NY State Senate Bill 2011-S6777

Senate Bill S6777

Signed By Governor

2011-2012 Legislative Session

Relates to branches, trust offices and interstate branching transactions; repealer

download bill text pdf

Archive: Last Bill Status Via A10567 - Signed by Governor

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

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jul 18, 2012	signed chap.180
Jul 06, 2012	delivered to governor
Jun 21, 2012	returned to assembly passed senate 3rd reading cal.898 substituted for s6777b
Jun 21, 2012	substituted by a10567a
Jun 18, 2012	amended on third reading 6777b
Jun 04, 2012	amended on third reading 6777a
May 31, 2012	advanced to third reading
May 30, 2012	2nd report cal.
May 23, 2012	1st report cal.898
Mar 21, 2012	referred to banks

Votes

- Jun 21, 2012 - Floor Vote
  A10567
  
  59
  
  Aye
  
  1
  
  Nay
  
  0
  
  Absent
  
  2
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jun 21, 2012
      
      aye (59)
      
      Adams
      
      Addabbo Jr.
      
      Alesi
      
      Avella
      
      Bonacic
      
      Breslin
      
      Carlucci
      
      DeFrancisco
      
      Diaz
      
      Dilan
      
      Duane
      
      Farley
      
      Flanagan
      
      Fuschillo
      
      Gallivan
      
      Gianaris
      
      Golden
      
      Griffo
      
      Grisanti
      
      Hannon
      
      Hassell-Thompson
      
      Johnson
      
      Kennedy
      
      Klein
      
      Krueger
      
      LaValle
      
      Lanza
      
      Larkin
      
      Libous
      
      Little
      
      Marcellino
      
      Martins
      
      Maziarz
      
      McDonald
      
      Montgomery
      
      Nozzolio
      
      O'Mara
      
      Oppenheimer
      
      Parker
      
      Peralta
      
      Perkins
      
      Ranzenhofer
      
      Ritchie
      
      Rivera
      
      Robach
      
      Saland
      
      Sampson
      
      Savino
      
      Serrano
      
      Seward
      
      Skelos
      
      Smith
      
      Squadron
      
      Stavisky
      
      Stewart-Cousins
      
      Storobin
      
      Valesky
      
      Young
      
      Zeldin
      
      nay (1)
      
      Ball
      
      excused (2)
      
      Espaillat
      
      Huntley
  May 23, 2012 - Banks Committee Vote
  S6777
  
  19
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Banks Committee Vote: May 23, 2012
      
      aye (19)
      
      Avella
      
      Bonacic
      
      Breslin
      
      Carlucci
      
      DeFrancisco
      
      Diaz
      
      Farley
      
      Gallivan
      
      Golden
      
      Griffo
      
      Johnson
      
      Krueger
      
      Marcellino
      
      O'Mara
      
      Ranzenhofer
      
      Rivera
      
      Savino
      
      Smith
      
      Valesky

Bill Amendments

Original

B (Active)

2011-S6777 - Details

See Assembly Version of this Bill:: A10515
Law Section:: Banking Law
Laws Affected:: Rpld §§223-a & 223-c, amd Bank L, generally

2011-S6777 - Summary

Relates to branches, trust offices and interstate branching transactions.

2011-S6777 - Sponsor Memo

                                BILL NUMBER:S6777

TITLE OF BILL:

An act
to amend the banking law, in relation to branches, trust offices and
interstate branching transactions, and to repeal certain provisions of
such law relating thereto

PURPOSE OF THE BILL:

This bill would amend various sections of the Banking Law ("BL") to
streamline and conform to existing law and practice, provisions
relating to interstate branching transactions as well as to the
establishment of branches and trust offices by both New York banks
and out-of-state banks and trust companies. Most importantly, it
conforms New York law to recent federal law amendments made by the
Dodd Frank Wall Street Reform and Consumer Protection Act (the "Dodd
Frank Act") which permitted nationwide interstate de novo branching.
Finally, the bill would make amendments to update and clarify the
sections in the BL relating to branch closings and make a clarifying
amendment to the community reinvestment act provision applicable to
insured branches of foreign banks.

SUMMARY OF PROVISIONS:

Section 1 of the bill would amend subdivision 4 of BL § 28-b, which
deals with community reinvestment act requirements, to clarify that
the management of a foreign branch subject to BL §28-b (i.e., an
FDIC-insured branch) shall establish a committee to function as the
board of directors for purposes of that section.

Section 2 of the bill would amend BL § 28-c relating to branch
closings to introduce flexibility with respect to the information
required to be provided by banking institutions pursuant to that
section.

Subdivision 2 of BL §28-c would change a reference to the maximum
advance notice of closing that may be provided by a banking
institution from 120 days to 180 days. This would conform the time
period with the Department's implementing regulation.

Subdivision 3 of BL §28-c would add language to give the
Superintendent authority to waive or modify certain information,
primarily of a statistical and
comparative nature, required in a report of planned branch closing to
be submitted by a banking institution. For example, the required
analyses of deposits and loans often create an unnecessary burden on
an institution when such information would not be useful or relevant
to the Superintendent's determination.

Section 3 of the bill would amend subdivision five of BL § 105 to
clarify that a bank or trust company may, if permitted by law,
maintain branches or trust offices it has acquired as a result of a
merger or acquisition transaction.

Section 4 of the bill would amend BL § 105-b to clarify that New York
trust companies may have trust offices in foreign countries.

Section 5 of the bill would amend subdivision 2 of BL §202-a to delete
a reference to Puerto Rico. This would eliminate uncertainty as to
whether banks chartered under the laws of Puerto Rico are governed by
the foreign bank provisions of Banking Law Article 5 as opposed to
the domestic out-of-state bank provisions of Article 5-C (i.e.,
BL §§ 222-227-c). The amendment is complementary to the clarification
made in BL § 222(7) regarding the definition of "state" and is
intended to clarify that banks chartered in Puerto Rico are
considered domestic out-of-state banks, consistently with how they
are treated for Federal Deposit Insurance Act purposes.

Section 6 of the bill would amend BL § 222 of the BL to add new
definitions for the terms "out-of-state federal savings association,"
"out-of-state trust company," "branch," and "trust office," for
purposes of the article. BL § 222 would also be amended to modify the
definitions of the terms "out-of-state bank," "out-of-state state
bank," "appropriate state supervisor," and "banking institution" to
broaden these terms, where applicable, to include out-of-state
state-chartered trust companies as well as federal institutions
within the definitions. Interstate transactions may involve both
banks and trust companies, whether state- or federally-chartered,
resulting in the maintenance of either interstate branches or trust
offices. BL 222(7) would also be amended to modify the definition of
"state" to include Puerto Rico. This would bring the definition into
conformity with the definition of "state" under the Federal Deposit
Insurance Act.

Section 7 of the bill would amend both the heading and the text of
BL § 223 to accurately describe that section as permitting the
establishment of either branches or trust offices in New York by
out-of-state banks (not necessarily constituting initial entry into
New York) by means of an acquisition transaction.

Section 8 of the bill would repeal BL § 223-a. That section, which
prohibited branching into New York as a result of the acquisition of
a New York chartered bank less than five years old that was directly
or indirectly established by the acquiring institution, is no longer
necessary as a result of de novo nationwide interstate branching
permitted by the Dodd Frank Act. BL §223-a was intended to prohibit
acquisition transactions designed to accomplish previously
unauthorized de novo interstate branching.

Section 9 of the bill would amend both the heading and the text of
BL § 223-b, which was added in 2008 to authorize de novo branching into
New York on a reciprocal basis by out-of-state banks (i.e. if the
home state of the branching bank would permit de novo entry by New
York banks). The language in BL §223-b requiring reciprocity should
be deleted as it is no longer consistent with federal law, as a
result of the Dodd Frank Act. The heading of the section would be
amended to eliminate the reference to "initial entry" as that section
would permit an out-of-state bank to establish not only an initial
branch, but also additional branches, in New York, without requiring
an acquisition transaction. This section would also be renumbered.

Section 10 of the bill would repeal BL § 223-c of the BL, which deals
with the application requirements for establishment of a de novo
branch by an out-of-state bank.
It would be combined with BL § 224, which deals with separate
application requirements for additional branches by out-of-state banks.

Section 11 of the bill would amend both the heading and the text of
BL §224.
The heading would be amended to describe the scope of both
subdivisions of that section.
Subdivision 1 would clarify the application (or notice) requirements
for branches and trust offices established by out-of-state state
banks and out-of-state state-chartered trust companies not resulting
from an acquisition transaction. Subdivision 2 would address the
authority of out-of-state state banks to maintain existing branches
and trust offices they have acquired pursuant to the terms of a
merger or acquisition agreement.

Section 12 would add a new BL §224-a to set forth application and
approval requirements for the relocation of either a New York branch
or trust office by an out-of-state
state bank or out-of-state state-chartered trust company.

