This bill has been amended

Bill S4350-2013

Makes technical corrections to the banking law

Makes technical corrections to the banking law.

Details

Actions

  • Jan 8, 2014: REFERRED TO BANKS
  • Jan 8, 2014: returned to senate
  • Jan 8, 2014: died in assembly
  • Apr 30, 2013: referred to banks
  • Apr 30, 2013: DELIVERED TO ASSEMBLY
  • Apr 30, 2013: PASSED SENATE
  • Apr 29, 2013: ADVANCED TO THIRD READING
  • Apr 24, 2013: 2ND REPORT CAL.
  • Apr 23, 2013: 1ST REPORT CAL.430
  • Mar 21, 2013: REFERRED TO BANKS

Meetings

Calendars

Votes

VOTE: COMMITTEE VOTE: - Banks - Apr 24, 2013
Ayes (19): Griffo, Farley, Bonacic, DeFrancisco, Golden, Marchione, Martins, Marcellino, O'Mara, Ranzenhofer, Savino, Valesky, O'Brien, Breslin, Diaz, Avella, Parker, Sanders, Gipson

Memo

BILL NUMBER:S4350

TITLE OF BILL: An act to amend the banking law, in relation to making certain technical corrections thereto

PURPOSE: To make technical corrections and fix certain inconsistencies in the Banking Law resulting from the elimination of the Banking Board.

SUMMARY OF PROVISIONS: This bill makes technical amendments to several sections of the Banking Law.

Sections 1, 3, 6 and 17 of the bill delete duplicative references to the Superintendent of Financial Services - these sections had previously referred to both the Superintendent and the Banking Board.

Sections 7, 9, 10 and 13 of the bill delete references to a 3/5ths vote of the Superintendent -these sections had previously referred to a 3/5ths vote of the Board.

Sections 2, 4, 8, 11, 12, 13, 14, 15, 16 and 18 of the bill change or delete references to "it" or "its." which had previously referred to the Board but now incorrectly refer to the Superintendent.

Section 5 of the bill amends Section 24 of the Banking Law to clarify the process for reviewing and approving applications for a bank organization certificate - previously, the Superintendent would make recommendations to the Banking Board for a final decision.

JUSTIFICATION: This bill makes several technical amendments to the Banking, Law. These amendments will clean up and clarify some inconsistencies which arose as a result of the elimination of the State Banking Board.

As part of the 2011 State Budget, legislation was enacted to merge the Banking Department and the Insurance Department into a new agency, the Department of Financial Services. This legislation also repealed the existence of the State Banking Board, which had consisted of the Superintendent of Banks and 16 appointed members. The Board had been responsible for chartering banking institutions, licensing foreign bank branches and agencies, approving bank mergers and acquisitions, and promulgating regulations governing many bank activities. In accordance with the merger legislation, these powers became vested solely with the Superintendent of Financial Services.

The 2011 law repealed the authorization for the Banking Board and made conforming amendments in some sections of the Banking Law. For many other sections, the law directed the Legislative Bill Drafting Commission to simply replace certain references in State law. For example, references to the Superintendent of Banks were to be changed to the Superintendent of Financial Services. Also, because the bill eliminated the Banking Board, references to the Banking Board were to be changed to the Superintendent.

However, these changes resulted in some duplication and inconsistencies in the law. For example, a few sections which

previously referred to both the Superintendent and the Banking Board now refer to the Superintendent and the Superintendent. A few sections which referred to a 3/5ths vote of the Board now refer to a 3/5ths vote of the Superintendent. There are also several uses of the word "it" or "its" which had been used in relation to the Board, but which are now used incorrectly in relation to the Superintendent.

The bill also clarifies the review and approval process for applications for a bank organization certificate. Previously, the Superintendent had a specific amount of time in which to review the application and make a recommendation to the Banking Board, which made the final decision. With the elimination of the Banking Board, and the reference changes made by the original law, this section now indicates that the Superintendent must make a recommendation to the Superintendent. This bill cleans up and clarifies the process.

