S5004-2011 - NY Senate Open Legislation - Amends the definition of "bank holding company" to replace the phrase "a banking institution" to "two or more banking institutions"

Amends the definition of "bank holding company" to replace the phrase "a banking institution" to "two or more banking institutions".

Sponsor: GRIFFO
Law Section: Banking Law
Law: Amd SS142-a, 105, 240 & 396, Bank L

S5004-2011 Actions

Jun 17, 2011: SUBSTITUTED BY A8157
May 24, 2011: ADVANCED TO THIRD READING
May 23, 2011: 2ND REPORT CAL.
May 18, 2011: 1ST REPORT CAL.783
May 2, 2011: REFERRED TO BANKS

S5004-2011 Meetings

Banks: May 18, 2011

S5004-2011 Calendars

Active List: Jun 17, 2011 , Floor Calendar: May 23, 2011 , Floor Calendar: May 24, 2011 , Floor Calendar: May 25, 2011 , Floor Calendar: Jun 1, 2011 , Floor Calendar: Jun 2, 2011 , Floor Calendar: Jun 6, 2011 , Floor Calendar: Jun 7, 2011 , Floor Calendar: Jun 13, 2011 , Floor Calendar: Jun 14, 2011 , Floor Calendar: Jun 15, 2011 , Floor Calendar: Jun 16, 2011 , Floor Calendar: Jun 17, 2011

S5004-2011 Votes

VOTE: COMMITTEE VOTE: - Banks - May 18, 2011

Ayes (19): Griffo, Farley, Bonacic, DeFrancisco, Gallivan, Golden, Johnson, O'Mara, Marcellino, Ranzenhofer, Smith, Breslin, Carlucci, Diaz, Kruger, Krueger, Rivera, Savino, Valesky

S5004-2011 Memo

BILL NUMBER:S5004

TITLE OF BILL:
An act
to amend the banking law, in relation to the definition of bank
holding company

PURPOSE:
This bill makes technical changes to Chapter 217 of the Laws
of 2010 with respect to the definition of bank holding company.

SUMMARY OF PROVISIONS:
Section 1 of the bill would amend Banking Law section 142-a
subdivision 2 to define a bank holding company as two or more banking
institutions. This would restore the prior definition of bank holding
company as two or more banking institutions. The reason for retaining
the definition of bank holding company in this section is so that the
potential home office protection for the principal office of
subsidiaries of one-bank holding companies will remain.

Section 2 of the bill would amend Banking Law section 105 concerning
branching to define a bank holding company as two or more banking
institutions. This would restore the prior definition of bank holding
company as two or more banking institutions. This change back would
retain the status quo with respect to home office protection for
principal offices of certain banking institutions that are
subsidiaries of one-bank holding companies which are subject to home
office protection.

Section 3 of the bill would amend Banking Law section 240 concerning
branching to define a bank holding company as two or more banking
institutions.

Section 4 of the bill would amend Banking Law section 396 concerning
branching to define a bank holding company as two or more banking
institutions.

Section 5 provides for an immediate effective date.

JUSTIFICATION/STATEMENT IN SUPPORT:
Chapter 217 of the Laws of 2010 made changes to the Banking Law to
streamline regulation of bank holding companies. Due to an oversight,
the definition of bank holding company was changed in Banking Law
sections 142-a, 105, 240 and 396 which relate to branching. This bill
would amend the term bank holding company to retain the former
definition of two bank holding company in the aforementioned
sections. This change is necessary because those provisions extend
New York's home office protection to the principal office of a state
bank or trust company or national bank in a city or village of
limited population, unless the principal office is
that of a bank which is a subsidiary of a bank holding company which
was previously defined under New York law as a two bank holding
company. This maintains the status quo to insure home office
protection for banks which were receiving the same.

LEGISLATIVE HISTORY:


This is a new bill intended to make technical corrections
to Chapter 217 of the Laws of 2010.

FISCAL IMPLICATIONS:
None to the State.

EFFECTIVE DATE:
This bill would take effect immediately.

S5004-2011 Text


                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    5004

                         2011-2012 Regular Sessions

                              I N  SENATE

                                 May 2, 2011
                                 ___________

  Introduced  by  Sen.  GRIFFO -- 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 definition  of  bank
    holding company

    THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section 1.  Subdivision 2 of section 142-a  of  the  banking  law,  as
  amended  by  chapter  217  of  the  laws  of 2010, is amended to read as
  follows:

