NY State Senate Bill 2009-S4874

Senate Bill S4874

2009-2010 Legislative Session

Prohibits a banking organization from opening a branch or public accommodation office at the premises of a subsidiary which does not engage in banking

download bill text pdf

Archive: Last Bill Status - In Senate Committee Banks Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to banks
Apr 27, 2009	referred to banks

2009-S4874 (ACTIVE) - Details

Current Committee:: Senate Banks
Law Section:: Banking Law
Laws Affected:: Amd §29, Bank L

2009-S4874 (ACTIVE) - Summary

Prohibits a banking organization from opening a branch office or public accommodation office upon the premises or real property of any of its subsidiaries or affiliates when such subsidiary or affiliate engages in commercial activities other than banking.

2009-S4874 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S4874

 TITLE OF BILL :
An act to amend the banking law, in relation to the opening of branch
offices and public accommodation offices by banking organizations


 PURPOSE :
To prohibit a banking organization from opening a branch office on the
premises of an affiliate which engages in commercial activities.

 SUMMARY OF PROVISIONS :
Section 29(1) of the Banking Law is amended to prohibit a banking
organization from opening a branch office or public accommodation
office, including an electronic branch, upon . the premises of an
affiliate of such banking organization which engages in commercial
activities other than real estate ownership or management that do not
constitute banking.

 JUSTIFICATION :
When a banking organization wants to open a branch office, it is
required to make an application to the Superintendent of Banks. This
bill would restrict the opening of a bank branch on the property of an
affiliate which engages in non-banking commercial activities.

Banking and commerce have traditionally been separated in this nation.

This policy is important because it avoids conflicts of interest that
would distort credit decisions. The banking system is predicated on
the impartial allocation of credit. It also guards against a
concentration of economic power and resources.

There are some states (but not New York) which make available an
industrial loan charter, which essentially permits a commercial firm
to operate a fully functional bank. Industrial loan companies (ILC)
are able to operate like a bank, but also have parallel business
activities and operations. However, an ILC would be able to escape
certain regulations under the Bank Holding Company Act, and would also
run contrary to the policy of separating banking from commerce.

The recent growth in the number of ILCs has raised a number of issues
and questions that need to be reviewed and considered in regard to the
longstanding policy of separating banking and commerce. In the
meantime, this bill would prevent ILCs from using an out-of-state
charter to open bank branch offices in commercial facilities in New
York State.

 LEGISLATIVE HISTORY :
S.5622/A.9110 in 2007-08: Referred to Banks

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
The 30th day after it shall have become a law.

2009-S4874 (ACTIVE) - Bill Text download pdf

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

                                  4874

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             April 27, 2009
                               ___________

Introduced  by  Sen.  FOLEY  -- 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  opening  of  branch
  offices and public accommodation offices by banking organizations

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

  Section 1. Section 29 of the banking law, as amended by section  7  of
part O of chapter 59 of the laws of 2006, is amended to read as follows:
  S  29.  Branch  offices;  public  accommodation  offices;  approval or
refusal; certificate; investigation fee.  When  a  banking  organization
seeks  to  open a branch office or public accommodation office, it shall
submit a written application  to  the  superintendent.  The  application
shall contain such information as the superintendent deems necessary. At
the  time of making such application, an investigation fee as prescribed
pursuant to section eighteen-a of this article  shall  be  paid  to  the
superintendent for each branch office or public accommodation office for
which  leave  to  open  is  sought. If the superintendent finds that the
opening of the branch office or public accommodation office is  consist-
ent  with  the  declaration  of  policy set forth in section ten of this
article and that the applicant is in  compliance  with  section  twenty-
eight-b  of  this article AND THAT THE APPLICANT DOES NOT SEEK TO OPEN A
BRANCH OFFICE OR PUBLIC ACCOMMODATION OFFICE, INCLUDING  ANY  ELECTRONIC
BRANCH,  UPON  THE  PREMISES  OR REAL PROPERTY OF ANY OF THE APPLICANT'S
SUBDIVISIONS OR AFFILIATES WHICH ENGAGE IN COMMERCIAL ACTIVITIES,  OTHER
THAN  REAL  ESTATE  OWNERSHIP  OR  MANAGEMENT,  THAT  DO  NOT CONSTITUTE
BANKING, he or she shall issue a certificate in triplicate under his  or
her hand and the official seal of the department authorizing the opening
and  occupation of such branch office or public accommodation office and
specifying the date on or after which and the conditions under which  it
may  be  opened and the place where it shall be located. The superinten-
dent shall cause one of such triplicate certificates to  be  transmitted

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11553-01-9

S. 4874                             2

to  the  applicant,  another to be filed in the office of the department
and the third to be filed in the office of the clerk of  the  county  in
which  the  principal  office of the applicant is located. If the super-
intendent shall not find that the opening of the branch or public accom-
modation  office  is consistent with the declaration of policy set forth
in section ten of this article or that the applicant  is  in  compliance
with  section twenty-eight-b of this article, he or she shall notify the
applicant that the application has been denied.
  No investigation fee for branch applications shall be  collected  from
applicants  if  such  branch  applications are filed in conjunction with
proceedings under section one hundred thirty-six, four  hundred  ten  or
subdivision eight of section six hundred five of this chapter.
  S  2.  This  act shall take effect on the thirtieth day after it shall
have become a law.

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