FISCAL IMPLICATIONS:None

EFFECTIVE DATE:Immediately


Text

STATE OF NEW YORK ________________________________________________________________________ 4350 2013-2014 Regular Sessions IN SENATE March 21, 2013 ___________
Introduced by Sen. FARLEY -- 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 making certain technical corrections thereto THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 6-i of the banking law, as added by chapter 571 of the laws of 1986 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: S 6-i. Mortgage loans. No person, partnership, corporation, banking organization, exempt organization as defined in section five hundred ninety of this chapter or other entity shall make a mortgage loan as defined in section five hundred ninety of this chapter except in conformity with the requirements of article twelve-D and in compliance with such rules and regulations as may be promulgated by the superinten- dent of financial services [or prescribed by the superintendent] under this section. Nothing in this section shall be construed to limit or otherwise modify any otherwise applicable requirement of state or feder- al law. S 2. Subdivision 3 of section 7 of the banking law, as added by chap- ter 184 of the laws of 1978 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: 3. The superintendent of financial services may promulgate such regu- lations as [it] HE OR SHE deems necessary and proper to implement and define the provisions of this section. S 3. Subdivision 3 of section 9-f of the banking law, as amended by chapter 571 of the laws of 1986 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: 3. For the purposes of this section, the term (a) "prudent loan" means a loan upon the security of real property which is prudent by acceptable banking standards and is in compliance with all of the provisions of
this chapter[,] AND RULES AND regulations of the superintendent of financial services [and rules of the superintendent]; and (b) notwith- standing any other provision of this chapter or law to the contrary, the term banking institution when used in this section shall mean and include all banks, trust companies, savings banks, savings and loan associations, credit unions, mortgage bankers, exempt organizations as defined in article twelve-D of this chapter and foreign banking corpo- rations whether incorporated, chartered, organized or licensed under the laws of this state or any other state or the United States. S 4. Subdivision 2 of section 14-c of the banking law, as added by chapter 19 of the laws of 1978 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: 2. The superintendent of financial services may alter or amend rules and regulations or promulgate additional rules and regulations as [it] HE OR SHE deems necessary and proper to effectuate the provisions of subdivision one. S 5. Subdivisions 1, 2 and 3 of section 24 of the banking law, subdi- vision 1 as amended by chapter 453 of the laws of 1960, subdivision 2 as amended by chapter 419 of the laws of 1996, subdivision 3 as amended by chapter 52 of the laws of 1944 and subdivisions 1, 2 and 3 as further amended by section 104 of part A of chapter 62 of the laws of 2011, are amended to read as follows: 1. Within ninety days after the date when any organization certificate or private banker's certificate shall have been filed for examination, the superintendent, if he OR SHE shall find after investigation and examination of what [he] THE SUPERINTENDENT deems to be the best sources of information at his OR HER command that the character, responsibility and general fitness of the person or persons named in such certificate are such as to command confidence and warrant belief that the business of the proposed corporation or private banker will be honestly and effi- ciently conducted in accordance with the intent and purpose of this chapter, and that the public convenience and advantage will be promoted by allowing such proposed corporation or private banker to engage in business, shall [submit] APPROVE such certificate [to the superintendent of financial services together with all papers, correspondence and other information in his possession relating thereto, including the results of his investigation and his recommendation in the matter] AND ENDORSE UPON EACH OF THE DUPLICATES THE DATE OF SUCH APPROVAL. Such period of ninety days may be extended, by a written consent executed by a majority of the persons from whom the superintendent received such organization certif- icate or private banker's certificate, for such additional reasonable period of time as may be required for applicants to comply with condi- tions precedent stipulated by the superintendent as being a prerequisite to his [recommendation to the superintendent of financial services] OR HER DETERMINATION. 2. If [three-fifths of the members of the board, after consideration of all relevant information available to them, shall vote for approval, the superintendent, if he is still satisfied, upon the considerations set forth in subdivision one of this section, that such proposed corpo- ration or private banker should be permitted to engage in business, shall approve such certificate and endorse upon each of the duplicates the date of such approval. He] APPROVED, THE SUPERINTENDENT shall forth- with cause notice of such approval to be given to the proposed incorpo- rators or private banker and one of the duplicate certificates to be filed in the office of the department and the other in the office of the clerk of the county in which the principal office of such proposed