Section 13 of the bill would amend BL §225 by adding language in BL
§225(1) to make clear that an out-of-state bank may engage in an
acquisition transaction not only with a New York bank, but with a
banking institution, as that term is defined in BL §222, which
includes non-New York chartered banks, including federally-chartered
banking institutions. Such transactions with non-New York-chartered
banks constitute a legitimate means by which an out-of-state bank
may acquire branches in New York. This language would bring the
wording of BL .225 into conformity with the definition of "acquisition
transaction" in BL § 222, which references the acquisition of all or
part of a "banking institution". This change would permit the
introductory phrase "Without limiting the transactions permissible
under section two hundred twenty-three of this article" to be
deleted. This language was added in 2008 in an attempt to clarify
that, while BL § 225 only referenced acquisition transactions
involving New York banks, in fact, acquisition transactions involving
non-New York chartered banks located in New York also were permitted.

Subdivision 2 of BL § 225 would be amended by the addition and deletion
of certain language for accuracy and clarity. The phrase "authorized
by this article" would be deleted in the first sentence as it is an
inaccurate reference to acquisition transactions in which the
receiving corporation is a New York bank. Such transactions are
actually
authorized by BL §§ 600 and 601-a. The second sentence, referencing
acquisition transactions in which the receiving corporation is an
out-of-state bank or trust company, would be further clarified.

Subdivision 3 of BL §225 would be clarified for accuracy by adding a
reference to BL §§ 600 and 601-a. Also, a new paragraph (e) would be
added to Subdivision 3 to clarify that a banking institution does not
acquire or gain powers it otherwise does not have under its own
charter, by virtue of a merger or purchase and assumption transaction
with another institution.

Subdivision 4 of §225 would be amended to add a reference to an
out-of-state trust company.

Section 14 of the bill would amend both the heading and the text of BL
§225-a to add references to out-of-state state-chartered trust
companies.

Section 15 of the bill would amend BL §225-b to clarify those Banking
Law provisions in Articles 5 and 5-B of the Banking Law that are
applicable to out-of-state banks or out-of-state trust company
branches or trust offices in New York.

Section 16 would amend BL §600 to clarify the authority of New
York-chartered banking institutions to merge with either out-of-state
banks or out-of-state trust companies. Language clarifying the
Superintendent's rulemaking authority to authorize additional types
of mergers would be added to BL § 600(8).

Section 17 of the bill would amend BL § 601-a to clarify the authority
of New York-chartered banking institutions to engage in an
acquisition transaction with either out-of-state banks or
out-of-state trust companies. It would also clarify that New York
licensed branches and agencies of foreign banks are considered
banking institutions subject to the requirements of §601-a if they
participate in an acquisition transaction involving a bulk transfer
of fiduciary relationships authorized under BL §604-a.
Language clarifying the Superintendent's authority to authorize
additional acquisition transactions, as well as to implement this
provision through rulemaking, would also be added.

Section 18 of the bill would amend BL 604-a to clarify that New York
licensed branches and agencies may engage in a transaction with
another banking institution involving transfer of all or
substantially all of the assets of the transferor institution, in
which the transferee institution agrees to assume all of the

fiduciary relationships of the transferor institution, and in which
the transferee files a certificate for approval and endorsement by
the superintendent, indicating that the transferee has succeeded to
all the rights and obligations of the transferor with respect to such
fiduciary relationships.

Section 19 would provide for an immediate effective date.

EXISTING LAW:

BL § 28-b sets forth Community Reinvestment Act requirements
applicable to banking institutions.

BL § 28-c contains requirements that must be followed by banking
organizations in connection with planned branch closings.

BL § 105(5) addresses the ability of a bank or trust company to
maintain branch offices as a result of a merger or acquisition
transaction.

BL § 105-b authorizes a New York trust company to establish or acquire
and maintain a trust office within New York state or in another
state, and provides the procedures for obtaining approval to do so.

BL §202-a addresses the authority of foreign banking corporations to
maintain branches and receive deposits in New York. Currently,
foreign banking corporations are described in this section as
including banking corporations organized under the laws of a foreign
country or Puerto Rico.

BL § 222 contains definitions for purposes of Article 5-C of the BL,
which relates to interstate branching.

BL § 223 authorizes an out-of-state bank to maintain one or more
branches in New York as a result of an acquisition transaction.

BL § 223-a prohibits an acquisition transaction which would result in
an out-of-state bank maintaining a branch or branches in New York if
the effect of such transaction would be to terminate the separate
existence of a less-than five year old banking institution that was
directly or indirectly chartered by the acquiring institution. Its
purpose was to prevent an acquisition transaction designed to
accomplish unauthorized de novo branching.

BL, § 223-b authorizes de novo branching into New York by
out-of-state banks, on a reciprocal basis.

BL §223-c sets forth the application requirements for establishment of
a de novo branch in New York by an out-of-state state bank.

BL § 224 describes the processes by which an out-of-state bank may
maintain additional branch offices in New York.

BL §225 describes the application and approval procedures for
interstate merger and acquisition transactions between New York banks
and out-of-state banks. It also contains provisions describing the
legal effect of a merger or other consolidation.

BL § 225-a describes the power of the Superintendent to examine
branches or trust offices of out-of-state banks.

BL § 225-b sets forth the applicability of certain sections of
Articles 5 and 5-B of the BL to branches of out-of-state banks that
are established in New York under the authority in Article 5-C.

BL § 600 enumerates authorized merger transactions between two New
York banking institutions as well as between New York banking
institutions and other banking institutions.

BL § 601-a enumerates authorized acquisition transactions between two
New York banking institutions as well as between New York banking
institutions and other banking institutions.

BL §604-a authorizes a bulk transfer of fiduciary relationships as
part of a transaction between banking institutions in which the
transferee corporation is assuming all or substantially all of the
assets, as well as the deposit liabilities, if any, of the transferor
corporation.

PRIOR LEGISLATIVE HISTORY:

This is a new bill.

STATEMENT IN SUPPORT:

The changes made by this bill streamline the branching processes for
banking institutions operating under the Banking Law. Changes are
also made in a number of cases (e.g. Sections 8, 9, 10) to conform to
changes made in federal law by the Dodd Frank Act. These changes are
necessary to insure that New York law remains consistent with federal
law and state laws across the country.

FISCAL IMPLICATIONS:

There are no fiscal implications from this bill.

EFFECTIVE DATE

The bill would take effect immediately.

2011-S6777 - Bill Text download pdf

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

                                  6777

                            I N  S E N A T E

                             March 21, 2012
                               ___________

Introduced  by Sen. GRIFFO -- (at request of the Department of Financial
  Services) -- 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 branches, trust offices
  and  interstate  branching  transactions,  and   to   repeal   certain
  provisions of such law relating thereto

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

  Section 1. Subdivision 4 of  section  28-b  of  the  banking  law,  as
amended  by  chapter  883  of  the  laws  of 1980, is amended to read as
follows:
  4. Notwithstanding any other provision of this chapter or OTHER 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 and foreign banking  corpo-
rations incorporated, chartered, organized or licensed under the laws of
this state. IN THE CASE OF A FOREIGN BANKING CORPORATION LICENSED PURSU-
ANT  TO THIS ARTICLE AND MAINTAINING A BRANCH IN THIS STATE, THE MANAGE-
MENT OF THE BRANCH SHALL ESTABLISH A COMMITTEE OF NOT FEWER  THAN  THREE
OFFICERS TO FUNCTION IN THE ROLE OF A BOARD OF DIRECTORS FOR PURPOSES OF
THIS SECTION.
  S  2.  Subdivisions 1, 2, and 3 of section 28-c of the banking law, as
added by chapter 362 of the  laws  of  1984,  are  amended  to  read  as
follows:
  1.  This  section  is  intended  to  provide  the  superintendent with
detailed information concerning the planned closing of branch offices by
state-chartered banking organizations, the availability  of  alternative
financial services within the general area served by such branch and the
economic  impact  upon the community resulting from such closing, and to
provide the superintendent with authority to conduct meetings with bank-
ing organizations and community groups in areas where a  branch  closing
is  planned.    THE  REQUIREMENTS OF THIS SECTION SHALL NOT APPLY TO THE
FOLLOWING:
  (A) BRANCH OFFICES LOCATED OUTSIDE THE STATE OF NEW YORK;

