senate Bill S4350A

Signed by Governor

Makes technical corrections to the banking law

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Bill Status


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

  • 21 / Mar / 2013
    • REFERRED TO BANKS
  • 23 / Apr / 2013
    • 1ST REPORT CAL.430
  • 24 / Apr / 2013
    • 2ND REPORT CAL.
  • 29 / Apr / 2013
    • ADVANCED TO THIRD READING
  • 30 / Apr / 2013
    • PASSED SENATE
  • 30 / Apr / 2013
    • DELIVERED TO ASSEMBLY
  • 30 / Apr / 2013
    • REFERRED TO BANKS
  • 08 / Jan / 2014
    • DIED IN ASSEMBLY
  • 08 / Jan / 2014
    • RETURNED TO SENATE
  • 08 / Jan / 2014
    • REFERRED TO BANKS
  • 07 / May / 2014
    • AMEND AND RECOMMIT TO BANKS
  • 07 / May / 2014
    • PRINT NUMBER 4350A
  • 21 / May / 2014
    • 1ST REPORT CAL.910
  • 28 / May / 2014
    • 2ND REPORT CAL.
  • 29 / May / 2014
    • ADVANCED TO THIRD READING
  • 11 / Jun / 2014
    • PASSED SENATE
  • 11 / Jun / 2014
    • DELIVERED TO ASSEMBLY
  • 11 / Jun / 2014
    • REFERRED TO BANKS
  • 16 / Jun / 2014
    • SUBSTITUTED FOR A9851
  • 16 / Jun / 2014
    • ORDERED TO THIRD READING RULES CAL.225
  • 16 / Jun / 2014
    • PASSED ASSEMBLY
  • 16 / Jun / 2014
    • RETURNED TO SENATE
  • 01 / Aug / 2014
    • DELIVERED TO GOVERNOR
  • 11 / Aug / 2014
    • SIGNED CHAP.291

Summary

Makes technical corrections to the banking law.

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Bill Details

See Assembly Version of this Bill:
A9851
Versions:
S4350
S4350A
Legislative Cycle:
2013-2014
Law Section:
Banking Law
Laws Affected:
Amd Bank L, generally

Sponsor Memo

BILL NUMBER:S4350A

TITLE OF BILL: An act to amend the banking law, in relation to making
certain technical corrections thereto

PURPOSE:

To make technical corrections and fix certain inconsistencies in the
Banking Law resulting from the elimination of the Banking Board.

SUMMARY OF PROVISIONS:

This bill makes technical amendments to several sections of the
Banking Law.

Sections 1, 3 and 13 of the bill delete duplicative references to the
Superintendent of Financial Services - these sections had previously
referred to both the Superintendent and the Banking Board.

Sections 6 and 9 of the bill delete references to a 3/5ths vote of the
Superintendent - these sections had previously referred to a 3/5ths
vote of the Banking Board.

Sections 2, 4, 5, 7, 8, 10, 11, 12 and 14 of the bill change or delete
references to "it" or "its," which had previously referred to the
Board but now incorrectly refer to the Superintendent.

JUSTIFICATION:

This bill makes several technical amendments to the Banking Law. These
amendments will clean up and clarify some inconsistencies which arose
as a result of the elimination of the State Banking Board.

As part of the 2011 State Budget, legislation was enacted to merge the
Banking Department and the Insurance Department into a new agency, the
Department of Financial Services. This legislation also repealed the
existence of the State Banking Board, which had consisted of the
Superintendent of Banks and 16 appointed members. The Board had been
responsible for chartering banking institutions, licensing foreign
bank branches and agencies, approving bank mergers and acquisitions,
and promulgating regulations governing many bank activities. In
accordance with the merger legislation, these powers became vested
solely with the Superintendent of Financial Services.

The 2011 law repealed the authorization for the Banking Board and made
conforming amendments in some sections of the Banking Law. For many
other sections, the law directed the Legislative Bill Drafting
Commission to simply replace certain references in State law. For
example, references to the Superintendent of Banks were to be changed
to the Superintendent of Financial Services. Also, because the bill
eliminated the Banking Board, references to the Banking Board were to
be changed to the Superintendent.

