Bill S4193A-2011

Relates to certain provisions regarding foreign banking corporations

Treats a branch or agency of a foreign banking corporation licensed under article 5 of the banking law as a banking institution for the purposes of provisions governing the purchase of assets and with regard to the transfer of fiduciary relationships.

Details

Actions

  • Apr 17, 2012: referred to banks
  • Apr 17, 2012: DELIVERED TO ASSEMBLY
  • Apr 17, 2012: PASSED SENATE
  • Mar 30, 2012: ADVANCED TO THIRD READING
  • Mar 29, 2012: 2ND REPORT CAL.
  • Mar 28, 2012: 1ST REPORT CAL.474
  • Jan 4, 2012: REFERRED TO BANKS
  • Jan 4, 2012: returned to senate
  • Jan 4, 2012: died in assembly
  • May 16, 2011: referred to banks
  • May 16, 2011: DELIVERED TO ASSEMBLY
  • May 16, 2011: PASSED SENATE
  • Apr 12, 2011: AMENDED ON THIRD READING 4193A
  • Apr 4, 2011: ADVANCED TO THIRD READING
  • Mar 31, 2011: 2ND REPORT CAL.
  • Mar 30, 2011: 1ST REPORT CAL.282
  • Mar 23, 2011: REFERRED TO BANKS

Meetings

Calendars

Votes

VOTE: COMMITTEE VOTE: - Banks - Mar 28, 2012
Ayes (19): Griffo, Farley, Bonacic, DeFrancisco, Gallivan, Golden, Johnson, O'Mara, Marcellino, Ranzenhofer, Smith, Breslin, Carlucci, Diaz, Krueger, Rivera, Savino, Valesky, Avella

Memo

BILL NUMBER:S4193A

TITLE OF BILL: An act to amend the banking law, in relation to certain provisions relating to foreign banking corporations

PURPOSE: To clarify and streamline the ability of foreign banking corporations to enter into merger and purchase transactions.

SUMMARY OF PROVISIONS: Section 1 of the bill amends Section 601-a of the Banking Law to clarify the authority of New York-chartered banking institutions to engage in an acquisition transaction with out-of-state banks. It also clarifies that New York licensed branches and agencies of foreign banks are considered banking institutions subject to the requirements of Section 601-a if they participate in an acquisition transaction involving a bulk transfer of fiduciary relationships authorized under Section 604-a. The bill also adds language to clarify the Superintendent's authority to authorize additional acquisition transactions, as well as to implement this provision through rulemaking.

Section 2 of the bill amends Section 604-a of the Banking Law to clarify that New York licensed branches and agencies of foreign banking corporations may engage in a transaction with another banking institution involving the transfer of all or substantially all of the assets of the transferor institution, in which the transferee institution agrees to assume all of the fiduciary relationships of the transferor institution, and in which the transferee files a certificate for approval and endorsement by the superintendent, indicating that the transferee has succeeded to all the rights and obligations of the transferor with respect to such fiduciary relationships.

EXISTING LAW: Section 601-a of the Banking Law enumerates the types of authorized acquisition transactions which may occur between two New York banking institutions as well as between New York banking institutions and other banking institutions.

Section 604-a of the Banking Law authorizes a bulk transfer of fiduciary relationships as part of a transaction between banking institutions in which the transferee corporation is assuming all or substantially all of the assets, as well as the deposit liabilities, if any, of the transferor corporation.

JUSTIFICATION: The Banking Law currently contains provisions which authorize banking institutions to enter into purchase and assumption agreements with

other institutions, and to transfer fiduciary relationships between institutions. This bill amends these laws to clarify and ensure that they apply to branches and agencies of foreign banking corporations.

The foreign banking community is a very important contributor to the economy of New York State and New York City, and to our reputation as the world's financial center. In fact, the vast majority of foreign banking corporations which have offices in the United States are subject to the regulatory jurisdiction of the New York State Banking Department. These regulated entities hold over 80% of the assets held by foreign bank offices located in the United States.

There has been some uncertainty about whether the existing laws regarding purchases and transfers apply to the branches and agencies of foreign banking corporations. This legislation will clarify and ensure that these institutions can enter into these types of transactions.