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

                                                           LBD14431-01-2

S. 6777                             2

  (B) A SALE OR OTHER TRANSFER OF A BRANCH OFFICE WHICH DOES NOT  RESULT
IN  ANY  MATERIAL  REDUCTION  IN  THE FINANCIAL SERVICES OFFERED AT SUCH
LOCATION;
  (C)  THE  CLOSING OF A BRANCH OFFICE ACQUIRED FROM A FAILING OR FAILED
INSTITUTION, PROVIDED THAT SUCH CLOSING OCCURS WITHIN ONE HUNDRED EIGHTY
DAYS FROM THE DATE OF THE ACQUISITION; OR
  (D) THE CLOSING OF A BRANCH OFFICE WHEN UNEXPECTED CIRCUMSTANCES  MAKE
STRICT  COMPLIANCE IMPOSSIBLE, PROVIDED THAT SUCH DETERMINATION SHALL BE
SOLELY WITHIN THE DISCRETION OF THE SUPERINTENDENT AND PROVIDED  FURTHER
THAT  THE  SUPERINTENDENT MAY REQUIRE THE BANKING ORGANIZATION TO COMPLY
WITH THE REQUIREMENTS OF THIS SECTION TO THE EXTENT POSSIBLE.
  2. Every banking organization shall submit  to  the  superintendent  a
report  of its planned or intended closing of a branch office, and shall
give written notice to  any  person  who  maintains  a  banking  account
relationship  with  such  branch  office  which  is  the subject of such
planned or intended closing, no less than ninety days nor more than  one
hundred  [twenty]  EIGHTY  days prior to the date of actual closing. The
banking organization shall post and keep posted in a  conspicuous  place
notice  of such planned closing at such branch office, commencing on the
date the banking organization submits its report pursuant to the forego-
ing provision and until the proposed closing is effected or withdrawn.
  3. Such report shall be in writing and shall contain  a  statement  of
the  reasons leading to the decision to close the branch and any statis-
tical or other information in support thereof. Such report shall be  and
remain  at  all  times  subject  to the provisions of subdivision ten of
section thirty-six of this chapter. Such report shall also  contain  THE
FOLLOWING  INFORMATION,  PROVIDED  THAT  THE SUPERINTENDENT MAY WAIVE OR
MODIFY THESE REQUIREMENTS FOR GOOD CAUSE:
  (a) a past (at least three years),  present  and  projected  financial
analysis  of  deposits  at  such  branch  (giving number of accounts and
dollar amount, profits and losses);
  (b) a past (at least three years),  present  and  projected  financial
analysis  of  profits  and  losses relating to the loan activity at such
branch;
  (c) a detailed map of the general area served by such  branch  showing
the distance and direction of all remaining state or federally chartered
institutions  within  such area and any licensee of the department which
provides financial services of any kind; and
  (d) a description of any  planned  limited  or  full  service  banking
facility  to  be opened within such area by either the reporting banking
organization or, if known, to the reporting banking organization, by any
other banking institution.
  S 3. Paragraph (a) of subdivision 5 of section 105 of the banking law,
as amended by chapter 547 of the laws of 2008, is  amended  to  read  as
follows:
  (a) A bank or trust company may, if the merger or asset acquisition is
permitted  by  law,  and if the merger or asset acquisition agreement so
provides, maintain as a branch office or branch offices OR TRUST  OFFICE
OR  TRUST  OFFICES,  the  place or places of business of any bank, trust
company, safe deposit company,  national  banking  association,  out-of-
state  state bank OR OUT-OF-STATE TRUST COMPANY (as such [term is] TERMS
ARE defined in section two hundred twenty-two of this chapter),  savings
bank,  or  savings and loan association, federal savings bank or federal
savings and loan association which it has received into itself by merger
or by acquisition of assets thereof pursuant to the provisions  of  this
chapter  and,  if  the  merger or acquisition agreement so provides, may

S. 6777                             3

maintain, as its principal office rather  than  as  a  branch  OR  TRUST
office,  the  principal office of such banking institution with which it
has merged or from which it has acquired assets (so long as such princi-
pal  office is located in this state), in which event the former princi-
pal office of the receiving or acquiring bank or trust  company  may  be
maintained  as  a branch office. A state bank or trust company resulting
from the conversion of  a  national  banking  association  may,  if  the
conversion  agreement so provides, maintain as a branch office or branch
offices OR TRUST OFFICE OR TRUST OFFICES the place or places of business
of the national banking association. As used in  this  subdivision,  the
term  "place  or  places of business" shall include any branch office OR
TRUST OFFICE of the banking institution that was  converted,  merged  or
the  assets  of  which were acquired which has been approved pursuant to
this chapter or federal law or the law of another state, as the case may
be, even if such branch office OR TRUST OFFICE is not  in  operation  at
the time said merger, asset acquisition or conversion becomes effective.
  S  4.  Subdivision  1 of section 105-b of the banking law, as added by
chapter 209 of the laws of 2008, is amended to read as follows:
  1. A trust company may establish or acquire and maintain one  or  more
trust  offices anywhere in this state, or[, if and to the extent author-
ized by another state, in a state other than  this  state]  OUTSIDE  THE
STATE OF NEW YORK, EITHER IN THE UNITED STATES OR IN FOREIGN COUNTRIES.
  S  5. Subdivision 2 of section 202-a of the banking law, as amended by
chapter 288 of the laws of 1987, is amended to read as follows:
  2. A foreign banking corporation organized under the laws of a foreign
country [or of Puerto Rico] may be licensed pursuant to article  two  of
this  chapter  to  maintain  a  branch or branches in this state and may
engage in the business of receiving deposits in this state.
  S 6. Section 222 of the banking law, as amended by chapter  9  of  the
laws  of  1996 and subdivision 10 as added by chapter 217 of the laws of
2010, is amended to read as follows:
  S 222. Definitions. In this article, the following  definitions  shall
apply:
  1. The term "out-of-state bank" means an out-of-state state bank [or],
an  out-of-state national bank, OR AN OUT-OF-STATE FEDERAL SAVINGS ASSO-
CIATION.
  2. The term "out-of-state state bank" means a state bank, as such term
is defined in section 3(a)(2) of the Federal Deposit Insurance  Act  (12
U.S.C.  1813(a)(2)),  OR  AN OUT-OF-STATE STATE-CHARTERED TRUST COMPANY,
but such term shall not include a banking organization.
  3. The term "out-of-state national  bank"  means  a  national  banking
association the main office of which is located outside this state.
  4.  THE  TERM  "OUT-OF-STATE  FEDERAL  SAVINGS  ASSOCIATION" MEANS ANY
FEDERAL SAVINGS ASSOCIATION OR FEDERAL SAVINGS BANK WHICH  IS  CHARTERED
UNDER  SECTION  5  OF THE HOME OWNERS LOAN ACT (12 U.S.C. 1464) THE HOME
OFFICE OF WHICH IS LOCATED OUTSIDE THIS STATE.
  5. THE TERM "OUT-OF-STATE TRUST COMPANY"  MEANS  EITHER  A  NATIONALLY
CHARTERED TRUST COMPANY OR AN OUT-OF-STATE STATE-CHARTERED TRUST COMPANY
THAT  HAS  THE POWER TO EXERCISE FIDUCIARY POWERS, BUT IT NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION.
  [4.] 6. The term "New York bank" means  a  bank,  trust  company  [or]
savings  bank, OR SAVINGS AND LOAN ASSOCIATION as such terms are defined
in subdivisions one, two [and], four AND EIGHT of section  two  of  this
chapter.
  [5.]  7.  The term "state" means any state of the United States (other
than this state), the District of Columbia, any territory of the  United

