BILL NUMBER:  S4905

 TITLE OF BILL :

An act to amend the banking law, in relation to the powers of banks to
engage in certain financial transactions


 PURPOSE :

This bill would reduce unnecessary regulatory burdens and restrictions
on both the Banking Department and banking institutions in regard to
the ability of banks and trust companies to issue capital notes or
debentures

 SUMMARY :

Section 96(4) of the Banking Law is amended to:

- allow a duly constituted committee of a bank's board of directors to
issue capital notes or debentures;

- remove the requirement for approval of the Superintendent of Banks
before capital notes or debentures may be issued;

- remove the requirement for approval of the Superintendent of Banks
              

in order to receive mortgages or other property interests in payment
for such notes and debentures; and

- remove the general requirement that assigned and conveyed mortgages
and other property interests received in payment be registered or
recorded.

 JUSTIFICATION :

This bill would reduce unnecessary regulatory burdens and restrictions
on both the Banking Department and banking institutions in regard to
the ability of banks and trust companies to issue capital notes or
debentures

The current provisions, which have been in place since at least 1937,
requires the approval of the Superintendent of Banks prior to any
issuance of capital notes or debentures. In the Banking Department's
experience, such review and oversight has proven unnecessary. Instead,
the requirement simply imposes additional costs and paperwork on both
the Banking Department and the banking industry.This bill would remove
the requirement for the Superintendent's prior approval of such
actions.

The bill provides greater flexibility in the issuance of capital notes
and debentures. The existing restrictions have provided little real
benefit or protections. This bill updates the law and streamlines and
simplifies the process for issuing capital notes and debentures.

 FISCAL IMPACT :

None.

 LEGISLATIVE HISTORY :

Bill S.2857 of 2005-06: Passed by the Senate in 2005 and 2006.

 EFFECTIVE DATE :
Immediately.