Bill S7446-2009

Relates to bank holding companies; simplifies and streamlines the application of the bank holding company provisions; repealer

Relates to bank holding companies; simplifies and streamlines the application of the bank holding company provisions.

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Actions

  • Jul 15, 2010: SIGNED CHAP.217
  • Jul 9, 2010: DELIVERED TO GOVERNOR
  • Jun 23, 2010: returned to senate
  • Jun 23, 2010: passed assembly
  • Jun 23, 2010: ordered to third reading rules cal.308
  • Jun 23, 2010: substituted for a11120
  • Jun 22, 2010: referred to banks
  • Jun 22, 2010: DELIVERED TO ASSEMBLY
  • Jun 22, 2010: PASSED SENATE
  • Jun 14, 2010: ADVANCED TO THIRD READING
  • Jun 10, 2010: 2ND REPORT CAL.
  • Jun 9, 2010: 1ST REPORT CAL.895
  • Apr 12, 2010: REFERRED TO BANKS

Votes

VOTE: COMMITTEE VOTE: - Banks - Jun 9, 2010
Ayes (18): Foley, Onorato, Breslin, Krueger, Klein, Adams, Stewart-Cousins, Kruger, Diaz, Savino, Peralta, Farley, Johnson O, DeFrancisco, Bonacic, Golden, Marcellino, Ranzenhofer
Excused (1): Morahan

Memo

 BILL NUMBER:  S7446

TITLE OF BILL :

An act to amend the banking law, in relation to bank holding companies, to simplify and streamline the application of the bank holding company provisions and to repeal certain provisions of such law relating thereto

PURPOSE :

This bill would streamline and update Article III-A of the Banking Law ("BL"), sometimes referred to as the New York Banking Holding Company Act, by eliminating the requirement that a company obtain prior approval of the Banking Board to own or control two or more banking institutions with principal offices in New York State and by making various other technical amendments.

SUMMARY OF PROVISIONS :

Section 1 of the bill would amend BL § 141 to make various amendments to various definitions, including: (1) an amendment to the definition of "banking institution," as used in Article III-A of the BL, to remove national banks from the definition; and (2) an amendment to the definition of "bank holding company" from a company that owns or controls two or more banking institutions to a company that owns or controls one or more banking institutions. This section also makes certain technical and conforming amendments.

Section 2 of the bill would amend Article III-A of the Banking Law concerning application requirements to become a bank holding company. Specifically, subdivisions (1) and (2) of BL § 142, which currently contain the approval requirements and application standards to become a bank holding company, would be deleted in view of the fact that applications to become a New York bank holding company would no longer be required.

Section 3 of the bill would amend BL § 142-a, relating to limitations on acquisitions of newly chartered banking institutions by bank holding companies. Specifically, section 142-a(2) would be repealed as unnecessary. Section 142-a(3) would be renumbered as Section 142-a(2) and amended to retain the former (i.e. two-bank) definition of "bank holding company." The reason for not modifying 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 4 of the bill would make technical amendments to BL § 143, which contains provisions concerning limitations on loans to officers and directors of holding companies as well as director/officer interlock provisions. References to federal savings associations would be updated. Language concerning interlocks that were grandfathered on the date of the original effective date of the provision (May 1, 1973) would be deleted as no longer necessary. Conforming amendments to the definition of "bank holding company" would also be made.

Section 5 of the bill would make technical amendments to BL § 143-a, which relates to the acquisition of all of the stock of a banking corporation that does not result in a change in control. The current language would be broadened to recognize that, in certain cases, both holding companies and banking institutions may have non-corporate structures. References to now-deleted requirements of BL . 142 would be deleted.

Section 6 of the bill would make conforming technical amendments to BL § 143-b, which relates to acquisition of control of a banking institution by a person or company and related application requirements. Existing references to deleted requirements of BL § 142 would be removed. Language previously in BL § 142(2) detailing situations not constituting "control" and therefore not requiring an application would be moved to BL § 143-b(4).

Section 7 of the bill would repeal BL § 144, which relates to the requirement for a New York bank holding company to register with the Banking Department within 180 days after becoming a bank holding company.

Sections 8 and 9 of the bill would make conforming amendments to the definition of "bank holding company" as used in BL §§ 39 and 100 concerning orders issued by the Superintendent and concerning common trust funds.

Section 10 of the bill would make a conforming amendment to the definition of "bank holding company" as used in BL § 105 concerning branching. The change would retain the prior definition of "bank holding company" (i.e. two-bank company) in order to retain the status quo with respect to home office protection for principal offices of certain banking institutions that are subsidiaries of one-bank bank holding companies, which are deemed small enough to need home office protection.

Sections 11 and 12 of the bill would make a conforming amendment to the definition of "bank holding company" as used in BL §§ 240 and 396 concerning branching, similar to BL § 105.

Sections 13, 17, 19-21 of the bill would make technical and conforming amendments to various sections of the BL with regard to director/officer interlocks.

Sections 14 and 15 of the bill would make conforming amendments-to BL §§ 136(5) and 136-a(2) to delete a reference to the application and fee required in connection with a merger application submitted pursuant to BL § 136-b(2), which would be repealed.

Section 16 of the bill would make technical amendments to BL § 136-b, which relates to the Superintendent's approval of a merger or acquisition by a state bank or trust company of a national banking association.

Section 18 of the bill would make a technical conforming amendment to BL § 225-b to change an existing reference to BL § 143(3) to BL § 143(2).

Section 22 of the bill would make a technical conforming amendment to BL § 601(1) to delete a reference to the application and fee required in connection with a merger or purchase and assumption transaction application submitted pursuant to BL § 601-b (2), which would be repealed.

Section 23 of the bill would repeal BL § 601-b(2), which describes transactions involving a merger or purchase and assumption transaction involving a banking institution subsidiary of a bank holding company in which the Superintendent's approval is not required because there is a concomitant bank holding company application pursuant to BL § 142 being acted upon by the Banking Board. This section would no longer have relevance as the bank holding company application requirements of BL § 142 would be removed.

Section 24 of the bill would amend BL § 222, the definitional section in the New York Interstate Branching Act (Article V-C), by adding "banking institution" as a defined term. The term is used in the definition of the term "acquisition transaction" in Article V-C, and also in new amendments to BL § 223-a that are part of this bill.

Section 25 of the bill would amend BL § 223-a. This provision, in the New York Interstate Branching Act (Article V-C) prohibits, with certain exceptions, an out-of-state bank from acquiring a New York bank that has been chartered for less than five years if the New York bank charter would terminate as a result of the transaction. Like BL § 142-a(2), which would be repealed as part of this bill, BL § 223-a is designed to prohibit an out-of-state bank from circumventing the de novo branching restrictions by acquisition of a banking institution. The term "New York bank" would be replaced in § 223-a with the term "banking institution," so the prohibited acquisitions would include acquisitions of federally chartered banks as well as New York-state chartered banking institutions.

Section 26 of the bill would make a technical amendment to BL § 4002(a), which requires fingerprints of applicants in connection with various applications under the BL. The amendment would remove the reference to bank holding company applications pursuant to BL §142.

Section 27 of the bill would provide that any registration of a bank holding company in effect on the date prior to the effective date of this act shall expire on the effective date of this act.

Section 28 of the bill would provide an immediate effective date.

EXISTING LAW :

The BL currently defines "banking institution" for purposes of Article III-A to include New York state-chartered banking institutions and national banks having their principal offices in New York State.

BL § 141(2) currently defines "company" for purposes of Article III-A to include corporations and other entities organized under the laws of the State of New York or doing business in the State of New York, or any individual residing or doing business in the State of New York, or combinations thereof.

BL § 141(3) currently defines "bank holding company" as a company (including a natural person or group of persons) that owns or controls two banking institutions (as that term is currently defined in BL § 141(1)). "Bank holding company" currently also would include a parent banking institution which itself owns a subsidiary banking institution.

BL § 141 (4) currently defines "successor" for purposes of Article III-A.

BL § 141(5) currently defines "subsidiary" under a multi-pronged definition, including, in general terms: (a) any company ten percent of whose voting stock is owned or controlled directly or indirectly by a bank holding company the election of a majority of whose directors is controlled in any manner by a bank holding company.

