Bill S2873-2013

Relates to the imposition of fees for investigations and applications for banking institutions

Relates to the imposition of fees for investigations and applications for banking institutions.



  • Jan 8, 2014: REFERRED TO BANKS
  • Jan 24, 2013: REFERRED TO BANKS



TITLE OF BILL: An act to amend the banking law, in relation to the imposition of certain fees

PURPOSE: To help encourage smaller financial institutions to consider converting to a state charter by establishing a lower application fee.


Section 18-a of the Banking Law is amended to establish a lower application fee for smaller banks, thrifts and credit unions which are converting from a federal charter to a state charter.

Section 34 of the Banking Law is amended to provide that the Superintendent of the Department of Financial Services shall set the fee for service of process involving foreign banks, provided however that such fee shall not exceed the fee level established by the Legislature for service of process upon the Department of State pursuant to section l04-A(c) of the Business Corporation Law. The bill also provides that no fee shall be collected for process served on behalf of a municipality.


Section 18-a of the Banking Law was added in 2005 to set new fee levels for applications by banking institutions and financial service companies. These fee levels are intended to better reflect the Department's actual costs to investigate and process an application.

As a way to promote the state charter, this bill seeks to establish a lower application fee level for smaller banking institutions which may be considering a conversion from a federal charter to a state charter. Instead of the standard application fee of $12,500, this bill would set a $1,000 application fee for banking institutions which have less than $100 million in assets. Smaller entities are the ones which are most likely to factor the level of application costs (including the application fee itself) into their consideration of whether to change charters. Lowering the Department's application fee will help address this concern and eliminate one possible obstacle to a conversion.

It should be noted that both the Office of the Comptroller of the Currency (OCC), which regulates national banks, and the Office of Thrift Supervision, which regulates federal savings banks and savings and loan associations, charge lower application fees for an institution which is converting to a federal charter than for a new institution. This bill would establish a similar distinction in State law between' these different types of applications.

Maintaining and increasing the number of state charters is important for preserving the State's role in regulating and overseeing the financial services industry. New institutions will also help support the Depart ment's budget through the assessments they pay, thereby helping to spread the total regulatory costs among more institutions. Section 200 of the Banking Law currently requires foreign banking corporations to appoint the Superintendent of Department of Financial Services as their true and lawful attorney upon whom all process in any action or proceeding against them may be served. For each service of Process, Section 34 of the Banking Law directs the Superintendent to collect a two dollar fee. This fee level has remained unchanged since at least 1892, and does not reflect the Department of Financial Service's costs to process this paperwork.

This bill authorizes the Superintendent of the Department of Financial Services to establish a service of process fee which better reflects the Department's costs. However, the fee may not exceed the fee level authorized by the State Legislature under Section 104-A of the Business corporation Law for service of process upon the Secretary of State (this fee is currently $40). It is appropriate to give the superintendent of Banks the flexibility to set an appropriate fee level, but not to exceed a level which the State Legislature has determined is an appropriate fee level for the Department of State to charge for service of process. Also, the Business Corporation Law currently exempts municipalities from having to pay a service of process fee, and this bill would enact a similar exemption in the Banking Law.


S.4783 of 2008 Died in Committee S.4783 of 2007 Reported to Senate Calendar S.7528 of 2006 Reported to Senate Calendar S.3704 of 2010 Referred to Banks S.3704 of 2010 Referred to Banks S.3650 of 2012 Referred to Banks

FISCAL IMPLICATIONS: None to the State. The Department of Financial Services is fully funded by the regulated financial services industry. Each year, the Department receives varying amounts of revenue from the examination and application fees it charges, and then raises the remaining balance of its budget through assessments charged to the industry. Regardless of whether this bill results in slightly higher or slightly lower fee revenues, the Department's total budget remains unchanged. All that will vary is the remaining amount which the Department needs to raise through its assessments.

EFFECTIVE DATE: Immediately.


STATE OF NEW YORK ________________________________________________________________________ 2873 2013-2014 Regular Sessions IN SENATE January 24, 2013 ___________
Introduced by Sen. SMITH -- read twice and ordered printed, and when printed to be committed to the Committee on Banks AN ACT to amend the banking law, in relation to the imposition of certain fees THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 6 of section 18-a of the banking law is renum- bered subdivision 7 and a new subdivision 6 is added to read as follows: 6. FOR ANY FEDERAL BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT UNION WHICH HAS LESS THAN ONE HUNDRED MILLION DOLLARS IN ASSETS AND WHICH IS MAKING AN APPLICATION TO CONVERT INTO A STATE BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT UNION, THE INVESTIGATION FEE FOR ANY SUCH APPLICATION SHALL BE ONE THOUSAND DOLLARS. S 2. Section 34 of the banking law, as amended by chapter 310 of the laws of 1962, is amended to read as follows: S 34. Superintendent as attorney to accept service of process. When- ever pursuant to any provision of this chapter, the superintendent shall have been duly appointed attorney to receive service of process for any individual, partnership, unincorporated association or corporation, such service shall be made by personally delivering duplicate copies of the process to and leaving them with the superintendent or any deputy super- intendent. Service of process so made shall be deemed to have been made within the territorial jurisdiction of any court in this state. The superintendent or deputy superintendent shall forthwith forward by mail, postage prepaid, a copy of every process served upon him OR HER in accordance with this section, directed to the person last designated by such individual, partnership, unincorporated association or corporation in accordance with the provisions of this chapter to receive such proc- ess on his OR HER or its behalf. For each service of process upon the superintendent or a deputy, he OR SHE shall collect [the sum of two dollars] A FEE AS SET BY THE SUPERINTENDENT, PROVIDED THAT SUCH FEE
SHALL NOT EXCEED THE AMOUNT OF THE SERVICE OF PROCESS FEE COLLECTED BY THE DEPARTMENT OF STATE PURSUANT TO PARAGRAPH (C) OF SECTION ONE HUNDRED FOUR-A OF THE BUSINESS CORPORATION LAW, which shall be paid by the plaintiff or moving party at the time of such service, EXCEPT THAT NO FEE SHALL BE COLLECTED FOR PROCESS SERVED ON BEHALF OF A COUNTY, CITY, TOWN, VILLAGE OR OTHER POLITICAL SUBDIVISION OF THE STATE. The term process when used in this section, includes any writ, summons, petition or order whereby any suit, action or proceeding shall be commenced. S 3. This act shall take effect immediately.


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