S. 6777                             4

States,  PUERTO  RICO,  Guam, American Samoa, the Trust Territory of the
Pacific Islands, the United States  Virgin  Islands,  and  the  Northern
Mariana Islands.
  [6.]  8.  The  term "home state" means with respect to an out-of-state
state bank OR OUT-OF-STATE  STATE-CHARTERED  TRUST  COMPANY,  the  state
under  the  laws  of  which such out-of-state state bank OR OUT-OF-STATE
STATE-CHARTERED TRUST COMPANY is incorporated  or  otherwise  organized,
and  with respect to an out-of-state national bank OR TRUST COMPANY, the
state in which such out-of-state national bank's OR TRUST COMPANY'S main
office is located.
  [7.] 9. The term "acquisition transaction" means any  merger,  consol-
idation  or  purchase  of assets and assumption of liabilities of all or
part of a banking institution.
  [8.] 10. The term "like-type banking organization" means, with respect
to an out-of-state bank, a banking organization with the type of charter
that most nearly corresponds to the charter of such  out-of-state  bank,
as determined by the superintendent.
  [9.]  11. The term "appropriate state supervisor" means the home state
supervisor with supervisory and regulatory jurisdiction over an  out-of-
state  state  bank  OR OUT-OF-STATE STATE-CHARTERED TRUST COMPANY in its
home state.
  [10.] 12. The term "banking institution" means any bank, trust  compa-
ny,  savings  bank, savings and loan association, or branch of a foreign
banking corporation the deposits of which are  insured  by  the  federal
deposit  insurance corporation, which is incorporated, chartered, organ-
ized or licensed under the laws of this state or any other state of  the
United States, OR UNDER THE LAWS OF THE UNITED STATES.
  13.    THE  TERM "BRANCH" MEANS ANY OFFICE OF A BANKING INSTITUTION AT
WHICH DEPOSITS ARE RECEIVED, CHECKS PAID OR MONEY LENT. THE  TERM  SHALL
NOT  INCLUDE  AN  AUTOMATED TELLER MACHINE OR OTHER ELECTRONIC FACILITY.
FOR PURPOSES OF THIS ARTICLE, THE TERM "BRANCH" SHALL ALSO REFER TO  THE
PRINCIPAL OR MAIN OFFICE OF A BANKING INSTITUTION.
  14.  THE  TERM "TRUST OFFICE" MEANS AN OFFICE OF A BANKING INSTITUTION
OTHER THAN A BRANCH AT WHICH SUCH INSTITUTION MAY CONDUCT  ONE  OR  MORE
FIDUCIARY ACTIVITIES PERMITTED FOR A TRUST COMPANY.
  S 7. Section 223 of the banking law, as added by chapter 9 of the laws
of 1996, is amended to read as follows:
  S 223. [Initial entry by out-of-state banks] ESTABLISHMENT OF BRANCHES
OR TRUST OFFICES BY MEANS OF AN ACQUISITION TRANSACTION. An out-of-state
bank  [that does not operate a branch in this state] may maintain one or
more branches OR ONE OR MORE TRUST OFFICES located in  this  state  THAT
HAVE BEEN acquired by means of an acquisition transaction.
  S 8. Section 223-a of the banking law is REPEALED.
  S  9. Section 223-b of the banking law, as added by chapter 316 of the
laws of 2008, is amended to read as follows:
  S [223-b. Initial entry] 223-A. ESTABLISHMENT OF BRANCHES  by  out-of-
state  banks  by  de  novo branching. In addition to the authority of an
out-of-state bank to maintain a branch or branches by means of an acqui-
sition transaction, an out-of-state bank may [enter New York  by  estab-
lishing]  WITH  THE APPROVAL OF THE SUPERINTENDENT ESTABLISH one or more
de novo branches  in  this  state[;  provided,  however,  that  in  each
instance  the  laws  of the jurisdiction where the out-of-state bank has
its principal office expressly authorize a New York  bank  to  establish
one  or  more de novo branches under conditions no more restrictive than
those imposed by this section as so determined by the superintendent].
  S 10. Section 223-c of the banking law is REPEALED.

S. 6777                             5

  S 11. Section 224 of the banking law, as amended by chapter 9  of  the
laws  of  1996  and  subdivision 1 as amended by section 26 of part O of
chapter 59 of the laws of 2006, is amended to read as follows:
  S 224.  [Establishment  of  additional  branches by out-of-state state
banks] APPLICATION FOR THE ESTABLISHMENT OF BRANCHES  OR  TRUST  OFFICES
NOT  RESULTING FROM AN ACQUISITION TRANSACTION; RETENTION OF BRANCHES OR
TRUST OFFICES RESULTING FROM MERGER OR ACQUISITION.  1. [Subject to  the
provisions  of  this article, an out-of-state state bank which maintains
one or more branches in this state may open and occupy one or more addi-
tional de novo branches in this state with prior approval of the  super-
intendent.  An  application  for  approval  submitted  pursuant  to this
section shall contain  such  information  as  the  superintendent  deems
necessary.] AN APPLICATION FOR APPROVAL TO THE SUPERINTENDENT CONTAINING
SUCH  INFORMATION  AS HE OR SHE DEEMS NECESSARY SHALL BE SUBMITTED BY AN
OUT-OF-STATE STATE BANK PRIOR TO THE ESTABLISHMENT OF  EACH  BRANCH.  At
the  time of making such application, an investigation fee as prescribed
pursuant to section eighteen-a of this chapter  shall  be  paid  to  the
superintendent for each branch [office] for which approval is sought. If
the  superintendent finds that the opening of the branch [office] is not
consistent with the declaration of policy set forth in  section  ten  of
this  chapter, he or she shall notify the applicant that the application
has been denied.  AN OUT-OF-STATE STATE BANK OR OUT-OF-STATE STATE-CHAR-
TERED TRUST COMPANY SEEKING TO ESTABLISH ONE OR MORE  TRUST  OFFICES  IN
THIS STATE SHALL COMPLY WITH THE NOTICE PROCEDURES SET FORTH IN SUBDIVI-
SION FOUR OF SECTION ONE HUNDRED THIRTY-ONE OF THIS CHAPTER.
  2.  Subject to the provisions of this article, if the merger or acqui-
sition agreement so provides, an out-of-state state bank may maintain as
a branch or branches OR TRUST OFFICE OR TRUST OFFICES the place or plac-
es of business of any banking institution which  it  has  received  into
itself  as  a  result  of  an acquisition transaction authorized by this
article.
  3. No out-of-state state bank shall open, occupy or maintain a  branch
in  this state at a location not permitted to a like-type banking organ-
ization.
  S 12.  The banking law is amended by adding a  new  section  224-a  to
read as follows:
  S   224-A.  CHANGE  OF  LOCATION  OF  BRANCHES  OR  TRUST  OFFICES  BY
OUT-OF-STATE STATE BANKS OR OUT-OF-STATE  STATE-CHARTERED  TRUST  COMPA-
NIES.  AN  APPLICATION  FOR  APPROVAL CONTAINING SUCH INFORMATION AS THE
SUPERINTENDENT DEEMS NECESSARY SHALL BE  SUBMITTED  BY  AN  OUT-OF-STATE
STATE BANK OR AN OUT-OF-STATE STATE-CHARTERED TRUST COMPANY PRIOR TO THE
RELOCATION  OF  A  BRANCH  OR TRUST OFFICE IN THIS STATE. AT THE TIME OF
MAKING SUCH APPLICATION, AN INVESTIGATION FEE AS PRESCRIBED PURSUANT  TO
SECTION  EIGHTEEN-A  OF THIS CHAPTER SHALL BE PAID TO THE SUPERINTENDENT
FOR EACH BRANCH OR TRUST OFFICE FOR WHICH APPROVAL  IS  SOUGHT.  IF  THE
SUPERINTENDENT  SHALL BE SATISFIED THAT SUCH RELOCATION MAY BE PERMITTED
UNDER THE TERMS  OF  THIS  CHAPTER  AND  THAT  THERE  IS  NO  REASONABLE
OBJECTION TO SUCH CHANGE, HE OR SHE SHALL APPROVE SUCH APPLICATION.
  S  13.  Section 225 of the banking law, as amended by chapter 9 of the
laws of 1996 and subdivisions 1 and 2 as amended by chapter 547  of  the
laws of 2008, is amended to read as follows:
  S 225.  Interstate  acquisition transactions. 1. [Without limiting the
transactions permissible under section two hundred twenty-three of  this
article,  an]  AN  out-of-state bank may engage in an acquisition trans-
action with a New York bank OR WITH A BANKING INSTITUTION LOCATED IN NEW
YORK and may maintain as a branch or branches OR TRUST OFFICE  OR  TRUST

S. 6777                             6

OFFICES,  THE  BRANCHES  OR  TRUST  OFFICES, RESPECTIVELY, [the place or
places of business] of any such New York  bank  OR  BANKING  INSTITUTION
which  it  has  received  into  itself  as a result of such transaction,
subject to the requirements of this article.
  2.  Except  when  section twenty-nine of this chapter applies, section
six hundred one or six hundred one-a of this chapter, as  the  case  may
be,  and  section  six  hundred one-b of this chapter shall apply to any
acquisition transaction  [authorized  by  this  article]  in  which  the
receiving  corporation is a New York bank. In the case of [any other] AN
acquisition  transaction  authorized  by  this  article  IN   WHICH   AN
OUT-OF-STATE  BANK OR OUT-OF-STATE TRUST COMPANY IS THE RECEIVING CORPO-
RATION, the out-of-state bank OR OUT-OF-STATE TRUST COMPANY  shall  file
with  the superintendent a copy of any application filed with the appro-
priate state supervisor and appropriate federal banking agency.
  3. At the time when a merger or consolidation authorized by this arti-
cle OR BY SECTION SIX HUNDRED OF THIS CHAPTER becomes effective:
  (a) the resulting or consolidated corporation shall be considered  the
same  business  and  corporate  entity as each of the constituent corpo-
rations;
  (b) all the property, rights, powers and franchises  of  each  of  the
constituent  corporations  shall  vest  in the resulting or consolidated
corporation and the  resulting  or  consolidated  corporation  shall  be
subject to and shall be deemed to have assumed all of the debts, liabil-
ities,  obligations  and  duties  of each constituent corporation and to
have succeeded to all of its relationships, fiduciary or  otherwise,  as
fully  and to the same extent as if such property, rights, powers, fran-
chises, debts, liabilities, obligations, duties  and  relationships  had
been  originally  acquired, incurred or entered into by the resulting or
consolidated corporation;
  (c) any reference to a constituent corporation in any  contract,  will
or document, whether executed or taking effect before or after the merg-
er or consolidation, shall be considered a reference to the resulting or
consolidated  corporation  if not inconsistent with the other provisions
of the contract, will or document; [and]
  (d) a pending  action  or  other  judicial  proceeding  to  which  any
constituent  corporation  is a party, shall not be deemed to have abated
or to have discontinued by reason of the merger  or  consolidation,  but
may  be prosecuted to final judgment, order or decree in the same manner
as if the merger or consolidation had not been made, or the resulting or
consolidated corporation may be substituted as a party to such action or
proceeding, and any judgment, order or decree may  be  rendered  for  or
against it that might have been rendered for or against such constituent
corporation if the merger or consolidation had not occurred[.]; AND
  (E) NOTHING IN THIS SUBDIVISION SHALL BE DEEMED TO AUTHORIZE A BANKING
INSTITUTION  TO  EXERCISE ANY POWER OR ENGAGE IN ANY ACTIVITY NOT OTHER-
WISE PERMITTED UNDER ITS CHARTER.
  4. In the case of a merger or consolidation authorized by this article
in which an out-of-state bank  OR  OUT-OF-STATE  TRUST  COMPANY  is  the
resulting  or consolidated corporation, the franchise of any constituent
New York bank shall automatically terminate when the merger  or  consol-
idation is consummated.
  S  14.  Section 225-a of the banking law, as amended by chapter 454 of
the laws of 2006, is amended to read as follows:
  S 225-a. Power of superintendent to examine branches or trust  offices
of out-of-state state banks OR OUT-OF-STATE STATE-CHARTERED TRUST COMPA-
NIES.  The superintendent shall have the power at any time in his or her