BL § 141(7) currently defines "out-of-state bank holding company," and tracks the current federal definition of a bank holding company whose home state is a state other than New York.

BL § 142(1) currently provides that it is unlawful without prior approval of the Banking Board for any action to be taken that causes a company to become a bank holding company, or for a bank holding company to acquire another banking institution or otherwise expand. BL § 142(1) also contains the basic requirements for an application to

become a bank holding company as well as the factors to be taken into account by the Banking Board in approving an application.

BL § 142(2) enumerates several situations that do not require the Banking Board's approval - either under BL § 142 to become a holding company or under BL § 143-b to acquire control- because they are deemed not to constitute the acquisition of control (e.g. acquisition of stock in a fiduciary capacity; stock acquired in satisfaction of a debt; stock dividends, stock splits or additional stock acquired by a bank holding company or its subsidiary; or stock acquired by a legal representative). BL § 142(3) contains restrictions on loans to executive officers and directors of a bank holding company, as well as restrictions on loans from bank subsidiaries of holding companies for the purpose of purchasing holding company stock.

BL § 142-a contains certain prohibitions on bank holding companies acquiring banking institutions that have been chartered less than 5 years when such an acquisition would violate another banking institution's home office protection, or when such an acquisition would circumvent restrictions on de novo branching.

BL § 143 contains restrictions on loans to executive officers and directors of bank holding companies, as well as restrictions on interlocks of directors and officers of bank holding companies with other banking institutions.

BL § 143-a contains the application requirements for companies seeking to acquire all the capital stock of a New York-chartered banking institution, when such acquisition does not involve a change of control.

BL § 143-b contains the application requirements and factors considered by the Banking Board in the case of persons or entities seeking to acquire control of a New York-chartered banking institution. It also defines "control" for purposes of that section and sets forth certain situations when an application for control is not required.

BL § 144 contains provisions requiring bank holding companies to register with the Banking Department.

BL § 39 contains the authority permitting the Superintendent to issue orders against banking organizations, bank holding companies and other entities chartered, licensed, registered or authorized under the BL.

BL § 100-c relates to the establishment of common trust funds by banks and trust companies.

BL § 105 contains provisions relating to the authority of banks and trust companies to establish branches.

BL §§ 240 and 396 contain provisions relating to the authority of savings banks and savings and loan associations to establish branches.

BL § 130(3) contains provisions relating to restrictions on executive officer and director interlocks between banks and trust companies, with other banking institutions and bank holding companies.

BL § 136 and 136-a(2) contain application requirements for the conversion, merger or purchase of assets of a national bank into or by a state bank, and currently waives the fee requirements for such applications when they are submitted together with a BL § 142 bank holding company application.

BL § 136-b(2) relates to applications by banks and trust companies to merge with or purchase the assets of a national banking organization. It provides that the Superintendent's approval is not required for such transactions in situations where there is a concomitant application for approval of a New York bank holding company pursuant to BL § 142.

BL §§ 209, 247, 399 and 399-a contain provisions relating to restrictions on executive officer and director interlocks between foreign banking corporations, savings banks, savings and loan associations and thrift institutions with other banking institutions and bank holding companies.

BL § 222 is the definitional section in Article V -C, known as the New York Interstate Branching Act. The term "banking institution" is not currently defined for purposes of Article V-C.

BL § 223-a currently prohibits, with certain exceptions, an interstate acquisition transaction if the effect of the transaction is to terminate the existence of a New York state chartered banking institution that has been chartered for less than five years. The purpose of this provision is to prohibit acquisition transactions designed to circumvent the de novo branching restrictions in New York's interstate Branching Act.

BL § 225 contains references to several other sections of the BL that are made applicable to branches in New York of out-of-state banks.

BL § 601 sets forth application requirements for mergers by New York banking institutions and other banking institutions.

BL § 601-b contains provisions relating to factors to be considered and steps to be taken in approval of applications by New York state-chartered banking institutions for mergers and purchase and assumption transactions. BL § 601-b(2) provides that the Superintendent's approval is not required for transactions in which there is a concomitant bank holding company application pursuant to BL § 142 being acted upon by the Banking Board.

BL § 4002 contains the provisions relating to the requirement for applicants making various types of applications to the Banking Department, including an application for approval to become a bank holding company, to provide fingerprints in connection with such applications.

LEGISLATIVE HISTORY :

This is a new bill.

STATEMENT IN SUPPORT :

This bill would amend Article III-A of the BL with respect to New York bank holding companies to streamline New York State's banking regulatory scheme for the regulation and supervision of persons who control banking institutions.

The Article currently requires prior approval by the New York State Banking Board of a person or company that will become a "bank holding company" as defined in the Article. In general terms, this is a person or company that would own or control two or more banking institutions (currently defined to include New York State-chartered banks, trust companies and savings institutions, as well as national banks). This concept of a bank holding company as a two-bank company dates back several decades to when a federal bank holding company was defined as a company owning or controlling 2 banks, and exempting companies owning one bank from the definition. This policy changed in 1970 at the federal level, when one-bank holding companies became subject to the approval requirements and restrictions of the Federal Bank Holding Company Act, which was originally enacted in 1956. No corresponding change was ever made to New York's Bank Holding Company Act.

In addition, the scope of the Federal Bank Holding Company Act, as well as the supervisory mandate of the Federal Reserve under the Federal Bank Holding Company Act, is much broader than the Banking Department's under New York's Bank Holding Company Act, in that the Federal Reserve has authority to impose capital and other safety and soundness requirements on bank holding companies and to limit non-bank activities conducted by such holding companies. As a result, the focus of New York's Bank Holding Company Act is far narrower, with its main focus being on aggregation of bank assets in New York State.

Given the historical development of the bank regulatory system at the federal level, it has become apparent that the registration and supervision of holding companies at the state level adds very little if anything to the supervisory framework. Any company that would be a New York bank holding company would be registered and supervised as a federal bank holding company. Also, any individual that owned or controlled a bank, while not falling within the definition of a "company" for purposes of the Federal Bank Holding Company Act, would require approval at both the state and federal levels as a control party. Finally, the requirements under Article III-A have led to some unusual applications being presented to the Banking Board; for example, for approval of a holding company for two national banks with their principal offices in New York State. In such a situation, the Department has no regulatory jurisdiction over the national banks themselves, and the role of approving their holding company as a New York bank holding company is anachronistic. For this reason, the bill eliminates the registration requirement.

Nonetheless, there is value to retaining the concept of a "bank holding company" under New York Banking Law for banking institutions supervised by the Banking Department. Consequently, the bill would revise the definition of "bank holding company" to cover a person or company that owns or controls one or more New York chartered banks, trust companies, savings bank or savings and loan associations. Ownership or control of a national bank would no longer result in New York bank holding company status. Likewise, designation as a holding company would occur as long as a person or company owned at least one State-chartered banking institution. Thus, the "holding company" concept would remain simply as a parent/owner concept. In addition to formal approval not being required, formal registration of the holding company would no longer be required as currently provided in BL § 144. This will result in cost savings both for bank holding companies that hold multiple New York banking institutions and for the Department, without a decrease in the Department's capability to oversee control persons of banks it supervises.

While the technical application requirement for approval as a "bank holding company" under existing BL § 142 is being removed, any person or entity that owns or controls the stock of a New York-chartered banking institution still would have to file an application under the appropriate section _ under Section 143-b if such acquisition results in a change of control of the banking institution or under Section 143-a if a company is formed to acquire the banking institution's stock, but no change of control of the banking institution takes place.

The Department may still examine bank holding companies, require reports from bank holding companies and issue orders against bank holding companies. In addition, restrictions on borrowing from a subsidiary bank to purchase a bank holding company's stock and certain restrictions on director/officer interlocks between a bank holding company and unaffiliated banking institutions would remain in effect.