This will enhance the attractiveness of the New York license for foreign banking corporations seeking to operate in New York. Otherwise, these foreign banks would have to engage in additional lengthy and costly steps to undertake these types of business transactions. This measure improves the regulatory process, thereby helping to keep these institutions in New York and keeping them in the state charter system.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 4193--A Cal. No. 282 2011-2012 Regular Sessions IN SENATE March 23, 2011 ___________
Introduced by Sens. GRIFFO, FARLEY -- read twice and ordered printed, and when printed to be committed to the Committee on Banks -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading AN ACT to amend the banking law, in relation to certain provisions relating to foreign banking corporations THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph (g) of subdivision 1 of section 601-a of the banking law, as amended by chapter 152 of the laws of 1993, is amended to read as follows: (g) ONE OR MORE BANKS, TRUST COMPANIES, STOCK-FORM SAVINGS BANKS OR STOCK-FORM SAVINGS AND LOAN ASSOCIATIONS, WITH ONE OR MORE OUT-OF-STATE BANKS AS SUCH TERM IS DEFINED IN SECTION TWO HUNDRED TWENTY-TWO OF THIS CHAPTER. (H) One or more banking institutions by another banking institution [to the extent permitted under regulations of the banking board] AS THE SUPERINTENDENT MAY AUTHORIZE. FOR PURPOSES OF THIS PARAGRAPH, A BRANCH OR AGENCY OF A FOREIGN BANKING CORPORATION LICENSED PURSUANT TO ARTICLE TWO OF THIS CHAPTER AND SEEKING APPROVAL FOR A TRANSFER OF FIDUCIARY RELATIONSHIPS PURSUANT TO SECTION SIX HUNDRED FOUR-A OF THIS CHAPTER SHALL BE CONSIDERED A BANKING INSTITUTION. THE SUPERINTENDENT MAY PROMULGATE SUCH REGULATIONS AS HE OR SHE DEEMS NECESSARY AND PROPER TO IMPLEMENT AND DEFINE THE PROVISIONS OF THIS PARAGRAPH. S 2. Section 604-a of the banking law, as added by chapter 743 of the laws of 1958, the section heading and subdivision 1 as amended by chap- ter 297 of the laws of 1993, subdivision 2 as amended by chapter 489 of the laws of 1963 and subdivision 3 as amended by chapter 115 of the laws of 1981, is amended to read as follows: S 604-a. Transfer of fiduciary relationships [of a banking institu- tion]. 1. If any banking institution, including a bank or trust company, national banking association, savings bank, savings and loan associ- ation, federally chartered savings bank, federally chartered savings
[and loan] association, OR A BRANCH OR AGENCY OF A FOREIGN BANKING CORPORATION LICENSED PURSUANT TO ARTICLE TWO OF THIS CHAPTER, located in this state, shall have transferred all or substantially all of its assets to another banking institution in a transaction subject to this chapter pursuant to a written agreement between the transferor and transferee [corporations] whereby the transferee [corporation] has assumed the deposit liabilities, if any, of the transferor [corporation] and has agreed to assume all fiduciary relationships of the transferor [corporation], the transferee [corporation] may file in the office of the superintendent a certificate in its name and under its [corporate] seal, signed by its president, secretary or cashier, setting forth a copy of such agreement and stating that the transferee [corporation] assumes all of the fiduciary relationships of the transferor [corpo- ration] pursuant to the provisions of this section; provided, however, that such certificate shall not be filed unless the approval of the superintendent shall have been endorsed thereon or annexed thereto before filing. IN THE CASE OF A BRANCH OR AGENCY LICENSED PURSUANT TO ARTICLE TWO OF THIS CHAPTER THAT SEEKS TO PARTICIPATE IN A TRANSACTION DESCRIBED IN THIS SECTION, SUCH BRANCH OR AGENCY SHALL BE SUBJECT TO THE APPLICATION AND APPROVAL REQUIREMENTS GOVERNING ACQUISITION TRANSACTIONS SET FORTH IN SECTIONS SIX HUNDRED ONE-A AND SIX HUNDRED ONE-B OF THIS CHAPTER. 2. Upon the filing of such certificate in the office of the super- intendent, all of the property, rights, powers and franchises of the transferor [corporation] as fiduciary shall vest in the transferee [corporation] and the transferee [corporation] shall be deemed to have assumed all of the debts, liabilities, obligations and duties of the transferor [corporation] as fiduciary, and to have succeeded to all the fiduciary relationships of the transferor [corporation], as fully and with the same effect as is provided in sections one hundred thirty-six-c and six hundred two in the case of a merger, and any reference to the transferor [corporation] as fiduciary in any capacity, contained in any contract, will or document, whether executed or taking effect before or after the filing of such certificate in the office of the superinten- dent, shall be considered a reference to the transferee [corporation] if not inconsistent with the other provisions of the contract, will or document. 3. For [the] purposes of this section, the fiduciary relationships of the transferor shall include all relationships as agent, trustee, guard- ian, receiver, committee, conservator, executor, administrator, or other fiduciary in any capacity or for any purpose mentioned in section one hundred, and all relationships of the transferor as bailee or depositary of personal property. 4. This section shall not be deemed to authorize a transferee [corpo- ration] to assume any fiduciary relationship of a kind which it would not otherwise have power to undertake and perform. Nothing in this section shall be deemed to authorize any such transferee [corporation] to maintain as its own office any office previously maintained by the transferor [corporation], and authority, if any, to maintain any such office shall be governed by the applicable provisions of law other than this section. This section shall not be deemed to apply to contracts of the transferor for the leasing of safe deposit boxes or vaults. S 3. This act shall take effect immediately.

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