    2. As used in this section, the term "control" means  the  possession,
  directly or indirectly, of the power to direct or cause the direction of
  the  management  and  policies of a banking institution, whether through
  the ownership of voting stock of such banking institution, the ownership
  of voting stock of any company which possesses such power or  otherwise.
  Control shall be presumed to exist if any company, directly or indirect-
  ly,  owns,  controls  or  holds with the power to vote ten per centum or
  more of the voting stock of any banking institution or  of  any  company
  which  owns, controls or holds with power to vote ten percent or more of
  the voting stock of such banking institution, but  no  person  shall  be
  deemed to control a banking institution solely by reason of his being an
  officer  or  director of such banking institution or company. As used in
  this section, the terms "bank holding company" and "banking institution"
  shall have the meanings as defined in section one hundred  forty-one  of
  this  article,  except  that the definition of "bank holding company" is
  modified to change  the  phrase  "a  banking  institution"  wherever  it
  appears  therein  to  "[one]  TWO  or more banking institutions" and the
  definition of "banking institution" is modified to add a national  bank-
  ing association, the principal office of which is located in this state.
    S 2. Paragraph (a) of subdivision 1 of section 105 of the banking law,
  as  amended  by  chapter  217 of the laws of 2010, is amended to read as
  follows:


   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD11212-01-1

 S. 5004                             2

    (a) No bank or trust company or officer, director, agent  or  employee
  thereof, shall transact any part of its usual business of banking at any
  place  other  than  its  principal  office,  except that a bank or trust
  company may open and occupy one or more branch offices at  any  location
  in the state, provided: (i) that the requirements of section twenty-nine
  of this chapter are met and (ii) that, except for the city or village in
  which  its  principal  office  is located, in no event shall a branch be
  opened and occupied pursuant to this subdivision in a  city  or  village
  with  a population of fifty thousand or less in which is already located
  the principal office of another bank, trust company or national  banking
  association,  other  than  a  bank holding company, if such bank holding
  company is a banking institution, or a  banking  subsidiary  of  a  bank
  holding company (as such terms "bank holding company", "banking institu-
  tion"  and  "banking  subsidiary"  are  defined  in  section one hundred
  forty-one of this chapter) except that the definition of  "bank  holding
  company"  is modified to change the phrase "a banking institution" wher-
  ever it appears therein to "[one] TWO or more banking institutions"  and
  the  definition  of  "banking institution" is modified to add a national
  banking association,  the  principal  office  of  which  institution  is
  located  in  this state, except, in the case of a conversion pursuant to
  the provisions of this  article,  branch  offices  occupied  immediately
  prior  thereto or except for the purpose of acquiring by merger, sale or
  otherwise the business and property of a bank, trust company or national
  banking association, whether in liquidation or  doing  business  in  the
  usual course.
    S 3. Paragraph (c) of subdivision 2 of section 240 of the banking law,
  as  amended  by  chapter  217 of the laws of 2010, is amended to read as
  follows:

    (c) Except for the city or village in which its  principal  office  is
  located,  no  branch office may be opened and occupied pursuant to para-
  graph (a) of this subdivision in any city or village with  a  population
  of  fifty thousand or less and in which is already located the principal
  office of a bank, trust company or national banking  association,  other
  than  a  bank holding company, if such bank holding company is a banking
  institution, or a banking subsidiary of a bank holding company, as  such
  terms "bank holding company", "banking institution" and "banking subsid-
  iary"  are  defined  in  section  one  hundred forty-one of this chapter
  except that the definition of "bank  holding  company"  is  modified  to
  change the phrase "a banking institution" wherever it appears therein to
  "[one]  TWO or more banking institutions" and the definition of "banking
  institution" is modified to add  a  national  banking  association,  the
  principal office of which institution is located in this state.
    S 4. Paragraph (b) of subdivision 2 of section 396 of the banking law,
  as  amended  by  chapter  217 of the laws of 2010, is amended to read as
  follows:

    (b) Except for the city or village in which its  principal  office  is
  located,  no branch office may hereafter be opened and occupied pursuant
  to paragraph (a) of this subdivision in any city or village with a popu-
  lation of less than thirty thousand and in which is already located  the
  principal  office  of  a bank, trust company or national banking associ-
  ation, other than a bank holding company, if such bank  holding  company
  is  a  banking  institution,  or  a banking subsidiary of a bank holding
  company, as such terms "bank holding company", "banking institution" and
  "banking subsidiary" are defined in section  one  hundred  forty-one  of
  this  chapter  except  that  the definition of "bank holding company" is
  modified to change  the  phrase  "a  banking  institution"  wherever  it

 S. 5004                             3

  appears  therein  to  "[one]  TWO  or more banking institutions" and the
  definition of "banking institution" is modified to add a national  bank-
  ing association, the principal office of which institution is located in
  this state.
    S 5. This act shall take effect immediately.

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S5004-2011: Amends the definition of "bank holding company" to replace the phrase "a banking institution" to "two or more banking institutions"