In BL §§ 105,240 and 396, which relate to branching, and BL § 142-a, which relates to branching by an out-of-state bank via an acquisition of a banking institution in New York, amendments are made to the term "bank holding company" to retain the former two-bank holding company definition for purposes of those sections. The reason for this is that 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 as currently defined under New York law (i.e. two-bank holding company). If the term "bank holding company" as used in these sections were changed to the proposed one-bank holding company definition, then all such bank subsidiaries (of one-bank holding companies) that might have been entitled to home office protection under the prior provisions would lose that protection.

BUDGET IMPLICATIONS :

This bill would not have an impact on state finances.

EFFECTIVE DATE : This bill would take effect immediately.

Text

STATE OF NEW YORK ________________________________________________________________________ 7446 IN SENATE April 12, 2010 ___________
Introduced by Sen. FOLEY -- (at request of the Banking Department) -- 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 bank holding companies, to simplify and streamline the application of the bank holding company provisions and to repeal certain provisions of such law relating ther- eto THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 141 of the banking law, as added by chapter 146 of the laws of 1961, subdivision 1 as amended by chapter 1 of the laws of 1984, subdivision 2 as amended by chapter 119 of the laws of 1973, subdivisions 3, 5 and 6 as amended by chapter 950 of the laws of 1969 and subdivision 8 as added by chapter 417 of the laws of 1982, is amended to read as follows: S 141. Definitions. 1. "Banking institution," when used in this arti- cle, means a bank, a trust company [or a national banking association, the principal office of which institution is located in this state. Unless otherwise provided by any provision of this article, or unless the context requires otherwise, the term "banking institution" shall also mean], a stock-form savings bank or a stock-form savings and loan association[, the principal office of which institution is located in this state]. 2. "Company," when used in this article, means any corporation, part- nership, trust, unincorporated association, joint stock association or similar organization organized under the laws of the state of New York, or if not so organized, doing business in the state of New York, or any individual residing or doing business in the state of New York, or any combination of individuals which combination is residing or is doing business in the state of New York, any combination of the foregoing which combination is residing or is doing business in the state of New York, or any such individual and any of the foregoing acting in concert, but shall not include (a) any corporation the majority of the stock of which is owned by the United States or by any state UNLESS THE SUPER-
INTENDENT DETERMINES THAT IT WOULD BE IN THE PUBLIC INTEREST TO DEEM SUCH A CORPORATION TO CONSTITUTE A COMPANY, or (b) any corporation or community chest, fund, or foundation, organized and operated exclusively for religious, charitable, or educational purposes, no part of the net earnings of which inures to the benefit of any private stockholder or individual, and no substantial part of the activities of which is the carrying on of propaganda, or otherwise attempting to influence legis- lation UNLESS THE SUPERINTENDENT DETERMINES THAT IT WOULD BE IN THE PUBLIC INTEREST TO DEEM SUCH A CORPORATION, COMMUNITY CHEST, FUND, OR FOUNDATION TO CONSTITUTE A COMPANY, or (c) any corporation or partner- ship owning or controlling stock acquired in connection with an under- writing of securities and which is held only for such period of time as will permit the sale thereof upon a reasonable basis. 3. "Bank holding company," when used in this article, means any compa- ny which (a) directly or indirectly, or through a subsidiary or subsid- iaries, owns, controls, or holds with power to vote (i) [more than] ten per centum OR MORE of the voting stock of a company which is or becomes a bank holding company by virtue of this article, or (ii) ten per centum or more of the voting stock of [each of two or more] A banking [insti- tutions] INSTITUTION, [or (iii) if such company is a banking institu- tion, more than ten per centum of the voting stock of any one banking institution,] or (b) controls in any manner the election of a majority of the directors of (i) [each of two or more] A banking [institutions] INSTITUTION, OR (ii) a company which is or becomes a bank holding compa- ny by virtue of this article, [or (iii) if such company is a banking institution, another banking institution,] or (c) is a company, [if such company is not a banking institution,] for the benefit of whose stock- holders or members ten per centum or more of the voting stock of [each of two or more] A banking [institutions] INSTITUTION or of a company which is or becomes a bank holding company by virtue of this article is held, directly or indirectly, by a trustee or trustees, or (d) [is a company for the benefit of whose stockholders or members, if such compa- ny is a banking institution, ten per centum or more of the voting stock of any other banking institution, or ten per centum or more of the voting stock of any company which is or becomes a bank holding company by virtue of this article, is hereafter acquired and held by a trustee or trustees, or (e)] through a combination of (i) ownership, control or holding, directly or indirectly, of voting stock and (ii) voting stock [hereinafter acquired] and held, directly or indirectly, by a trustee or trustees for the benefit of the members or stockholders of such company, if such voting stock is voting stock of one or more banking institutions or of one of more companies which are or become bank holding companies by virtue of this article, as the case may be, is a company which would be a bank holding company if the aggregate of such voting stock were either entirely owned, controlled or held, directly or indirectly, by such company or entirely held, directly or indirectly, by a trustee or trustees for the benefit of the members or stockholders of such company. Notwithstanding the foregoing, no company shall be a bank holding compa- ny by virtue of its ownership or control of EITHER stock ACQUIRED in a fiduciary capacity, except where such stock is held for the benefit of the stockholders or members of such company[, nor shall any]; OR VOTING RIGHTS OF STOCK ACQUIRED IN THE COURT OF A PROXY SOLICITATION BY A company formed and operated for the sole purpose of participating in [a] proxy [solicitation be a bank holding company] SOLICITATIONS by virtue of its control of voting rights of stock in any banking institution or
bank holding company acquired in the course of such [solicitation] SOLICITATIONS. 4. [The term "successor" shall include any company which acquired, directly or indirectly, from a bank holding company, stock of any bank- ing institution, when and if the relationship between such company and the bank holding company is such that the transaction effects no substantial change in the control of the banking institution or benefi- cial ownership of the stock thereof. The banking board may, by regu- lation adopted by a three-fifths vote of all the members thereof, further define the term "successor" to the extent necessary to effectu- ate, or to prevent evasion of, the purposes of this article. 5.] "Subsidiary," when used in this article, means (a) any company ten per centum or more of whose voting stock is directly or indirectly, or through a subsidiary or subsidiaries, owned, controlled, or held with power to vote, by a bank holding company; or (b) any company the election of a majority of whose directors is controlled in any manner by a bank holding company; or (c) any company ten per centum or more of whose voting stock is directly or indirectly owned, controlled, or held with power to vote, by a trustee or trustees for the benefit of the stockholders or members of a bank holding company; or (d) any company at least ten per centum of the voting stock of which is directly or indi- rectly, or through a subsidiary or subsidiaries, owned, controlled or held with power to vote by a combination of a bank holding company and by a trustee or trustees for the benefit of the stockholders or members of such bank holding company. For purposes of this subdivision [five], voting stock shall not be deemed to include voting stock owned by the United States or by any company wholly owned by the United States. Any company having any of the relationships with a bank holding company described in clauses (a), (b), (c) or (d) of this subdivision [five] shall be deemed to be a subsidiary of such bank holding company. [6. ] 5. "Doing business," when used in this article, shall include the maintenance by a foreign company of [its principal] A place of busi- ness in this state, or the conduct by a foreign company of operations in this state, or the acquisition, owning or holding by a foreign company of any stock or assets of any banking institution or any company which directly or indirectly owns, controls or holds with power to vote ten per centum or more of the voting stock of a banking institution. [7.] 6. "Banking subsidiary," when used in this article, means a subsidiary that is a banking institution, and a "non-banking subsidiary" means a subsidiary that is not a banking institution. [8. "Out-of-state bank holding company", when used in this article, means a bank holding company as defined in Title twelve United States Code Section 1841 which conducted its principal banking business in a state other than this state or in the District of Columbia on July first, nineteen hundred sixty-six or the date on which such company became a bank holding company, whichever was the last to occur. The jurisdiction in which an out-of-state bank holding company conducts its principal banking business is that state or the District of Columbia in which the total deposits of such company and its banking subsidiaries are largest.] S 2. Section 142 of the banking law, as added by chapter 146 of the laws of 1961, subdivision 1 as amended by section 18 of part O of chap- ter 59 of the laws of 2006, subdivision 2 as amended by chapter 702 of the laws of 2006 and paragraph (b) of subdivision 3 as amended by chap- ter 256 of the laws of 1986, is amended to read as follows:
