senate Bill S3650

Relates to the imposition of fees for investigations and applications for banking institutions

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 28 / Feb / 2011
    • REFERRED TO BANKS
  • 09 / Mar / 2011
    • REPORTED AND COMMITTED TO FINANCE
  • 04 / Jan / 2012
    • REFERRED TO BANKS

Summary

Relates to the imposition of fees for investigations and applications for banking institutions.

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Bill Details

Versions:
S3650
Legislative Cycle:
2011-2012
Current Committee:
Senate Banks
Law Section:
Banking Law
Laws Affected:
Amd ยงยง18-a & 34, Bank L
Versions Introduced in 2009-2010 Legislative Cycle:
S3704

Votes

17
1
17
Aye
1
Nay
1
aye with reservations
0
absent
0
excused
0
abstained
show Banks committee vote details

Sponsor Memo

BILL NUMBER:S3650

TITLE OF BILL:
An act
to amend the banking law, in relation to the imposition of certain fees

PURPOSE:
To help encourage smaller financial institutions to consider
converting to a state charter by establishing a lower application fee.

SUMMARY OF PROVISIONS:
Section 18-a of the Banking Law is amended to establish a lower
application fee for smaller banks, thrifts and credit unions which
are converting from a federal charter to a state charter.

Section 34 of the Banking Law is amended to provide that the
Superintendent of Banks shall set the fee for service of process
involving foreign banks, provided however that such fee shall not
exceed the fee level established by the Legislature for service of
process upon the Department of State pursuant to section 104-A(c) of
the Business Corporation Law. The bill also provides that no fee
shall be collected for process served on behalf of a municipality.

JUSTIFICATION:
Section 18-a of the Banking Law was added in 2005 to set new fee
levels for applications by banking institutions and financial service
companies. These fee levels are intended to better reflect the
Department's actual costs to investigate and process an application.

As a way to promote the state charter, this bill seeks to establish a
lower application fee level for smaller banking institutions which
may be considering a conversion from a federal charter to a state
charter. Instead of the standard application fee of $12,500, this
bill would set a $1,000 application fee for banking institutions
which have less than $100 million in assets. Smaller entities are the
ones which are most likely to factor the level of application costs
(including the application fee itself) into their consideration of
whether to change charters. Lowering the Department's application fee
will help address this concern and eliminate one possible obstacle to
a conversion.

It should be noted that both the Office of the Comptroller of the
Currency (OCC), which regulates national banks, and the Office of
Thrift Supervision, which regulates federal savings banks and savings
and loan associations, charge lower application fees for an
institution which is converting to a federal charter than for a new
institution. This bill
would establish a similar distinction in State law between these
different types of applications.

Maintaining and increasing the number of state charters is important
for preserving the State's role in regulating and overseeing the
financial services industry. New institutions will also help support
the Department's budget through the assessments they pay, thereby
helping to spread the total regulatory costs among more institutions.
Section 200 of the Banking Law currently requires foreign banking


corporations to appoint the Superintendent of Banks as their true and
lawful attorney upon whom all process in any action or proceeding
against them may be served. For each service of process, Section 34
of the Banking Law directs the Superintendent to collect a two dollar
fee. This fee level has remained unchanged since at least 1892, and
does not reflect the Banking Department's costs to process this
paperwork.

This bill authorizes the Superintendent of Banks to establish a
service of process fee which better reflects the Department's costs.
However, the fee may not exceed the fee level authorized by the State
Legislature under Section 104-A of the Business corporation Law for
service of process upon the Secretary of State (this fee is currently
$40). It is appropriate to give the superintendent of Banks the
flexibility to set an appropriate fee level, but not to exceed a
level which the State Legislature has determined is an appropriate
fee level for the Department of State to charge for service of
process. Also, the Business Corporation Law currently exempts
municipalities from having to pay a service of process fee, and this
bill would enact a similar exemption in the Banking Law.

LEGISLATIVE HISTORY:
S.4783 of 2008 Died in Committee
S.4783 of 2007 Reported to Senate Calendar
S.7528 of 2006 Reported to Senate Calendar
S.3704 of 2010 Referred to Banks

FISCAL IMPLICATIONS:
None to the State. The Banking Department is fully funded by the
regulated financial services industry. Each year, the Department
receives varying amounts of revenue from the examination and
application fees it charges, and then raises the remaining balance of
its budget through assessments charged to the industry. Regardless of
whether this bill results in slightly higher or slightly lower fee
revenues, the Department's total budget remains unchanged. All that
will vary is the remaining amount which the Department needs to raise
through its assessments.

EFFECTIVE DATE:
Immediately.

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

                                  3650

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            February 28, 2011
                               ___________

Introduced  by  Sen.  SMITH  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Banks

AN ACT to amend the banking  law,  in  relation  to  the  imposition  of
  certain fees

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

  Section 1. Subdivision 6 of section 18-a of the banking law is  renum-
bered subdivision 7 and a new subdivision 6 is added to read as follows:
  6. FOR ANY FEDERAL BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR
CREDIT  UNION  WHICH HAS LESS THAN ONE HUNDRED MILLION DOLLARS IN ASSETS
AND WHICH IS MAKING AN APPLICATION TO CONVERT INTO A STATE BANK, SAVINGS
BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT  UNION,  THE  INVESTIGATION
FEE FOR ANY SUCH APPLICATION SHALL BE ONE THOUSAND DOLLARS.
  S  2.  Section 34 of the banking law, as amended by chapter 310 of the
laws of 1962, is amended to read as follows:
  S 34. Superintendent as attorney to accept service of process.   When-
ever pursuant to any provision of this chapter, the superintendent shall
have  been duly appointed attorney to receive service of process for any
individual, partnership, unincorporated association or corporation, such
service shall be made by personally delivering duplicate copies  of  the
process to and leaving them with the superintendent or any deputy super-
intendent.  Service of process so made shall be deemed to have been made
within the territorial jurisdiction of any  court  in  this  state.  The
superintendent or deputy superintendent shall forthwith forward by mail,
postage  prepaid,  a  copy  of  every  process served upon him OR HER in
accordance with this section, directed to the person last designated  by
such  individual, partnership, unincorporated association or corporation
in accordance with the provisions of this chapter to receive such  proc-
ess  on  his  OR HER or its behalf. For each service of process upon the
superintendent or a deputy, he OR SHE shall  collect  [the  sum  of  two
dollars]  A  FEE  AS  SET  BY THE SUPERINTENDENT, PROVIDED THAT SUCH FEE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09854-01-1

S. 3650                             2

SHALL NOT EXCEED THE AMOUNT OF THE SERVICE OF PROCESS FEE  COLLECTED  BY
THE DEPARTMENT OF STATE PURSUANT TO PARAGRAPH (C) OF SECTION ONE HUNDRED
FOUR-A  OF  THE  BUSINESS  CORPORATION  LAW,  which shall be paid by the
plaintiff  or  moving  party at the time of such service, EXCEPT THAT NO
FEE SHALL BE COLLECTED FOR PROCESS SERVED ON BEHALF OF A  COUNTY,  CITY,
TOWN,  VILLAGE  OR  OTHER  POLITICAL SUBDIVISION OF THE STATE.  The term
process when used in this section, includes any writ, summons,  petition
or order whereby any suit, action or proceeding shall be commenced.
  S 3. This act shall take effect immediately.

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