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Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
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| Jun 18, 2010 |
referred to banks delivered to assembly passed senate ordered to third reading cal.1049 |
| Jun 15, 2010 |
reported and committed to rules |
| Jun 09, 2010 |
reported and committed to finance |
| Apr 12, 2010 |
referred to banks |
Senate Bill S7445
2009-2010 Legislative Session
Permits remote deposit capture machines, clarifies the definition of capital impairment for banking institutions, and makes other technical changes
download bill text pdfSponsored By
(D, WF) Senate District
Archive: Last Bill Status - In Assembly Committee
- Introduced
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- In Committee Assembly
- In Committee Senate
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- On Floor Calendar Assembly
- On Floor Calendar Senate
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- Passed Assembly
- Passed Senate
- Delivered to Governor
- Signed By Governor
Actions
Votes
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Floor Vote: Jun 18, 2010
aye (58)- Adams
- Addabbo Jr.
- Alesi
- Aubertine
- Bonacic
- Breslin
- DeFrancisco
- Diaz
- Dilan
- Duane
- Espada
- Farley
- Flanagan
- Foley
- Fuschillo
- Griffo
- Hannon
- Hassell-Thompson
- Huntley
- Johnson
- Johnson
- Klein
- Krueger
- Kruger
- LaValle
- Lanza
- Larkin
- Leibell
- Libous
- Little
- Marcellino
- Maziarz
- McDonald
- Montgomery
- Nozzolio
- Onorato
- Padavan
- Parker
- Peralta
- Perkins
- Ranzenhofer
- Robach
- Saland
- Sampson
- Savino
- Serrano
- Seward
- Skelos
- Smith
- Squadron
- Stachowski
- Stavisky
- Stewart-Cousins
- Thompson
- Valesky
- Volker
- Winner
- Young
excused (4)
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Jun 18, 2010 - Rules Committee Vote
S744523Aye0Nay0Aye with Reservations0Absent0Excused0AbstainedJun 15, 2010 - Finance Committee Vote
S744529Aye0Nay4Aye with Reservations0Absent0Excused0Abstained-
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Finance Committee Vote: Jun 15, 2010
aye (29)
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Jun 9, 2010 - Banks Committee Vote
S744517Aye0Nay1Aye with Reservations0Absent1Excused0Abstained-
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Banks Committee Vote: Jun 9, 2010
aye (17)aye wr (1)excused (1)
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2009-S7445 (ACTIVE) - Details
- See Assembly Version of this Bill:
- A10915
- Current Committee:
- Assembly Banks
- Law Section:
- Banking Law
- Laws Affected:
- Amd Bank L, generally; amd §520-c, Gen Bus L
2009-S7445 (ACTIVE) - Summary
Permits remote deposit capture machines, clarifies the definition of capital impairment for banking institutions, modifies reporting required by banking organizations, conforms criminal provisions of the mortgage banking article to those in the mortgage loan originator article, reduces operating expenses of the banking department, and makes other technical changes.
2009-S7445 (ACTIVE) - Sponsor Memo
BILL NUMBER: S7445
TITLE OF BILL :
An act to amend the banking law and the general business law, in
relation to reporting by banking organizations, conforming criminal
provisions of the mortgage banking article to those in the mortgage
loan originator article, permitting remote deposit capture machines,
clarifying the definition of capital impairment for banking
institutions, reducing operating expenses of the banking department
and making other technical changes
PURPOSE :
This bill would make various technical and clarifying amendments to
the Banking Law ("BL") and the General Business Law ("GBL") to reduce
the operating costs of the Banking Department ("Department"),
facilitate operation, of banks chartered under New York law and make
various technical changes to the Banking Law.
SUMMARY OF PROVISIONS :
Section 1 of the bill would amend BL § 2 to provide a definition of
the term Superintendent.
Section 2 of the bill would amend BL § 2 to provide a definition of the term remote deposit capture machine, a machine located at a business customer's place of business and operated by the customer's employees, that remotely transmits check data to a bank. Section 3 of the bill would amend BL § 28-b(3)(a) to clarify the ATMs to which the section applies. Section 4 of the bill would amend BL § 37 with regard to the Superintendent's ability to require the filing of periodic reports of condition from banking institutions. Section 5 of the bill would amend BL § 39 to clarify the grounds for the Superintendent's issuance of a regulatory enforcement order based on a deficiency in an institution's capital condition. Section 6 of the bill would amend BL § 42 with regard to the posting of information concerning the work of the Department. The amendment would give the Superintendent the flexibility to post notices more than once a week. Section 7 of the bill would delete Subdivision 2 of BL § 75-g, which requires the Department to provide a report to the Legislature with respect to compliance by banks with the ATM Safety Act. Sections 8 through 10 of the bill would amend BL §§ 105-a, 240-a and 396-a, respectively, to include remote deposit capture machines within the ambit of these sections. Section 11 of the bill would amend the heading of Article 12-D to clarify that the article covers mortgage brokers and mortgage loan servicers in addition to mortgage bankers. Section 12 of the bill would amend paragraph (c) of subdivision 2 of BL § 590 to clarify the provision by insertion of a comma. Section 13 of the bill would amend BL § 592 to conform the felony restrictions imposed on mortgage bankers to those imposed on mortgage loan originators. The Banking Department would be permanently prohibited from licensing a felon guilty of a fraud related crime. There would be a seven-year bar on licensing for those convicted of all other felonies. As with the felony restrictions applicable to mortgage loan originators, these amended restrictions would bar the Department from licensing a mortgage banker if an individual associated with such entity has one of the listed felony convictions, notwithstanding any other provision of New York law. Section 14 of the bill would amend BL § 592-a to conform the felony restrictions on mortgage brokers to those imposed on mortgage loan originators and mortgage bankers. Section 15 of the bill would amend BL § 601-a with regard to branches and agencies of foreign banking corporations. It would treat a branch or agency of a foreign banking corporation licensed under BL Article V as a banking institution for the purposes of the Section. Section 16 of the bill would amend BL § 604-a to treat a branch or agency of a foreign banking corporation as a banking institution with regard to the transfer of fiduciary relationships. Section 17 of the bill would amend BL § 606 to clarify the grounds for the Superintendent to take possession of a banking institution based on the institution's capital level. The provision is amended to reference modem capital standards; in particular, federal banking agency capital standards. Section 18 of the bill would amend BL § 609 to eliminate references to industrial banks, and to make the section gender neutral. Section 19 of the bill would amend GBL § 520-c to allow the Banking Department to make available information on credit cards more cost-effectively than is required by current law. GBL § 520-c requires the Superintendent to conduct an annual survey of information with respect to credit cards, such as annual percentage rates, annual fees, per-transaction charges, late payment fees and grace period, and to make such information available to members of the public. This survey has proved very expensive to conduct and collate, and is wasteful, given the availability of similar information on a number of financial websites. The bill would eliminate the need to conduct the survey and would instead direct the Department to make such information available on a toll-free telephone line and on its internet website (either directly or through hyperlinks to other sites). Section 20 of the bill would provide for the effective date of the bill. All provisions would be effective upon enactment, except for the requirement of credit card issuers to print certain information on credit card statements, which would become effective 30 days after the bill becomes law. EXISTING LAW : BL § 28-b(3) provides standards for evaluating the Community Reinvestment Act practices of banking institutions. BL § 37 contains the procedures to be followed by the Superintendent when requesting institutions to submit quarterly reports of condition. BL § 39 sets the various circumstances under which the Superintendent can impose orders on regulated entities. Currently, the language used in Section 39 concerning imposing an order for deficient capital levels contains only a reference to "making good an impairment of capital", which is an outdated concept as it relates to capital adequacy. This is particularly true for banking institutions, which currently have very detailed capital ratio requirements established under federal law and regulations. BL § 42 requires the Superintendent to publish a weekly bulletin regarding the Department's activities. BL § 75-g requires the Department to provide a report to the Legislature with respect to compliance by banks with the ATM Safety Act. BL §§ 105-a and 240-a set forth the authority of banks, trust companies and savings banks to operate electronic facilities. BL § 396-a sets forth the authority of savings and loan associations to operate electronic