Industry Letters

Creditor Negotiations with Budget Planners

March 24, 2003

To the CEO of the Institution Addressed:

This letter is to apprise you of the fact that amendments to Article 28-B of the General Business Law and Article 12-C of the New York State Banking Law, as well as a new Part 402 of the Superintendent’s Regulations, will become effective on April 7, 2003. The laws and regulations pertain to budget planners and mandate that any entity which provides budget planning services to New York residents, as defined in Article 28-B, must be licensed by the New York State Banking Department (“Department”), irrespective of whether the entity has a physical presence in New York State.

If, in the course of your business activities, your institution negotiates with a budget planner executing contracts with New York residents, we urge you to ensure that such an entity is licensed by the Department. A list of licensed entities, as well as the new regulations, may be found on the Department’s web site, We recommend that you institute a procedure to ensure that your institution conducts business only with licensed budget planners.

Should you have any questions, please do not hesitate to contact the undersigned at 212-709-5500.

Thank you for your cooperation.

Very truly yours,

Paul J. Fazio
Deputy Superintendent of Banks