However, these changes resulted in some duplication and
inconsistencies in the law. For example, a few sections of law which
previously referred to both the Superintendent and the Banking Board
now refer to the Superintendent and the Superintendent. A few sections


which referred to a 3/5ths vote of the Board now refer to a 3/5ths
vote of the Superintendent. There are also several uses of the word
"it" or "its" which had been used in relation to the Board, but which
are now used incorrectly in relation to the Superintendent.

This bill would make necessary technical corrections to the Banking
Law to address these inconsistencies.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately.

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

                                 4350--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             March 21, 2013
                               ___________

Introduced  by  Sen.  FARLEY -- read twice and ordered printed, and when
  printed to be committed to the Committee on Banks  --  recommitted  to
  the  Committee  on  Banks  in accordance with Senate Rule 6, sec. 8 --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted to said committee

AN ACT to amend the banking law, in relation to making certain technical
  corrections thereto

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

  Section 1. Section 6-i of the banking law, as added by chapter 571  of
the  laws  of  1986  and  as further amended by section 104 of part A of
chapter 62 of the laws of 2011, is amended to read as follows:
  S 6-i. Mortgage loans. No person,  partnership,  corporation,  banking
organization,  exempt  organization  as  defined in section five hundred
ninety of this chapter or other entity shall make  a  mortgage  loan  as
defined  in  section  five  hundred  ninety  of  this  chapter except in
conformity with the requirements of article twelve-D and  in  compliance
with such rules and regulations as may be promulgated by the superinten-
dent  of  financial services [or prescribed by the superintendent] under
this section. Nothing in this section shall be  construed  to  limit  or
otherwise modify any otherwise applicable requirement of state or feder-
al law.
  S  2. Subdivision 3 of section 7 of the banking law, as added by chap-
ter 184 of the laws of 1978 and as further amended  by  section  104  of
part A of chapter 62 of the laws of 2011, is amended to read as follows:
  3.  The superintendent of financial services may promulgate such regu-
lations as [it] HE OR SHE deems necessary and proper  to  implement  and
define the provisions of this section.
  S  3.  Subdivision  3 of section 9-f of the banking law, as amended by
chapter 571 of the laws of 1986 and as further amended by section 104 of
part A of chapter 62 of the laws of 2011, is amended to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09332-03-4

S. 4350--A                          2

  3. For the purposes of this section, the term (a) "prudent loan" means
a loan upon the security of real property which is prudent by acceptable
banking standards and is in compliance with all  of  the  provisions  of
this  chapter[,]  AND  RULES  AND  regulations  of the superintendent of
financial  services  [and rules of the superintendent]; and (b) notwith-
standing any other provision of this chapter or law to the contrary, the
term banking institution when  used  in  this  section  shall  mean  and
include  all  banks,  trust  companies,  savings banks, savings and loan
associations, credit unions, mortgage bankers, exempt  organizations  as
defined  in  article twelve-D of this chapter and foreign banking corpo-
rations whether incorporated, chartered, organized or licensed under the
laws of this state or any other state or the United States.
  S 4. Subdivision 2 of section 14-c of the banking  law,  as  added  by
chapter  19 of the laws of 1978 and as further amended by section 104 of
part A of chapter 62 of the laws of 2011, is amended to read as follows:
  2. The superintendent of financial services may alter or  amend  rules
and  regulations  or promulgate additional rules and regulations as [it]
HE OR SHE deems necessary and proper to  effectuate  the  provisions  of
subdivision one.
  S  5.  Subdivision 10 of section 100-c of the banking law, as added by
chapter 239 of the laws of 1986 and as further amended by section 104 of
part A of chapter 62 of the laws of 2011, is amended to read as follows:
  10. The superintendent of financial  services  shall  promulgate  such
regulations  and rules as [it] HE OR SHE considers appropriate to govern
the administration of common  trust  funds  and  short  term  investment
common trust funds.
  S  6.  Subdivision  4 of section 103 of the banking law, as amended by
chapter 313 of the laws of 2001, the opening  paragraph  and  the  fifth
undesignated  paragraph  as  further amended by section 104 of part A of
chapter 62 of the laws of 2011, is amended to read as follows:
  4. Make a loan upon the security of real estate within or without this
state which does not comply with any such rules or  regulations  as  the
superintendent of financial services may prescribe.
  No  loan shall be made under the provisions of this subdivision except
upon the written and signed certificate of an appraiser appointed pursu-
ant to policies established by the board of directors, certifying to the
value of the premises according to his judgment.
  The provisions of this subdivision shall not constitute the  authority
to make a loan to a natural person upon the security of a mortgage which
is not a first lien.
  Where the collateral for any loan consists partly of real estate secu-
rity  and partly of other security, including a guarantee or endorsement
by or an obligation or commitment of a person other than  the  borrower,
only  the  amount  by  which the loan exceeds the value as collateral of
such other security, as found in good faith by a duly authorized officer
of such bank or trust company, at the time of the making of the loan  or
commitment  therefor,  shall  be  considered a loan upon the security of
real estate, provided, that in no event shall a  loan  be  considered  a
loan  upon the security of real estate (i) where the principal amount of
any real estate security taken therefor is less than fifteen per  centum
of  the amount of such loan or (ii) where the loan is payable in monthly
or quarterly installments over a period not to exceed one hundred  twen-
ty-one months and does not exceed twenty thousand dollars and is for the
purpose  of  paying the cost of any repairs, alterations or improvements
upon, or in connection with, or, as the  superintendent  may  authorize,
the  equipping  of existing structures or the building of new structures