S. 6777                             7

discretion to examine every branch or trust office located in this state
of an out-of-state state  bank  OR  OUT-OF-STATE  STATE-CHARTERED  TRUST
COMPANY  for  the same purposes and to the same extent as is provided in
the  case  of  banking  organizations pursuant to the provisions of this
chapter.
  S 15. Section 225-b of the banking law, as amended by chapter  217  of
the laws of 2010, is amended to read as follows:
  S 225-b. Applicability of certain sections to out-of-state banks.
  1.  Except  as  otherwise provided in this section, nothing in article
five or article five-B of this chapter shall apply  to  an  out-of-state
bank  OR OUT-OF-STATE TRUST COMPANY authorized to open, occupy and main-
tain a branch pursuant to the provisions of  this  article  OR  A  TRUST
OFFICE  PURSUANT  TO  THIS ARTICLE OR TO SUBDIVISION FOUR OF SECTION ONE
HUNDRED THIRTY-ONE OF THIS CHAPTER. Any reference in this chapter (other
than in article five or article  five-B)  to  a  foreign  bank,  foreign
corporation  or  foreign  banking  corporation  shall  be deemed to be a
reference to an out-of-state bank OR OUT-OF-STATE TRUST COMPANY  author-
ized to open, occupy and maintain a branch pursuant to the provisions of
this  article  OR A TRUST OFFICE PURSUANT TO THIS ARTICLE OR TO SUBDIVI-
SION FOUR OF SECTION ONE HUNDRED THIRTY-ONE OF  THIS  CHAPTER.  Notwith-
standing  the  foregoing, [(a)] the provisions of [sections] SECTION two
hundred two-h (Repayment of deposits standing in the  names  of  minors,
trustees,  joint  depositors  or  custodians;  interpleader  in  certain
actions), [two hundred three (Change of location, name or business)  and
two  hundred  four (Reports of foreign banking corporations; penalties)]
of this chapter shall apply with equal force and effect to  out-of-state
banks  OR  OUT-OF-STATE  TRUST  COMPANIES  authorized to open, occupy or
maintain branches pursuant to the provisions of this article[;  and  (b)
the].
  2.  THE provisions of section three hundred ninety-nine-a, subdivision
three of section one hundred thirty,  subdivision  two  of  section  one
hundred forty-three, subdivision five of section two hundred forty-seven
and  subdivision five of section three hundred ninety-nine of this chap-
ter with respect to restrictions on executive officers or  directors  of
foreign  banking  corporations  and  the  provisions of sections twenty,
twenty-six, thirty, thirty-one and six hundred thirty-four, [subdivision
two of section thirteen,] subdivisions eleven and twelve of section  six
hundred  five, subdivision four of section six hundred six and paragraph
(a) of subdivision one of section fourteen of this  chapter,  shall  not
apply  to  out-of-state  banks  authorized  to  open, occupy or maintain
branches pursuant to the provisions of this article.
  S 16. Subdivisions 6 and 8 of section 600 of the banking law, subdivi-
sion 6 as amended by chapter 9 of the laws of  1996,  subdivision  8  as
amended by chapter 152 of the laws of 1993, as renumbered by chapter 455
of  the  laws of 2006 and as further amended by section 104 of part A of
chapter 62 of the laws of 2011, are amended to read as follows:
  (6) One or more banks, trust companies, stock-form  savings  banks  or
stock-form  savings and loan associations, with one or more out-of-state
banks OR OUT-OF-STATE TRUST  COMPANIES  as  such  [term  is]  TERMS  ARE
defined  in  [subdivision one of] section two hundred twenty-two of this
chapter.
  (8) Such other mergers between and among banking institutions  as  the
superintendent  of financial services may authorize.  THE SUPERINTENDENT
MAY PROMULGATE SUCH REGULATIONS AS HE OR SHE DEEMS NECESSARY AND  PROPER
TO IMPLEMENT AND DEFINE THE PROVISIONS OF THIS PARAGRAPH.

S. 6777                             8

  S  17.  Paragraph (g) of subdivision 1 of section 601-a of the banking
law, as amended by chapter 152 of  the  laws  of  1993  and  as  further
amended  by  section 104 of part A of chapter 62 of the laws of 2011, is
amended to read as follows:
  (g)  ONE  OR  MORE BANKS, TRUST COMPANIES, STOCK-FORM SAVINGS BANKS OR
STOCK-FORM SAVINGS AND LOAN ASSOCIATIONS, WITH ONE OR MORE  OUT-OF-STATE
BANKS  OR  OUT-OF-STATE  TRUST  COMPANIES  AS  SUCH TERMS ARE DEFINED IN
SECTION TWO HUNDRED TWENTY-TWO OF THIS CHAPTER.
  (H) One or more banking institutions by  another  banking  institution
[to  the  extent  permitted  under  regulations of the superintendent of
financial services] AS THE SUPERINTENDENT MAY AUTHORIZE. FOR PURPOSES OF
THIS PARAGRAPH, A BRANCH OR AGENCY  OF  A  FOREIGN  BANKING  CORPORATION
LICENSED  PURSUANT  TO  ARTICLE TWO OF THIS CHAPTER AND SEEKING APPROVAL
FOR A TRANSFER  OF  FIDUCIARY  RELATIONSHIPS  PURSUANT  TO  SECTION  SIX
HUNDRED  FOUR-A  OF  THIS CHAPTER SHALL BE CONSIDERED A BANKING INSTITU-
TION. THE SUPERINTENDENT MAY PROMULGATE SUCH REGULATIONS AS  HE  OR  SHE
DEEMS  NECESSARY  AND  PROPER  TO IMPLEMENT AND DEFINE THE PROVISIONS OF
THIS PARAGRAPH.
  S 18. Section 604-a of the banking law, as added by chapter 743 of the
laws of 1958, the section heading and subdivision 1 as amended by  chap-
ter  297 of the laws of 1993, subdivision 2 as amended by chapter 489 of
the laws of 1963 and subdivision 3 as amended by chapter 115 of the laws
of 1981, is amended to read as follows:
  S 604-a. Transfer of fiduciary relationships [of  a  banking  institu-
tion]. 1. If any banking institution, including a bank or trust company,
national  banking  association,  savings  bank, savings and loan associ-
ation, federally chartered savings  bank,  federally  chartered  savings
[and  loan]  association,  OR  A  BRANCH  OR AGENCY OF A FOREIGN BANKING
CORPORATION LICENSED PURSUANT TO ARTICLE TWO OF THIS CHAPTER, located in
this state, shall have transferred  all  or  substantially  all  of  its
assets  to  another banking institution in a transaction subject to this
chapter pursuant to a  written  agreement  between  the  transferor  and
transferee  [corporations]  whereby  the  transferee  [corporation]  has
assumed the deposit liabilities, if any, of the transferor [corporation]
and has agreed to assume all fiduciary relationships of  the  transferor
[corporation],  the  transferee  [corporation] may file in the office of
the superintendent a certificate in its name and under  its  [corporate]
seal,  signed  by  its  president, secretary or cashier, setting forth a
copy of such agreement and stating  that  the  transferee  [corporation]
assumes  all  of  the  fiduciary relationships of the transferor [corpo-
ration] pursuant to the provisions of this section;  provided,  however,
that  such  certificate  shall  not  be filed unless the approval of the
superintendent shall have  been  endorsed  thereon  or  annexed  thereto
before  filing.   IN THE CASE OF A BRANCH OR AGENCY LICENSED PURSUANT TO
ARTICLE TWO OF THIS CHAPTER THAT SEEKS TO PARTICIPATE IN  A  TRANSACTION
DESCRIBED IN THIS SECTION, SUCH BRANCH OR AGENCY SHALL BE SUBJECT TO THE
APPLICATION AND APPROVAL REQUIREMENTS GOVERNING ACQUISITION TRANSACTIONS
SET  FORTH  IN  SECTIONS SIX HUNDRED ONE-A AND SIX HUNDRED ONE-B OF THIS
ARTICLE.
  2. Upon the filing of such certificate in the  office  of  the  super-
intendent,  all  of  the  property, rights, powers and franchises of the
transferor [corporation] as  fiduciary  shall  vest  in  the  transferee
[corporation]  and  the transferee [corporation] shall be deemed to have
assumed all of the debts, liabilities, obligations  and  duties  of  the
transferor  [corporation] as fiduciary, and to have succeeded to all the
fiduciary relationships of the transferor [corporation],  as  fully  and