facilities. Article 12-D of the BL provides for the regulation of mortgage bankers, mortgage brokers and mortgage loan servicers. The current title of the article does not reflect the extent of its reach. BL § 590(2)(c) authorizes licensees and registrants under Article 12-D to apply for branch offices. BL § 592(2) sets forth the restrictions on felons who apply for licenses as mortgage bankers or who work for such entities. The amendments would conform these standards to those applicable to mortgage loan originators. BL § 592-a(2) sets forth the restrictions on felons who apply for registration as mortgage brokers or who work for such entities. The amendments would conform these standards to those applicable to mortgage loan originators. BL § 601-a provides the circumstances pursuant to which various types of banking institutions can enter into purchase and assumption agreements. BL § 604-a allows various banking institutions to transfer their fiduciary relationships. BL § 606(1)(e) contains one ground, relating to erosion of an institution's capital level, on which the Superintendent may take possession of a banking organization. The current language in this section is inadequate to reflect modem capital concepts and when a banking organization is considered to have deficient regulatory capital. BL § 609 sets forth the circumstances where the Superintendent may allow certain banking institutions to resume business after he or she has taken possession of them. BL § 599-b provides the definitions used in the regulation of mortgage loan originators. GBL § 520-c requires the Superintendent to conduct an annual survey of information with respect to credit cards, such as annual percentage rates, annual fees, per-transaction charges, late payment fees and grace period, and to make such information available to members of the public. PRIOR LEGISLATIVE HISTORY : This is a new bill. STATEMENT IN SUPPORT : This bill continues the Banking Department's longstanding effort to update its statutory framework for the regulation of entities subject to its jurisdiction. Many of the amendments in the bill are non-substantive and would not change the way the Banking Law is currently interpreted. The amendments in sections 1, 2, 3, 4, 11, 12, and 19 are designed to clarify existing law or interpretations. The amendment in Section 5 of the bill is intended to provide a more accurate description of the capital deficiency scenarios in which the Superintendent will impose a regulatory order. The amendment in Section 6 would allow the Department to post items in its "bulletin" on days other the regular Friday printing. This will make some items available for a longer period than would otherwise be possible if items are posted only once a week. The amendment in Section 7 will enable the Department to rely more heavily on the existing self-reporting system under BL § 75-g, which will enable it to concentrate its resources on safety and soundness examinations. Sections 8, 9 and 10 are designed to bring clarity to the regulation of a new form of electronic facility - remote deposit capture machines, which have become prevalent since 2003, when the so-called "Check 21" legislation was adopted to streamline and speed up the processing of checks by encouraging the replacement of paper checks with digital images, which have the same legal status as paper checks. Section 13 and 14 of the bill would amend the character requirements for mortgage bankers and mortgage brokers to make them consistent with the similar requirements for mortgage loan originators, which were adopted by the Legislature during the 2009 session. The Department believes that, if the standards in Article 12-D are not conformed to the more stringent standards set forth in Article 12-E, individuals who are denied authority to engage in mortgage loan origination activities will move into positions as non-MLO officers and directors of mortgage bankers and brokers. Given the extent of the foreclosure problem in New York, and the number of foreclosures resulting from mortgage underwriting practices that border on the fraudulent, the Department believes that elevating the character of officers, directors and associated persons of mortgage bankers and brokers is vital to protecting consumers. Sections 15 and 16 - the amendments to BL §§ 601-a and 604-a - would facilitate the transfer of fiduciary businesses to the branch or agency of a foreign bank. The authority to make such transfers is unclear under current law. This will enhance the attractiveness of the New York license for foreign banking corporations seeking to operate in New York. The amendment in Section 17 of the bill would amend BL § 606(1)(e) and is intended to provide a more accurate description of potential capital deficiency scenarios under which the Superintendent is authorized to take possession of an institution. Federal banking laws now contain detailed regulatory capital requirements for banking institutions, including target ratios that trigger mandatory closure of insured institutions if not improved. The existing reference in BL § 606(1)(e) to an "impairment of capital" of a banking organization is a narrow and outdated capital concept that alone is insufficient to describe when the Superintendent may have adequate grounds for finding that an institution's capital is deficient given the nature and extent of its operations. The new language incorporates a reference to the federal "significantly under capitalized" capital level as a non-exclusive example of a capital level at which the Superintendent might find an institution to have deficient capital so as to provide a ground for possession. Section 18 of the bill would remove references to industrial banks, a form of banking organization that no longer exists, and make other non-substantive changes. Section 19 of the bill would amend General Business Law § 520-c, which requires the Banking Department to conduct an annual survey of credit card rates. Because credit card rates may change frequently, an annual survey does not provide consumers with the up-to-date information they need. The Department has been putting on its website more current information that it obtains free of charge from other websites. Consequently, the expenditure of the Department's funds on the current survey seems wasteful. BUDGET IMPLICATIONS : This bill is expected to generate cost efficiencies derived from more streamlined operations. EFFECTIVE DATE : This bill will take effect immediately.
2009-S7445 (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K
________________________________________________________________________
7445
I N S E N A T E
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 and the general business law, in
relation to reporting by banking organizations, conforming criminal
provisions of the mortgage banking article to those in the mortgage
loan originator article, permitting remote deposit capture machines,
clarifying the definition of capital impairment for banking insti-
tutions, reducing operating expenses of the banking department and
making other technical changes
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 2 of the banking law is amended by adding a new
subdivision 28 to read as follows:
28. SUPERINTENDENT. THE TERM, "SUPERINTENDENT," WHEN USED IN THIS
CHAPTER, SHALL MEAN THE SUPERINTENDENT OF BANKS AS PROVIDED FOR IN
SECTION TWELVE OF THIS CHAPTER.
S 2. Section 2 of the banking law is amended by adding a new subdivi-
sion 29 to read as follows:
29. REMOTE DEPOSIT CAPTURE MACHINE. THE TERM, "REMOTE DEPOSIT CAPTURE
MACHINE," WHEN USED IN THIS CHAPTER, SHALL MEAN AN AUTOMATED MACHINE,
LOCATED AT A CUSTOMER'S PLACE OF BUSINESS AND OPERATED BY PERSONNEL OF
THE BUSINESS CUSTOMER, THAT REMOTELY TRANSMITS THE DATA LOCATED ON
CHECKS TO A BANKING INSTITUTION FOR PROCESSING AND DEPOSIT.
S 3. Paragraph (a) of subdivision 3 of section 28-b of the banking
law, as amended by chapter 315 of the laws of 2008, is amended to read
as follows:
(a) When taking any action on an application OR NOTICE made by a bank-
ing institution under (I) section one hundred five, two hundred twenty-
four, two hundred forty, or three hundred ninety-six of this chapter for
a branch office [or under], (II) section one hundred ninety-one of this
chapter for a public accommodation office [or under], (III) section six
hundred one-b of this chapter for approval or disapproval of a merger or
purchase of assets, or [taking any action on a notice submitted by a
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15519-05-0
S. 7445 2
banking institution under] (IV) section one hundred five-a, two hundred
forty-a or three hundred ninety-six-a of this chapter for the use or
installation of an automated teller machine, [point-of-sale terminal or
similar electronic facility] or on any other application OR NOTICE to
which the banking board shall by rule or regulation make applicable the
provisions of this section, the superintendent shall take into account,
among other factors, an assessment, in writing, of the record of
performance of the banking institution in helping to meet the credit
needs of its entire community, including low and moderate-income neigh-
borhoods, consistent with safe and sound operation of the banking insti-
tution. Such assessment and any written communications from the banking
department to a banking institution relating to such assessment shall be
made available to the public upon request, provided that nothing
contained in this subdivision shall be deemed to alter, amend or affect
the provisions of subdivision ten of section thirty-six of this chapter.