S. 4350--A                          3

by the owners thereof or by the lessees under a lease expiring not  less
than  six  months after the maturity of the loan or (iii) where the loan
is fully guaranteed or insured by the United States or a state,  or  any
department,  agency  or  instrumentality thereof, and for the payment of
which loan the full faith and credit of the United  States  or  of  such
state  is  pledged  and  if under the terms of the guaranty or insurance
agreement the bank or trust company will  be  assured  of  repayment  in
accordance  with  the terms of the loan or (iv) where there is a binding
and valid commitment or agreement by a financially  responsible  lender,
purchaser  or  other  financially responsible party either directly with
the lending bank or trust company or which is for the benefit of, or has
been assigned to, the lending bank or  trust  company  and  pursuant  to
which  commitment,  agreement  or  assignment,  the lender, purchaser or
other party is required to advance to the lending bank or trust  company
within  thirty  months from the date of such commitment or agreement the
full amount of the loan to be made by the lending bank or trust  company
upon the security of real estate improved by a building or buildings, or
to   be   improved  by  a  building  or  buildings  in  the  process  of
construction, the major portion of which building is  used,  or  in  the
case  of  a  building under construction is to be used, for residential,
business, manufacturing or agricultural purposes, and where pursuant  to
the  terms  and  provisions of such commitment or agreement such advance
shall be made prior to or upon the maturity of the loan by  the  lending
bank or trust company.
  Real  estate  security  for purposes of this section shall not include
(a) an assignment of rents under a lease, (b) a mortgage or  other  lien
upon  a  leasehold, (c) a mortgage or other lien upon leasehold, royalty
or other rights  in  oil,  gas,  minerals,  standing  timber,  or  other
products  of  land, (d) a mortgage or other lien made or given upon real
estate and taken  as  collateral  security  for  loans  to  a  borrower,
provided,  that  at  the  time  of  the making of the loan or commitment
therefor, repayment thereof is reasonably expected to be made out of the
operations of such borrower or of the mortgagor, or (e)  such  mortgages
or  other  liens  on  property  as may be specifically exempted from the
limitations and restrictions of this subdivision by  the  superintendent
of  financial  services by general or specific regulations [adopted by a
three-fifths vote of all its members]. Nothing in this  paragraph  shall
be construed to imply that security of a kind not mentioned herein is to
be deemed real estate security.
  The  limitations  and restrictions contained in this subdivision shall
not prevent the acceptance of any real estate  security  to  secure  the
payment  of  a  debt previously contracted in good faith. Every mortgage
and every assignment of a mortgage taken or held by such bank  or  trust
company  shall  immediately be recorded or registered in its name in the
office of the clerk or the proper recording officer  of  the  county  in
which  the real estate described in the mortgage is located, except that
where the underlying real estate is located outside  the  state  of  New
York  such  mortgage  or assignment may be recorded or registered in the
name of a duly authorized nominee, and except that if such  mortgage  or
assignment  of  mortgage or of an interest therein shall be taken from a
corporation organized under the banking law or all of the capital  stock
of  which  is owned by not less than twenty savings banks of this state,
the bank or trust company may hold such  mortgage  or  assignment  unre-
corded  unless the superintendent shall direct the bank or trust company
to record the same. The recording or registering of assignments of mort-
gages shall not be  required  when  not  less  than  ten  mortgages  are