S 142. Limitations on, and regulation of, bank holding companies. 1. [It shall be unlawful except with the prior approval of the banking board by a three-fifths vote of all the members thereof (a) for any action to be taken that causes any company to become a bank holding company; (b) for any action to be taken that causes a banking institu- tion to become, or to be merged or consolidated with, a subsidiary of a bank holding company; (c) for any bank holding company, or for any trus- tee or trustees acting for the benefit of the stockholders or members of any bank holding company, to acquire direct or indirect ownership or control of any voting stock of any banking institution if, after such acquisition, such company or such trustee or trustees or both will directly or indirectly own, control or hold more than five per centum of the voting stock of such banking institution; (d) for any bank holding company or subsidiary thereof to acquire all or substantially all of the assets of a banking institution; or (e) for any bank holding company to merge or consolidate with another bank holding company. For the purposes of this section, the term "bank holding company" shall be deemed to include any successor thereof. Any company desiring to take any action requiring approval under this subdivision shall submit an application therefor, in writing, to the superintendent and pay to the superinten- dent an investigation fee as prescribed pursuant to section eighteen-a of this chapter to the superintendent. If such action includes the acquisition of all the capital stock of one or more corporations organ- ized under or subject to the provisions of article three, six or ten of this chapter, there shall be submitted in duplicate together with such application a written plan of acquisition of such stock in a form satis- factory to the superintendent and containing the information required by subdivision one of section one hundred forty-three-a of this article and a certificate which complies with the provisions of subdivision two of said section one hundred forty-three-a. Upon receipt of such applica- tion, the superintendent shall post notice of the receipt thereof upon the bulletin board of the banking department. The superintendent shall submit such application together with his or her recommendations in regard thereto and all papers, correspondence and other information in his or her possession and relating thereto, to the banking board which shall by order grant or deny the application and shall state the reasons for such grant or denial. An order granting such application may be made only by three-fifths vote of all the members thereof. An order shall be issued within one hundred twenty days after the date of the submission of the application to the superintendent and a copy thereof shall be posted upon the bulletin board of the banking department. In determining whether or not to approve any such application, the banking board shall take into consideration (i) the declaration of policy contained in section ten of this chapter, (ii) whether the effect of such action shall be either to result in the formation of a bank holding company or to expand the size or extent of the resulting or acquiring bank holding company beyond limits consistent with adequate or sound banking and the preservation thereof, or result in a concentration of assets beyond limits consistent with effective competition, (iii) whether such forma- tion, merger, consolidation or acquisition may result in such a lessen- ing of competition as to be injurious to the interest of the public or tend toward monopoly, and (iv) primarily, the public interest and the needs and convenience thereof. 2. The limitations in subdivision one of this section and the provisions of section one hundred forty-three-b of this article shall not apply to (a) stock acquired by a banking institution in good faith
in a fiduciary capacity, except where such stock is held for the benefit of the stockholders of such banking institutions, or (b) stock acquired by a banking institution in settlement or reduction of a loan, or advance of credit, or in exchange for an investment previously made in good faith and in the ordinary course of business, where such acquisi- tion of stock is necessary in order to minimize or avoid loss in connection with any such loan, advance of credit, or investment previ- ously made in good faith and in the ordinary course of business, but any stock so acquired after the effective date of this act shall be disposed of within a period of two years from the date upon which it was acquired unless the superintendent shall authorize such banking institution, in writing, to hold such stock for a longer period, or (c) additional stock acquired by a bank holding company or a subsidiary thereof in a banking institution in which such bank holding company or subsidiary owned or controlled ten per centum of the voting stock prior to such acquisition, or (d) stock dividends, stock splits or additional stock acquired by a bank holding company, or by any subsidiary thereof, in the exercise of its pre-emptive right as a stockholder, (e) any merger or consolidation between banking institutions that are subsidiaries of the same bank holding company, or any acquisition by a banking institution of all or substantially all of the assets of another banking institution that is a subsidiary of the same bank holding company, or, (f) for a period of six months from the date of qualification thereof and for such additional period of time as the superintendent may prescribe in writing, the acquisition of control of a banking institution or bank holding company by a legal representative. For purposes of this subdivision, "legal representative" shall have the same meaning as prescribed in subdivision five of section one hundred forty-three-b of this article. 3. (a)]
It shall be unlawful for any person knowingly to borrow, directly or indirectly, any money or property for the purpose of enabl- ing such person to pay for or to hold shares of stock of a bank holding company from any subsidiary of such bank holding company, unless such borrowing is made upon security having an ascertained market value of at least fifteen per centum more than the amount thereof. Any person know- ingly violating the provisions of this [paragraph (a) of this] subdivi- sion [three] shall, for each offense, forfeit to the people of the state twice the amount of such borrowing. [(b)] 2. Except in conformity with such rules and regulations as may be promulgated by the superintendent, it shall be unlawful for any exec- utive officer or director of a bank holding company to borrow any sum of money from any subsidiary of such bank holding company. Every executive officer or director of such bank holding company violating the provisions of this [paragraph] SUBDIVISION shall, for each offense, forfeit to the people of the state twice the amount of such borrowing or borrowings. S 3. Subdivision 2 of section 142-a of the banking law is REPEALED and subdivisions 3 and 4, as added by chapter 380 of the laws of 1971 and as renumbered by chapter 9 of the laws of 1996, are amended to read as follows: [3.] 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 institu- tion, 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 indirectly, 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 [percentum] PERCENT or more of the voting stock of such banking institu- tion, 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 HOLD- ING 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 OR MORE BANKING INSTITUTIONS" AND THE DEFINITION OF "BANKING INSTITUTION" IS MODIFIED TO ADD A NATIONAL BANKING ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH IS LOCATED IN THIS STATE. [4.] 3. As used in this section, the term "village" shall mean either an incorporated or unincorporated village. S 4. Subdivision 2 of section 143 of the banking law is renumbered subdivision 1 and subdivision 3, as added by chapter 255 of the laws of 1973 and paragraph (a) of subdivision 3 as amended by chapter 702 of the laws of 2006, is amended to read as follows: [3.] 2. (a) No executive officer of a bank holding company may be an executive officer or director of another bank holding company or of a bank or trust company, savings bank, OR savings and loan association, OR OF A national bank [located in this state, federal savings and loan association located in this state], FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH IS LOCATED IN THIS STATE, or OF A foreign banking corporation maintaining a branch in this state, unless permission therefor has been granted by the banking board pursuant to the provisions of paragraph (b) of this subdivision, except that an executive officer of a bank holding company may be (i) an execu- tive officer and (ii) a director of one or more banking institutions or bank holding companies which are subsidiaries of such bank holding company[; provided, however, that an executive officer of a bank holding company, who on the effective date of this act is an executive officer or director of another bank holding company or of a bank or trust compa- ny, or of a savings bank, savings and loan association, national bank located in this state, federal savings and loan association located in this state or foreign banking corporation maintaining a branch in this state, may continue to hold such other office, without permission from the banking board, until the expiration of the term of such office or the close of business on the last day of December, nineteen hundred seventy-four, whichever occurs sooner]. (b) The banking board 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 execu- tive officer of a bank holding company to be at the same time an execu- tive officer, director or trustee or both an executive officer and a director or a trustee of another bank holding company or of a bank or trust company, savings bank, savings and loan association, national bank located in this state, federal savings and loan association located in this state or foreign banking corporation maintaining a branch in this state. Such permission may be granted only if in the judgment of the banking board 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 banking board shall have the power to revoke such permission by a like vote whenever it finds, after a reasonable notice
