, THE DELETERIOUS EFFECT OF THE VIOLATION
44 ON THE PUBLIC, THE NET WORTH OF THE VIOLATOR, AND ANY OTHER FACTOR THE
45 SUPERINTENDENT CONSIDERS RELEVANT TO THE DETERMINATION OF THE CIVIL
46 PENALTY.
47 S 587-A. SUSPENSION, REVOCATION, OR NONRENEWAL OF REGISTRATION. 1. IN
48 THIS SECTION, "INSOLVENT" MEANS:
49 (A) HAVING GENERALLY CEASED TO PAY DEBTS IN THE ORDINARY COURSE OF
50 BUSINESS OTHER THAN AS A RESULT OF GOOD-FAITH DISPUTE;
51 (B) BEING UNABLE TO PAY DEBTS AS THEY BECOME DUE; OR
52 (C) BEING INSOLVENT WITHIN THE MEANING OF THE FEDERAL BANKRUPTCY LAW,
53 11 U.S.C. SECTION 101 ET SEQ., AS AMENDED.
54 2. THE SUPERINTENDENT MAY SUSPEND, REVOKE, OR DENY RENEWAL OF A
55 PROVIDER'S REGISTRATION IF:
S. 7317 25
1 (A) A FACT OR CONDITION EXISTS THAT, IF IT HAD EXISTED WHEN THE REGIS-
2 TRANT APPLIED FOR REGISTRATION AS A PROVIDER, WOULD HAVE BEEN A REASON
3 FOR DENYING REGISTRATION;
4 (B) THE PROVIDER HAS COMMITTED A MATERIAL VIOLATION OF THIS ARTICLE OR
5 A RULE OR ORDER OF THE SUPERINTENDENT UNDER THIS ARTICLE;
6 (C) THE PROVIDER IS INSOLVENT;
