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Instructions: Licensed Lenders

Instructions for preparing and filing an application pursuant to the provisions of Article 9 of the Banking Law. There is a separate application that accompanies these instructions.

 GENERAL APPLICATION PROCEDURE

  1. The application for a license shall be made upon forms issued by the Superintendent of Financial Services of the State of New York. The application forms are available here on the Department’s website.
  2. The Application Form, Individual Questionnaires and other related forms shall be filed in under oath.
  3. A separate application is required for each location at which an applicant will make loans under the provisions of this Article.
  4. All forms are to be printed or typed and fully completed. Type "none" or "not applicable" where appropriate.  If additional space is required to respond, prepare and annex a signed rider.
  5. Full names and addresses must be given, including Zip Codes and Counties, where requested.
  6. The completed application shall be submitted, accompanied by any required fees, to:

    New York State Department of Financial Services
    Licensed Financial Services – Applications Unit
    One State Street
    New York, NY 10004-1511

APPLICATION PROCESSING

Upon receipt, each application is reviewed by Licensed Financial Services (LFS) to determine if it is substantially complete. Following this review, details of every substantially complete application are published in Section I of the Department’s Weekly Banking Bulletin. Applicants/licensees submitting incomplete applications will receive written notification of the reason(s) their application was found to be incomplete and an itemized list of its deficiencies. In cases where the application deficiencies are too extreme, the entire application package will be returned to the applicant.

APPLICATION FORMS

  1. Application – Licensed Lender.
  2. Personal Forms- Every individual with an ownership interest in the applicant; the officer(s) who satisfy the experience requirement (as specified below in Item H); and any other individual(s) who have managerial or supervisory responsibilities, must complete and submit the following forms with every application from a proposed new licensed lender (If the previously filed forms are more than a year old). These forms must also be completed by any individual seeking approval for a change in control of an existing licensed lender.
    • Department Personal Questionnaire
    • Authority to Release Information Form
    • Department Personal Financial Statement
    • Taxpayer Identification Information
    • Litigation Affidavit - Individual
    • Background Report Certification.- (To indicate a background investigation report was ordered on the individual)
    • Resumes
    • Financial Institution References
    • Background Report(s)
    • Fingerprint Receipt from L-1 for applicants located in New York State, or fingerprint cards and fees for applicants located out of New York State.
  3. Litigation Affidavit – Applicant. A duly authorized individual with an ownership interest in the applicant or licensee must complete and submit this form.
  4. Compliance Affidavit. This form may be submitted in lieu of certain affidavits requested on the application. It may also be used by entities seeking approval for a change in control of an existing licensed lender.
  5. Affidavit of compliance with local zoning requirements.
  6. Affidavit of compliance with the privacy provisions of the Gramm-Leach-Bliley Act.
  7. Affidavit of financial solvency reflecting liquid assets of at least $50,000, net worth of at least $100,000 and a line of credit of at least $100,000 issued by a banking institution incorporated under the laws of the United States or any state or any insurance company for the operation of each location.
  8. Fingerprint Procedures. Every applicable partner, officer, director, stockholder, and owner of an applicant or, for a change of control, all individuals not currently employed by a licensee, must follow the “Fingerprinting Procedure” posted on our website.  Fingerprints are to be processed via L-1 Enrollment Services, where possible. If you have any questions concerning this procedure, please contact the Department at (212) 709-5507.
  9. The "Certificate of Fair Lending Compliance" in accordance with Section 296-a(9) of the New York Executive Law is to be completed and returned. The proper section of the Banking Law under which application for license is being made is to be entered on the form.
  10. One copy of the Statement of Corporate Ownership form must be completed and submitted with the application. 

REQUIRED SUPPLEMENTARY DOCUMENTATION

Supplementary documentation must accompany every application submitted to the Department. This material is determined by the type of application being filed. The enclosed “Supplementary Material Required” chart identifies specific documentation required with various types of applications.

