S T A T E O F N E W Y O R K
________________________________________________________________________
171
2009-2010 Regular Sessions
I N A S S E M B L Y
(PREFILED)
January 7, 2009
___________
Introduced by M. of A. JEFFRIES, COLTON, PERRY, WRIGHT -- Multi-Spon-
sored by -- M. of A. HYER-SPENCER -- read once and referred to the
Committee on Banks
AN ACT to amend the banking law, in relation to maturity notices
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 389 of the banking law, as amended by chapter 341
of the laws of 1939, is amended to read as follows:
S 389. Matured shares; conversion into shares of another class upon
notice. 1. Whenever the dues and dividends credited to instalment or
accumulative prepaid shares shall equal their matured value, notice of
such maturity shall be given to the holders thereof and the payment of
dues thereon shall cease. Such notice shall be mailed to such share-
holder at his last known address as it appears on the books of the asso-
ciation and, in the discretion of the board of directors, may contain a
further provision that if such shareholder fails to accept payment for
such shares, convert such shares into shares of another class or file an
application to withdraw such shares within sixty days after the mailing
of such notice, the same will be converted into another class of shares
specified in such notice. If such additional provision has been
included in such notice and the shareholder fails or neglects to accept
payment for such shares, convert such shares into shares of another
class or file an application to withdraw such shares, within such sixty
days, the board of directors may, by resolution, convert such shares
into the class of shares specified in such notice. For the purpose of
maturing such shares, a special dividend may be credited between regular
dividend dates at the same rate at which the last regular dividend was
credited. When shares pledged to the association mature, the value of
such shares shall, to the extent of the obligation for which they are
pledged, be applied in payment thereof. Any remaining balance of such
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00325-01-9
A. 171 2
shares shall be treated as matured shares and any other collateral not
required to satisfy such obligation shall be returned.
2. SUCH NOTICE SHALL BE ITEMIZED TO ENUMERATE THE DOLLAR AMOUNT IN THE
ACCOUNT AT MATURITY, THE RATE OF INTEREST BEING EARNED AND THE NAME OR
NAMES OF ANY AND ALL ACCOUNT HOLDERS AND BENEFICIARIES OF SUCH ACCOUNT.
S 2. The banking law is amended by adding a new section 245-a to read
as follows:
S 245-A. MATURED SHARES; CONVERSION INTO SHARES OF ANOTHER CLASS UPON
NOTICE. 1. WHENEVER THE DUES AND DIVIDENDS CREDITED TO INSTALMENT OR
ACCUMULATIVE PREPAID SHARES SHALL EQUAL THEIR MATURED VALUE, NOTICE OF
SUCH MATURITY SHALL BE GIVEN TO THE HOLDERS THEREOF AND THE PAYMENT OF
DUES THEREON SHALL CEASE. SUCH NOTICE SHALL BE MAILED TO SUCH SHARE-
HOLDER AT HIS LAST KNOWN ADDRESS AS IT APPEARS ON THE BOOKS OF THE ASSO-
CIATION AND, IN THE DISCRETION OF THE BOARD OF DIRECTORS, MAY CONTAIN A
FURTHER PROVISION THAT IF SUCH SHAREHOLDER FAILS TO ACCEPT PAYMENT FOR
SUCH SHARES, CONVERT SUCH SHARES INTO SHARES OF ANOTHER CLASS OR FILE AN
APPLICATION TO WITHDRAW SUCH SHARES WITHIN SIXTY DAYS AFTER THE MAILING
OF SUCH NOTICE, THE SAME WILL BE CONVERTED INTO ANOTHER CLASS OF SHARES
SPECIFIED IN SUCH NOTICE. IF SUCH ADDITIONAL PROVISION HAS BEEN
INCLUDED IN SUCH NOTICE AND THE SHAREHOLDER FAILS OR NEGLECTS TO ACCEPT
PAYMENT FOR SUCH SHARES, CONVERT SUCH SHARES INTO SHARES OF ANOTHER
CLASS OR FILE AN APPLICATION TO WITHDRAW SUCH SHARES, WITHIN SUCH SIXTY
DAYS, THE BOARD OF DIRECTORS MAY, BY RESOLUTION, CONVERT SUCH SHARES
INTO THE CLASS OF SHARES SPECIFIED IN SUCH NOTICE. FOR THE PURPOSE OF
MATURING SUCH SHARES, A SPECIAL DIVIDEND MAY BE CREDITED BETWEEN REGULAR
DIVIDEND DATES AT THE SAME RATE AT WHICH THE LAST REGULAR DIVIDEND WAS
CREDITED. WHEN SHARES PLEDGED TO THE BANK MATURE, THE VALUE OF SUCH
SHARES SHALL, TO THE EXTENT OF THE OBLIGATION FOR WHICH THEY ARE
PLEDGED, BE APPLIED IN PAYMENT THEREOF. ANY REMAINING BALANCE OF SUCH
SHARES SHALL BE TREATED AS MATURED SHARES AND ANY OTHER COLLATERAL NOT
REQUIRED TO SATISFY SUCH OBLIGATION SHALL BE RETURNED.