and an opportunity to be heard, that the public interest requires such revocation. (c) For the purposes of this subdivision, the terms "subsidiary", "banking institution" and "bank holding company" shall each be given the same meaning as is contained in their respective definition in section one hundred forty-one of this [chapter] ARTICLE, except that the defi- nition of ["bank holding company" is modified by deleting the phrase "each of two or more" and substituting the word "institution" for "institutions", and the definition of] the term "banking institution" is modified to include NATIONAL BANK, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS LOCATED IN THIS STATE, AND a foreign banking corporation maintaining a branch in this state. (d) All other restrictions and limitations imposed by this chapter on executive officers and directors of bank holding companies shall contin- ue in effect. S 5. Subdivisions 1, 3 and 4 of section 143-a of the banking law, subdivision 1 as amended by chapter 1 of the laws of 1984, the opening paragraph of subdivision 1 and subdivision 3 as amended by chapter 702 of the laws of 2006, the closing paragraph of subdivision 1 as amended by section 19 of part O of chapter 59 of the laws of 2006 and subdivi- sion 4 as amended by chapter 52 of the laws of 1968, are amended to read as follows: 1. A company having capital stock OR MEMBERSHIP INTERESTS may acquire all the capital stock OR MEMBERSHIP INTERESTS of one or more corpo- rations organized under or subject to the provisions of article three, six, or ten of this chapter, provided THAT (a) [that] such corporation or corporations are directly or indirectly controlled prior to such acquisition by the persons or entities that directly or indirectly control such company and (b) [that] such persons or entities will continue to control such company thereafter. Such company and such corporation or corporations shall submit in duplicate to the superinten- dent a written plan of acquisition of such stock. Such plan shall be in form satisfactory to the superintendent, shall specify each corporation the stock of which is to be acquired by the company and shall prescribe the terms and conditions of the acquisition and the mode of carrying it into effect, including the manner of exchanging the shares of each of the corporations for shares or other securities of the company. Any such plan may provide for the payment of cash in lieu of the issuance of fractional shares of the company. At the time of submission to the superintendent of the written plan of acquisition of stock, an investigation fee as prescribed pursuant to section eighteen-a of this chapter shall be paid to the superintendent[; provided, however, that if the plan of acquisition has been submitted in connection with an application submitted by the company pursuant to section one hundred forty-two of this article, no investigation fee shall be payable pursuant to this section]. 3. If no action to be taken pursuant to the plan of acquisition requires the prior approval of the banking board pursuant to section [one hundred forty-two or] one hundred forty-three-b of this article, the superintendent shall approve or disapprove of a proposed plan of acquisition within one hundred twenty days after the submission of such plan of acquisition [to him], and in determining whether or not to approve any such plan the superintendent shall take into consideration the declaration of policy contained in section ten of this chapter. If any action to be taken pursuant to the plan of acquisition requires such
prior approval of the banking board, the superintendent shall submit such plan of acquisition together with his OR HER recommendations in regard thereto and all papers, correspondence and other information in his OR HER possession and relating thereto, to the banking board for its approval or disapproval as part of the application submitted to it pursuant to [said] SUCH section [one hundred forty-two or] one hundred forty-three-b. If the superintendent or the banking board, AS REQUIRED, shall approve such plan of acquisition, the superintendent shall file the plan, together with such certificates and the original of the approval of the superintendent or a certified copy of the approving resolution of the banking board, in the office of the superintendent. Upon such filing in the office of the superintendent, the plan, and the acquisitions provided for therein, shall become effective, unless a later date is specified in the plan, in which event the plan and such acquisitions shall become effective upon such later date. 4. Any stockholder of any such corporation, entitled to vote on such plan of acquisition, who does not assent thereto shall, subject to and by complying with section six thousand twenty-two of this chapter, have the right to receive payment of the fair value of [his] SUCH STOCKHOLD- ER'S shares and the other rights and benefits provided by such section. S 6. Subdivisions 1 and 4 of section 143-b of the banking law, subdi- vision 1 as amended by chapter 793 of the laws of 1980 and subdivision 4 as added by chapter 950 of the laws of 1969, are amended to read as follows: 1. It shall be unlawful except with the prior approval of the banking board by a three-fifths vote of all the members thereof for any company to acquire control of any banking institution, directly or indirectly, provided, however, that the provisions of this section shall not apply to a [bank holding company, a] company which has submitted to the super- intendent a plan of acquisition pursuant to section one hundred forty- three-a [or stock described in subdivision two of section one hundred forty-two] OF THIS ARTICLE FOR AN ACQUISITION NOT INVOLVING A CHANGE OF CONTROL OF THE BANKING INSTITUTION. 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 bank- ing 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 indirectly, 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 per centum or more of the voting stock of such banking institution, but no person shall be deemed to control a banking institu- tion solely by reason of his OR HER being an officer or director of such banking institution or company. The superintendent may in his OR HER discretion, upon the application of a banking institution or any company which, directly or indirectly, owns, controls or holds with power to vote or seeks to own, control or hold with power to vote any voting stock of such banking institution, determine whether or not the owner- ship, control or holding of such voting stock would constitute control of such banking institution for purposes of this section. 4. [This section shall not apply to the exercise of control in a national banking association if the acquisition of such control or its exercise is subject to approval or disapproval pursuant to federal law.] A COMPANY DOES NOT CONTROL A BANKING INSTITUTION BY VIRTUE OF ITS OWNER- SHIP OR CONTROL OF: (A) STOCK ACQUIRED BY A COMPANY IN GOOD FAITH IN A
FIDUCIARY CAPACITY, EXCEPT WHERE SUCH STOCK IS HELD FOR THE BENEFIT OF STOCKHOLDERS OR MEMBERS OF SUCH COMPANY; (B) VOTING RIGHTS OF STOCK ACQUIRED IN THE COURSE OF A PROXY SOLICITATION BY A COMPANY FORMED FOR THE SOLE PURPOSE OF PARTICIPATING IN PROXY SOLICITATIONS BY VIRTUE OF ITS CONTROL OF VOTING RIGHTS OF STOCK ACQUIRED IN THE COURSE OF SUCH SOLICITATION; (C) STOCK ACQUIRED BY A COMPANY IN CONNECTION WITH ITS UNDERWRITING OF SECURITIES IF SUCH SHARES ARE HELD ONLY FOR SUCH PERIOD OF TIME AS WILL PERMIT THE SALE THEREOF ON A REASONABLE BASIS; (D) STOCK ACQUIRED BY A COMPANY IN SETTLEMENT OR REDUCTION OF A LOAN, OR ADVANCE OF CREDIT, OR IN EXCHANGE FOR AN INVESTMENT PREVIOUSLY MADE IN GOOD FAITH AND IN THE ORDINARY COURSE OF BUSINESS, PROVIDED THAT ANY STOCK SO ACQUIRED SHALL BE DISPOSED OF WITHIN A PERIOD OF TWO YEARS FROM THE DATE UPON WHICH IT WAS ACQUIRED UNLESS THE SUPERINTENDENT SHALL, IN WRITING, AUTHORIZE SUCH BANKING INSTITUTION TO HOLD SUCH STOCK FOR A LONGER PERI- OD; OR (E) STOCK DIVIDENDS, STOCK SPLITS, OR ADDITIONAL STOCK ACQUIRED BY A BANK HOLDING COMPANY, OR BY ANY SUBSIDIARY THEREOF, IN EXERCISE OF ITS PREEMPTIVE RIGHT AS A STOCKHOLDER. S 7. Section 144 of the banking law is REPEALED. S 8. Subdivision 6 of section 39 of the banking law, as amended by section 1 of part FF of chapter 59 of the laws of 2004, is amended to read as follows: 6. As used in this section, "bank holding company" shall have the same meaning as that term is defined in section one hundred forty-one of this chapter[, except that such definition is modified by deleting the phrase "each of two or more" and substituting the word "institution" for "institutions"]. S 9. Paragraph (b) of subdivision 8 of section 100-c of the banking law, as added by chapter 239 of the laws of 1986, is amended to read as follows: (b) For the purpose of this subdivision, (i) the term "bank holding company" shall be given the same meaning as is contained in the defi- nition of such term in section one hundred forty-one of this chapter, [except that such definition is modified by substituting the words "a banking institution" for the phrase "each of two or more banking insti- tutions" wherever such phrase appears,] and (ii) the term "trust compa- ny" shall be given the same meaning as is contained in the definition of such term in subdivision seven of this section, except that such term shall be deemed to include, in addition to the entities listed in such subdivision, any banking, trust or financial company, corporation or association, organized under the laws of the United States, whether or not having its principal office outside this state, or of any state of the United States, which is duly authorized to exercise fiduciary powers. S 10. Paragraph (a) of subdivision 1 of section 105 of the banking law, as amended by chapter 380 of the laws of 1971 and as designated by chapter 9 of the laws of 1996, is amended to read as follows: (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 [article three-A] 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 OR MORE BANKING INSTI- TUTIONS" AND THE DEFINITION OF "BANKING INSTITUTION" IS MODIFIED TO ADD A NATIONAL BANKING ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITU- TION 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 11. Paragraph (c) of subdivision 2 of section 240 of the banking law, as amended by chapter 380 of the laws of 1971 and as relettered by chapter 9 of the laws of 1996, 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 [article three-A] 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 OR MORE BANKING INSTITUTIONS" AND THE DEFINITION OF "BANKING INSTITUTION" IS MODIFIED TO ADD A NATIONAL BANKING ASSOCI- ATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS LOCATED IN THIS STATE. S 12. Paragraph (b) of subdivision 2 of section 396 of the banking law, as amended by chapter 349 of the laws of 1986, 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 [article three-A] SECTION ONE HUNDRED FORTY-ONE of this chapter EXCEPT THAT THE DEFINITION OF "BANK HOLDING COMPANY" IS MODIFIED TO CHANGE THE PHRASE "A BANKING INSTITU- TION" WHEREVER IT APPEARS THEREIN TO "ONE 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 13. Paragraphs (a), (b) and (c) of subdivision 3 of section 130 of the banking law, as added by chapter 255 of the laws of 1973, are amended to read as follows: (a) No executive officer of a bank or trust company may be an execu- tive officer, director or trustee of another bank or trust company,