  1. Business Formation Documents - For Corporations, Limited Liability Companies (LLC) and Partnerships: Documents must be certified by the NYS Secretary of State or the clerk of the counties in which business is to be conducted and must be certified within six (6) months of the date of application. For Foreign entities, submit documents that have been certified by the respective Secretary of State.
    • Certificates of Incorporation for a Corporation; Articles of Organization for a LLC; Certificate of Limited Partnership for a Limited Partnership; or Certificate of Registration of a Limited Liability Partnership – submit as applicable. Documents must be certified by the NYS Secretary of State.
    • Assumed Name Certificate - Certified by the NYS Secretary of State or clerk of the county/ies in which the business is conducted. Corporations, LLC’s and Limited Partnerships proposing to conduct business under an assumed name must apply to the Secretary of State for authorization to do so. Individuals and general partnerships proposing to conduct business under an assumed name (i.e., d/b/a) must apply to their local county clerk for permission to do so. In either case, certified copies of the applicable authorization must accompany any application filed.
    • Businesses formed in other states (i.e., foreign entities) - Submit copy of its Application for Authority to Do Business in NYS, certified by the NYS Secretary of State.
    • Copies of any amendments and/or changes to the business formation - These forms also must be certified by the Secretary of State.
    • Copies of Incorporation or Organization filing receipt(s).
    • Corporate By-Laws or Operating Agreement or Partnership Agreements certified by an officer of the applicant.
  2. Fees - A non-refundable check which must be payable to the order of the Superintendent of Financial Services for the following investigation fee(s):
    1. $3,000 is to be sent with each new license
    2. $3,000 is to be sent for each change of control application
    3. $500 is to be submitted for each additional branch
    4. $500 is to be submitted for each change of location.
  3. Organizational Information - Copy of organizational chart; list of officers and directors of applicant and of all affiliated corporations; joint stock associations or business trusts; and number of authorized shares and total number of shares issued. Applicants are required to list branches, subsidiaries, affiliates and parent company operating in this state, whether or not engaged in the business of a licensed lender.
  4. A certified copy of the Board Resolution or minutes approving the proposed change in control. Changes in the ownership structure must be approved by its Board of Directors and documentation providing evidence of this approval must be included with every application seeking approval for such a change.
  5. Amended Business Formation Documents approving the change of name.
  6. Contract of Sale, Asset Purchase Agreement or equivalent contract. Any application seeking approval for a change in control of a licensee must include the applicable contract(s) that detail the terms and conditions of such a change.
  7. Statement explaining the reason(s) the licensee is seeking to relocate. An application for a change in location must include a statement providing the reasons for the relocation.
  8. Statement Of Merit - Each applicant must furnish, on its own form, a detailed statement describing the proposed operation. Additionally, the following is to be included:
    • A detailed statement (business plan) describing the business activity for which licensing under Article 9 of the Banking Law is being sought as well as any other business that will be conducted at the proposed licensed location.
    • A written statement describing the availability of capital and financing with which to handle the projected volume, listing all sources of capital and financing available to the applicant and including copies of written confirmation of extensions of credit to the applicant.
    • The applicant should submit any additional information, which it deems pertinent and which may bear upon a determination that the business will be conducted honestly, fairly, efficiently within the intent and purpose of the law and in such manner as to command the confidence of the community.
    • The applicant’s business background shall demonstrate that it has five years of verifiable experience in the business of making licensed lender loans or similar lending experience or will engage in its employ one or more persons having such experience.
  9. The applicant’s current financial statements.
    • A current financial statement is to be submitted by each applicant. If the corporation is a newly formed corporation, a pro-forma (projection) financial statement for the applicant’s first year of operations in New York is to be submitted.  Should a net loss be reported, an estimate of the period of time required for the operation to reach a break-even point as to profitability with supporting documentation will need to be submitted by their management.  Please note that, under Section 341.4 of the Banking Law, financial responsibility is a criterion for licensing.
    • A current financial statement must also be submitted by each member of a partnership, and each officer, director, and ten percent stockholder of a corporate applicant. If a member's wife is not a member of the applicant, a joint financial statement of husband and wife is not acceptable.
    • Unless the members of an applicant are experienced in the preparation of financial statements, such financial statements should be prepared by an accountant.
  10. A facility letter from a bank demonstrating access to a line of credit in the amount of $100,000 or more for the proposed location. This facility letter should be sent directly to the Department. In many cases, the bank providing the credit facility will condition the final approval and availability of this line upon the Department’s approval of a license for the proposed location. This condition is acceptable. If the credit officer at the applicant’s bank has any questions about the requirements for such a facility, he/she should contact the Department.
  11. Fair Lending Plan Requirement -  The Department must ensure that the application and underwriting processes for loans in New York State made pursuant to the provisions of Article 9 of the Banking Law by licensed lenders do not violate Section 296-a of the Executive Law, which is New York's Fair Lending Statute. As part of our effort to eliminate prohibited practices, we require applicants seeking a license to become a licensed lender to submit a satisfactory Fair Lending Plan as part of their application. Please be advised that the implementation of this requirement is not an attempt to compel licensed lenders to abandon the use of objective factors in evaluating the creditworthiness of a borrower when determining whether to underwrite a loan. Risk based pricing is and continues to be valid in New York, provided that it is not impermissibly tied to a protected class. Please refer to the July 19, 1999 Industry Letter and the subsequent revision thereto dated December 24, 2003, available on our website, for your guidance. 
  12. State Regulators Information -  List of all states in which applicant and/or any affiliated company is licensed to operate in the field of finance including banking, insurance, sales finance, small loans, insurance premium finance, etc. together with the name of the operating company and the name, title and address of the state supervisor.
  13. Submission Of The Loan Forms And Rate Charts -  A copy of the proposed loan instrument and rate chart (or, if a computer program will be used to calculate the required disclosures on the loan form, ten-sample loan instruments with the computer calculated disclosures), which the applicant intends to use, is to be submitted, including the following, if applicable.
  14. Any rate chart(s) setting forth rates or amounts of interest to be used in its licensed lender operation.
  15. Any form or forms of loan agreement or related security instruments to be used in its licensed lender operation.
  16. Every form of loan agreement or related security instrument and every rate chart(s) of which a copy or copies are required to be filed with the Superintendent pursuant to the provisions of this section shall indicate a date of issuance and an identifying symbol consisting of a combination of numbers and/or letters.