S. 4350--A                          4

assigned  as  security  for  a  loan,  the term of which does not exceed
twelve months.
  Any  bank  or  trust company may renew from time to time any loan upon
the security of real estate lawfully made by it prior to June thirtieth,
nineteen hundred thirty-seven.
  None of the prohibitions and restrictions contained in  this  subdivi-
sion shall apply to any corporation all of the capital stock of which is
owned by not less than twenty savings banks of this state.
  S 7. Paragraph (d) of subdivision 8 of section 108 of the banking law,
as  added by chapter 344 of the laws of 1974, such subdivision as renum-
bered by chapter 512 of the laws of 1977,  and  as  further  amended  by
section  104  of part A of chapter 62 of the laws of 2011, is amended to
read as follows:
  (d) The superintendent of financial services may promulgate such regu-
lations as [it] HE OR SHE deems necessary and proper  to  implement  and
define  the provisions of this subdivision. The superintendent of finan-
cial services may prescribe maximum charges from time to time,  but  not
more  often than once in any six month period, and shall provide reason-
able notice to the public of any change in such maximum charges, of  the
effective  date  of such change, which shall not be less than seven days
following the adoption of such change by the superintendent of financial
services, and of any rule or regulation adopted pursuant to this  subdi-
vision.
  S 8.  Section 111 of the banking law, as amended by chapter 360 of the
laws  of 1984 and as further amended by section 104 of part A of chapter
62 of the laws of 2011, is amended to read as follows:
  S 111. Profits; credits to surplus fund and to undivided  profits.  In
any  case  where  the combined capital stock, surplus fund and undivided
profits of a bank or trust company do not equal ten per  centum  of  its
net deposit liabilities, the superintendent of financial services may in
[its]  HIS  OR  HER discretion require such bank or trust company at the
close of each accounting period  to  credit  its  surplus  fund  with  a
portion of its net profits for such period, not to exceed ten per centum
thereof,  until  its  combined capital stock, surplus fund and undivided
profits equal ten per centum of its net  deposit  liabilities.  For  the
purposes  of this section, the term "net deposit liabilities" shall mean
total deposits including all amounts due to national banks, banks, bank-
ers, trust companies and savings banks, the amounts due on certified and
cashier's checks, and for unpaid dividends less the amounts of  balances
due  from  national  banks, banks, bankers, and trust companies and cash
items in process of collection payable immediately upon presentation  in
the United States.
  S  9.    Paragraph  (b) of subdivision 3 of section 130 of the banking
law, as amended by chapter 217 of  the  laws  of  2010  and  as  further
amended  by  section 104 of part A of chapter 62 of the laws of 2011, is
amended to read as follows:
  (b) The superintendent of financial services 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 executive officer of a bank or trust company to
be an executive officer, director or trustee or both an executive  offi-
cer  and director or a trustee 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, bank holding company, or foreign  banking  corpo-