S. 6777                             9

with the same effect as is provided in sections one hundred thirty-six-c
and  six  hundred  two  OF THIS CHAPTER in the case of a merger, and any
reference to the transferor [corporation] as fiduciary in any  capacity,
contained  in any contract, will or document, whether executed or taking
effect before or after the filing of such certificate in the  office  of
the  superintendent,  shall  be considered a reference to the transferee
[corporation] if not inconsistent  with  the  other  provisions  of  the
contract, will or document.
  3.  For [the] purposes of this section, the fiduciary relationships of
the transferor shall include all relationships as agent, trustee, guard-
ian, receiver, committee, conservator, executor, administrator, or other
fiduciary in any capacity or for any purpose mentioned  in  section  one
hundred  OF  THIS  CHAPTER,  and  all relationships of the transferor as
bailee or depositary of personal property.
  4. This section shall not be deemed to authorize a transferee  [corpo-
ration]  to  assume  any fiduciary relationship of a kind which it would
not otherwise have power to  undertake  and  perform.  Nothing  in  this
section  shall  be deemed to authorize any such transferee [corporation]
to maintain as its own office any office previously  maintained  by  the
transferor  [corporation],  and  authority, if any, to maintain any such
office shall be governed by the applicable provisions of law other  than
this  section. This section shall not be deemed to apply to contracts of
the transferor for the leasing of safe deposit boxes or vaults.
  S 19. This act shall take effect immediately.

2011-S6777A - Details

See Assembly Version of this Bill:: A10515
Law Section:: Banking Law
Laws Affected:: Rpld §§223-a & 223-c, amd Bank L, generally

2011-S6777A - Summary

Relates to branches, trust offices and interstate branching transactions.

2011-S6777A - Sponsor Memo

                                BILL NUMBER:S6777A

TITLE OF BILL:

An act
to amend the banking law, in relation to branches, trust offices and
interstate branching transactions, and to repeal certain provisions of
such law relating thereto

PURPOSE OF THE BILL:

This bill would amend various sections of the Banking Law ("BL") to
streamline and conform to existing law and practice, provisions
relating to interstate branching transactions as well as to the
establishment of branches and trust offices by both New York banks
and out-of-state banks and trust companies. Most importantly, it
conforms New York law to recent federal law amendments made by the
Dodd Frank Wall Street Reform and Consumer Protection Act (the "Dodd
Frank Act") which permitted nationwide interstate de novo branching.
Finally, the bill would make amendments to update and clarify the
sections in the BL relating to branch closings and make a clarifying
amendment to the community reinvestment act provision applicable to
insured branches of foreign banks.

SUMMARY OF PROVISIONS:

Section 1 of the bill would amend subdivision 4 of BL § 28-b, which
deals with community reinvestment act requirements, to clarify that
the management of a foreign branch subject to BL §28-b (i.e. an
FDIC-insured branch) shall establish a committee to function as the
board of directors for purposes of that section.

Section 2 of the bill would amend BL § 28-c relating to branch
closings to introduce flexibility with respect to the information
required to be provided by banking institutions pursuant to that
section.

Subdivision 2 of BL §28-c would change a reference to the maximum
advance notice of closing that may be provided by a banking
institution from 120 days to 180 days. This would conform the time
period with the Department's implementing regulation.

Subdivision 3 of BL §28-c would add language to give the Superintendent
authority to waive or modify certain information, primarily of a
statistical and
comparative nature, required in a report of planned branch closing to
be submitted by a banking institution. For example, the required
analyses of deposits and loans often create an unnecessary burden on
an institution when such information would not be useful or relevant
to the Superintendent's determination.

Section 3 of the bill would amend subdivision five of BL § 105 to
clarify that a bank or trust company may, if permitted by law,
maintain branches or trust offices it has acquired as a result of a
merger or acquisition transaction.


Section 4 of the bill would amend BL § 105-b to clarify that New York
trust companies may have trust offices in foreign countries.

Section 5 of the bill would amend subdivision 2 of BL §202-a to delete
a reference to Puerto Rico. This would eliminate uncertainty as to
whether banks chartered under the laws of Puerto Rico are governed by
the foreign bank provisions of Banking Law Article 5 as opposed to
the domestic out-of-state bank provisions of Article 5-C (i,e.
BL §§ 222-227-c). The amendment is complementary to the clarification
made in BL § 222(7) regarding the definition of "state" and is
intended to clarify that banks chartered in Puerto Rico are
considered domestic out-of-state banks, consistently with how they
are treated for Federal Deposit Insurance Act purposes.

Section 6 of the bill would amend BL § 222 of the BL to add new
definitions for the terms "out-of-state federal savings association,"
"out-of-state trust company," "branch," and "trust office," for
purposes of the article. BL § 222 would also be amended to modify the
definitions of the terms "out-of-state bank," "out-of-state state
bank," "appropriate state supervisor," and "banking institution" to
broaden these terms, where applicable, to include out-of-state
state-chartered trust companies as well as federal institutions
within the definitions. Interstate transactions may involve both
banks and trust companies, whether state- or federally-chartered,
resulting in the maintenance of either interstate branches or trust
offices. BL 222(7) would also be amended to modify the definition of
"state" to include Puerto Rico. This would bring the definition into
conformity with the definition of "state" under the Federal Deposit
Insurance Act.

Section 7 of the bill would amend both the heading and the text of
BL § 223-a to
accurately describe that section as permitting the establishment of
either branches or trust offices in New York by out-of-state banks
(not necessarily constituting initial entry into New York) by means
of an acquisition transaction.

Section 8 of the bill would repeal BL § 223-a. That section, which
prohibited branching into New York as a result of the acquisition of
a New York chartered bank less than five years old that was directly
or indirectly established by the acquiring institution, is no longer
necessary as a result of de novo nationwide interstate branching
permitted by the Dodd Frank Act. BL §223-a was intended to prohibit
acquisition transactions designed to accomplish previously
unauthorized de novo interstate branching.

Section 9 of the bill would amend both the heading and the text of BL
§ 223-b, which was added in 2008 to authorize de novo
branching into
New York on a reciprocal basis by out-of-state banks (ie. if the home
state of the branching bank would permit de novo entry by New York
banks). The language in BL §223-b requiring reciprocity should be
deleted as it is no longer consistent with federal law, as a result
of the Dodd Frank Act. The heading of the section would be amended to
eliminate the reference to "initial entry" as that section would
permit an out-of-state bank to establish not only an initial branch,


but also additional branches, in New York, without requiring an
acquisition transaction. This section would also be renumbered.

Section 10 of the bill would repeal BL § 223-c of the BL, which deals
with the application requirements for establishment of a
de novo branch by an out-of-state bank.
It would be combined with BL § 224, which deals with separate
application requirements for additional branches by out-of-state banks.

Section 11 of the bill would amend both the heading and the text of BL
§224.
The heading would be amended to describe the scope of both
subdivisions of that section.
Subdivision 1 would clarify the application (or notice) requirements
for branches and trust offices established by out-of-state state
banks and out-of-state state-chartered trust companies not resulting
from an acquisition transaction. Subdivision 2 would address the
authority of out-of-state state banks to maintain existing branches
and trust offices they have acquired pursuant to the terms of a
merger or acquisition agreement.

Section 12 would add a new BL §224-a to set forth application and
approval requirements for the relocation of either a New York branch
or trust office by an out-of-state state bank or out-of-state
state-chartered trust company.