corporation or private banker is to be located. [In a case in which a private banker certificate is submitted to the superintendent for the purpose of continuing the business in connection with a change in its partnership, the superintendent shall approve the private banker certif- icate without any action by the superintendent of financial services upon making a determination that the private banker should be permitted to continue its business based upon the considerations set forth in subdivision one of this section.] 3. If [three-fifths of the members of the superintendent of financial services shall not vote for approval, or if the superintendent, either prior or subsequent to the submission of such certificate to the board,] THE SUPERINTENDENT is not satisfied, upon the considerations set forth in subdivision one of this section, that such proposed corporation or private banker should be permitted to engage in business, the super- intendent shall refuse such certificate and shall endorse thereon the date of such refusal and return one of the duplicates to the proposed incorporators or private banker from whom such certificate was received. S 6. Subparagraph 12 of paragraph (a) of subdivision 3 of section 28-b of the banking law, as amended by chapter 315 of the laws of 2008 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: (12) Other factors that, in the judgment of the [superintendent and] superintendent of financial services, reasonably bear upon the extent to which a banking institution is helping to meet the credit needs of its entire community, including, without limitation, the banking insti- tution's participation in credit counseling services. S 7. Subdivision 5 of section 28-b of the banking law, as added by section 361 of the laws of 1984 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: 5. The superintendent of financial services is hereby authorized and empowered[, by a three-fifths vote of all its members,] to promulgate rules and regulations effectuating the provisions of this section, including any rules and regulations providing that the assessment of banking institutions referred to in subdivision three of this section shall be made on a graduated numerical basis. S 8. Subdivision 10 of section 100-c of the banking law, as added by chapter 239 of the laws of 1986 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: 10. The superintendent of financial services shall promulgate such regulations and rules as [it] HE OR SHE considers appropriate to govern the administration of common trust funds and short term investment common trust funds. S 9. Paragraph (c) of subdivision 1 of section 103 of the banking law, as amended by chapter 1 of the laws of 1983 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: (c) Loans (exclusive of any loan described in paragraph (a) of this subdivision) to any state other than the state of New York, or to any foreign nation, the New York State thruway authority, the Triborough bridge and tunnel authority, The Port of New York Authority, a railroad corporation, a municipal corporation of this state, a corporation subject to the jurisdiction of a public service commission of this state, or any international lending facility or public benefit corpo- ration designated by the superintendent of financial services by general or specific regulation [upon a three-fifths vote of all its members,]
may equal but not exceed twenty-five per centum of the capital stock, surplus fund and undivided profits of such bank or trust company. S 10. Subdivision 4 of section 103 of the banking law, as amended by chapter 313 of the laws of 2001, and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: 4. Make a loan upon the security of real estate within or without this state which does not comply with any such rules or regulations as the superintendent of financial services may prescribe. No loan shall be made under the provisions of this subdivision except upon the written and signed certificate of an appraiser appointed pursu- ant to policies established by the board of directors, certifying to the value of the premises according to his judgment. The provisions of this subdivision shall not constitute the authority to make a loan to a natural person upon the security of a mortgage which is not a first lien. Where the collateral for any loan consists partly of real estate secu- rity and partly of other security, including a guarantee or endorsement by or an obligation or commitment of a person other than the borrower, only the amount by which the loan exceeds the value as collateral of such other security, as found in good faith by a duly authorized officer of such bank or trust company, at the time of the making of the loan or commitment therefor, shall be considered a loan upon the security of real estate, provided, that in no event shall a loan be considered a loan upon the security of real estate (i) where the principal amount of any real estate security taken therefor is less than fifteen per centum of the amount of such loan or (ii) where the loan is payable in monthly or quarterly installments over a period not to exceed one hundred twen- ty-one months and does not exceed twenty thousand dollars and is for the purpose of paying the cost of any repairs, alterations or improvements upon, or in connection with, or, as the superintendent may authorize, the equipping of existing structures or the building of new structures by the owners thereof or by the lessees under a lease expiring not less than six months after the maturity of the loan or (iii) where the loan is fully guaranteed or insured by the United States or a state, or any department, agency or instrumentality thereof, and for the payment of which loan the full faith and credit of the United States or of such state is pledged and if under the terms of the guaranty or insurance agreement the bank or trust company will be assured of repayment in accordance with the terms of the loan or (iv) where there is a binding and valid commitment or agreement by a financially responsible lender, purchaser or other financially responsible party either directly with the lending bank or trust company or which is for the benefit of, or has been assigned to, the lending bank or trust company and pursuant to which commitment, agreement or assignment, the lender, purchaser or other party is required to advance to the lending bank or trust company within thirty months from the date of such commitment or agreement the full amount of the loan to be made by the lending bank or trust company upon the security of real estate improved by a building or buildings, or to be improved by a building or buildings in the process of construction, the major portion of which building is used, or in the case of a building under construction is to be used, for residential, business, manufacturing or agricultural purposes, and where pursuant to the terms and provisions of such commitment or agreement such advance shall be made prior to or upon the maturity of the loan by the lending bank or trust company.