7 (D) THE PROVIDER OR AN EMPLOYEE OR AFFILIATE OF THE PROVIDER HAS
8 REFUSED TO PERMIT THE SUPERINTENDENT TO MAKE AN EXAMINATION AUTHORIZED
9 BY THIS ARTICLE, FAILED TO COMPLY WITH PARAGRAPH (B) OF SUBDIVISION TWO
10 OF SECTION FIVE HUNDRED EIGHTY-SIX-C OF THIS ARTICLE WITHIN FIFTEEN DAYS
11 AFTER REQUEST, OR MADE A MATERIAL MISREPRESENTATION OR OMISSION IN
12 COMPLYING WITH PARAGRAPH (B) OF SUBDIVISION TWO OF SECTION FIVE HUNDRED
13 EIGHTY-SIX-C OF THIS ARTICLE; OR
14 (E) THE PROVIDER HAS NOT RESPONDED WITHIN A REASONABLE TIME AND IN AN
15 APPROPRIATE MANNER TO COMMUNICATIONS FROM THE SUPERINTENDENT.
16 3. IF A PROVIDER DOES NOT COMPLY WITH SUBDIVISION SIX OF SECTION FIVE
17 HUNDRED EIGHTY-FOUR-A OF THIS ARTICLE OR IF THE SUPERINTENDENT OTHERWISE
18 FINDS THAT THE PUBLIC HEALTH OR SAFETY OR GENERAL WELFARE REQUIRES EMER-
19 GENCY ACTION, THE SUPERINTENDENT MAY ORDER A SUMMARY SUSPENSION OF THE
20 PROVIDER'S REGISTRATION, EFFECTIVE ON THE DATE SPECIFIED IN THE ORDER.
21 4. IF THE SUPERINTENDENT SUSPENDS, REVOKES, OR DENIES RENEWAL OF THE
22 REGISTRATION OF A PROVIDER, THE SUPERINTENDENT MAY SEEK A COURT ORDER
23 AUTHORIZING SEIZURE OF ANY OR ALL OF THE MONEY IN A TRUST ACCOUNT
24 REQUIRED BY SECTION FIVE HUNDRED EIGHTY-FOUR-A OF THIS ARTICLE, BOOKS,
25 RECORDS, ACCOUNTS, AND OTHER PROPERTY OF THE PROVIDER WHICH ARE LOCATED
26 IN THIS STATE.
27 5. IF THE SUPERINTENDENT SUSPENDS OR REVOKES A PROVIDER'S REGISTRA-
28 TION, THE PROVIDER MAY APPEAL AND REQUEST A HEARING IN ACCORDANCE WITH
29 THE PROVISIONS OF THE STATE ADMINISTRATIVE PROCEDURE ACT.
30 S 587-B. PRIVATE ENFORCEMENT. 1. IF AN INDIVIDUAL VOIDS AN AGREEMENT
31 PURSUANT TO SUBDIVISION TWO OF SECTION FIVE HUNDRED EIGHTY-FIVE OF THIS
32 ARTICLE, THE INDIVIDUAL MAY RECOVER IN A CIVIL ACTION ALL MONEY PAID OR
33 DEPOSITED BY OR ON BEHALF OF THE INDIVIDUAL PURSUANT TO THE AGREEMENT,
34 EXCEPT AMOUNTS PAID TO CREDITORS, IN ADDITION TO THE RECOVERY UNDER
35 PARAGRAPHS (C) AND (D) OF SUBDIVISION THREE OF THIS SECTION.
36 2. IF AN INDIVIDUAL VOIDS AN AGREEMENT PURSUANT TO SUBDIVISION TWO OF
37 SECTION FIVE HUNDRED EIGHTY-FIVE OF THIS ARTICLE, THE INDIVIDUAL MAY
38 RECOVER IN A CIVIL ACTION THREE TIMES THE TOTAL AMOUNT OF THE FEES,
39 CHARGES, MONEY, AND PAYMENTS MADE BY THE INDIVIDUAL TO THE PROVIDER, IN
40 ADDITION TO THE RECOVERY UNDER PARAGRAPH (D) OF SUBDIVISION THREE OF
41 THIS SECTION.
42 3. SUBJECT TO SUBDIVISION FOUR OF THIS SECTION, AN INDIVIDUAL WITH
43 RESPECT TO WHOM A PROVIDER VIOLATES THIS ARTICLE MAY RECOVER IN A CIVIL
44 ACTION FROM THE PROVIDER AND ANY PERSON THAT CAUSED THE VIOLATION:
45 (A) COMPENSATORY DAMAGES FOR INJURY, INVOLVING NONECONOMIC INJURY,
46 CAUSED BY THE VIOLATION;
47 (B) EXCEPT AS OTHERWISE PROVIDED IN SUBDIVISION FOUR OF THIS SECTION
48 AND SUBJECT TO ADJUSTMENT OF THE DOLLAR AMOUNT PURSUANT TO SUBDIVISION
49 SIX OF SECTION FIVE HUNDRED EIGHTY-SIX-C OF THIS ARTICLE, WITH RESPECT
50 TO A VIOLATION OF SECTION FIVE HUNDRED EIGHTY-THREE, FIVE HUNDRED EIGHT-
51 Y-THREE-B, FIVE HUNDRED EIGHTY-THREE-C, FIVE HUNDRED EIGHTY-FOUR, FIVE
52 HUNDRED EIGHTY-FOUR-A, FIVE HUNDRED EIGHTY-FOUR-B, FIVE HUNDRED EIGHTY-
53 FOUR-C, FIVE HUNDRED EIGHTY-FIVE-B, OR SUBDIVISION ONE, TWO OR FOUR OF
54 SECTION FIVE HUNDRED EIGHTY-FIVE-C OF THIS ARTICLE, THE GREATER OF THE
55 AMOUNT RECOVERABLE UNDER PARAGRAPH (A) OF THIS SUBDIVISION OR FIVE THOU-
56 SAND DOLLARS;
S. 7317 26
1 (C) PUNITIVE DAMAGES; AND
2 (D) REASONABLE ATTORNEY'S FEES AND COSTS.