savings bank, savings and loan association, national bank [in this state, federal savings and loan association], FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS located in this state, bank holding company or foreign banking corpo- ration maintaining a branch in this state, unless permission therefor has been granted by the banking board pursuant to the provisions of [subparagraph] PARAGRAPH (b) of this subdivision, except that [(1)] an executive officer of a bank or trust company which is a subsidiary of a bank holding company may be (i) an executive officer and (ii) a director of the bank holding company and of one or more banking institutions which are subsidiaries of such bank holding company[; and (2) an execu- tive officer of a bank or trust company owned by savings banks pursuant to subdivision eighteen of section two hundred thirty-five, or by savings and loan associations or federal savings and loan associations located in this state pursuant to section three hundred seventy-nine-a, may be (i) an executive officer and (ii) a director or trustee of one of the stockholders of such a bank or trust company of which he is an exec- utive officer; provided, however, that except as stated in the foregoing exceptions, an executive officer of a bank or trust company, who on the effective date of this act is an executive officer, director or trustee of another bank or trust company, savings bank, savings and loan associ- ation, national bank located in this state, federal savings and loan association located in this state, bank holding company or foreign bank- ing corporation maintaining a branch in this state, may continue to hold such other office, without permission from the banking board, until the expiration of the term of such office or the close of business on the last day of December, nineteen hundred seventy-four, whichever occurs sooner]. (b) The banking board 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 execu- tive officer of a bank or trust company to be an executive officer, director or trustee or both an executive officer and director or a trus- tee 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, [federal savings and loan association located in this state,] bank hold- ing company, or foreign banking corporation maintaining a branch in this state. Such permission may be granted only if in the judgment of the banking board 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 banking board shall have the power to revoke such permission by a like vote whenever it finds, after reasonable notice and an opportunity to be heard, that the public interest requires such revo- cation. (c) For the purposes of this subdivision, the terms "subsidiary", "banking institution" and "bank holding company" shall each be given the same meaning as is contained in their respective definition in section one hundred forty-one of this chapter, except that the definition of ["bank holding company" is modified by deleting the phrase "each of two or more" and substituting the word "institution" for "institutions", and the definition of] the term "banking institution" is modified to include A NATIONAL BANK, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS IN THIS STATE, AND a foreign banking corporation maintaining a branch in this state.
S 14. Subdivision 5 of section 136 of the banking law, as amended by section 16 of part O of chapter 59 of the laws of 2006, is amended to read as follows: 5. With the written plan of conversion submitted under subdivision two [hereof] OF THIS SECTION, there shall be paid to the superintendent an investigation fee as prescribed pursuant to section eighteen-a of this chapter[; provided, however, that no investigation fee shall be payable under this subdivision with respect to a merger to which subdivision two of section one hundred thirty-six-b of this article is applicable], and with the written plan of merger submitted under subdivision three [here- of] OF THIS SECTION there shall be paid to the superintendent an inves- tigation fee as prescribed pursuant to section eighteen-a of this chap- ter. S 15. Subdivision 2 of section 136-a of the banking law, as amended by chapter 509 of the laws of 1977 and the closing paragraph as amended by section 17 of part O of chapter 59 of the laws of 2006, is amended to read as follows: 2. In the case of each such acquisition, a written plan providing for the acquisition by the bank or trust company of the assets of the national banking association shall be submitted, in duplicate, by the bank or trust company to the superintendent. Such plan shall be in form satisfactory to the superintendent, shall specify the selling and the acquiring corporation, and shall prescribe the terms and conditions of the acquisition and the mode of carrying it into effect. At the time of submission for action by the superintendent of the written plan of acquisition of assets, an investigation fee as prescribed pursuant to section eighteen-a of this chapter shall be paid to the superintendent[; provided, however, that no investigation fee shall be payable under this subdivision with respect to an acquisition to which subdivision two of section one hundred thirty-six-b of this article is applicable]. S 16. Section 136-b of the banking law, as amended by chapter 55 of the laws of 1965, is amended to read as follows: S 136-b. Approval of superintendent. [1.] The superintendent shall approve or disapprove of a proposed merger as authorized by section one hundred thirty-six of this [chapter] ARTICLE or a proposed acquisition of all or a substantial part of the assets of a national banking associ- ation as authorized by section one hundred thirty-six-a of this [chap- ter] ARTICLE, as the case may be, within one hundred twenty days after the submission of the proposed plan thereof to him OR HER. In determin- ing whether to so approve, the superintendent shall take into consider- ation (i) the declaration of policy contained in section ten of this chapter, (ii) whether the effect of such merger or acquisition shall be either to expand the size or extent of the resulting or acquiring insti- tution beyond limits consistent with adequate and sound banking and the preservation thereof or result in a concentration of assets beyond limits consistent with effective competition, (iii) whether such merger or acquisition may result in such a lessening of competition as to be injurious to the interests of the public or tend toward monopoly and (iv) primarily, the public interest and the needs and convenience there- of. If the superintendent shall approve such proposed merger or acquisi- tion, he OR SHE shall file the plan, together with such certificates and the original of the approval of the superintendent, in the office of the superintendent, and, in the case of merger, a duplicate of the plan, together with a duplicate of each of such certificates and a duplicate of the superintendent's approval, shall be filed in the office of the
clerk of the county in which the principal office of the receiving corporation is located. Upon such filing in the office of the super- intendent, the merger or acquisition shall become effective, unless a later date is specified in the plan, in which event the merger or acqui- sition shall become effective upon such later date. [2. Notwithstanding the provisions of subdivision one of this section, the approval of the superintendent shall not be required with respect to such merger or acquisition, if any of the corporations which are to merge, or if the selling or acquiring corporation, is a banking subsid- iary of a bank holding company, and the banking board pursuant to section one hundred forty-two of this chapter has granted its approval for such bank holding company, or any trustee or trustees who hold voting stock of such banking subsidiary for the benefit of the stock- holders or members of such bank holding company, to vote the stock of such banking subsidiary in favor of the proposed merger or acquisition. The superintendent shall file the plan of merger or acquisition and the certificate submitted to him pursuant to section one hundred thirty-six or section one hundred thirty-six-a of this chapter, together with a certified copy of the resolution of the banking board granting such approval, in the office of the superintendent, and, in the case of a merger, a duplicate of the plan and of each of such certificates, together with a certified copy of such resolution, shall be filed in the office of the clerk of the county in which the receiving corporation is located. Upon such filing in the office of the superintendent, the merg- er or acquisition shall become effective, unless a later date is speci- fied in the plan, in which event the merger or acquisition shall become effective upon such later date. For purposes of this subdivision, the terms "bank holding company" and "banking subsidiary" shall have the meanings stated in section one hundred forty-one of this chapter.] S 17. Section 209 of the banking law, as added by chapter 255 of the laws of 1973, is amended to read as follows: S 209. Restrictions on executive officers of foreign banking corpo- rations and national banks. 1. No executive officer of a foreign banking corporation maintaining a branch in this state may be an executive offi- cer, director or trustee of a bank or trust company, savings bank, savings and loan association, national bank, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS located in this state, [federal savings and loan association located in this state,] bank holding company or another foreign banking corpo- ration maintaining a branch in this state, unless permission therefor has been granted by the banking board pursuant to the provisions of subdivision three of this section, except that an executive officer of a foreign banking corporation maintaining a branch in this state which is a subsidiary of a bank holding company may be (i) an executive officer and (ii) a director of the bank holding company of which such foreign banking corporation is a subsidiary, and of one or more of the banking institutions which are subsidiaries of such bank holding company[; and provided, however, that, except as stated in the foregoing exceptions, an executive officer of a foreign banking corporation maintaining a branch in this state, who on the effective date of this act is an execu- tive officer, director or trustee of a bank or trust company, savings bank, savings and loan association, national bank located in this state, federal savings and loan association located in this state, bank holding company or another foreign banking corporation maintaining a branch in this state, may continue to hold such other office, without permission from the banking board, until the expiration of the term of such office
