(a) If a licensee seeks to utilize a licensee service provider to hold, or have access to, or to effectuate possession of, by any means, the monies of another licensee's debtors in contract with the licensee for budget planning services, or to distribute, or be in the chain of distribution of such monies to creditors of the licensee's debtors, the licensee shall give the superintendent 10 days written notice of its intention to do so.

(b) Notice to the superintendent shall contain the following information:

(c) Unless the licensee maintains assets on deposit in lieu of a surety bond, pursuant to Banking Law, section 580.4, the superintendent, in his/her discretion, may require the licensee service provider to obtain a larger surety bond or maintain a greater amount of assets on deposit for the protection of debtors in accordance with the terms and conditions as set forth in sections 402.5, 402.6 and 402.7 of this Title in connection with the services being provided by the licensee service provider to the licensee as described in subdivision (a) of this section.

(d) A licensee shall not use a licensee service provider until the licensee receives written notice from the superintendent confirming that the superintendent has received a copy of the licensee service provider's bond or asset deposit agreement, if required under subdivision (c) of this section.

(e) Notwithstanding the provisions of subdivision (c) of this section, if a licensee maintains a surety bond and seeks to utilize a licensee service provider, as defined in section 404.1(c) of this Part, the superintendent, in his/her sole discretion, may permit the use of an alternate mechanism to the licensee service provider obtaining a larger surety bond or maintaining a greater amount of assets on deposit, consistent with the purposes of section 580.4 of article 12-C of New York's Banking Law and the requirements of this Part.

(f) If the use of an alternate mechanism pursuant to subdivision (e) of this section is proposed by a licensee, the licensee must provide a description of the alternate mechanism and a copy of all applicable documents and records, as well as any other information requested by the superintendent, in connection with obtaining and/or using the alternate mechanism, including all contracts/ agreements pertaining or related thereto.

(g) If a licensee proposes the use of an alternate mechanism to a licensee service provider obtaining a larger surety bond or maintaining a greater amount of assets on deposit, pursuant to subdivision (e) of this section, use of the alternate mechanism shall not be permitted until the licensee receives written notice from the superintendent that he/she has no objection to such alternate mechanism.