In making such assessment the superintendent shall review all reports
and documents filed pursuant to subdivision one of this section and any
signed, written comments received by the superintendent which specif-
ically relate to the banking institution's performance in helping to
meet the credit needs of its community. In addition, the superintendent
shall consider the following factors in assessing a banking insti-
tution's record of performance:
(1) Activities conducted by the banking institution to ascertain cred-
it needs of its community, including the extent of the banking insti-
tution's efforts to communicate with members of its community regarding
the credit services being provided by the banking institution;
(2) The extent of the banking institution's marketing and special
credit-related programs to make members of the community aware of the
credit services offered by the banking institution;
(3) The extent of participation by the banking institution's board of
directors or board of trustees in formulating the banking institution's
policies and reviewing its performance with respect to the purposes of
the Community Reinvestment Act of 1977;
(4) Any practices intended to discourage application for types of
credit set forth in the banking institution's Community Reinvestment Act
Statement(s);
(5) The geographic distribution of the banking institution's credit
extensions, credit applications and credit denials;
(6) Evidence of prohibited discriminatory or other illegal credit
practices;
(7) The banking institution's record of opening and closing offices
and providing services at offices;
(8) The banking institution's participation, including investments, in
local community development and redevelopment projects or programs;
(9) The banking institution's origination of residential mortgage
loans, housing rehabilitation loans, home improvement loans and small
business or small farm loans within its community or the purchase of
such loans originated in its community;
(10) The banking institution's participation in governmentally-in-
sured, guaranteed or subsidized loan programs for housing, small busi-
nesses or small farms;
(11) The banking institution's ability to meet various community cred-
it needs based on its financial condition, size, legal impediments,
local economic condition and other factors;
(11-a) The geographic distribution, availability and use of automated
teller machines, point-of-sale terminals, personal computer banking,
S. 7445 3
debit cards or similar electronic facilities or services; and any train-
ing of customers thereon among every branch of the banking institution,
if the institution offers such services to any of its customers; and
(12) Other factors that, in the judgment of the superintendent and
banking board, reasonably bear upon the extent to which a banking insti-
tution is helping to meet the credit needs of its entire community,
including, without limitation, the banking institution's participation
in credit counseling services.
S 4. Subdivision 1 of section 37 of the banking law, as amended by
chapter 116 of the laws of 1973, is amended to read as follows:
1. The superintendent shall at least two times in each year designate
a past day as of which every bank, trust company, private banker and, in
the discretion of the superintendent, a bank holding company and any
non-banking subsidiary thereof shall render a [periodical report of
condition to him. He shall deliver or mail a notice designating such day
to such bank, trust company, private banker, bank holding company or any
non-banking subsidiary thereof at its principal office] PERIODIC REPORT
OF CONDITION TO THE SUPERINTENDENT GIVING SUCH INFORMATION AS THE SUPER-
INTENDENT MAY REQUIRE CONCERNING THE BUSINESS AND OPERATIONS OF SUCH
ENTITY DURING SUCH PRECEDING PERIOD. THE REPORT OF CONDITION SHALL BE IN
THE FORM AND SHALL BE FILED AS PRESCRIBED BY THE SUPERINTENDENT.
S 5. Subdivision 3 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:
3. To make good AN impairment of capital OR DEFICIENT CAPITAL CONDI-
TION or to ensure compliance with financial requirements. [Whenever] THE
SUPERINTENDENT MAY, IN HIS OR HER DISCRETION, ISSUE AN ORDER DIRECTING
THAT A BANKING ORGANIZATION, BANK HOLDING COMPANY, BRANCH OR AGENCY OF A
FOREIGN BANKING CORPORATION, REGISTERED MORTGAGE BROKER, LICENSED MORT-
GAGE BANKER, LICENSED LENDER, LICENSED CASHER OF CHECKS, LICENSED SALES
FINANCE COMPANY, LICENSED INSURANCE PREMIUM FINANCE AGENCY, LICENSED
TRANSMITTER OF MONEY, LICENSED BUDGET PLANNER, OR PRIVATE BANKER MAKE
GOOD A DEFICIENCY FORTHWITH OR WITHIN A TIME SPECIFIED IN SUCH ORDER,
WHENEVER it shall appear to [the superintendent] HIM OR HER that:
(A) the capital or capital stock of any banking organization, bank
holding company or any subsidiary thereof which is organized, licensed
or registered pursuant to this chapter, is impaired[, or];
(B) THE CAPITAL OF ANY BANK, TRUST COMPANY, SAVINGS BANK, SAVINGS AND
LOAN ASSOCIATION OR CREDIT UNION IS, IN THE SOLE DISCRETION OF THE
SUPERINTENDENT, DEFICIENT GIVEN THE EXTENT AND NATURE OF ITS OPERATIONS;
(C) the financial requirements imposed by subdivision one of section
two hundred two-b of this chapter or any regulation of the superinten-
dent or the banking board on any branch or agency of a foreign banking
corporation ARE NOT SATISFIED, or
(D) the financial requirements imposed by this chapter or any regu-
lation of the superintendent or THE banking board on any licensed lend-
er, registered mortgage broker, licensed mortgage banker, licensed cash-
er of checks, licensed sales finance company, licensed insurance premium
finance agency, licensed transmitter of money, licensed budget planner
or private banker are not satisfied[, he or she may, in his or her
discretion, issue an order directing that such banking organization,
bank holding company, branch or agency of a foreign banking corporation,
registered mortgage broker, licensed mortgage banker, licensed lender,
licensed casher of checks, licensed sales finance company, licensed
insurance premium finance agency, licensed transmitter of money,
S. 7445 4
licensed budget planner, or private banker make good such deficiency
forthwith or within a time specified in such order].
S 6. The opening paragraph of section 42 of the banking law, as
amended by chapter 547 of the laws of 2008, is amended to read as
follows:
The superintendent shall [publish and] make available to the general
public at the offices of the department and also post on the depart-
ment's internet website a bulletin [at noon] on Friday of each week AND
ON SUCH OTHER DAYS AS THE SUPERINTENDENT SHALL DEEM APPROPRIATE AND IN
THE PUBLIC INTEREST stating the following items of general information
with regard to the work of the department since the preceding statement:
S 7. Section 75-g of the banking law, as added by chapter 9 of the
laws of 1996, subdivision 1 as designated by section 4-a of part A of
chapter 57 of the laws of 1998 and subdivision 2 as amended by chapter
650 of the laws of 2008, is amended to read as follows:
S 75-g. Report of compliance. [1.] Within one year after the effec-
tive date of this article, and each year thereafter, every banking
institution which has an automated teller machine facility which is in
operation on such date and such date every year thereafter shall submit
a written report to the department on a form prescribed by the super-
intendent, certifying that such automated teller machine facility is in
compliance with the provisions of this article or any variance or
exemption that has been granted, or if such facility is not in compli-
ance with such provisions, such report shall state the manner in which
such facility fails to meet such requirements, the reasons for such
non-compliance and a plan to remedy any such non-compliance.
[2. The superintendent shall report to the legislature on or before
the fifteenth day of January and annually thereafter, with respect to
compliance with this article. Such report shall include, but not be
limited to:
(a) the number of inspections undertaken by the department in the
previous year pursuant to this section;
(b) the number and types of violations or other instances of non-com-
pliance identified through such inspections and measures undertaken by
the department and banking institutions to address such instances;
(c) expenses of the department incurred exclusively for the purpose of
the implementation of this section, including the number of department
personnel assigned to such purpose; and
(d) during the year for which the report is rendered, a listing of the
number of variance or exemption applications received and granted
related to the automated teller machine security measures; the name of
any banking institution which received a variance or exemption; the
geographic location of the automated teller machines subject to the
variance or exemption; and, the general conditions or terms of the vari-
ance or exemption.]
