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Part 501.  The Superintendent's Regulations (Banking Division Assessments)
(Statutory authority: Banking Law §17; Financial Services Law §206)

October 23, 2013



§ 501.1


§ 501.2


§ 501.3

Billing and Assessment Process

§ 501.4

Computation of Assessment

§ 501.5

Penalties/Enforcement Actions

§ 501.6

Effective Date

Pursuant to the Financial Services Law (“FSL”), the New York State Banking Department (“Banking Department”) and the New York State Insurance Department were consolidated on October 3, 2011 into the Department of Financial Services (“Department”).

Prior to the consolidation, assessments of institutions subject to the Banking Law (“BL”) were governed by Section 17 of the BL. Effective October 3, 2011, assessments are governed by Section 206 of the FSL, provided that Section 17 of the BL continues to apply to assessments for the fiscal year commencing on April 1, 2011.

Both Section 17 of the BL and Section 206 of the FSL provide that all expenses (including, but not limited to, compensation, lease costs and other overhead costs) of the Department attributable to institutions subject to the BL are to be charged to, and paid by, such regulated institutions. These institutions (“Regulated Entities”) are now regulated by the Banking Division of the Department.  Under both Section 17 of the BL and Section 206 of the FSL, the Superintendent is authorized to assess Regulated Entities for its total costs in such proportions as the Superintendent shall deem just and reasonable.

The Banking Department has historically funded itself entirely from industry assessments of Regulated Entities. These assessments have covered all direct and indirect expenses of the Banking Department, which are activities that relate to the conduct of banking business and the regulatory concerns of the Department, including all salary expenses, fringe benefits, rental and other office expenses and all miscellaneous and overhead costs such as human resource operations, legal and technology costs.   

This regulation sets forth the basis for allocating such expenses among Regulated Entities and the process for making such assessments.

§ 501.2 Definitions.

The following definitions apply in this Part:

  1. “Total Operating Cost” means for the fiscal year beginning on April 1, 2011, the total direct and indirect costs of operating the Banking Division.  For fiscal years beginning on April 1, 2012, “Total Operating Cost” means (1) the sum of the total operating expenses of the Department that are solely attributable to regulated persons under the Banking Law and (2) the proportion deemed just and reasonable by the Superintendent of the other operating expenses of the Department which under Section 206(a) of the Financial Services Law may be assessed against persons regulated under the Banking Law and other persons regulated by the Department.   
  2. “Industry Group“ means the grouping to which a business entity regulated by the Banking Division is assigned. There are three Industry Groups in the Banking Division:
    1. The Depository Institutions Group, which consists of all banking organizations and foreign banking corporations licensed by the Department to maintain a branch, agency or representative office in this state;
    2. The Mortgage-Related Entities Group, which consists of all mortgage brokers, mortgage bankers and mortgage loan servicers; and
    3. The Licensed Financial Services Providers Group, which consists of all check cashers, budget planners, licensed lenders, sales finance companies, premium finance companies and money transmitters.
  3. “Industry Group Operating Cost” means the amount of the Total Operating Cost to be assessed to a particular Industry Group. The amount is derived from the percentage of the total expenses for salaries and fringe benefits for the examining, specialist and related personnel represented by such costs for the particular Industry Group.
  4. “Industry Group Supervisory Component” means the total of the Supervisory Components for all institutions in that Industry Group.
  5. “Supervisory Component” for an individual institution means the product of the average number of hours attributed to supervisory oversight by examiners and specialists of all institutions of a similar size and type, as determined by the Superintendent, in the applicable Industry Group, or the applicable sub-group, and the average hourly cost of the examiners and specialists assigned to the applicable Industry Group or sub-group.  
  6. “Industry Group Regulatory Component” means the Industry Group Operating Cost for that group minus the Industry Group Supervisory Component and certain miscellaneous fees such as application fees. 
  7. “Industry Financial Basis” means the measurement tool used to distribute the Industry Group Regulatory Component among individual institutions in an Industry Group. 
  8. The Industry Financial Basis used for each Industry Group is as follows:
    1. For the Depository Institutions Group: total assets of all institutions in the group;
    2. For the Mortgage-Related Entities Group: total gross revenues from New York State operations, including servicing and secondary market revenues, for all institutions in the group; and
    3. For the Licensed Financial Services Providers Group: (i.) for budget planners, the number of New York customers; (ii.) for licensed lenders, the dollar amount of New York assets; (iii.) for check cashers, the dollar amount of checks cashed in New York; (iv.) for money transmitters, the dollar value of all New York transactions; (v.) for premium finance companies, the dollar value of loans originated in New York; and (vi.) for sales finance companies, the dollar value of credit extensions in New York.   
  9. “Financial Basis” for an individual institution is that institution’s portion of the measurement tool used in Section 501.2(g) to develop the Industry Financial Basis. (For example, in the case of the Depository Institutions Group, an entity’s Financial Basis would be its total assets.)
  10. “Industry Group Regulatory Rate” means the result of dividing the Industry Group Regulatory Component by the Industry Financial Basis.
  11. “Regulatory Component” for an individual institution is the product of the Financial Basis for the individual institution multiplied by the Industry Group Regulatory Rate for that institution. 

§ 501.3 Billing and Assessment Process.

The New York State fiscal year begins April 1 and ends March 31 of the following calendar year. Each institution subject to assessment pursuant to this Part is billed five times for a fiscal year: four quarterly assessments (each approximately 25% of the anticipated annual amount) based on the Banking Division’s estimated annual budget at the time of the billing, and a final assessment (or “true-up”), based on the Banking Division’s actual expenses for the fiscal year. Any institution that is a Regulated Entity for any part of a quarter shall be assessed for the full quarter.

§ 501.4 Computation of Assessment.

The total annual assessment for an institution shall be the sum of its Supervisory Component and its Regulatory Component.

§ 501.5 Penalties/Enforcement Actions.

All Regulated Entities shall be subject to all applicable penalties, including late fees and interest, provided for by the BL, the FSL, the State Finance law or other applicable laws. Enforcement actions for nonpayment could include suspension, revocation, termination or other actions.  

§ 501.6 Effective Date.

This Part shall be effective immediately.  It shall apply to all State Fiscal Years beginning with the Fiscal Year starting on April 1, 2011.


Explanatory All Institutions Letter


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