NY S02088

Creates new Banking Law § 78-a requiring the Department of Financial Services' financial frauds unit to refer unauthorized banking entities to the Attorney General and other agencies, with the Attorney General providing written status updates every six months.

Adds Banking Law § 590(e) prohibiting mortgage bankers, brokers, and exempt organizations from conducting business with unlicensed or unregistered mortgage operators, requiring prompt notification to the department of such violations.

Increases civil penalties under Banking Law § 598 for unlicensed or unregistered persons engaging in mortgage banking activities from a maximum of four times the amount paid to affected persons up to ten times that amount if the violation continues after receiving a cease and desist notice from the superintendent.

Expands Penal Law Article 187 mortgage fraud statutes to apply to all mortgage loans (removing "residential" limitation) and to loans made to entities in addition to individuals, while maintaining existing penalty thresholds based on fraud amount ($1,000+ for fourth degree, $3,000+ for third degree, $50,000+ for second degree, $1,000,000+ for first degree).

Effective date is thirty days after the bill becomes law.