or the close of business on the last day of December, nineteen hundred seventy-four, whichever occurs sooner]
. 2. No executive officer of a national bank, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS located in this state, may be an executive officer, director or trus- tee of a bank or trust company, savings bank, savings and loan associ- ation, bank holding company or foreign banking corporation maintaining a branch in this state, unless permission therefor has been granted by the banking board pursuant to the provisions of subdivision three of this section, except that (1) an executive officer of a national bank located in this state, which is a subsidiary of a bank holding company may be (i) an executive officer and (ii) a director of the bank holding company and of one or more banking institutions which are subsidiaries of such bank holding company[; provided, however, that, except as stated in the foregoing exceptions, an executive officer of a national bank located in this state, who on the effective date of this act is an executive offi- cer, director or trustee of a bank or trust company, savings bank, savings and loan association, bank holding company or foreign banking corporation maintaining a branch in this state, may continue to hold such other office, without permission from the banking board, until the expiration of the term of such office or the close of business on the last day of December, nineteen hundred seventy-four, whichever occurs sooner]. 3. The banking board 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 execu- tive officer of a foreign banking corporation maintaining a branch in this state and to an executive officer of a national bank located in this state, to be at the same time an executive officer, trustee or director or both an executive officer and a trustee or director of a bank or trust company, savings bank, savings and loan association, national bank, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH IS located in this state, [federal savings and loan association located in this state,] bank holding company, and foreign banking corporation maintaining a branch in this state. Such permission may be granted only if in the judgment of the banking board 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 banking board shall have the power to revoke such permission by a like vote whenever it finds, after reasonable notice and an opportunity to be heard, that the public interest requires such revocation. 4. For the purposes of this subdivision, the terms "subsidiary", "banking institution" and "bank holding company" shall each be given the same meaning as is contained in their respective definition in section one hundred forty-one of this chapter, except that the definition of ["bank holding company" is modified by deleting the phrase "each of two or more" and substituting the word "institution" for "institutions", and the definition of] the term "banking institution" is modified to include A NATIONAL BANK, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS LOCATED IN THIS STATE, AND a foreign banking corporation maintaining a branch in this state. 5. All other restrictions and limitations imposed by this chapter on executive officers and directors of foreign banking corporations main- taining a branch in this state and on national banks, FEDERAL SAVINGS
BANKS AND FEDERAL SAVINGS ASSOCIATIONS, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS located in this state, shall continue in effect. S 18. Section 225-b of the banking law, as amended by chapter 9 of the laws of 1996, is amended to read as follows: S 225-b. Applicability of certain sections to out-of-state banks. Except as otherwise provided in this section, nothing in article five or article five-B of this chapter shall apply to an out-of-state bank authorized to open, occupy and maintain a branch pursuant to the provisions of this article. Any reference in this chapter (other than in article five or article five-B) to a foreign bank, foreign corporation or foreign banking corporation shall be deemed to be a reference to an out-of-state bank authorized to open, occupy and maintain a branch pursuant to the provisions of this article. Notwithstanding the forego- ing, (a) the provisions of sections two hundred two-h (Repayment of deposits standing in the names of minors, trustees, joint depositors or custodians; interpleader in certain actions), two hundred three (Change of location, name or business) and two hundred four (Reports of foreign banking corporations; penalties) of this chapter shall apply with equal force and effect to out-of-state banks authorized to open, occupy or maintain branches pursuant to the provisions of this article; and (b) the provisions of section three hundred ninety-nine-a, subdivision three of section one hundred thirty, subdivision [three] TWO of section one hundred forty-three, subdivision five of section two hundred forty-seven and subdivision five of section three hundred ninety-nine of this chap- ter with respect to restrictions on executive officers or directors of foreign banking corporations and the provisions of sections twenty, twenty-six, thirty, thirty-one and six hundred thirty-four, subdivision two of section thirteen, subdivisions eleven and twelve of section six hundred five, subdivision four of section six hundred six and paragraph (a) of subdivision one of section fourteen of this chapter, shall not apply to out-of-state banks authorized to open, occupy or maintain branches pursuant to the provisions of this article. S 19. Paragraphs (a), (b) and (c) of subdivision 5 of section 247 of the banking law, as added by chapter 255 of the laws of 1973, are amended to read as follows: (a) No executive officer of a savings bank may be an executive offi- cer, director or trustee of another savings bank, or of a bank or trust company, savings and loan association, national bank, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS located in this state, [federal savings and loan associ- ation located in this state,] bank holding company or foreign banking corporation maintaining a branch in this state, unless permission there- for has been granted by the banking board pursuant to the provisions of [subparagraph] PARAGRAPH (b) of this subdivision[, except that an execu- tive officer of a savings bank may be (1) an executive officer and (2) a director of a trust company owned by savings banks, pursuant to subdivi- sion eighteen of section two hundred thirty-five of this chapter, if one of the stockholders of such trust company is the savings bank of which he is an executive officer; provided, however, that, except as stated in the foregoing exceptions, an executive officer of a savings bank who on the effective date of this act is an executive officer, director or trustee of another savings bank, bank or trust company, savings and loan association, national bank located in this state, federal savings and loan association located in this state, bank holding company or foreign banking corporation maintaining a branch in this state, may continue to hold such other office without permission from the banking board, until
the expiration of the term of such office or the close of business on the last day of December, nineteen hundred seventy-four, whichever occurs sooner]
. (b) The banking board 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 execu- tive officer of a savings bank to be an executive officer, director or trustee or both an executive officer and director or trustee of another savings bank or a bank or trust company, savings and loan association, national bank, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS located in this state, [federal savings and loan association located in this state,] bank holding compa- ny or foreign banking corporation maintaining a branch in this state. Such permission may be granted only if in the judgment of the banking board 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 chap- ter. The banking board shall have the power to revoke such permission by a like vote whenever it finds, after reasonable notice and an opportu- nity to be heard, that the public interest requires such revocation. (c) For the purposes of this subdivision, the term "bank holding company" shall be given the same meaning as is contained in section one hundred forty-one of this chapter, [except that the definition is modi- fied by deleting the phrase "each of two or more" and substituting the word "institution" for "institutions",] and the definition of the term, "banking institution" is modified to include a NATIONAL BANK, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS LOCATED IN THIS STATE, AND A foreign banking corpo- ration maintaining a branch in this state. S 20. Paragraphs (a), (b) and (c) of subdivision 5 of section 399 of the banking law, as added by chapter 255 of the laws of 1973, are amended to read as follows: (a) No executive officer of a savings and loan association may be an executive officer, director or trustee of another savings and loan asso- ciation, bank or trust company, savings bank, national bank, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS located in this state, [federal savings and loan association located in this state,] bank holding company or foreign banking corporation maintaining a branch in this state unless permission therefor has been granted by the banking board pursuant to paragraph (b) of this subdivision[, except that an executive officer of a savings and loan association may be (1) an executive officer and (2) a director of a trust company owned by savings and loan association or federal savings and loan associations located in this state, pursuant to section three hundred seventy-nine-a of this chapter, if one of the stockholders of such trust company is a savings and loan association of which he is an executive officer; provided, however, that, except as stated in the foregoing exceptions, an executive officer of a savings and loan associ- ation, who on the effective date of this act is an executive officer, director or trustee of another savings and loan association, bank or trust company, savings bank, national bank located in this state, feder- al savings and loan association located in this state, bank holding company or foreign banking corporation maintaining a branch in this state, may continue to hold such other office, without permission from the banking board, until the expiration of the term of such office or