S 8. Section 105-a of the banking law, as amended by chapter 613 of
the laws of 1995, is amended to read as follows:
S 105-a. Electronic facilities. A bank or trust company may conduct a
banking business, at automated teller machines, point-of-sale terminals,
REMOTE DEPOSIT CAPTURE MACHINES, and similar facilities subject to regu-
lations which may be promulgated by the banking board. Such facilities
shall not be deemed to be branches and shall not be subject to any of
the provisions of this chapter applicable to branches; provided however
that notwithstanding the foregoing, AUTOMATED TELLER MACHINES AND SUCH
OTHER ELECTRONIC FACILITIES AS SPECIFICALLY DESIGNATED BY REGULATION OF
THE BANKING BOARD SHALL BE DEEMED TO BE BRANCHES for purposes of clause
S. 7445 5
(ii) of PARAGRAPH (A) OF subdivision one of section one hundred five [of
this chapter, such facilities shall be deemed to be branches, and such
facilities shall be subject to the terms and conditions of section one
hundred five, and for purposes of] AND section twenty-eight-b of this
chapter[, such facilities shall be deemed to be branches].
S 9. Section 240-a of the banking law, as amended by chapter 613 of
the laws of 1995, is amended to read as follows:
S 240-a. Electronic facilities. A savings bank may conduct a banking
business, at automated teller machines, point-of-sale terminals, REMOTE
DEPOSIT CAPTURE MACHINES, and similar facilities, subject to regulations
which may be promulgated by the banking board. Such facilities shall not
be deemed to be branches and shall not be subject to any of the
provisions of this chapter applicable to branches; provided however that
notwithstanding the foregoing, AUTOMATED TELLER MACHINES AND SUCH OTHER
ELECTRONIC DEVICES AS SPECIFICALLY DESIGNATED BY THE BANKING BOARD SHALL
BE DEEMED TO BE BRANCHES for purposes of paragraph (b) of subdivision
two of section two hundred forty [of this chapter, such facilities shall
be deemed to be branches, and such facilities shall be subject to the
terms and conditions of section two hundred forty,] and [for purposes
of] section twenty-eight-b of this chapter[, such facilities shall be
deemed to be branches].
S 10. Section 396-a of the banking law, as amended by chapter 613 of
the laws of 1995, is amended to read as follows:
S 396-a. Electronic facilities. A savings and loan association may
conduct a banking business, at automated teller machines, point-of-sale
terminals, REMOTE DEPOSIT CAPTURE MACHINES, and similar facilities,
subject to regulations which may be promulgated by the banking board.
Such facilities shall not be deemed to be branches and shall not be
subject to any of the provisions of this chapter applicable to branches;
provided however that notwithstanding the foregoing, AUTOMATED TELLER
MACHINES AND SUCH OTHER ELECTRONIC FACILITIES AS SPECIFICALLY DESIGNATED
BY REGULATION BY THE BANKING BOARD SHALL BE DEEMED TO BE BRANCHES for
purposes of paragraph (b) of subdivision two of section three hundred
ninety-six [of this chapter, such facilities shall be deemed to be
branches, and such facilities shall be subject to the terms and condi-
tions of section three hundred ninety-six,] and [for purposes of]
section twenty-eight-b of this chapter[, such facilities shall be deemed
to be branches].
S 11. The article heading of article 12-D of the banking law, as added
by chapter 864 of the laws of 1981, is amended to read as follows:
[LICENSED] MORTGAGE BANKERS, MORTGAGE BROKERS AND
MORTGAGE LOAN SERVICERS
S 12. Paragraph (c) of subdivision 2 of section 590 of the banking
law, as amended by chapter 472 of the laws of 2008, is amended to read
as follows:
(c) A licensee, registrant or mortgage loan servicer may apply for
authority to open and maintain one or more branch offices.
S 13. Subdivision 2 of section 592 of the banking law, as amended by
chapter 472 of the laws of 2008, is amended to read as follows:
2. [The] NOTWITHSTANDING ANY OTHER LAW, THE superintendent [may refuse
to] SHALL NOT issue a license pursuant to this article if he or she
shall find that the applicant, or any person who is a director, officer,
partner, agent, employee, substantial stockholder of the applicant,
consultant or person having a relationship with the applicant similar to
a consultant, (a) has been convicted of [a crime involving an activity
which is a felony under this chapter or under article one hundred
S. 7445 6
fifty-five, one hundred seventy, one hundred seventy-five, one hundred
seventy-six, one hundred eighty, one hundred eighty-five, one hundred
eighty-seven, one hundred ninety, two hundred, two hundred ten or four
hundred seventy of the penal law or any comparable felony under the laws
of any other state or the United States, provided that such crime would
be a felony if committed and prosecuted under the laws of this state] OR
PLED NOLO CONTENDERE TO, A FELONY IN A DOMESTIC, FOREIGN, OR MILITARY
COURT DURING THE SEVEN-YEAR PERIOD PRECEDING THE DATE OF THE APPLICATION
FOR LICENSING OR AT ANY TIME PRECEDING SUCH DATE OF APPLICATION, IF SUCH
FELONY INVOLVED AN ACT OF FRAUD, DISHONESTY, OR A BREACH OF TRUST, OR
MONEY LAUNDERING or (b) has had a MORTGAGE BANKER license [or], MORTGAGE
BROKER registration OR MORTGAGE LOAN ORIGINATOR AUTHORIZATION, LICENSE
OR LICENSE EQUIVALENT revoked [by the superintendent] IN ANY GOVERN-
MENTAL JURISDICTION, EXCEPT THAT A SUBSEQUENT FORMAL VACATION OF SUCH
REVOCATION SHALL NOT BE DEEMED TO BE A REVOCATION or (c) has been a
director, partner, or substantial stockholder of an entity which has had
a license or registration revoked by the superintendent or (d) has been
an agent, employee or officer of an entity, or a consultant to, or
person having had a similar relationship with, any entity which has had
a license or registration revoked by the superintendent where such
person shall have been found by the superintendent to bear responsibil-
ity in connection with the revocation. The term "substantial stockhold-
er", as used in this subdivision, shall be deemed to refer to a person
owning or controlling directly or indirectly ten [per centum] PERCENT or
more of the total outstanding stock of a corporation.
S 14. Subdivision 2 of section 592-a of the banking law, as amended by
chapter 472 of the laws of 2008, is amended to read as follows:
2. [The] NOTWITHSTANDING ANY OTHER LAW, THE superintendent [may refuse
to] SHALL NOT issue a certificate pursuant to this article if he or she
shall find that the applicant, or any person who is a director, officer,
partner, agent, employee, substantial stockholder of the applicant,
consultant or person having a relationship with the applicant similar to
a consultant, (a) has been convicted of [a crime involving an activity
which is a felony under this chapter or under article one hundred
fifty-five, one hundred seventy, one hundred seventy-five, one hundred
seventy-six, one hundred eighty, one hundred eighty-five, one hundred
eighty-seven, one hundred ninety, two hundred, two hundred ten or four
hundred seventy of the penal law or any comparable felony under the laws
of any other state or the United States, provided that such crime would
be a felony if committed and prosecuted under the laws of this state] IN
A DOMESTIC, FOREIGN, OR MILITARY COURT OR PLED NOLO CONTENDERE TO, A
FELONY DURING THE SEVEN-YEAR PERIOD PRECEDING THE DATE OF THE APPLICA-
TION FOR LICENSING OR AT ANY TIME PRECEDING SUCH DATE OF APPLICATION, IF
SUCH FELONY INVOLVED AN ACT OF FRAUD, DISHONESTY, OR A BREACH OF TRUST,
OR MONEY LAUNDERING or (b) has had a MORTGAGE BANKER license [or], MORT-
GAGE BROKER registration OR MORTGAGE LOAN ORIGINATOR AUTHORIZATION,
LICENSE OR LICENSE EQUIVALENT revoked [by the superintendent] IN ANY
GOVERNMENTAL JURISDICTION, EXCEPT THAT A SUBSEQUENT FORMAL VACATION OF
SUCH REVOCATION SHALL NOT BE DEEMED TO BE A REVOCATION or (c) has been a
director, partner, or substantial stockholder of an entity which has had
a license or registration revoked by the superintendent or (d) has been
an agent, employee or officer of an entity, or a consultant to, or
person having had a similar relationship with, any entity which has had
a license or registration revoked by the superintendent where such
person shall have been found by the superintendent to bear responsibil-
ity in connection with the revocation. The term "substantial stockhold-
S. 7445 7
er", as used in this subdivision, shall be deemed to refer to a person
owning or controlling directly or indirectly ten [per centum] PERCENT or
more of the total outstanding stock of a corporation.
