Relates to the exercise of federally permitted powers by a state chartered banking institution; requires a banking institution to make an application with one or more state chartered banking institutions to the superintendent indicating intent to exercise the federally permitted power and the basis for doing so.
TITLE OF BILL: An act to amend the banking law, in relation to the exercise of federally permitted powers by a state chartered banking institution
PURPOSE: To expedite the consideration of wild card applications by mandating that properly submitted applications be posted on the Department's website and made available for public consideration within 120 days of their receipt and requiring the superintendent to notify applicants within 10 days of making a decision.
SUMMARY OF PROVISIONS: Section one of the bill amends subdivision 3 of section 12-a of the banking law to mandate that wild card applications be reviewed and posted on the Department's website and made available for public consideration within 120 days of their receipt and requiring the superintendent to notify applicants within 10 days of making a decision on the request. The superintendent's failure to comply with the posting and notice provisions will allow an applicant to petition the superintendent to act on the application. The subsequent failure of the superintendent to act within 30 days of a petition shall be deemed denial of the application with an opportunity for the applicant to appeal. Currently, there is no deadline by which applications have to be posted or when applicants need to be notified.
JUSTIFICATION: New York banking law authorizes state-chartered credit unions and banks to apply to the Banking Department for permission to exercise the same powers as their federally chartered counterparts. This power is critical to the state, as it give state-chartered institutions the ability to exercise the same power as federally chartered institutions while still maintaining state-charter status. Consumers receive the benefit of financial institutions being able to offer more services, and the state retains the money it gains from state-chartered institutions and the ability to engage in continued regulation of the financial industry.
Unfortunately, in spite of the importance of this power, its implementation has provided no benefits to credit unions. Credit unions seeking to exercise their wild card powers have seen their applications delayed to the point where they are not even considered. The amendments made by this bill will make wild card powers a truly useful instrument for all state-chartered financial institutions. By mandating that applications made by either a bank or credit union be reviewed in 30 days, credit unions will no longer be faced with endless delays in the official consideration of wild card proposals.
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: Immediately after enactment.
STATE OF NEW YORK ________________________________________________________________________ 4612--A 2011-2012 Regular Sessions IN SENATE April 13, 2011 ___________Introduced by Sens. GRIFFO, AVELLA -- read twice and ordered printed, and when printed to be committed to the Committee on Banks -- commit- tee discharged, bill amended, ordered reprinted as amended and recom- mitted to said committee AN ACT to amend the banking law, in relation to the exercise of feder- ally permitted powers by a state chartered banking institution THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 3 of section 12-a of the banking law, as amended by section 88 of part A of chapter 62 of the laws of 2011, is amended to read as follows: 3. Except with respect to a federally permitted power approved pursu- ant to subdivision four of this section, prior to any state chartered banking institution initially exercising any federally permitted power pursuant to this section, such banking institution shall make an appli- cation individually or with one or more state chartered banking insti- tutions to the superintendent indicating that such institution or insti- tutions intend to exercise such federally permitted power and the basis on which such institution or institutions believe such power is a feder- ally permitted power. THE SUPERINTENDENT SHALL HAVE ONE HUNDRED TWENTY DAYS FROM RECEIPT OF THE APPLICATION TO DETERMINE WHETHER IT MEETS THE REQUIREMENTS OF THIS SECTION, PROVIDED THAT SUCH PERIOD MAY BE EXTENDED FOR AN ADDITIONAL PERIOD OF TIME WITH THE WRITTEN CONSENT OF THE APPLI- CANT OR APPLICANTS. If such application meets the requirements of this section, the superintendent shall post such application upon the bulle- tin board of the department pursuant to section forty-two of this arti- cle.
[After promptly reviewing such application, the]IF SUCH APPLICA- TION DOES NOT MEET THE REQUIREMENTS OF THIS SECTION, THE SUPERINTENDENT SHALL, WITHIN TEN DAYS OF SUCH DETERMINATION, NOTIFY THE APPLICANT OR APPLICANTS OF THE REASONS WHY THE APPLICATION FAILS TO MEET THE REQUIRE- MENTS. THE superintendent shall determine, consistent with the standardsEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD10810-02-1 S. 4612--A 2
set forth in subdivision five of this section, whether to approve such application subject to such terms and conditions as the superintendent may deem appropriate, in the superintendent's sole discretion. Such determination, shall be made by the superintendent within forty-five days after the posting of such application
[by the superintendent], provided however that the superintendent may notify the applicant or applicants that the review of the application shall be extended for an additional period of time not exceeding [one hundred twenty]SIXTY days after the posting of such application, and provided further that such period of time may be extended for an additional period of time with the written consent of the applicant or applicants. The superintendent shall not act upon the application prior to thirty days after such application has been posted. [If the superintendent shall determine not to approve of such application, the superintendent shall notify the applicant or applicants in writing that the applicant or applicants may not exercise such federally permitted power.]If the superintendent approves such application, the superintendent shall, WITHIN TEN DAYS OF APPROVING THE APPLICATION, notify the applicant or applicants in writing thereof, and the applicant or applicants may exercise such federally permitted power subject to such terms and conditions as the superintendent may have approved. IF THE SUPERINTENDENT DECLINES SUCH APPLICATION, THE SUPER- INTENDENT SHALL, WITHIN TEN DAYS OF MAKING SUCH DETERMINATION, NOTIFY THE APPLICANT OR APPLICANTS IN WRITING THEREOF. AN APPLICANT OR APPLI- CANTS MAY, UPON THE SUPERINTENDENT'S FAILURE TO COMPLY WITH THIS SECTION, PETITION THE SUPERINTENDENT TO ACT UPON THE APPLICATION. THE FAILURE OF THE SUPERINTENDENT TO ACT UPON THE APPLICATION OR NOTIFY THE APPLICANT OR APPLICANTS, IN WRITING, AS TO THE REASONS WHY ACTION CANNOT BE TAKEN WITHIN THIRTY DAYS OF RECEIPT OF SUCH PETITION SHALL BE DEEMED A DENIAL OF THE APPLICATION, WHICH SHALL BE SUBJECT TO JUDICIAL REVIEW. Notwithstanding any other law, the superintendent may make the approval of an application under this section applicable to one or more addi- tional state chartered banking institutions that are qualified to exer- cise the same federally permitted powers as the applicant or applicants pursuant to subdivision two of this section, subject to such terms and conditions as the superintendent shall find necessary and appropriate. S 2. This act shall take effect immediately, provided, however, that the amendments to subdivision 3 of section 12-a of the banking law made by section one of this act shall not affect the repeal of such section and shall be deemed repealed therewith.