Section 13 of the bill would amend BL §225 by adding language in BL
§225(1) to make clear that an out-of-state bank may engage in an
acquisition transaction not only with a New York bank, but with a
banking institution, as that term is defined in BL §222, which
includes non-New York chartered banks, including federally-chartered
banking institutions. Such transactions with non-New York-chartered
banks constitute a legitimate means by which an out-of-state bank may
acquire branches in New York. This language would bring the wording of
BL §255 into conformity with the definition of "acquisition transaction"
in BL § 222, which references the acquisition of all or part of a
"banking institution". This change would permit the introductory
phrase "Without limiting the transactions permissible under section
two hundred twenty-three of this article" to be deleted. This
language was added in 2008 in an attempt to clarify that, while BL
§225 only referenced acquisition transactions involving New York
banks, in fact, acquisition transactions involving non-New York
chartered banks located in New York also were permitted.

Subdivision 2 of BL § 225 would be amended by the addition and deletion
of certain language for accuracy and clarity. The phrase "authorized
by this article" would be deleted in the first sentence as it is an
inaccurate reference to acquisition transactions in which the
receiving corporation is a New York bank. Such transactions are
actually
authorized by BL §§ 600 and 601-a. The second sentence, referencing
acquisition transactions in which the receiving corporation is an
out-of-state bank or trust company, would be further clarified.

Subdivision 3 of BL §225 would be clarified for accuracy by adding a
reference to BL §§ 600 and 601-a. Also, a new paragraph (e) would be
added to Subdivision 3 to clarify that a banking institution does not


acquire or gain powers it otherwise does not have under its own
charter, by virtue of a merger or purchase and assumption transaction
with another institution.

Subdivision 4 of §225 would be amended to add a reference to an
out-of-state trust company.

Section 14 of the bill would amend both the heading and the text of BL
§225-a to add references to out-of-state state-chartered trust
companies.

Section 15 of the bill would amend BL §225-b to clarify those Banking
Law provisions in Articles 5 and 5-B of the Banking Law that are
applicable to out-of-state banks or out-of-state trust company
branches or trust offices in New York.

Section 16 would amend BL §600 to clarify the authority of New
York-chartered banking institutions to merge with either out-of-state
banks or out-of-state trust companies. Language clarifying the
Superintendent's rulemaking authority to authorize additional types
of mergers would be added to BL § 600(8).

Section 17 of the bill would amend BL § 601-a to clarify the
authority of New York-chartered banking institutions to engage in an
acquisition transaction with either out-of-state banks or
out-of-state trust companies. It would also clarify that New York
licensed branches and agencies of foreign banks are considered
banking institutions subject to the requirements of §601-a if they
participate in an acquisition transaction involving a bulk transfer
of fiduciary relationships authorized under BL §604-a.
Language clarifying the Superintendent's authority to authorize
additional acquisition transactions, as well as to implement this
provision through rulemaking, would also be added.

Section 18 of the bill would amend BL §604-a to clarify that New York
licensed branches and agencies may engage in a transaction with
another banking institution involving transfer of all or
substantially all of the assets of the transferor institution, in
which the transferee institution agrees to assume all of the
fiduciary relationships of the transferor institution, and in which
the transferee files a certificate for approval and endorsement by
the superintendent, indicating that the transferee has succeeded to
all the rights and obligations of the transferor with respect to such
fiduciary relationships.

Section 19 would provide for an immediate effective date.

EXISTING LAW:

BL § 28-b sets forth Community Reinvestment Act requirements
applicable to banking institutions.

BL § 28-c contains requirements that must be followed by banking
organizations in connection with planned branch closings.


BL § 105(5) addresses the ability of a bank or trust company to
maintain branch offices as a result of a merger or acquisition
transaction.

BL § 105-b authorizes a New York trust company to establish or
acquire and maintain a trust once within New York state or in
another state, and provides the procedures for obtaining approval to
do so.

BL §202-a addresses the authority of foreign banking corporations to
maintain branches and receive deposits in New York. Currently,
foreign banking corporations are described in this section as
including banking corporations organized under the laws of a foreign
country or Puerto Rico.

BL § 222 contains definitions for purposes of Article 5-C of the BL,
which relates to interstate branching.

BL § 223 authorizes an out-of-state bank to maintain one or more
branches in New York as a result of an acquisition transaction.

BL § 223-a prohibits an acquisition transaction which would result in
an out-of-state bank maintaining a branch or branches in New York if
the effect of such transaction would be to terminate the separate
existence of a less-than five year old banking institution that was
directly or indirectly chartered by the acquiring institution. Its
purpose was to prevent an acquisition transaction designed to
accomplish unauthorized de novo branching.

BL § 223-b authorizes de novo branching into New York
by out-of-state banks, on a reciprocal basis.

BL §223-c sets forth the application requirements for establishment of
a de novo branch in New York by an out-of-state state bank.

BL § 224 describes the processes by which an out-of-state bank may
maintain additional branch offices in New York.

BL §225 describes the application and approval procedures for
interstate merger and acquisition transactions between New York banks
and out-of-state banks. It also contains provisions describing the
legal effect of a merger or other consolidation.

BL § 225-a describes the power of the Superintendent to examine
branches or trust offices of out-of-state banks.

BL § 225-b sets forth the applicability of certain sections of
Articles 5 and 5-B of the BL to branches of out-of-state banks that
are established in New York under the authority in Article 5-C.

BL § 600 enumerates authorized merger transactions between two New
York banking institutions as well as between New York banking
institutions and other banking institutions.

BL § 601-a enumerates authorized acquisition transactions between two
New York banking institutions as well as between New York banking
institutions and other banking institutions.


BL §604-a authorizes a bulk transfer of fiduciary relationships as
part of a transaction between banking institutions in which the
transferee corporation is assuming all or substantially all of the
assets, as well as the deposit liabilities, if any, of the transferor
corporation.

PRIOR LEGISLATIVE HISTORY:

This is a new bill.

STATEMENT IN SUPPORT:

The changes made by this bill streamline the branching processes for
banking institutions operating under the Banking Law. Changes are
also made in a number of cases (e.g. Sections 8,9, 10) to conform to
changes made in federal law by the Dodd Frank Act. These changes are
necessary to insure that New York law remains consistent with federal
law and state laws across the country.

FISCAL IMPLICATIONS:

There are no fiscal implications from this bill.

EFFECTIVE DATE:

The bill would take effect immediately.

2011-S6777A - Bill Text download pdf

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

                                 6777--A
    Cal. No. 898

                            I N  S E N A T E

                             March 21, 2012
                               ___________

Introduced  by Sen. GRIFFO -- (at request of the Department of Financial
  Services) -- read twice and ordered printed, and when  printed  to  be
  committed  to  the  Committee on Banks -- reported favorably from said
  committee, ordered to first and second  report,  ordered  to  a  third
  reading,  amended  and  ordered  reprinted, retaining its place in the
  order of third reading

AN ACT to amend the banking law, in relation to branches, trust  offices
  and   interstate   branching   transactions,  and  to  repeal  certain
  provisions of such law relating thereto

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

  Section  1.  Subdivision  4  of  section  28-b  of the banking law, as
amended by chapter 883 of the laws  of  1980,  is  amended  to  read  as
follows:
  4. Notwithstanding any other provision of this chapter or OTHER 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 and foreign banking corpo-
rations incorporated, chartered, organized or licensed under the laws of
this state. IN THE CASE OF A FOREIGN BANKING CORPORATION LICENSED PURSU-
ANT TO THIS ARTICLE AND MAINTAINING A BRANCH IN THIS STATE, THE  MANAGE-
MENT  OF  THE BRANCH SHALL ESTABLISH A COMMITTEE OF NOT FEWER THAN THREE
OFFICERS TO FUNCTION IN THE ROLE OF A BOARD OF DIRECTORS FOR PURPOSES OF
THIS SECTION.
  S 2. Subdivisions 1, 2, and 3 of section 28-c of the banking  law,  as
added  by  chapter  362  of  the  laws  of  1984, are amended to read as
follows:
  1. This  section  is  intended  to  provide  the  superintendent  with
detailed information concerning the planned closing of branch offices by
state-chartered  banking  organizations, the availability of alternative
financial services within the general area served by such branch and the
economic impact upon the community resulting from such closing,  and  to
provide the superintendent with authority to conduct meetings with bank-
ing  organizations  and community groups in areas where a branch closing

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                      [ ] is old law to be omitted.
                                                           LBD14431-04-2

