Bill > S01290

This bill aims to enhance the Department of Financial Services' oversight of banks and insurance companies operating without proper state licensing by creating a comprehensive framework for addressing unlicensed financial activities. The legislation introduces a new section (408-a) to the financial services law that defines "prohibited unlicensed acts" as either conducting regulated financial activities without a required license or performing actions that would violate financial regulations if the entity were licensed. The bill establishes a graduated penalty system for such violations, with penalties varying based on the specific financial sector (banking, insurance, or general financial services) and potentially doubling if the unlicensed act results in consumer harm. Additionally, the bill allows the superintendent of financial services to investigate these unlicensed activities, impose civil penalties, and even order restitution for affected consumers. The underlying rationale is to eliminate any potential advantage gained by entities that disregard licensing requirements and to ensure that all financial service providers are held to the same regulatory standards, regardless of their current licensing status, thus protecting consumers from potentially imprudent or harmful business practices.

Business and Industry

https://www.nysenate.gov/legislation/bills/2025/S1290