the close of business on the last day of December, nineteen hundred seventy-four, whichever occurs sooner]
. (b) The banking board 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 execu- tive officer of a savings and loan association to be an executive offi- cer, director or trustee or both an executive officer and a director or a trustee of another savings and loan association, bank or trust compa- ny, savings bank, national bank, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH IS located in this state, [federal savings and loan association located in this state,] bank hold- ing company or foreign banking corporation maintaining a branch in this state. Such permission may be granted only if in the judgment of the banking board 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 banking board shall have the power to revoke such permission by a like vote whenever it finds, after reasonable notice and an opportunity to be heard, that the public interest requires such revo- cation. (c) For the purposes of this subdivision, the term "bank holding company" shall be given the same meaning as is contained in section one hundred forty-one of this chapter, [except that the definition is modi- fied by deleting the phrase "each of two or more" and substituting the word "institution" for "institutions",] and the definition of the term "banking institution" is modified to include a NATIONAL BANK, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS LOCATED IN THIS STATE, AND A foreign banking corpo- ration maintaining a branch in this state. S 21. The section heading and subdivisions 1, 2 and 3 of section 399-a of the banking law, as added by chapter 255 of the laws of 1973, are amended to read as follows: Restrictions on holding of certain offices by executive officers of federal savings [and loan] BANKS AND FEDERAL SAVINGS associations. 1. No executive officer of a federal savings [and loan] BANK OR FEDERAL SAVINGS association THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS located in this state may be an executive officer, director or trustee of a savings and loan association, bank or trust company, savings bank, bank holding company or foreign banking corporation maintaining a branch in this state, unless permission therefor has been granted by the banking board pursuant to subdivision two of this section, [except that an exec- utive officer of a federal savings and loan association located in this state may be (1) an executive officer and (2) a director of a trust company owned by savings and loan associations or federal savings and loan associations located in this state, pursuant to section three hundred seventy-nine-a of this chapter, if one of the stockholders of such trust company is the federal savings and loan association of which he is an executive officer;] provided, however, that[, except as stated in the foregoing exceptions,] an executive officer of a federal savings and loan association located in this state, who on the effective date of this [act] SECTION is an executive officer, director or trustee of a savings and loan association, bank or trust company, savings bank, bank holding company or foreign banking corporation maintaining a branch in this state, may continue to hold such other office without permission from the banking board, until the expiration of the term of such office
or the close of business on the last day of December, nineteen hundred seventy-four, whichever occurs sooner. 2. The banking board 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 execu- tive officer of a federal savings [and loan] BANK OR FEDERAL SAVINGS association located in this state, to be at the same time an executive officer, director or trustee, or both an executive officer and a direc- tor or trustee of a savings and loan association, bank or trust company, savings bank, bank holding company, and foreign banking corporation maintaining a branch in this state. Such permission may be granted only if in the judgment of the banking board 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 banking board shall have the power to revoke such permission by a like vote whenever it finds, after reasonable notice and an opportunity to be heard, that the public interest requires such revocation. 3. For the purposes of this subdivision, the term "bank holding compa- ny" shall be given the same meaning as is contained in section one hundred forty-one of this chapter, [except that the definition is modi- fied by deleting the phrase "each of two or more" and substituting the word "institution" for "institutions",] and the definition of the term "banking institution" is modified to include a NATIONAL BANK, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS ASSOCIATION, THE PRINCIPAL OFFICE OF WHICH INSTITUTION IS LOCATED IN THIS STATE, AND A foreign banking corpo- ration maintaining a branch in this state. S 22. The closing paragraph of subdivision 1 of section 601 of the banking law, as amended by section 58 of part O of chapter 59 of the laws of 2006, is amended to read as follows: At the time of submission for action by the superintendent of the written plan of merger, an investigation fee as prescribed pursuant to section eighteen-a of this chapter shall be paid to the superintendent[; provided, however, that no investigation fee shall be payable under this subdivision with respect to a merger to which subdivision two of section six hundred one-b of this article is applicable]. S 23. Subdivision 2 of section 601-b of the banking law is REPEALED. S 24. Section 222 of the banking law is amended by adding a new subdi- vision 10 to read as follows: 10. THE TERM "BANKING INSTITUTION" MEANS ANY BANK, TRUST COMPANY, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, OR BRANCH OF A FOREIGN BANK- ING CORPORATION THE DEPOSITS OF WHICH ARE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, WHICH IS INCORPORATED, CHARTERED, ORGANIZED OR LICENSED UNDER THE LAWS OF THIS STATE OR ANY OTHER STATE OF THE UNITED STATES. S 25. Section 223-a of the banking law, as added by chapter 9 of the laws of 1996, is amended to read as follows: S 223-a. Limitations on acquisition of a newly chartered New York bank. An acquisition transaction in which the resulting or consolidated corporation is an out-of-state bank is hereby prohibited if the effect thereof is to terminate the separate existence of a [New York bank] BANKING INSTITUTION that has been chartered less than five years, unless the superintendent finds that the [New York bank] BANKING INSTITUTION to be acquired was not chartered directly or indirectly by the out-of-state bank, its officers, directors or principal stockholders, or any other person in a position to exercise control over such out-of-state bank;
provided, however, that the prohibitions contained in this section shall not apply if the superintendent finds that the [New York bank] BANKING INSTITUTION does not have the capacity to continue to conduct its busi- ness independently in a manner consistent with the public interest and the interests of depositors, creditors, and stockholders; and provided further that the prohibitions contained in this section shall not apply to an out-of-state bank which, prior to the acquisition transaction otherwise prohibited by this section, lawfully maintained one or more branches in this state. S 26. Subdivision (a) of section 4002 of the banking law, as amended by chapter 302 of the laws of 2003, is amended to read as follows: (a) Notwithstanding any other provisions of law, every incorporator of a corporation shall, in addition to any other requirements which may be imposed by the superintendent, submit simultaneously with an applica- tion, his or her fingerprints in such form and in such manner as speci- fied by the division of criminal justice services, but in any event, no less than two digit imprints. Every applicant filing an application to acquire control [of any bank holding company under section one hundred forty-two of this chapter or] of any banking institution under sections one hundred forty-three-a and one hundred forty-three-b of this chapter shall, in addition to any other requirements which may be imposed by the superintendent, submit simultaneously with an application, his or her fingerprints in such form and in such manner as specified by the divi- sion of criminal justice services, but in any event, no less than two digit imprints. The superintendent shall submit the fingerprints to the division of criminal justice services for the purpose of conducting a criminal history search and returning a report thereon in accordance with the procedures and requirements established by the division pursu- ant to the provisions of article thirty-five of the executive law, which shall include the payment of the prescribed processing fees. The super- intendent shall request that the division submit such fingerprints to the federal bureau of investigation, together with the processing fees prescribed by such bureau, for the purpose of conducting a criminal history search and returning a report thereon. S 27. Any registration of a bank holding company pursuant to section 144 of the banking law as in effect as of the date prior to the effec- tive date of this act shall expire on the effective date of this act. S 28. This act shall take effect immediately.

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