New York Codes, Rules and Regulations
Title 23 - FINANCIAL SERVICES
Chapter I - Regulations of the Superintendent of Financial Services
Part 600
Section 600.21 - Duties of financers and brokers, and additional duties of providers

Universal Citation: 600.21 NY Comp Codes Rules and Regs ยง 600.21

Current through Register Vol. 46, No. 52, December 24, 2024

(a) A financer shall:

(1) provide a copy of compliant disclosures to a broker, whenever a financer provides a broker with specific commercial financing offer;

(2) maintain a copy of the evidence of transmission of the disclosures provided by a broker to the financer in compliance with subdivision (b) of this section for a period of at least four years following the date that the disclosure is presented to the recipient; and

(3) develop procedures reasonably designed to ensure that recipients receive the disclosures required pursuant to subdivision (a)(1) of this section at the time that a broker provides a specific commercial financing offer to a recipient. These procedures may include:
(i) contractual requirements that brokers timely provide to the financer documentation of transmission of the disclosure (including timing of transmission) to the recipient;

(ii) timely investigation of facts that would give a financer reasonable notice that a broker has not provided disclosures to recipients as required by subdivision (b) of this section; and

(iii) discontinuation of relationships with any broker who the financer has found to have engaged in a pattern of noncompliance with subdivision (b) of this section.

(b) Following receipt of the disclosures required by subdivision (a)(1) of this section, and before communicating a specific commercial financing offer to a recipient, a broker shall transmit the unaltered disclosures received from the financer to the recipient. After a broker transmits disclosures to the recipient, the broker shall provide evidence of transmission of the disclosures to the financer, including the time of transmission.

(c) A broker shall not provide a specific offer of commercial financing to a recipient without:

(1) complying with subdivision (b) of this section; or

(2) obtaining confirmation from the financer that the disclosures required by this section have been provided to the recipient.

(d) A provider shall maintain a copy of each disclosure that it generates pursuant to this section for a period of at least four years following the date that the disclosure is presented to the recipient or provided to a broker.

(e) A financer may, in lieu of compliance with subdivision (a) of this section, provide a copy of compliant disclosures directly to a recipient any time the financer provides a broker with a specific commercial financing offer for the recipient.

(f) If the commercial financing involves a broker, the provider must inform the recipient, in writing, of how, and by whom, the broker will be compensated for the broker's role in the transaction.

(g) This section shall not be construed to:

(1) require a broker to evaluate the accuracy of the disclosures provided by the financer;

(2) create any liability for a broker if the disclosures that the financer provides do not comply with this Part; or

(3) limit any liability that may arise when a broker makes representations concerning the commercial financing.

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