Banking Interpretations

General Business Law 455

August 1, 2006

Ms. Leslie Linfield, Esq.
Executive Director/Founder
Institute for Financial Literacy
PO Box 1842
Portland, ME 04101

Dear Ms. Linfield:

You have asked whether the Institute for Financial Literacy (the "Institute") would need to be licensed as a budget planner in New York State in order to provide certain educational services to New York State residents. The Institute is a 501(c) (3) not-for-profit organization incorporated in the state of Maine. The Institute offers to individuals credit counseling prior to filing of bankruptcy and financial management instructional education prior to discharge in bankruptcy as required under Title 11 of the United States Code. In connection therewith, the Institute has been approved by the United States Trustee to provide such services.

As is more fully described in your correspondence, the Institute provides credit counseling and financial management education to individuals by way of the internet and telephone. The Institute receives funding from program fees charged to participants for the credit counseling and financial management education that range from $40 to $65 dollars. Additionally, the Institute may receive grant money and private donations from individuals and corporations. In providing these services, you point out that the Institute does not administer debt payments for or on behalf of any of its program participants. Therefore, other than receiving fees for the educational programs, the Institute does not hold any client funds in trust or on behalf of any parties.

Based on the business activity referred to above, the State of New York Banking Department is of the opinion that the Institute is not conducting budget planning as that business is contemplated under Article 12-C of New York's Banking Law. In particular, the Institute does not meet the definition of budget planning contained in Section 455 of New York's General Business Law because it does not enter into budget planning contracts with New York residents ("debtors") and in connection therewith distribute, supervise, coordinate or control payments made by the debtors to specified creditors. Accordingly, under the circumstances that you describe, the Institute would not require a budget planning license under New York's Banking Law.

I trust that this is responsive to your inquiry.


Christine R. Cardi
Assistant Counsel

cc: Deputy Superintendent Regina Stone