S 15. Subdivision 1 of section 601-a of the banking law, as amended by
chapter 152 of the laws of 1993, is amended to read as follows:
1. The following acquisitions are hereby authorized whether by
purchase or otherwise, other than by merger, of all or a substantial
part of the assets of:
(a) One or more corporations organized under the laws of this state
and subject to the provisions of article three, article eight or article
twelve of this chapter by another corporation subject to the provisions
of the same article.
(b) One or more safe deposit companies by a bank or trust company.
(c) One or more mutual savings banks by another mutual savings bank.
(d) One or more mutual savings and loan associations by another mutual
savings and loan association.
(e) One or more stock-form savings banks by another stock-form savings
bank.
(f) One or more stock-form savings and loan associations by another
stock-form savings and loan association.
(g) One or more banking institutions by another banking institution to
the extent permitted under regulations of the banking board. FOR
PURPOSES OF THIS SUBDIVISION, A BRANCH OR AGENCY OF A FOREIGN BANKING
CORPORATION LICENSED UNDER ARTICLE FIVE OF THIS CHAPTER SHALL BE CONSID-
ERED A BANKING INSTITUTION.
S 16. Section 604-a of the banking law, as added by chapter 743 of the
laws of 1958, the section heading and subdivision 1 as amended by chap-
ter 297 of the laws of 1993, subdivision 2 as amended by chapter 489 of
the laws of 1963 and subdivision 3 as amended by chapter 115 of the laws
of 1981, is amended to read as follows:
S 604-a. Transfer of fiduciary relationships [of a banking institu-
tion]. 1. If any banking institution, including a bank or trust company,
national banking association, savings bank, savings and loan associ-
ation, federally chartered savings bank, federally chartered savings and
loan association, BRANCH OR AGENCY OF A FOREIGN BANKING CORPORATION,
located in this state, shall have transferred all or substantially all
of its assets to another banking institution in a transaction subject to
this chapter pursuant to a written agreement between the transferor and
transferee [corporations] whereby the transferee [corporation] has
assumed the deposit liabilities, if any, of the transferor [corporation]
and has agreed to assume all fiduciary relationships of the transferor
[corporation], the transferee [corporation] may file in the office of
the superintendent a certificate in its name and under its [corporate]
seal, signed by its president, secretary or cashier, setting forth a
copy of such agreement and stating that the transferee [corporation]
assumes all of the fiduciary relationships of the transferor [corpo-
ration] pursuant to the provisions of this section; provided, however,
that such certificate shall not be filed unless the approval of the
superintendent shall have been endorsed thereon or annexed thereto
before filing.
2. Upon the filing of such certificate in the office of the super-
intendent, all of the property, rights, powers and franchises of the
transferor [corporation] as fiduciary shall vest in the transferee
[corporation] and the transferee [corporation] shall be deemed to have
assumed all of the debts, liabilities, obligations and duties of the
transferor [corporation] as fiduciary, and to have succeeded to all the
S. 7445 8
fiduciary relationships of the transferor [corporation], as fully and
with the same effect as is provided in sections one hundred thirty-six-c
and six hundred two in the case of a merger, and any reference to the
transferor [corporation] as fiduciary in any capacity, contained in any
contract, will or document, whether executed or taking effect before or
after the filing of such certificate in the office of the superinten-
dent, shall be considered a reference to the transferee [corporation] if
not inconsistent with the other provisions of the contract, will or
document.
3. For the purposes of this section the fiduciary relationships of the
transferor shall include all relationships as agent, trustee, guardian,
receiver, committee, conservator, executor, administrator, or other
fiduciary in any capacity or for any purpose mentioned in section one
hundred, and all relationships of the transferor as bailee or depositary
of personal property.
4. This section shall not be deemed to authorize a transferee [corpo-
ration] to assume any fiduciary relationship of a kind which it would
not otherwise have power to undertake and perform. Nothing in this
section shall be deemed to authorize any such transferee [corporation]
to maintain as its own office any office previously maintained by the
transferor [corporation], and authority, if any, to maintain any such
office shall be governed by the applicable provisions of law other than
this section. This section shall not be deemed to apply to contracts of
the transferor for the leasing of safe deposit boxes or vaults.
S 17. Paragraph (e) of subdivision 1 of section 606 of the banking
law, as amended by chapter 1 of the laws of 1984, is amended to read as
follows:
(e) Has, AS DETERMINED BY THE SUPERINTENDENT IN HIS OR HER SOLE
DISCRETION, (I) an impairment of its capital; or[, in the case of a
mutual savings and loan association or credit union, has assets insuffi-
cient to pay its debts and the amount due members upon their shares]
(II) A DEFICIENT CAPITAL CONDITION GIVEN THE EXTENT AND NATURE OF ITS
OPERATIONS; PROVIDED THAT, FOR PURPOSES OF THIS SUBPARAGRAPH, A DEFI-
CIENT CAPITAL CONDITION SHALL INCLUDE, WITHOUT LIMITATION, A FINDING BY
THE SUPERINTENDENT THAT THE INSTITUTION IS SIGNIFICANTLY UNDERCAPITAL-
IZED, AS SUCH TERM IS USED IN THE REGULATIONS OF SUCH INSTITUTION'S
PRIMARY FEDERAL REGULATOR;
S 18. Section 609 of the banking law, as amended by chapter 684 of the
laws of 1938, the section heading and subdivision 1 as amended by chap-
ter 1 of the laws of 1984, subdivision 6 and paragraph (k) of subdivi-
sion 8 as amended and subdivision 9 as added by chapter 849 of the laws
of 1964 and paragraph (g) of subdivision 8 as amended by chapter 115 of
the laws of 1981, is amended to read as follows:
S 609. Resumption of business by bank[,] OR trust company [or indus-
trial bank]; retirement of certificates; applicability to stock-form
savings banks and stock-form savings and loan associations. 1. Any bank,
trust company, stock-form savings bank or stock-form savings and loan
association of which the superintendent has taken possession or which is
operating under restrictions imposed by duly constituted authority may
be permitted by the superintendent, in his OR HER discretion and subject
to such conditions as may be approved by him OR HER, to resume business
in accordance with the provisions of this section.
