Industry Letter

Changes in the Banking Law Pertaining to the General Assessment, Expiration and Suspension of a License and Annual Registration Fees

August 4, 2006

To the Individual or Institution Addressed:

This is to inform you of changes in the Banking Law that pertain to the general assessment, suspension and expiration of your registration, and the annual registration fees.

Section 17.2 of the Banking Law provides that the Department will assess the cost of operating the Department to any entity licensed, registered or incorporated or otherwise formed pursuant to the Banking law. In February 2005, the Department began billing Mortgage Brokers for their portion of the Department operating cost.

On June 23, 2006, Section 592-a of the Banking Law was revised retroactive to May 11, 2006 to require the payment of a late fee on all past due assessments. As revised, Section 592-a states that failure to pay the general assessment provided under Section 17.2 by the due date will result in a late fee of $100 being added to the bill. This will be in addition to interest charged for the late payment. Section 17.5 of the Banking Law allows for the immediate suspension of the registration if payment is not made by the due date.

Further, Section 592-a provides that if the general assessment bill along with interest and late fees is not paid within 30 days after the due date, the registration will expire. If full payment is made within 60 days of the expiration, the registration will be reinstated. However, if no payment is received, the expiration is permanent, and a new application must be filed before any business may be conducted. The investigation charge to become a registered mortgage broker as established by Section 18-a of the Banking Law is $1,500 effective May 11, 2006.

Expiration does not satisfy the debt owed the Department, and the Department will exercise its right under Part 410.15 of the Superintendent’s Regulations to collect the amount owed from the corporate surety bond or pledged deposit posted by the mortgage broker.

The Department will implement the new provisions of Section 592-a and Section 17.5 with the billing for the 3 rd quarter, which will be sent on August 10, 2006, and will be due on September 10, 2006. Registrants are advised that outstanding bills from previous quarters must also be paid in full to avoid the late charge and expiration, as any payment received by the Department is applied to the earliest bill first.

Registrants who believe their bill is based on incorrect information must notify the Department in writing of the discrepancy. The Department will contact the registrant to verify the information, which could include a special examination or audit of the financial records to determine the accuracy of the information provided. Upon completion of our review we will advise whether to pay the bill as presented, or whether it will be recalculated. Section 44-a provides for the payment of a fine of not more than $2,000 per day for filing inaccurate regulatory reports.

Section 17 of the Banking Law was amended in May 2006 to allow the Department to apply investigation fees collected on new applications to the operating expenses of the Department. Prior to this change, these fees were deposited in the State’s General Fund. The Department will apply investigation fees collected since May 11, 2006 for mortgage broker applications to the portion of the budget assessed against all mortgage brokers, reducing the regulatory portion of the billing. These fees will not impact the supervisory portion of the bills.

Section 594-a of the Banking Law was repealed effective May 11, 2006. This section required payment of an annual fee in order to continue a registration. As a result of the repeal of the annual fee , the December registration billing is eliminated.

Please take note of these important changes. Should you have any questions regarding the issues discussed herein, please contact the Mortgage Banking Division at (212) 709-5542.

Very truly yours,


Rholda L. Ricketts
Deputy Superintendent of Banks