Real estate security for purposes of this section shall not include (a) an assignment of rents under a lease, (b) a mortgage or other lien upon a leasehold, (c) a mortgage or other lien upon leasehold, royalty or other rights in oil, gas, minerals, standing timber, or other products of land, (d) a mortgage or other lien made or given upon real estate and taken as collateral security for loans to a borrower, provided, that at the time of the making of the loan or commitment therefor, repayment thereof is reasonably expected to be made out of the operations of such borrower or of the mortgagor, or (e) such mortgages or other liens on property as may be specifically exempted from the limitations and restrictions of this subdivision by the superintendent of financial services by general or specific regulations [adopted by a three-fifths vote of all its members]. Nothing in this paragraph shall be construed to imply that security of a kind not mentioned herein is to be deemed real estate security. The limitations and restrictions contained in this subdivision shall not prevent the acceptance of any real estate security to secure the payment of a debt previously contracted in good faith. Every mortgage and every assignment of a mortgage taken or held by such bank or trust company shall immediately be recorded or registered in its name in the office of the clerk or the proper recording officer of the county in which the real estate described in the mortgage is located, except that where the underlying real estate is located outside the state of New York such mortgage or assignment may be recorded or registered in the name of a duly authorized nominee, and except that if such mortgage or assignment of mortgage or of an interest therein shall be taken from a corporation organized under the banking law or all of the capital stock of which is owned by not less than twenty savings banks of this state, the bank or trust company may hold such mortgage or assignment unre- corded unless the superintendent shall direct the bank or trust company to record the same. The recording or registering of assignments of mort- gages shall not be required when not less than ten mortgages are assigned as security for a loan, the term of which does not exceed twelve months. Any bank or trust company may renew from time to time any loan upon the security of real estate lawfully made by it prior to June thirtieth, nineteen hundred thirty-seven. None of the prohibitions and restrictions contained in this subdivi- sion shall apply to any corporation all of the capital stock of which is owned by not less than twenty savings banks of this state. S 11. Paragraph (d) of subdivision 8 of section 108 of the banking law, as added by chapter 344 of the laws of 1974, such subdivision as renumbered by chapter 512 of the laws of 1977, and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: (d) The superintendent of financial services may promulgate such regu- lations as [it] HE OR SHE deems necessary and proper to implement and define the provisions of this subdivision. The superintendent of finan- cial services may prescribe maximum charges from time to time, but not more often than once in any six month period, and shall provide reason- able notice to the public of any change in such maximum charges, of the effective date of such change, which shall not be less than seven days following the adoption of such change by the superintendent of financial services, and of any rule or regulation adopted pursuant to this subdi- vision.
S 12. Section 111 of the banking law, as amended by chapter 360 of the laws of 1984 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: S 111. Profits; credits to surplus fund and to undivided profits. In any case where the combined capital stock, surplus fund and undivided profits of a bank or trust company do not equal ten per centum of its net deposit liabilities, the superintendent of financial services may in [its] HIS OR HER discretion require such bank or trust company at the close of each accounting period to credit its surplus fund with a portion of its net profits for such period, not to exceed ten per centum thereof, until its combined capital stock, surplus fund and undivided profits equal ten per centum of its net deposit liabilities. For the purposes of this section, the term "net deposit liabilities" shall mean total deposits including all amounts due to national banks, banks, bank- ers, trust companies and savings banks, the amounts due on certified and cashier's checks, and for unpaid dividends less the amounts of balances due from national banks, banks, bankers, and trust companies and cash items in process of collection payable immediately upon presentation in the United States. S 13. Paragraph (b) of subdivision 3 of section 130 of the banking law, as amended by chapter 217 of the laws of 2010 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: (b) The superintendent of financial services shall have the power to determine by regulation who shall be considered, under the provisions of this subdivision, to be an executive officer, and by a general or specific regulation[, upon a three-fifths vote of all its members,] to grant permission to an executive officer of a bank or trust company to be an executive officer, director