2. SUCH NOTICE SHALL BE ITEMIZED TO ENUMERATE THE DOLLAR AMOUNT IN THE
ACCOUNT AT MATURITY, THE RATE OF INTEREST BEING EARNED AND THE NAME OR
NAMES OF ANY AND ALL ACCOUNT HOLDERS AND BENEFICIARIES OF SUCH ACCOUNT.
S 3. The banking law is amended by adding a new section 460-a to read
as follows:
S 460-A. MATURED SHARES; CONVERSION INTO SHARES OF ANOTHER CLASS UPON
NOTICE. 1. WHENEVER THE DUES AND DIVIDENDS CREDITED TO INSTALMENT OR
ACCUMULATIVE PREPAID SHARES SHALL EQUAL THEIR MATURED VALUE, NOTICE OF
SUCH MATURITY SHALL BE GIVEN TO THE HOLDERS THEREOF AND THE PAYMENT OF
DUES THEREON SHALL CEASE. SUCH NOTICE SHALL BE MAILED TO SUCH SHARE-
HOLDER AT HIS LAST KNOWN ADDRESS AS IT APPEARS ON THE BOOKS OF THE ASSO-
CIATION AND, IN THE DISCRETION OF THE BOARD OF DIRECTORS, MAY CONTAIN A
FURTHER PROVISION THAT IF SUCH SHAREHOLDER FAILS TO ACCEPT PAYMENT FOR
SUCH SHARES, CONVERT SUCH SHARES INTO SHARES OF ANOTHER CLASS OR FILE AN
APPLICATION TO WITHDRAW SUCH SHARES WITHIN SIXTY DAYS AFTER THE MAILING
OF SUCH NOTICE, THE SAME WILL BE CONVERTED INTO ANOTHER CLASS OF SHARES
SPECIFIED IN SUCH NOTICE. IF SUCH ADDITIONAL PROVISION HAS BEEN
INCLUDED IN SUCH NOTICE AND THE SHAREHOLDER FAILS OR NEGLECTS TO ACCEPT
PAYMENT FOR SUCH SHARES, CONVERT SUCH SHARES INTO SHARES OF ANOTHER
CLASS OR FILE AN APPLICATION TO WITHDRAW SUCH SHARES, WITHIN SUCH SIXTY
DAYS, THE BOARD OF DIRECTORS MAY, BY RESOLUTION, CONVERT SUCH SHARES
INTO THE CLASS OF SHARES SPECIFIED IN SUCH NOTICE. FOR THE PURPOSE OF
MATURING SUCH SHARES, A SPECIAL DIVIDEND MAY BE CREDITED BETWEEN REGULAR
DIVIDEND DATES AT THE SAME RATE AT WHICH THE LAST REGULAR DIVIDEND WAS
CREDITED. WHEN SHARES PLEDGED TO THE CREDIT UNION MATURE, THE VALUE OF
A. 171 3
SUCH SHARES SHALL, TO THE EXTENT OF THE OBLIGATION FOR WHICH THEY ARE
PLEDGED, BE APPLIED IN PAYMENT THEREOF. ANY REMAINING BALANCE OF SUCH
SHARES SHALL BE TREATED AS MATURED SHARES AND ANY OTHER COLLATERAL NOT
REQUIRED TO SATISFY SUCH OBLIGATION SHALL BE RETURNED.
2. SUCH NOTICE SHALL BE ITEMIZED TO ENUMERATE THE DOLLAR AMOUNT IN THE
ACCOUNT AT MATURITY, THE RATE OF INTEREST BEING EARNED AND THE NAME OR
NAMES OF ANY AND ALL ACCOUNT HOLDERS AND BENEFICIARIES OF SUCH ACCOUNT.
S 4. This act shall take effect immediately.