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Explanatory All Institutions Letter

January 26, 2011

TO THE INDIVIDUAL OR INSTITUTION ADDRESSED:

Re: Amendments to Part 301 of the Superintendent’s Regulations, Title 3 NYCRR (Security At Automated Teller Facilities)

The Superintendent has adopted as final the attached amendments to Part 301 of the Superintendent’s Regulations.  The amendments became effective upon publication in the January 26, 2011 State Register.

Part 301 implements the provisions of the ATM Safety Act (the “Act”), Article II-AA of the Banking Law, which sets forth security measures which must be employed at automated teller machines (“ATMs”) subject to its provisions. The objective of the Act is to ensure that such ATMs can be used safely and conveniently. 
 
Superintendent’s Regulation Section 301.6 requires that a banking institution file an annual report of compliance with the Superintendent and certify that the institution is in compliance with the Act. The amendments clarify the filing deadlines and require the annual report of compliance to be made under the penalties of perjury. 

The amendments also add a new subsection (b) to Section 301.6. This new subsection effectively requires banking institutions found to be in violation of Banking Law Section 75-c, which specifies certain required ATM security measures, to file with the Department, also under the penalties of perjury, a report that corrective action has been taken or to provide a remedial plan as to the corrective action that will be taken.  This new reporting requirement facilitates the enforcement of Banking Law Section 75-j, which states that where a banking institution fails to correct a violation of Section 75-c within ten business days of such finding, the Superintendent may, after notice and a hearing, require the institution to pay a civil penalty.

This type of self reporting furthers the intent of the Act by ensuring that violations are corrected in a timely manner.  Proof of failure to correct violations of Banking Law Section 75-c within 10 business days after notification, whether gathered from the required follow up reports or from reinspections, could serve in appropriate cases as the basis for the Department to hold hearings and impose civil monetary penalties pursuant to Section 75-j.

Thus, the self reporting requirement will enable the Banking Department to maximize the effective use of its ATM inspection resources.

Very truly yours,

Sam L. Abram
Secretary of the Banking Board

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