or trustee or both an executive offi- cer and director or a trustee of another bank or trust company, savings bank, or savings and loan association, national bank, federal savings bank or federal savings association, the principal office of which is located in this state, bank holding company, or foreign banking corpo- ration maintaining a branch in this state. Such permission may be grant- ed only if in the judgment of the superintendent of financial services such service by the executive officer will be consistent with the policy of the state of New York as declared in section ten of this chapter. The superintendent of financial services shall have the power to revoke such permission [by a like vote] whenever [it] HE OR SHE finds, after reason- able notice and an opportunity to be heard, that the public interest requires such revocation. S 14. Subdivision 4 of section 234-b of the banking law, as added by chapter 883 of the laws of 1980 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: 4. The superintendent of financial services is authorized to promul- gate such regulations as [it] HE OR SHE may deem necessary or proper to implement the provisions of this section and the proper exercise of the powers granted by this section. S 15. Section 380-h of the banking law, as added by chapter 883 of the laws of 1980, subdivisions 1 and 4 as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: S 380-h. Trust powers. 1. The superintendent of financial services is authorized and empowered to grant permission to a savings and loan asso- ciation to exercise any or all of the powers specified in sections one hundred, one hundred-a, one hundred-b and one hundred-c of this chapter.
In passing upon applications for permission to exercise any such powers, the superintendent of financial services may take into consideration the amount of surplus of the applying association, whether or not such surplus is sufficient under the circumstances of the case, the needs of the community to be served and any other facts and circumstances that seem [to it] proper, and may grant or refuse it permission accordingly. 2. Whenever the laws of this state require a trust company acting in a fiduciary capacity to deposit securities with the state authorities for the protection of private or court trusts, a savings and loan associ- ation, so acting, is empowered to make similar deposits of securities. 4. The superintendent of financial services is authorized to promul- gate such regulations as [it] HE OR SHE may deem necessary or proper to implement the provisions of this section and the proper exercise of the powers granted by this section. S 16. Section 455 of the banking law, as added by chapter 608 of the laws of 1996 and subdivisions 1 and 3 as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: S 455. Trust powers. 1. The superintendent of financial services is authorized and empowered to grant permission to a credit union to exer- cise any or all of the powers specified in sections one hundred, one hundred-a, one hundred-b and one hundred-c of this chapter. In passing upon applications for permission to exercise any such powers, the super- intendent of financial services may take into consideration the amount of net worth of the applying credit union, whether or not such net worth is sufficient under the circumstances of the case, the needs of the community to be served and any other facts and circumstances that seem [to it] proper, and may grant or refuse it permission accordingly. 2. Whenever the laws of this state require a trust company acting in a fiduciary capacity to deposit securities with the state authorities for the protection of private or court trusts, a credit union, so acting, is required and empowered to make similar deposits of securities. 3. The superintendent of financial services is authorized to promul- gate such regulations as [it] HE OR SHE may deem necessary or proper to implement the provisions of this section and the proper exercise of the powers granted by this section. S 17. Paragraph (a) of subdivision 1 of section 595 of the banking law, as amended by chapter 571 of the laws of 1986 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: (a) Through a course of conduct, the licensee or registrant has violated any provisions of this article, or any rule or regulation promulgated by the superintendent of financial services[, or any rule or regulation prescribed by the superintendent] under and within the authority of this article or of any other law, rule or regulation of this state or the federal government; S 18. Subdivision 7 of section 600 of the banking law, as amended by chapter 315 of the laws of 2008 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: (7) One or more subsidiaries or affiliates of a bank, trust company, savings bank or savings and loan association, which are not a bank, trust company, savings bank or savings and loan association, as those terms are defined in section two of this chapter, with the bank, trust company, savings bank or savings and loan association of which it is a subsidiary or affiliate, as the superintendent of financial services shall approve and enter on its records; provided, however, that nothing
in this subdivision shall be deemed to authorize a bank, trust company, savings bank or savings and loan association to exercise any power or engage in any activity that it may not exercise or engage in pursuant to this chapter. The superintendent of financial services may promulgate such regulations as [it] HE OR SHE deems necessary and proper to imple- ment and define the provisions of this subdivision. Nothing in this subdivision shall alter, affect or impair any regulation or resolution adopted, or that may be adopted, by the superintendent of financial services, pursuant to section twelve-a or former sections fourteen-g or fourteen-h of this chapter. S 19. This act shall take effect immediately.

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