N.Y. Banking Law § 44: Violations; penalties

§ 44. Violations; penalties. 1. * (a) Without limiting any power

granted to the superintendent under any other provision of this chapter,

the superintendent may, in a proceeding after notice and a hearing,

require any safe deposit company, licensed lender, licensed casher of

checks, licensed sales finance company, licensed insurance premium

finance agency, licensed transmitter of money, licensed mortgage banker,

licensed student loan servicer, registered mortgage broker, licensed

mortgage loan originator, registered mortgage loan servicer or licensed

budget planner to pay to the people of this state a penalty for any

violation of this chapter, any regulation promulgated thereunder, any

final or temporary order issued pursuant to section thirty-nine of this

article, any condition imposed in writing by the superintendent in

connection with the grant of any application or request, or any written

agreement entered into with the superintendent.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* (a) Without limiting any power granted to the superintendent under

any other provision of this chapter, the superintendent may, in a

proceeding after notice and a hearing, require any safe deposit company,

licensed lender, licensed buy-now-pay-later lender, licensed casher of

checks, licensed sales finance company, licensed insurance premium

finance agency, licensed transmitter of money, licensed mortgage banker,

licensed student loan servicer, registered mortgage broker, licensed

mortgage loan originator, registered mortgage loan servicer or licensed

budget planner to pay to the people of this state a penalty for any

violation of this chapter, any regulation promulgated thereunder, any

final or temporary order issued pursuant to section thirty-nine of this

article, any condition imposed in writing by the superintendent in

connection with the grant of any application or request, or any written

agreement entered into with the superintendent.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

(b) The penalty for each violation prescribed in paragraph (a) of this

subdivision shall not exceed two thousand five hundred dollars for each

day during which such violation continues.

(c) Notwithstanding paragraph (b) of this subdivision, if the

superintendent determines (i) that any such licensee, registrant or safe

deposit company has committed a violation as described in paragraph (a)

of this subdivision, or has recklessly engaged in any unsafe and unsound

practice and (ii) that such violation or practice is part of a pattern

of misconduct, results or is likely to result in more than minimal loss

to such licensee, registrant or safe deposit company, or results in

pecuniary gain or other benefit to such licensee, registrant or safe

deposit company, then the penalty shall not exceed fifteen thousand

dollars for each day during which such violation or practice continues.

(d) Notwithstanding paragraphs (b) or (c) of this subdivision, if the

superintendent determines (i) that any such licensee, registrant or safe

deposit company has knowingly and willfully committed any violation as

described in paragraph (a) of this subdivision, or has knowingly and

willfully engaged in any unsafe and unsound practice, or (ii) that any

licensee, registrant or safe deposit company has knowingly committed any

violation described in paragraph (a) of this subdivision which

substantially undermines public confidence in any such licensee,

registrant or safe deposit company or in such licensees, registrants or

safe deposit companies generally, and, in either case, (iii) that such

licensee, registrant or safe deposit company has knowingly or recklessly

incurred so substantial a loss as a result of such violation or practice

as to threaten the safety and soundness of such licensee, registrant or

safe deposit company, then the penalty shall not exceed seventy-five

thousand dollars for each day during which such violation continues.

(e) The superintendent, in determining the amount of any penalty

assessed pursuant to this subdivision, shall take into consideration the

net worth and annual business volume of such licensees, registrants or

safe deposit companies.

2. (a) Without limiting any power granted to the superintendent under

any other provision of this chapter, the superintendent may, in a

proceeding after notice and hearing, require any banking organization,

bank holding company out-of-state state bank that maintains a branch or

branches or representative or other offices in this state, or foreign

banking corporation licensed by the superintendent to maintain a branch,

agency or representative office in this state to pay to the people of

this state a penalty for any violation of this chapter, any regulation

promulgated thereunder, any final or temporary order issued pursuant to

section thirty-nine of this article, any condition imposed in writing by

the superintendent in connection with the grant of any application or

request, or any written agreement entered into with the superintendent.

For purposes of this section, any reference to a "banking organization"

shall be deemed to exclude a safe deposit company and any reference to a

"foreign bank licensee" shall be deemed to include an out-of-state state

bank that maintains a branch or branches or representative or other

offices in this state and a foreign banking corporation licensed to

maintain a branch, agency or representative office in this state.

(b) The penalty for each violation prescribed in paragraph (a) of this

subdivision shall not exceed five thousand dollars for each day during

which such violation continues.

3. Notwithstanding paragraph (b) of subdivision two of this section,

if the superintendent determines: (a) that any banking organization,

bank holding company, or foreign bank licensee has committed any

violation described in subdivision two of this section or has recklessly

engaged in any unsafe and unsound practice, and

(b) that such violation or practice is part of a pattern of

misconduct, results or is likely to result in more than minimal loss to

the banking organization, bank holding company, or foreign bank

licensee, or results in pecuniary gain or other benefit to the banking

organization, bank holding company, or foreign bank licensee, then the

penalty shall not exceed twenty-five thousand dollars for each day

during which such violation or practice continues.

4. Notwithstanding paragraph (b) of subdivision two and subdivision

three of this section, if the superintendent determines: (a) (i) that

any banking organization, bank holding company, or foreign bank licensee

has knowingly and willfully committed any violation described in

subdivision two of this section or has knowingly and willfully engaged

in any unsafe and unsound practice, or (ii) that any banking

organization, bank holding company, or foreign bank licensee has

knowingly committed any violation described in subdivision two of this

section which substantially undermines public confidence in any such

banking organization, bank holding company, or foreign bank licensee or

in banking organizations, bank holding companies, or foreign bank

licensees generally, and, in either case, (b) that the banking

organization, bank holding company, or foreign bank licensee has

knowingly or recklessly incurred so substantial a loss as a result of

such violation or practice as to threaten the safety and soundness of

such banking organization, bank holding company, or foreign bank

licensee, then the penalty shall not exceed the lesser of (i) two

hundred fifty thousand dollars or (ii) one percent of the total assets

of such banking organization, or one percent of the total assets of the

banking subsidiaries, as such term is defined pursuant to section one

hundred forty-one of this chapter, of such bank holding company, or one

percent of the total assets in this state of such foreign bank licensee,

as applicable, for each day during which such violation or practice

continues.

5. In assessing any penalty against any entity listed in paragraph (a)

of subdivision one or paragraph (a) of subdivision two of this section,

the superintendent shall take into account, without limitation, factors

including: (a) the extent, if any, to which senior management or board

directors or trustees participated therein, (b) the extent to which the

entity has cooperated with the superintendent in the investigation of

such conduct, (c) any sanction imposed by any other regulatory agency,

(d) the financial resources and good faith of the entity, (e) the

gravity of the violation, (f) any history of prior violations, and (g)

such other matters as justice and the public interest may require.

6. Whenever the superintendent shall require the payment of such

penalty by any such entity, he shall forthwith execute in duplicate a

written order to that effect. On the date such order is executed, the

superintendent shall file one copy of such order in the office of the

department and serve the second copy upon such entity either personally

or by registered or certified mail, return receipt requested, directed

to the entity's principal place of business or, in the case of a

licensee or registrant, its last known address of record. Such order may

be reviewed in the manner provided by article seventy-eight of the civil

practice law and rules. Such special proceeding for review as authorized

by this section must be commenced within thirty days from the service of

such order.

7. The superintendent may compromise, modify, or remit any penalty

which he or she may assess or had already assessed under this section.

8. The superintendent may prescribe regulations to carry out the

provisions and purposes of this section.

9. As used in this section, "bank holding company" shall have the same

meaning as that term is defined in subdivision six of section

thirty-nine of this article.