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Banking Interpretations

NYBL 491

October 31, 2011 

[---]

Re: Banking Law Articles IX and XI

Dear [---],

Your inquiry, dated October 12, 2011 addressed to Manzar Atabaki, was referred to me for my review.

You stated that the business of your client, [---] is to engage in non-consumer, commercial equipment leasing business and in the financing of equipment for commercial entities.

You cited Articles IX, Section 340 and XI-B, Section 491, of the New York State Banking Law ("Banking law") and concluded that since your client engages in commercial transactions and none of the transactions are for personal household or marital purposes they are not required by the Banking laws to have a license to do business in the State of New York.

Your conclusion is correct. Under Section 491.5 of the Banking Law, a sale to a business for commercial use is not a retail instalment sale, and therefore, such a sale does not require a license under Article XI-B (Sales Finance Companies). Similarly, under Section 340 of Article IX of the Banking Law, only loans to individuals require licensing. If your client is making loans to businesses, then it's not covered by the statute.

I trust the foregoing is responsive to your inquiry.

Very truly yours,

Orinthia E. Perkins
Assistant Counsel