3 4. IN A CLASS ACTION, EXCEPT FOR A VIOLATION OF PARAGRAPH (E) OF
4 SUBDIVISION ONE OF SECTION FIVE HUNDRED EIGHTY-FIVE-C OF THIS ARTICLE,
5 THE MINIMUM DAMAGES PROVIDED IN PARAGRAPH (B) OF SUBDIVISION THREE OF
6 THIS SECTION DO NOT APPLY.
7 5. IN ADDITION TO THE REMEDY AVAILABLE UNDER SUBDIVISION THREE OF THIS
8 SECTION, IF A PROVIDER VIOLATES AN INDIVIDUAL'S RIGHTS UNDER SECTION
9 FIVE HUNDRED EIGHTY-THREE-C OF THIS ARTICLE, THE INDIVIDUAL MAY RECOVER
10 IN A CIVIL ACTION ALL MONEY PAID OR DEPOSITED BY OR ON BEHALF OF THE
11 INDIVIDUAL PURSUANT TO THE AGREEMENT, EXCEPT FOR AMOUNTS PAID TO CREDI-
12 TORS.
13 6. A PROVIDER IS NOT LIABLE UNDER THIS SECTION FOR A VIOLATION OF THIS
14 ARTICLE IF THE PROVIDER PROVES THAT THE VIOLATION WAS NOT INTENTIONAL
15 AND RESULTED FROM A GOOD-FAITH ERROR NOTWITHSTANDING THE MAINTENANCE OF
16 PROCEDURES REASONABLY ADAPTED TO AVOID THE ERROR. AN ERROR OF LEGAL
17 JUDGMENT WITH RESPECT TO A PROVIDER'S OBLIGATIONS UNDER THIS ARTICLE IS
18 NOT A GOOD-FAITH ERROR. IF, IN CONNECTION WITH A VIOLATION, THE PROVIDER
19 HAS RECEIVED MORE MONEY THAN AUTHORIZED BY AN AGREEMENT OR THIS ARTICLE,
20 THE DEFENSE PROVIDED BY THIS SUBDIVISION IS NOT AVAILABLE UNLESS THE
21 PROVIDER REFUNDS THE EXCESS WITHIN TWO BUSINESS DAYS OF LEARNING OF THE
22 VIOLATION.
23 7. THE SUPERINTENDENT SHALL ASSIST AN INDIVIDUAL IN ENFORCING A JUDG-
24 MENT AGAINST THE SURETY BOND OR OTHER SECURITY PROVIDED UNDER SECTION
25 FIVE HUNDRED EIGHTY-TWO OR FIVE HUNDRED EIGHTY-TWO-A OF THIS ARTICLE.
26 S 587-C. VIOLATION OF THE GENERAL BUSINESS LAW. IF AN ACT OR PRACTICE
27 OF A PROVIDER VIOLATED BOTH THIS ARTICLE AND ARTICLE TWENTY-TWO-A OF THE
28 GENERAL BUSINESS LAW AN INDIVIDUAL MAY NOT RECOVER UNDER BOTH FOR THE
29 SAME ACT OR PRACTICE.
30 S 588. STATUTE OF LIMITATIONS. 1. AN ACTION OR PROCEEDING BROUGHT
31 PURSUANT TO SUBDIVISIONS ONE, TWO AND THREE OF SECTION FIVE HUNDRED
32 EIGHTY-SEVEN OF THIS ARTICLE MUST BE COMMENCED WITHIN FOUR YEARS AFTER
33 THE CONDUCT THAT IS THE BASIS OF THE SUPERINTENDENT'S COMPLAINT.
34 2. AN ACTION BROUGHT PURSUANT TO SECTION FIVE HUNDRED EIGHTY-SEVEN-B
35 OF THIS ARTICLE MUST BE COMMENCED WITHIN TWO YEARS AFTER THE LATEST OF:
36 (A) THE INDIVIDUAL'S LAST TRANSMISSION OF MONEY TO A PROVIDER;
37 (B) THE INDIVIDUAL'S LAST TRANSMISSION OF MONEY TO A CREDITOR AT THE
38 DIRECTION OF THE PROVIDER;
39 (C) THE PROVIDER'S LAST DISBURSEMENT TO A CREDITOR OF THE INDIVIDUAL;
40 (D) THE PROVIDER'S LAST ACCOUNTING TO THE INDIVIDUAL PURSUANT TO
41 SUBDIVISION ONE OF SECTION FIVE HUNDRED EIGHTY-FIVE-B OF THIS ARTICLE;
