Shown verbatim: the complete text as captured from the official source posted by the New York State Senate, fetched 2026-08-11. Nothing is edited or removed. Where this bill amends existing law, language marked for deletion in the official source appears here in brackets. The official bill page.
S T A T E O F N E W Y O R K
________________________________________________________________________
8408
2025-2026 Regular Sessions
I N S E N A T E
June 9, 2025
___________
Introduced by Sen. KRUEGER -- (at request of the Department of Financial
Services) -- read twice and ordered printed, and when printed to be
committed to the Committee on Rules
AN ACT to amend the financial services law, in relation to prohibited
unlicensed activities
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative findings. The legislature finds that it is
essential to the protection of users of financial products and services
from imprudent conduct and harmful business practices in the financial
services marketplace that all persons offering financial products and
services in New York State be sufficiently deterred from disregarding
the laws and regulations governing the offering of financial products or
services, regardless of whether they are properly licensed or authorized
otherwise to do business. Furthermore, to ensure that the business of,
and the persons providing, financial products and services are appropri-
ately supervised, the law should not advantage persons who disregard
such requirements. Currently, as to engagement in many activities for
which a license or other authorization from the superintendent of finan-
cial services is required by the banking law or financial services law
or the regulations promulgated thereunder, an unlicensed or otherwise
unauthorized person not exempt from licensing or other authorization is
not subject to civil monetary penalty for acts that would constitute
violations subject to penalty if the person were licensed or otherwise
authorized. This act provides that persons engaged in activity for which
a license or other authorization from the superintendent of financial
services is required under the banking law or financial services law
will be subject to a civil penalty for conducting such activity in a
manner inconsistent with the law, regardless of whether such person is
licensed or otherwise authorized to do such activity.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10329-02-5
S. 8408 2
§ 2. Subsections (a) and (b) of section 305 of the financial services
law are amended to read as follows:
(a) Unless otherwise provided in this chapter, the banking law, the
insurance law or any other law, any hearing pursuant to any such law may
be held before the superintendent, any deputy superintendent, or any
designated salaried employee of the department authorized by the super-
intendent for such purpose. Any adjudicatory proceeding, including any
hearings to assess civil penalties under section four hundred eight OR
FOUR HUNDRED EIGHT-A of this chapter, held pursuant to the provisions of
this chapter, the insurance law or the banking law shall be noticed,
conducted and administered in compliance with the state administrative
procedure act.
(b) The person conducting such hearing shall have power to administer
oaths, examine and cross-examine witnesses and receive documentary
evidence, and shall report [his or her] SUCH PERSON'S findings, orally
or in writing, to the superintendent with or without recommendation.
Such report, if adopted by the superintendent may be the basis of any
determination made by the superintendent. One hundred twenty days after
the effective date of a determination of liability for a civil penalty
pursuant to section four hundred eight OR FOUR HUNDRED EIGHT-A of this
chapter or four hundred three, one thousand one hundred two, two thou-
sand one hundred two, two thousand one hundred seventeen, two thousand
one hundred thirty-three or seven thousand eight hundred sixteen of the
insurance law, such determination of liability for a civil penalty may
be entered as a judgment and enforced, without court proceedings, in the
same manner as the enforcement of a money judgment in civil actions in
any court of competent jurisdiction or any other place provided for the
entry of civil judgment within this state.
§ 3. Subsection (a) of section 404 of the financial services law is
amended to read as follows:
(a) The superintendent has authority under this article, the banking
law, the insurance law and other applicable laws to investigate activ-
ities that may constitute violations subject to section four hundred
eight OR FOUR HUNDRED EIGHT-A of this article or violations of the
insurance law or banking law and to develop evidence thereon.
§ 4. The financial services law is amended by adding a new section
408-a to read as follows:
§ 408-A. UNLICENSED ACTIVITIES PROHIBITED. (A) FOR THE PURPOSES OF
THIS SECTION, A "PROHIBITED UNLICENSED ACT" SHALL MEAN:
(1) ENGAGING IN AN ACTIVITY IN THIS STATE FOR WHICH A LICENSE, CERTIF-
ICATION, REGISTRATION, AUTHORIZATION, CHARTER, ACCREDITATION OR INCORPO-
RATION IS REQUIRED BY THIS CHAPTER OR THE BANKING LAW, OR THE REGU-
LATIONS PROMULGATED THEREUNDER, WITHOUT SUCH LICENSE, CERTIFICATION,
REGISTRATION, AUTHORIZATION, CHARTER, ACCREDITATION OR INCORPORATION OR
AN EXEMPTION FROM SUCH REQUIREMENT; OR
(2) ANY ACT OR OMISSION BY A PERSON WHO IS REQUIRED BY THIS CHAPTER OR
THE BANKING LAW, OR THE REGULATIONS PROMULGATED THEREUNDER, TO BE
LICENSED, CERTIFIED, REGISTERED, AUTHORIZED, CHARTERED, ACCREDITED OR
INCORPORATED AND IS NOT SO LICENSED, CERTIFIED, REGISTERED, AUTHORIZED,
CHARTERED, ACCREDITED OR INCORPORATED, OR EXEMPTED FROM SUCH REQUIRE-
MENT, IF SUCH ACT OR OMISSION WOULD CONSTITUTE A VIOLATION OF THIS CHAP-
TER OR THE BANKING LAW, OR THE REGULATIONS PROMULGATED THEREUNDER,
SUBJECT TO MONETARY PENALTY IF SUCH PERSON WERE SO LICENSED, CERTIFIED,
REGISTERED, AUTHORIZED, CHARTERED, ACCREDITED OR INCORPORATED.
