New York Codes, Rules and Regulations
Title 3 - BANKING
Chapter III - SUPERINTENDENT'S REGULATIONS
Subchapter B - NON-BANKING ORGANIZATIONS
Part 404 - Budget Planners/delegation Of Certain Activities
Section 404.4 - Servicing by a non-licensee service provider
Current through Register Vol. 46, No. 12, March 20, 2024
(a) If a licensee seeks to utilize a non-licensee service provider to hold, or have access to, or to effectuate possession of, by any means, the monies of the licensee's debtors in contract with the licensee for budget planning services, or to distribute, or to be in the chain of distribution of such monies, to the creditors of the licensee's debtors, the licensee shall give the superintendent 10 days written notice of its intention to do so.
(b) Notice to the superintendent shall contain the following information:
(c) A licensee shall not use a non-licensee service provider for the services described in subdivision (a) of this section until:
(d) Notwithstanding the provisions of paragraph (c)(2) of this section, if a licensee maintains a surety bond and seeks to utilize a non-licensee service provider, as defined in section 404.1(d) of this Part, the superintendent, in his/her sole discretion, may permit the use of an alternate mechanism to the non-licensee service provider maintaining assets on deposit, consistent with the purposes of section 580.4 of article 12-C of New York's Banking Law and the requirements of this Part.
(e) If the use of an alternate mechanism pursuant to subdivision (d) of this section is proposed by a licensee, the licensee must provide a description of the alternate mechanism and a copy of all applicable documents and records, as well as any other information requested by the superintendent, in connection with obtaining and/or using the alternate mechanism, including all contracts/ agreements pertaining or related thereto.
(f) If a licensee proposes the use of an alternate mechanism to a non-licensee service provider maintaining assets on deposit pursuant to subdivision (d) of this section, use of the alternate mechanism shall not be permitted until the licensee receives written notice from the superintendent that he/she has no objection to such alternate mechanism.