Relates to reporting requirements of banking institutions regarding ATM safety

Summary of provisions

Section 1 of the bill makes a number of amendments to Section 75-g of the banking law.

First, it amends subdivision 1 of Section 75-g to increase the number of ATM compliance reports that must be filed by banking institutions from 1 to 4 per year. It also requires such reports to be filed electronically, unless the Superintendent waives the electronic filing requirement for good cause shown.

It adds new Subdivision 1-a of Section 75-g, which requires a banking institution whose quarterly compliance report indicated any failure to comply with the ATM safety standards to file an additional written report by the eleventh business day after the original report, indicating whether each failure has been corrected. In addition, for each failure that was not corrected within 10 business days of the original report, the institution must report, promptly after correcting the failure, the date of correction.

Section 2 of the bill amends the penalty provisions of Section 75-j of the banking law to make clear that the obligation to correct violations within 10 business days applies equally to each of the quarterly compliance reports.

Section 3 of the bill provides that the amendments will become effective on March 1 of the year following enactment, or such later date as the Superintendent may determine is necessary for the Department to develop a system for automated filing of quarterly compliance reports.

Existing law

Section 75-g of the banking law provides that banking institutions must file a compliance report once a year. The current reports are made in hard copy by mail.

Section 75-j of the banking law currently authorizes the Banking Department to impose civil penalties after the banking institution has been "found to be in violation," and the institution fails to correct the violation within 10 business days. That section also

contains penalties for failure to file required reports or for filing reports with inaccurate information or omissions.

Prior legislative history

This is a new proposal. In both 2009 and 2010, the Banking Department proposed, as part of a larger regulatory reform effort, legislation that would have allowed the Banking Department by regulation to require electronic filing of compliance reports, but the bill was not passed.

Statement in support

The ATM Safety Act is very prescriptive in directing the Banking Department on how to administer its provisions. Over time, the cost of administering these provisions has increased. The Banking Department has divided the state into 10 regions and has assigned ATM Safety Inspectors to conduct inspections of ATM Facilities within those regions, At least part of those inspections must occur at night, since the inspection involves measuring whether the lighting in the ATM facility meets the appropriate number of foot candles required by the act's illuminance standards.

Over time, as banks have become more familiar with the standards, instances of non-compliance have decreased. Consequently, the Banking Department believes that its resources could beneficially be reallocated to other pressing issues, without detracting from ATM safety, if financial institutions were required to make the appropriate inspections, take the appropriate measurements and report the results to the Banking Department. Because the bill would increase the number of compliance reports required of banking institutions from one annual report to four quarterly reports, the Banking Department believes that compliance with the ATM Safety Act's standards could actually increase.

Budget implications

There are no budget implications from this bill.

Effective date

The bill would take effect on the March 1st next succeeding the effective date of the bill or such later date as the superintendent of banks may determine is necessary for the Banking Department to develop a system for the automated reporting of compliance with the requirements of article 2-AA of the banking law.