NET LIQUID ASSETS, CAPITAL AND LINE OF CREDIT REQUIREMENTS

Pursuant to Section 341 of the Banking Law and Section 401.1 of the Superintendent's Regulations an applicant must have at least $50,000 in liquid assets available for the operation of each location. Further, an applicant must demonstrate a net worth of at least $100,000 and must submit written documentation that it has a confirmed line of credit of at least $100,000 issued by a banking institution incorporated under the laws of the United States or any state or any insurance company for the operation of each location.

FINANCIAL INSTITUTION REFERENCES

Each applicant and each member of a partnership, and each officer, director, and ten percent stockholder of a corporate applicant must provide the name and address of the financial institution which provides their checking account services.

Please include specific account identification and a written authorization for the bank to release account information to the New York State Department of Financial Services.  If the financial institution relationship is less than two years duration, kindly provide an additional financial institution reference.

BACKGROUND INVESTIGATION REPORTS

In connection with your application to organize a financial services entity supervised by the Department, an investigative background report is required. It is the responsibility of the applicant and its principals to order such reports at their own expense from an independent licensed private investigation company.  Reports should be ordered on every individual with an ownership interest in the applicant; the officer(s) who satisfy the experience requirement and any other individual(s) who have managerial or supervisory responsibilities, and any individual seeking approval for a change in control of an existing licensed lender. A new report is required if the previously submitted ones are more than three (3) years old.

Please note that all background investigation reports must be provided directly to the Department by the private investigation company. These reports should be ordered early and prior to filing the application(s) since they may take almost 8 weeks to be completed and delivered to the Department. Failure to promptly order the reports may delay application processing. These reports should be sent to:

New York State Department of Financial Services
Licensed Financial Services - Applications Unit
One State Street
New York, NY 10004-1511

The following listing relative to such background reports specifies all requirements and must be submitted as part of the application process.

New York State Department of Financial Services Required Background Investigation Information No background report will be considered complete unless all the information requested below is included in the investigation report.

  1. Comprehensive credit report/history (include the actual report as well as summary).
  2. A. *. Civil Court and Bankruptcy Court records for the past 10 years.

    B. *. Criminal records (felonies, misdemeanors and violations).

    *Include federal, state and local courts. Such reports shall contain, at a minimum, court data from courts located in counties in which the applicant both worked and resided and all counties contiguous to those counties.

  3. Education records.
  4. Employment history.
  5. Personal and professional references (at least three of each, excluding relatives), which must be furnished in writing.
  6. Media history, if applicable (including electronic search of national and local newspapers, wire services and business publications).
  7. Regulatory history, if applicable (HUD, FREDDIE MAC, State Regulators, OCC, FINRA, etc.)
  8. Department of Motor Vehicle records.
  9. All judgments and liens filed with the county clerk (within the past ten years).  Such reports shall contain, at a minimum, information on judgments and liens filed with the county clerk in counties where the applicant worked and resided and all counties contiguous to those counties.
  10. Licenses granted by any governmental agency or judicial body. (Indicate if they are still in good standing.)
  11. Listing of all credit relationships by the applicant such as revolving credit and established credit facilities. Indicate any credit extensions, including loans, on which the applicant is in default (more than 90 days past due).