S. 8408 3
(B) IN ADDITION TO ANY CIVIL OR CRIMINAL LIABILITY PROVIDED BY LAW,
THE SUPERINTENDENT MAY, AFTER NOTICE AND A HEARING, LEVY A CIVIL PENALTY
FOR ANY PROHIBITED UNLICENSED ACT AS FOLLOWS:
(1) THE PENALTY FOR A PROHIBITED UNLICENSED ACT THAT RELATES TO THE
REQUIREMENTS OF THE BANKING LAW OR THE REGULATIONS PROMULGATED THERE-
UNDER SHALL BE THE SAME AS THE PENALTY PROVIDED IN SECTION FORTY-FOUR OF
THE BANKING LAW FOR ANY VIOLATION OF THE BANKING LAW.
(2) THE PENALTY FOR A PROHIBITED UNLICENSED ACT THAT RELATES TO THE
REQUIREMENTS OF THIS CHAPTER OR THE REGULATIONS PROMULGATED THEREUNDER
SHALL BE THE SAME AS THE PENALTY PROVIDED FOR IN SECTION FOUR HUNDRED
EIGHT OF THIS ARTICLE FOR VIOLATIONS OF THIS CHAPTER OR THE REGULATIONS
PROMULGATED THEREUNDER. HOWEVER, THE SUPERINTENDENT SHALL NOT IMPOSE OR
COLLECT ANY PENALTY FOR A PROHIBITED UNLICENSED ACT PURSUANT TO THIS
PARAGRAPH IF THE SUPERINTENDENT IMPOSES OR COLLECTS ANY PENALTY PURSUANT
TO PARAGRAPH ONE OF THIS SUBSECTION OR PARAGRAPHS TWO OR THREE OF
SUBSECTION (A) OF SECTION FOUR HUNDRED EIGHT OF THIS ARTICLE FOR THE
SAME ACT OR OMISSION.
(3) IF A PROHIBITED UNLICENSED ACT RESULTS IN CONSUMER HARM, THE
PENALTY SHALL BE NOT MORE THAN DOUBLE THE PENALTY AMOUNT APPLICABLE TO
SUCH VIOLATION SET FORTH IN PARAGRAPHS ONE AND TWO OF THIS SUBSECTION.
(C) CIVIL PENALTIES RECEIVED BY THE SUPERINTENDENT PURSUANT TO THIS
SECTION SHALL BE APPLIED IN THE SAME MANNER AS CIVIL PENALTIES RECEIVED
BY THE SUPERINTENDENT PURSUANT TO SECTION FOUR HUNDRED EIGHT OF THIS
CHAPTER.
(D) IN ADDITION TO ANY OTHER PENALTY OR SANCTION IMPOSED UPON A PERSON
BY LAW FOR A PROHIBITED UNLICENSED ACT, AFTER NOTICE AND A HEARING, THE
SUPERINTENDENT MAY ISSUE AN ORDER DIRECTING SUCH PERSON TO PAY RESTITU-
TION FOR SUCH UNLICENSED ACT.
§ 5. Subsection (a) of section 409 of the financial services law is
amended to read as follows:
(a) Whenever the superintendent is satisfied that a violation subject
to section four hundred eight OR FOUR HUNDRED EIGHT-A of this article or
fraud or other criminal activity under the insurance law or banking law
has been committed or attempted, the superintendent shall report any
such violation of law, as the superintendent deems appropriate, to the
appropriate licensing agency, the district attorney of the county in
which such acts were committed, to the attorney general, and where
appropriate, to the person who submitted the report of fraudulent activ-
ity, as provided by the provisions of this article. Within one hundred
twenty days of receipt of the superintendent's report, the attorney
general or the district attorney concerned shall inform the superinten-
dent as to the status of the reported violations.
§ 6. This act shall take effect immediately.Every fact on this page links to its source, starting with the official bill record.