2. No bank[,] OR trust company [or industrial bank] permitted by the
superintendent to resume business in accordance with the provisions of
this section shall, without previously obtaining the written permission
of the superintendent, pay, on account of any deposit made or debt
S. 7445 9
incurred before such restrictions were imposed or before the superinten-
dent took possession of such bank[,] OR trust company [or industrial
bank], more than that proportion of eighty [per centum] PERCENT of the
total value of its sound assets, as determined by the superintendent,
which such deposit or debt bears to the total of the deposits and debts
of such bank[,] OR trust company [or industrial bank] at the time of
resuming business[:]; provided that nothing contained in this section
shall affect any preference created by any law of this state for the
benefit of any depositor or creditor or impair the rights of any secured
depositor or creditor in any assets lawfully pledged or assigned as such
security. For the purposes of this section, the holder of a judgment
against any such bank[,] OR trust company [or industrial bank] for the
payment of money arising out of a cause of action arising prior to such
resumption of business, whether such judgment was recovered prior or
subsequent to such resumption of business, shall have the same rights as
if he OR SHE were a depositor having a balance equal to the amount of
such judgment at the time such restrictions were imposed or at the time
the superintendent took possession of such bank[,] OR trust company [or
industrial bank]. The superintendent shall prepare for each such bank[,]
OR trust company [or industrial bank] a list of the assets which, in his
OR HER judgment, are sound and the value thereof as determined by him OR
HER.
3. Such bank[,] OR trust company [or industrial bank] shall, imme-
diately upon resuming business, issue to its depositors and creditors
non-negotiable transferable certificates, in a form approved by the
superintendent, representing the part of its deposits and debts which it
is not authorized to pay at that time under the provisions of subdivi-
sion two of this section. Such certificates shall bear interest, if any,
at a rate not in excess of three [per centum] PERCENT per annum.
4. The superintendent shall from time to time determine the excess of
the value of the sound assets of such bank[,] OR trust company [or
industrial bank] over the total of the principal amount of such certif-
icates outstanding and of the deposits and debts of such bank[,] OR
trust company [or industrial bank] not represented by such certificates,
including deposits made and debts incurred after resuming business. The
amount by which such excess is greater than the excess of the value of
the sound assets of such bank[,] OR trust company [or industrial bank],
determined as provided in subdivision two of this section, over its
total deposits and debts at the time of resuming business may, unless
the superintendent disapproves, be paid pro rata on account of the prin-
cipal due on such certificates or, if the principal has been paid in
full, on account of the interest, if any, due thereon. No such bank[,]
OR trust company [or industrial bank] shall, without previously obtain-
ing the written permission of the superintendent, make any other payment
on account of the principal or interest of such certificates.
5. No dividends shall be paid on the stock of such bank[,] OR trust
company [or industrial bank] while any such certificates are outstand-
ing, unless, having previously secured the written permission of the
superintendent to pay such certificates, it shall set aside and maintain
a sum sufficient for the payment of all such outstanding certificates
and the interest, if any, accrued thereon and shall publish once a week
for two calendar weeks in a newspaper published in the county in which
its principal office is located, notice to the effect that it will pay
all such certificates and the interest, if any, accrued thereon upon due
presentation for payment. If, thereafter, any such certificate together
with all interest, if any, accrued thereon, shall not be paid when so
S. 7445 10
presented, the authority of such bank[,] OR trust company [or industrial
bank] to pay such dividends shall cease.
6. So long as any of such certificates are outstanding, every holder
of such a certificate shall have the same right to notice of all regular
or special meetings of the stockholders of such bank[,] OR trust company
[or industrial bank] and to attend and to vote in person or by proxy at
such meetings as would a holder of stock of the par value of the unpaid
principal amount of such certificate, except that no holder of a certif-
icate or certificates shall be entitled to vote upon any change in
respect to shares or capital stock pursuant to title eight of article
fifteen OF THIS CHAPTER or to receive notice of or attend a meeting of
stockholders specially called for that purpose. Within sixty days after
such bank[,] OR trust company [or industrial bank] has resumed business
a meeting of its stockholders and holders of such certificates shall be
called upon notice prescribed by the superintendent. At such meeting
directors shall be elected who shall succeed the former directors, and
the directors so elected shall elect officers who shall succeed the
former officers. Directors in office at the date of such meeting may be
elected at such meeting to succeed themselves and the directors elected
at such meeting may elect officers then serving to succeed themselves.
7. If the superintendent shall retake possession of the business and
property of such bank[,] OR trust company [or industrial bank] while any
such certificates are still outstanding and liquidate its business as
elsewhere provided in this chapter, deposits and debts not represented
by such certificates, including deposits made and debts incurred after
resuming business, shall be entitled to payment of principal and inter-
est in priority to the payment of the principal and interest of such
certificates.
8. (a) A plan for the retirement of certificates issued or made avail-
able by a bank[,] OR trust company [or industrial bank] pursuant to the
provisions of this section may be promulgated in accordance with this
subdivision [eight] in any case where the value of all the assets of
such bank[,] OR trust company [or industrial bank] as determined by the
superintendent is less than the aggregate of the amounts owing to depos-
itors and other creditors plus the unpaid amount of all such certif-
icates so issued or made available by such bank[,] OR trust company [or
industrial bank]. Such plan may be promulgated by such bank[,] OR trust
company [or industrial bank] or by the holders of ten [per centum]
PERCENT or more in principal amount of all such outstanding certificates
or the representative or representatives of such holders.
(b) Such plan may provide for any one or more of the following:
(1) The retirement of certificates by the issuance in exchange there-
for of shares of capital stock or debentures or both of such bank[,] OR
trust company [or industrial bank];
(2) The issuance of preferred stock of such bank[,] OR trust company
[or industrial bank] and the sale of such preferred stock for cash or
its exchange for real or personal property or for outstanding capital
notes, debentures or other obligations of such bank[,] OR trust company
[or industrial bank];
(3) The issuance of fractional shares of capital stock of such bank[,]
OR trust company [or industrial bank] in exchange for certificates or
portions thereof in unpaid amount insufficient to permit the exchange
thereof for a full share of capital stock. Such fractional shares of
capital stock shall have no voting rights, but, when combined with other
fractional shares in sufficient amount, shall be convertible into a full
share or shares of capital stock;
S. 7445 11
(4) The transfer into a separate account upon the books of such
bank[,] OR trust company [or industrial bank] or to a separate corpo-
ration, of any assets to be liquidated for the pro rata benefit of
certificate holders and the issuance to certificate holders of evidences
of participation in such assets if transferred into a separate account
upon the books of such bank[,] OR trust company [or industrial bank], or
of stock or obligations or both of such separate corporation, if such
assets are transferred to a separate corporation;
(5) The organization of a corporation to issue its stock or obli-
gations or both in exchange for certificates and for the exchange of
certificates so acquired by such corporation for shares of the capital
stock or debentures or both of such bank[,] OR trust company [or indus-
trial bank];
(6) The amount of capital stock which such bank[,] OR trust company
[or industrial bank] shall have upon the plan becoming effective, the
classes, if any, into which such capital stock shall be divided, the
number of shares in each class and the par value of each share.
In addition to provisions herein specifically authorized to be
contained in a plan promulgated pursuant to this subdivision, such plan
may also contain any other provisions deemed necessary or convenient to
effectuate the general purpose or purposes of the plan.
(c) The person or persons promulgating such plan shall first submit it
to the superintendent for his OR HER approval. If the plan is approved
by the superintendent, such person shall within sixty days of such
approval submit it to the supreme court in and for the county in which
the principal office of such bank[,] OR trust company [or industrial
bank] is located, together with an application for its approval. Such
application shall set forth such facts as may be necessary to enable the
court to determine the fairness of such plan and shall be made upon an
order to show cause which shall provide that notice thereof of a kind
which the court deems to be adequate shall be given by such bank[,] OR
trust company [or industrial bank] to all holders of such certificates
and all other persons whose interests, in the opinion of the court, may
be affected by such plan. If the issue is raised in any proceeding
involving a plan promulgated pursuant to this subdivision, a certificate
executed by the superintendent and filed with the court shall be
presumptive evidence of the fact that the value of all of the assets of
such bank[,] OR trust company [or industrial bank] is less than the
aggregate of the amounts owing to depositors and other creditors plus
the unpaid amount of all such certificates issued or made available by
such bank[,] OR trust company [or industrial bank].