DUAL AUTHORIZATION CERTIFICATE

According to Article 9, Section 350.3 of the Banking Law, a licensed lender could conduct other consumer finance business(s) on the same premises.  Such business(s) may be conducted upon notification to the Superintendent.  For all other legal businesses, a request for a dual authorization certificate must be submitted for approval.

ADDITIONAL LOCATION APPLICATION

The information to be submitted is basically the same as that required for a de novo applicant.  However, applicants applying for a branch license need not resubmit information submitted within the past three years, simply incorporate it by reference.  Information filed over three years ago is considered outdated and will need to be re-filed.

The Certificate of Compliance, required under Section 296-a of the Executive Law, must be filed with each application.

CHANGE OF LOCATION NOTIFICATION

  1. Written notification to the Superintendent, at least 30 days prior to moving to the new location, on corporate letterhead (there is no application to download), and signed by an authorized executive officer, indicating the following:
    • Current and proposed location.
    • Reason for relocation.
    • Effective date of the relocation.
    • If there will be any change in ownership, directors, officers, or business model
  2. Zoning Affidavit.  (Refer to Application Forms - Item 5 above)
  3. Board of Director's resolution approving the relocation.
  4. Signed lease agreement

The original license must be surrendered with the relocation request.  A license reflecting the new address will be issued to the licensee.

CHANGE OF NAME NOTIFICATION

  1. Written notification to the Superintendent on corporate letterhead (there is no application to download), and signed by an authorized executive officer, indicating the following:
    • Current name and proposed name.
    • Reason for name change.
    • Effective date of the change.
    • If there will be any change in ownership, directors, officers, or business model.
  2. Board of Director's resolution approving the name change.
  3. If a corporation, an amended copy of the articles of incorporation is required.
  4. If the licensee is incorporated outside of New York, a copy of the authority to do business in New York (under the new name), from the office of the Secretary of State, must also be submitted.
  5. If a partnership, the licensee must submit an amended copy of the Partnership Agreement.
  6. Licensees doing business under a trade name must file a certificate in the office of the county clerk where the business is located.  A certificate from the county clerk evidencing such filing must also be submitted.
  7. In all cases, approval from the State in which the applicant is incorporated in, must be submitted.
  8. In all cases, the license issued under the current name must be surrendered (If not objected to, a license in the proposed name will be issued).
  9. Trade names should be checked against existing licensee lists of Licensed Financial Services of the New York State Department of Financial Services prior to filing with the County Clerk or Secretary of State to avoid rejection of name because of duplication or similarity.  The lists are available on our website by accessing “Who We Supervise”.
  10. The permission of the Superintendent of Banks must be obtained if the new name contains any of the following words, acceptance, bank, finance, investment, loan, mortgage, savings and trust, or guarantee.  Refer to DFS Industry Letters for additional instructions associated with this request.

CHANGE OF CONTROL APPLICATION

A change of control requires the prior approval of the Superintendent. 

The information to be submitted with the application for new control parties unknown to the  Department is basically the same as is required for a new applicant.  A change of control is considered to occur on the transfer of ten percent or more of the voting power of a licensee.  However, the Superintendent, in his/her discretion, may determine what constitutes a change of control for a licensee.

If the proposed new control parties are already licensed by the Department it is suggested that a letter fully detailing the transaction and the most recent applications filed with the Department be submitted prior to filing the application.  Known applicants applying for a change of control need not resubmit any information already on file but may incorporate it by reference and specific waiver requests. Please note that previously filed information may be out-dated, the Department therefore may require that this information be re-filed.

CHANGE OF ENTITY TYPE NOTIFICATION

  1. Written notification to the Superintendent, on company letterhead (there is no application to download),and signed by an authorized executive officer, indicating the following:
    1. The current entity type.
    2. The proposed entity type.
    3. Reason for the proposed change in entity.
    4. Effective date of proposed change.
    5. If there will be any change in ownership, directors, officers, or business model.
  2. Board of Director's resolution approving the change in entity type.
  3. If a corporation, an amended copy of the articles of incorporation
    1. If the licensee is incorporated outside of New York State, a copy of the authority to do business in New York (under the new entity type), from the office of the Secretary of State, must also be submitted.
  4. If a partnership, the licensee must submit an amended copy of the Partnership Agreement.
  5. Licensees doing business under a trade name must file a certificate in the office of the county clerk where the business is located.  A certificate from the county clerk evidencing such filing must also be submitted.
  6. In all cases, approval from the State in which the applicant is incorporated in, must be submitted.
  7. Surrender of the current license.  (If not objected to, a license for the new entity type will be issued).