S. 4350--A                          5

ration maintaining a branch in this state. Such permission may be grant-
ed  only  if in the judgment of the superintendent of financial services
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
superintendent of financial services shall have the power to revoke such
permission [by a like vote] whenever [it] HE OR SHE finds, after reason-
able  notice  and  an  opportunity to be heard, that the public interest
requires such revocation.
  S 10.  Subdivision 4 of section 234-b of the banking law, as added  by
chapter 883 of the laws of 1980 and as further amended by section 104 of
part A of chapter 62 of the laws of 2011, is amended to read as follows:
  4.  The  superintendent of financial services is authorized to promul-
gate such regulations as [it] HE OR SHE may deem necessary or proper  to
implement  the provisions of this section and the proper exercise of the
powers granted by this section.
  S 11.  Section 380-h of the banking law, as added by  chapter  883  of
the laws of 1980, subdivisions 1 and 4 as further amended by section 104
of  part  A  of  chapter  62  of the laws of 2011, is amended to read as
follows:
  S 380-h. Trust powers. 1. The superintendent of financial services  is
authorized and empowered to grant permission to a savings and loan asso-
ciation  to  exercise any or all of the powers specified in sections one
hundred, one hundred-a, one hundred-b and one hundred-c of this chapter.
In passing upon applications for permission to exercise any such powers,
the superintendent of financial services may take into consideration the
amount of surplus of the  applying  association,  whether  or  not  such
surplus  is sufficient under the circumstances of the case, the needs of
the community to be served and any other facts  and  circumstances  that
seem [to it] proper, and may grant or refuse it permission accordingly.
  2. Whenever the laws of this state require a trust company acting in a
fiduciary  capacity to deposit securities with the state authorities for
the protection of private or court trusts, a savings  and  loan  associ-
ation, so acting, is empowered to make similar deposits of securities.
  4.  The  superintendent of financial services is authorized to promul-
gate such regulations as [it] HE OR SHE may deem necessary or proper  to
implement  the provisions of this section and the proper exercise of the
powers granted by this section.
  S 12.  Section 455 of the banking law, as added by chapter 608 of  the
laws  of 1996, subdivisions 1 and 3 as further amended by section 104 of
part A of chapter 62 of the laws of 2011, is amended to read as follows:
  S 455. Trust powers. 1. The superintendent of  financial  services  is
authorized  and empowered to grant permission to a credit union to exer-
cise any or all of the powers specified in  sections  one  hundred,  one
hundred-a,  one  hundred-b and one hundred-c of this chapter. In passing
upon applications for permission to exercise any such powers, the super-
intendent of financial services may take into consideration  the  amount
of net worth of the applying credit union, whether or not such net worth
is  sufficient  under  the  circumstances  of the case, the needs of the
community to be served and any other facts and circumstances  that  seem
[to it] proper, and may grant or refuse it permission accordingly.
  2. Whenever the laws of this state require a trust company acting in a
fiduciary  capacity to deposit securities with the state authorities for
the protection of private or court trusts, a credit union, so acting, is
required and empowered to make similar deposits of securities.
  3. The superintendent of financial services is authorized  to  promul-
gate  such regulations as [it] HE OR SHE may deem necessary or proper to

S. 4350--A                          6

implement the provisions of this section and the proper exercise of  the
powers granted by this section.
  S  13.  Paragraph  (a)  of subdivision 1 of section 595 of the banking
law, as amended by chapter 571 of  the  laws  of  1986  and  as  further
amended  by  section 104 of part A of chapter 62 of the laws of 2011, is
amended to read as follows:
  (a) Through a course  of  conduct,  the  licensee  or  registrant  has
violated  any  provisions  of  this  article,  or any rule or regulation
promulgated by the superintendent of financial services[, or any rule or
regulation prescribed  by  the  superintendent]  under  and  within  the
authority  of  this  article  or of any other law, rule or regulation of
this state or the federal government;
  S 14.  Subdivision 7 of section 600 of the banking law, as amended  by
chapter 315 of the laws of 2008 and as further amended by section 104 of
part A of chapter 62 of the laws of 2011, is amended to read as follows:
  (7)  One  or more subsidiaries or affiliates of a bank, trust company,
savings bank or savings and loan association,  which  are  not  a  bank,
trust  company,  savings  bank or savings and loan association, as those
terms are defined in section two of this chapter, with the  bank,  trust
company,  savings  bank or savings and loan association of which it is a
subsidiary or affiliate, as the  superintendent  of  financial  services
shall  approve and enter on its records; provided, however, that nothing
in this subdivision shall be deemed to authorize a bank, trust  company,
savings  bank  or  savings and loan association to exercise any power or
engage in any activity that it may not exercise or engage in pursuant to
this chapter. The superintendent of financial  services  may  promulgate
such  regulations as [it] HE OR SHE deems necessary and proper to imple-
ment and define the provisions of  this  subdivision.  Nothing  in  this
subdivision  shall  alter, affect or impair any regulation or resolution
adopted, or that may be adopted,  by  the  superintendent  of  financial
services,  pursuant to section twelve-a or former sections fourteen-g or
fourteen-h of this chapter.
  S 15.  This act shall take effect immediately.

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