(d) The superintendent or the bank[,] OR trust company [or industrial
bank] or any person or persons authorized to promulgate a plan hereunder
may propose and submit to the court an alternative plan or a modifica-
tion or modifications of any plan before the court. The court may modify
any such plan or may propose a new or alternative plan, provided, howev-
er, that a modification or modifications, whether proposed by the court
or by any other person or persons, may be made only after a hearing upon
notice to all holders of certificates and all other persons whose inter-
ests, in the opinion of the court, may be affected thereby, and subject
to the right of any person who shall previously have consented to such
plan to withdraw such consent within a period to be prescribed by the
court and after such notice as the court may direct. If any person
having such right of withdrawal shall not withdraw within the period so
prescribed he OR SHE shall be deemed to have approved such plan as so
modified.
S. 7445 12
(e) After the hearing or hearings above provided the court shall by
order approve a plan, with or without modifications, or shall reject all
such plans, provided, however, that no order made pursuant to this para-
graph approving such plan shall be made or entered unless such plan, in
final form, shall first have been approved in writing by the superinten-
dent and such written approval shall have been filed in the proceeding.
If at the time of making the order approving such plan, the court is
satisfied that the holders of two-thirds in amount of such certificates
have approved such plan, the order of the court shall recite such fact
and shall declare that such plan shall be effective upon the filing by
the superintendent in the office of the clerk of the county in which is
located the principal office of such bank[,] OR trust company [or indus-
trial bank] of the certificate required to be filed pursuant to para-
graph (k) of this subdivision. If at the time of making such order, such
plan shall not have been approved by the holders of two-thirds in amount
of such certificates, such order shall provide that upon satisfactory
proof of the fact that the holders of two-thirds in amount of such
certificates shall have approved the same, a further order may be
entered ex parte declaring that such plan shall be effective upon the
filing by the superintendent in the office of the clerk of the county in
which is located the principal office of such bank[,] OR trust company
[or industrial bank] of the certificate required to be filed pursuant to
paragraph (k) of this subdivision.
(f) Upon the entering of an order declaring that such plan shall be
effective upon the filing by the superintendent in the office of the
county clerk of the certificate required to be filed pursuant to para-
graph (k) of this subdivision, such plan shall become binding upon the
holders of all certificates of such bank[,] OR trust company [or indus-
trial bank] and all such holders shall be conclusively deemed to have
consented to all the terms and conditions of such plan whether or not
all of such holders shall actually have consented thereto and whether or
not all of them shall have received notice thereof or of the hearing
thereon hereinbefore provided.
(g) Every executor, administrator, trustee, guardian, committee,
conservator, receiver, or other fiduciary, and every public and private
corporation or association, and every political and public instrumental-
ity or body, including, but not by way of limitation of the generality
of the foregoing, boards of education and school districts and other
special districts, is hereby authorized and empowered to approve and
accept a plan promulgated pursuant to this subdivision and to execute
and deliver such papers and documents as may be necessary or proper to
evidence such approval and acceptance, and shall not be subject to any
liability whatsoever for any such approval or acceptance or any exchange
of certificates for stock or other securities or both made pursuant
thereto.
(h) A plan promulgated pursuant to this subdivision may be effectuated
even though it has not been expressly approved by the holders of two-
thirds in amount of all outstanding certificates, provided, as an alter-
native to such express approval, the provisions of this paragraph have
been complied with. After the plan is approved by the superintendent as
provided by paragraph (c) of this subdivision, the person or persons
promulgating such plan shall file a copy thereof with the clerk of the
court and shall prepare and mail to each of the holders of such certif-
icates and to each of the holders of stock of the bank[,] OR trust
company [or industrial bank], addressed by registered mail to him OR
HER, postage prepaid, to his OR HER last known address as the same
S. 7445 13
appears on the records of the bank[,] OR trust company [or industrial
bank], a summary of such plan together with a notice stating in
substance that such plan will be presented to the supreme court in and
for the county in which the principal office of the bank[,] OR trust
company [or industrial bank] is located, and designating a date, which
date shall not be less than thirty days after the mailing of such
notice, when such court will consider such plan and hear any objection
thereto on the part of any holder of a certificate or of stock. Such
notice shall also be published by the person or persons promulgating
such plan once, at least twenty days before said date, in a daily news-
paper of general circulation published in the county where such hearing
is to be had and if no such daily newspaper is published in such county,
then such notice shall be published in a newspaper of general circu-
lation in said county. Upon the return of such notice or any adjourned
date or dates thereof, the court shall hear the parties interested ther-
ein and may accept proof in affidavit form or otherwise as to any facts
and circumstances material thereto. The court upon proof by affidavit
that the provisions hereof with respect to mailing and publication have
been fully complied with shall thereupon approve, modify or disapprove
such plan, but in no event shall any such plan, with or without modifi-
cations, be approved by the court unless the court deems such plan fair
and equitable to the holders of certificates and unless such plan, in
final form, shall first have been approved in writing by the superinten-
dent, and such written approval shall have been filed in the proceeding;
or if written dissent therefrom, duly executed and acknowledged, shall
be filed with the clerk of the court prior to such return date, or prior
to such other date as may be fixed by the court, by the holders in the
aggregate of more than thirty-three and one-third [per centum] PERCENT
of the face amount of the certificates affected by such plan. All hold-
ers of certificates who have not dissented from the plan in the manner
provided by this paragraph and prior to the return date or such other
date as may be fixed by the court shall be conclusively deemed to have
assented thereto. Such plan shall contain a provision in respect of
certificate holders dissenting thereto, to the effect that adequate
protection will be provided for the realization by them of the value of
their certificates by such method as will in the opinion of the court,
under and consistent with the circumstances of the particular case, be
equitable and fair to them. When such plan, with or without modifica-
tions, shall be approved by the court, the court shall make an order
reciting such approval and declaring that such plan shall be effective
upon the filing by the superintendent in the office of the clerk of the
county in which is located the principal office of such bank[,] OR trust
company [or industrial bank] of the certificate required to be filed
pursuant to paragraph (k) of this subdivision. The appellate court to
which an appeal is taken by any dissenting certificate holder or by any
stockholder from any action by the court pursuant to this section shall
have the right to impose upon the appellant as part of the costs of the
appeal, reasonable fees of counsel for the respondent, and such appel-
late court may also, in its discretion, require bond therefor before
entertaining any such appeal.
(i) Upon the entering of an order declaring that such plan shall be
effective upon the filing by the superintendent in the office of the
county clerk of the certificate required to be filed pursuant to para-
graph (k) of this subdivision, such steps shall be taken by the super-
intendent and all other persons, and all acts shall be done as may be
required by such plan and as may be necessary or desirable to make such
S. 7445 14
plan operative. Within ten days after the entering of such order, the
superintendent shall issue an order pursuant to article two of this
chapter directing that such bank[,] OR trust company [or industrial
bank] shall forthwith make good the impairment of its capital OR CAPITAL
DEFICIENCY. Upon receipt of such order, the directors of the bank[,] OR
trust company [or industrial bank] shall give notice to each stockholder
of such requisition and of the amount of the assessment he OR SHE must
pay, which amount shall be the aggregate par value of his OR HER shares.