APPLICABLE LAWS AND REGULATIONS

Licensed Lenders are subject to the provisions of Article 9 of the Banking Law. The Law is available through via the Consolidated Laws of NY under BNK (for Banking) Article 9 - Licensed Lenders” to access all sections of the law. The Executive Law pertinent to the required Certificate of Compliance is also available through the Consolidated Laws under EXC (for Executive).

Parts 401 and 407 of the Superintendent’s Regulations, specific to Licensed Lenders and Part 300 of the Superintendent’s Regulations regarding the Reporting of Crimes Against Banking Institutions, Mysterious Disappearances and Misconduct are also available via the “NY Codes, Rules and Regulations (NYCRR), under Title 3. Banking, Chapter III Superintendent’s Regulations, Subchapter B Non-Banking Organizations, Part 300, Part 401 or Part 407.

GENERAL ASSESSMENT CHARGES

Once licensed, a licensed lender will be charged an annual general assessment fee. This assessment consolidates all Department operating costs and is payable in four installments.  Please see the Department’s Annual Assessments Page to review the latest Assessment Calculator Charts, to determine costs and factors relevant to Licensed Lenders and to approximate your assessment amount.

FILED APPLICATIONS

No application will be published in the Department’s Weekly Banking Bulletin until all information and documents required by all applicable laws and regulations as determined by the Superintendent are received and evaluated by Department staff.  If you have questions concerning the preparation and filing of an application, please contact Licensed Financial Services at (212) 709-5507.

Request for waivers: All of the information and documents required to be submitted by an applicant shall be supplied or a waiver shall have been granted, before an application shall be considered complete. Requests for waivers of application requirements shall be in writing, and state, in reasonable detail, the basis for the request for the waiver. Please be aware that any waiver request should include an appropriate substitute for the required information.  No application requirement shall be deemed waived unless a written notice of waiver shall have been issued.

SUPPLEMENTARY MATERIAL REQUIRED- LICENSED LENDER

Application Forms Required 

New Licensee

New Location

Change of location /
Name

Change in Control

Application

X

X

X

X

Personal Forms [for applicable owners, directors and officers].

  • Personal Questionnaire
  • Personal Financial Statement
  • Authority to Release Information Form
  • Taxpayer Identification Information - Individual
  • Certification – Background Report (to indicate a Report was ordered on the individual)
  • Litigation Affidavit – Individual
  • Investigative Background Report
  • Resumes
  • Financial Institution References

Fingerprints

X

X/Y

 

X

Litigation Affidavit – Applicant.

X

X

 

X

Compliance Affidavit.

  • Zoning Affidavit
  • Privacy Affidavit
  • Financial Solvency Affidavit

X

X

 

X

Certificate of Fair Lending Compliance.

X

X

 

X

Statement of Corporate Ownership Form

X

X

 

X

Supplementary Material Required

 

 

 

 

Business Formation Documents

X

 

X/Y

X

Organizational Information.

X

 

 

X/Y

Certified copy of the Board Resolution or minutes approving the change in control.

 

 

 

X

Amended Business Formation Documents approving the change of name

 

 

X

 

Contract of Sale or equivalent Agreement

 

 

 

X

Statement explaining the reason(s) for relocating.

 

 

X

 

Statement of Merit (Business Plan).

X

 

 

Y

The applicant’s current financial statements

X

X

 

X

A facility letter from a bank demonstrating an existing right of access to a line of credit in the amount of $100,000 or more.

X

X

 

X

Fees - Company check or money order payable to the "Superintendent of Financial Services" representing the investigation fee.

X

X

X

X

Fair Lending Plan

X

 

 

X

State Regulators Information

X

 

 

X

Loan Forms and Rate Charts

X

 

 

X

Background Investigation Report(s)

X/Y

 

 

X/Y

Legend

 

 

 

 

Required.

 

 

 

 

Refer to Instructions

 

 

 

 

 

 

 

 

 

 

DFSLL Rev 02.14.2014

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