42 (E) THE DATE ON WHICH THE INDIVIDUAL DISCOVERED OR REASONABLY SHOULD
43 HAVE DISCOVERED THE FACTS GIVING RISE TO THE INDIVIDUAL'S CLAIM; OR
44 (F) TERMINATION OF ACTIONS OR PROCEEDINGS BY THE SUPERINTENDENT WITH
45 RESPECT TO A VIOLATION OF THIS ARTICLE.
46 3. THE PERIOD PRESCRIBED IN PARAGRAPH (E) OF SUBDIVISION TWO OF THIS
47 SECTION IS TOLLED DURING ANY PERIOD DURING WHICH THE PROVIDER OR, IF
48 DIFFERENT, THE DEFENDANT HAS MATERIALLY AND WILLFULLY MISREPRESENTED
49 INFORMATION REQUIRED BY THIS ARTICLE TO BE DISCLOSED TO THE INDIVIDUAL,
50 IF THE INFORMATION SO MISREPRESENTED IS MATERIAL TO THE ESTABLISHMENT OF
51 THE LIABILITY OF THE DEFENDANT UNDER THIS ARTICLE.
52 S 588-A. UNIFORMITY OF APPLICATION AND CONSTRUCTION. IN APPLYING AND
53 CONSTRUING THIS UNIFORM ACT, CONSIDERATION MUST BE GIVEN TO THE NEED TO
54 PROMOTE UNIFORMITY OF THE LAW WITH RESPECT TO ITS SUBJECT MATTER AMONG
55 STATES THAT ENACT IT.
S. 7317 27
1 S 588-B. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL
2 COMMERCE ACT. THIS ARTICLE MODIFIES, LIMITS, AND SUPERSEDES THE FEDERAL
3 ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT (15 U.S.C.
4 SECTION 7001 ET SEQ.) BUT DOES NOT MODIFY, LIMIT, OR SUPERSEDE SECTION
5 101(C) OF THAT ACT (15 U.S.C. SECTION 7001(C)) OR AUTHORIZE ELECTRONIC
6 DELIVERY OF ANY OF THE NOTICES DESCRIBED IN SECTION 103(B) OF THAT ACT
7 (15 U.S.C. SECTION 7003(B)).
8 S 588-C. TRANSITIONAL PROVISIONS; APPLICATION TO EXISTING TRANS-
9 ACTIONS. TRANSACTIONS ENTERED INTO BEFORE THIS ARTICLE TAKES EFFECT AND
10 THE RIGHTS, DUTIES, AND INTERESTS RESULTING FROM THEM MAY BE COMPLETED,
11 TERMINATED, OR ENFORCED AS REQUIRED OR PERMITTED BY A LAW AMENDED,
12 REPEALED, OR MODIFIED BY THIS ARTICLE AS THOUGH THE AMENDMENT, REPEAL,
13 OR MODIFICATION HAD NOT OCCURRED.
14 S 5. Severability. If any clause, sentence, paragraph, section or part
15 of this act shall be adjudged by any court of competent jurisdiction to
16 be invalid and after exhaustion of all further judicial review, the
17 judgment shall not affect, impair or invalidate the remainder thereof,
18 but shall be confined in its operation to the clause, sentence, para-
19 graph, section or part of this act directly involved in the controversy
20 in which the judgment shall have been rendered.
21 S 6. This act shall take effect one year after it shall have become a
22 law; provided, however, that effective immediately, the addition, amend-
23 ment and/or repeal of any rule or regulation necessary for implementa-
24 tion of this act on its effective date are authorized and directed to be
25 made and completed on or before such effective date.