Such notice shall be mailed to each stockholder at his OR HER address
appearing on the records of the bank[,] OR trust company [or industrial
bank] or shall be served personally upon him OR HER. Notwithstanding
any provision of section one hundred fourteen [or section three hundred
six] of this chapter, all outstanding stock certificates of the bank[,]
OR trust company [or industrial bank] shall be canceled of record not
less than thirty days after notice of assessment is given to stockhold-
ers as herein provided, and thereupon such stock certificates shall be
null and void for all purposes and the rights of the holders thereunder
shall cease and determine; provided, however, that each stockholder who
pays the full amount of such assessment within thirty days after notice
of assessment is given as herein provided shall receive, in lieu of the
stock on account of which such assessment was paid, new stock in the
amount to which he OR SHE would be entitled if he OR SHE held certif-
icates issued by such bank[,] OR trust company [or industrial bank]
pursuant to the provisions of this section in an aggregate unpaid prin-
cipal and interest amount equal to the assessment so paid.
(j) Not less than thirty nor more than sixty days after notice of
assessment is given to stockholders as provided in paragraph (i) of this
subdivision, the superintendent shall, if the plan so provides, cause
any assets of such bank[,] OR trust company [or industrial bank] which
are to be liquidated for the pro rata benefit of certificate holders, to
be set aside in a special account upon the books of such bank[,] OR
trust company [or industrial bank] or transferred to a separate corpo-
ration.
(k) Upon the completion of the acts required to be done pursuant to
paragraph (i) and paragraph (j) of this subdivision and not more than
sixty days after notice of assessment is given to stockholders as
provided in paragraph (i) of this subdivision, the superintendent shall
execute in triplicate a certificate declaring such plan to be effective
and stating the amount of capital stock which such bank[,] OR trust
company [or industrial bank] shall thereafter have, the classes, if any,
into which such capital stock shall be divided, the number of shares in
each class and the par value of each such share. The amount of capital
stock stated in such certificate shall be not less than the amount of
capital stock required to be issued to certificate holders pursuant to
such plan, plus the amount of capital stock required, pursuant to para-
graph (i) of this subdivision, to be issued to stockholders who shall
have paid the full amount of the assessments levied pursuant to such
paragraph (i). The amount of capital stock, the number of shares and
the par value of each such share as stated in such certificate shall be
the amount of capital stock, the number of shares and the par value
thereof which such bank[,] OR trust company [or industrial bank] shall
thereafter be authorized to have, provided that nothing herein contained
shall be deemed to limit the power of any such bank[,] OR trust company
[or industrial bank] subsequently to change the amount of its capital
stock, the number of its shares or the par value of its shares pursuant
to subdivision two of section eight thousand one. One of such triplicate
S. 7445 15
certificates shall be transmitted forthwith by the superintendent to
such bank[,] OR trust company [or industrial bank], another shall be
filed in the office of the superintendent and the third shall be filed
by the superintendent in the office of the clerk of the county in which
is located the principal office of such bank[,] OR trust company [or
industrial bank]. Upon such filing in the office of the county clerk,
the plan shall become effective and all certificates theretofore issued
by such bank[,] OR trust company [or industrial bank] pursuant to the
provisions of this section shall be null and void and shall not be
deemed to be outstanding for any purpose. Thereupon such bank[,] OR
trust company [or industrial bank] shall issue and make available to the
holders of such certificates shares of stock or debentures or both of
such bank[,] OR trust company [or industrial bank], and if the plan so
provides, evidences of participation in the assets aside in a special
account or stock or other securities or both of a separate corporation,
in the proportions and amounts specified in such plan.
(l) Within sixty days after a plan pursuant to this subdivision has
become effective with respect to any bank[,] OR trust company [or indus-
trial bank], there shall be called in accordance with its by-laws a
meeting of its stockholders who shall elect directors who shall succeed
the former directors. The directors so elected shall elect officers who
shall succeed the former officers. Directors in office at the date of
such meeting may be elected at such meeting to succeed themselves and
the directors elected at such meeting may elect officers then serving to
succeed themselves. [Notwithstanding the requirements as to ownership of
capital stock contained in section one hundred sixteen or section three
hundred three of this chapter, the] THE directors of such bank[,] OR
trust company [or industrial bank] holding office at the time that such
plan becomes effective may continue to hold office as directors, until
their successors are elected and shall have qualified.
(m) The supreme court in and for the county in which is located the
principal office of such bank[,] OR trust company [or industrial bank]
is hereby vested with jurisdiction and authority to determine the fair-
ness of, and to approve or disapprove, any plan, or modification or
modifications thereof, which may be promulgated hereunder and to deter-
mine the fairness of, and to approve or disapprove, the terms and condi-
tions of the issuance and exchange of stock or other securities, or
both, of any corporation for certificates issued pursuant to the
provisions of this section and to make such orders and do such other
things as may be required by this subdivision or as may be necessary or
convenient to carry out the purposes hereof.
9. If there be in article fifteen of this chapter a provision which
conflicts with any provision of this section six hundred nine, the
provision of this section six hundred nine shall prevail, and the
conflicting provision of article fifteen shall not apply in such case.
If there be in article fifteen a provision relating to a matter embraced
in this section six hundred nine, but not in conflict therewith, both
provisions shall apply.
S 19. Section 520-c of the general business law, as added by chapter 1
of the laws of 1994, is amended to read as follows:
S 520-c. Credit information. 1. The banking department shall establish
AND MAKE AVAILABLE ON ITS WEBSITE, OR PROVIDE A LINK OR LINKS ON SUCH
SITE TO OTHER WEBSITES WITH, a toll-free telephone number service at
which CONSUMERS MAY OBTAIN information on annual percentage rates, annu-
al fees, per-transaction charges, late payment fees, overlimit fees and
grace periods for credit cards [can be obtained], TO THE EXTENT READILY
S. 7445 16
AVAILABLE TO THE BANKING DEPARTMENT. Every issuer of credit cards to
natural persons residing in this state shall set forth on each solicita-
tion, application and monthly billing statement mailed or otherwise
presented to such persons, a notice stating "New York residents may
contact the New York state banking department [to obtain a] BY TELEPHONE
OR VISIT ITS WEBSITE FOR FREE INFORMATION ON comparative [listing of]
credit card rates, fees and grace periods." Such notice shall be printed
on the same side as the disclosure of rates, fees and charges, in case
of the solicitations and applications, and on the same side as the
notice of the balance of the account and the amount due are printed, in
the case of the monthly billing statement. The superintendent of banks
shall prescribe the [address and] telephone number AND WEBSITE to be
printed next to the notice. The notice shall be in type no smaller than
eight points. [Issuers shall include such notice in materials sent to
residents of this state as required under this section commencing Octo-
ber first, nineteen hundred ninety-four.]
2. [The superintendent of banks shall develop and distribute to all
issuers of credit cards, no more than thirty days after the effective
date of this section, a form which shall be used for the purpose of
collecting information on annual percentage rates, annual fees, per-
transaction charges, late payment fees, overlimit fees and grace periods
governed by the terms of each type of credit card offered by such issuer
to natural persons residing in this state. Issuers shall return the
forms to the banking department no later than one hundred fifty days
after the effective date of this section, and annually thereafter, but
no later than April first of each year, commencing in nineteen hundred
ninety-five. The superintendent of banks shall publish the information
obtained from such forms and make it available to New York residents
upon request, commencing not later than October first, nineteen hundred
ninety-four, and annually thereafter but not later than July first of
each year.
3.] The superintendent of banks is authorized to adopt such rules and
regulations as consistent with the provisions of this section.
[4] 3. For the purposes of this section:
(a) "Credit card" means any card issued pursuant to an agreement which
allows the holder of the card to obtain goods and services on the credit
of the issuer; and
(b) "Issuer" means any bank, trust company, savings bank, savings and
loan association, or branch of a foreign banking corporation the depos-
its 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 or the United States, which issues
credit cards to natural persons residing in this state.
[5] 4. The authority of the superintendent of banks pursuant to
sections thirty-nine and forty-four of the banking law shall extend to
violations of this section by any issuer.
S 20. This act shall take effect immediately; provided that section
nineteen of this act shall take effect on the thirtieth day after it
shall have become a law.
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