S. 6777--A                          2

is planned.  THE REQUIREMENTS OF THIS SECTION SHALL  NOT  APPLY  TO  THE
FOLLOWING:
  (A) BRANCH OFFICES LOCATED OUTSIDE THE STATE OF NEW YORK;
  (B)  A SALE OR OTHER TRANSFER OF A BRANCH OFFICE WHICH DOES NOT RESULT
IN ANY MATERIAL REDUCTION IN THE  FINANCIAL  SERVICES  OFFERED  AT  SUCH
LOCATION;
  (C)  THE  CLOSING OF A BRANCH OFFICE ACQUIRED FROM A FAILING OR FAILED
INSTITUTION, PROVIDED THAT SUCH CLOSING OCCURS WITHIN ONE HUNDRED EIGHTY
DAYS FROM THE DATE OF THE ACQUISITION; OR
  (D) THE CLOSING OF A BRANCH OFFICE WHEN UNEXPECTED CIRCUMSTANCES  MAKE
STRICT  COMPLIANCE IMPOSSIBLE, PROVIDED THAT SUCH DETERMINATION SHALL BE
SOLELY WITHIN THE DISCRETION OF THE SUPERINTENDENT AND PROVIDED  FURTHER
THAT  THE  SUPERINTENDENT MAY REQUIRE THE BANKING ORGANIZATION TO COMPLY
WITH THE REQUIREMENTS OF THIS SECTION TO THE EXTENT POSSIBLE.
  2. Every banking organization shall submit  to  the  superintendent  a
report  of its planned or intended closing of a branch office, and shall
give written notice to  any  person  who  maintains  a  banking  account
relationship  with  such  branch  office  which  is  the subject of such
planned or intended closing, no less than ninety days nor more than  one
hundred  [twenty]  EIGHTY  days prior to the date of actual closing. The
banking organization shall post and keep posted in a  conspicuous  place
notice  of such planned closing at such branch office, commencing on the
date the banking organization submits its report pursuant to the forego-
ing provision and until the proposed closing is effected or withdrawn.
  3. Such report shall be in writing and shall contain  a  statement  of
the  reasons leading to the decision to close the branch and any statis-
tical or other information in support thereof. Such report shall be  and
remain  at  all  times  subject  to the provisions of subdivision ten of
section thirty-six of this chapter. Such report shall also  contain  THE
FOLLOWING  INFORMATION,  PROVIDED  THAT  THE SUPERINTENDENT MAY WAIVE OR
MODIFY THESE REQUIREMENTS FOR GOOD CAUSE:
  (a) a past (at least three years),  present  and  projected  financial
analysis  of  deposits  at  such  branch  (giving number of accounts and
dollar amount, profits and losses);
  (b) a past (at least three years),  present  and  projected  financial
analysis  of  profits  and  losses relating to the loan activity at such
branch;
  (c) a detailed map of the general area served by such  branch  showing
the distance and direction of all remaining state or federally chartered
institutions  within  such area and any licensee of the department which
provides financial services of any kind; and
  (d) a description of any  planned  limited  or  full  service  banking
facility  to  be opened within such area by either the reporting banking
organization or, if known, to the reporting banking organization, by any
other banking institution.
  S 3. Paragraph (a) of subdivision 5 of section 105 of the banking law,
as amended by chapter 547 of the laws of 2008, is  amended  to  read  as
follows:
  (a) A bank or trust company may, if the merger or asset acquisition is
permitted  by  law,  and if the merger or asset acquisition agreement so
provides, maintain as a branch office or branch offices OR TRUST  OFFICE
OR  TRUST  OFFICES,  the  place or places of business of any bank, trust
company, safe deposit company,  national  banking  association,  out-of-
state  state bank OR OUT-OF-STATE TRUST COMPANY (as such [term is] TERMS
ARE defined in section two hundred twenty-two of this chapter),  savings
bank,  or  savings and loan association, federal savings bank or federal

S. 6777--A                          3

savings and loan association which it has received into itself by merger
or by acquisition of assets thereof pursuant to the provisions  of  this
chapter  and,  if  the  merger or acquisition agreement so provides, may
maintain,  as  its  principal  office  rather  than as a branch OR TRUST
office, the principal office of such banking institution with  which  it
has merged or from which it has acquired assets (so long as such princi-
pal  office is located in this state), in which event the former princi-
pal office of the receiving or acquiring bank or trust  company  may  be
maintained  as  a branch office. A state bank or trust company resulting
from the conversion of  a  national  banking  association  may,  if  the
conversion  agreement so provides, maintain as a branch office or branch
offices OR TRUST OFFICE OR TRUST OFFICES the place or places of business
of the national banking association. As used in  this  subdivision,  the
term  "place  or  places of business" shall include any branch office OR
TRUST OFFICE of the banking institution that was  converted,  merged  or
the  assets  of  which were acquired which has been approved pursuant to
this chapter or federal law or the law of another state, as the case may
be, even if such branch office OR TRUST OFFICE is not  in  operation  at
the time said merger, asset acquisition or conversion becomes effective.
  S  4.  Subdivision  1 of section 105-b of the banking law, as added by
chapter 209 of the laws of 2008, is amended to read as follows:
  1. A trust company may establish or acquire and maintain one  or  more
trust  offices anywhere in this state, or[, if and to the extent author-
ized by another state, in a state other than  this  state]  OUTSIDE  THE
STATE OF NEW YORK, EITHER IN THE UNITED STATES OR IN FOREIGN COUNTRIES.
  S  5. Subdivision 2 of section 202-a of the banking law, as amended by
chapter 288 of the laws of 1987, is amended to read as follows:
  2. A foreign banking corporation organized under the laws of a foreign
country [or of Puerto Rico] may be licensed pursuant to article  two  of
this  chapter  to  maintain  a  branch or branches in this state and may
engage in the business of receiving deposits in this state.
  S 6. Section 222 of the banking law, as amended by chapter  9  of  the
laws  of  1996 and subdivision 10 as added by chapter 217 of the laws of
2010, is amended to read as follows:
  S 222. Definitions. In this article, the following  definitions  shall
apply:
  1. The term "out-of-state bank" means an out-of-state state bank [or],
an  out-of-state national bank, OR AN OUT-OF-STATE FEDERAL SAVINGS ASSO-
CIATION.
  2. The term "out-of-state state bank" means a state bank, as such term
is defined in section 3(a)(2) of the Federal Deposit Insurance  Act  (12
U.S.C.  1813(a)(2)),  OR  AN OUT-OF-STATE STATE-CHARTERED TRUST COMPANY,
but such term shall not include a banking organization.
  3. The term "out-of-state national  bank"  means  a  national  banking
association the main office of which is located outside this state.
  4.  THE  TERM  "OUT-OF-STATE  FEDERAL  SAVINGS  ASSOCIATION" MEANS ANY
FEDERAL SAVINGS ASSOCIATION OR FEDERAL SAVINGS BANK WHICH  IS  CHARTERED
UNDER  SECTION  5  OF THE HOME OWNERS LOAN ACT (12 U.S.C. 1464) THE HOME
OFFICE OF WHICH IS LOCATED OUTSIDE THIS STATE.
  5. THE TERM "OUT-OF-STATE TRUST COMPANY"  MEANS  EITHER  A  NATIONALLY
CHARTERED TRUST COMPANY OR AN OUT-OF-STATE STATE-CHARTERED TRUST COMPANY
THAT  HAS  THE POWER TO EXERCISE FIDUCIARY POWERS, BUT IS NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION.
  [4.] 6. The term "New York bank" means  a  bank,  trust  company  [or]
savings  bank, OR SAVINGS AND LOAN ASSOCIATION as such terms are defined

S. 6777--A                          4

in subdivisions one, two [and], four AND EIGHT of section  two  of  this
chapter.
  [5.]  7.  The term "state" means any state of the United States (other
than this state), the District of Columbia, any territory of the  United
States,  PUERTO  RICO,  Guam, American Samoa, the Trust Territory of the
Pacific Islands, the United States  Virgin  Islands,  and  the  Northern
Mariana Islands.
  [6.]  8.  The  term "home state" means with respect to an out-of-state
state bank OR OUT-OF-STATE  STATE-CHARTERED  TRUST  COMPANY,  the  state
under  the  laws  of  which such out-of-state state bank OR OUT-OF-STATE
STATE-CHARTERED TRUST COMPANY is incorporated  or  otherwise  organized,
and  with respect to an out-of-state national bank OR TRUST COMPANY, the
state in which such out-of-state national bank's OR TRUST COMPANY'S main
office is located.
  [7.] 9. The term "acquisition transaction" means any  merger,  consol-
idation  or  purchase  of assets and assumption of liabilities of all or
part of a banking institution.
  [8.] 10. The term "like-type banking organization" means, with respect
to an out-of-state bank, a banking organization with the type of charter
that most nearly corresponds to the charter of such  out-of-state  bank,
as determined by the superintendent.
  [9.]  11. The term "appropriate state supervisor" means the home state
supervisor with supervisory and regulatory jurisdiction over an  out-of-
state  state  bank  OR OUT-OF-STATE STATE-CHARTERED TRUST COMPANY in its
home state.
  [10.] 12. The term "banking institution" means any bank, trust  compa-
ny,  savings  bank, savings and loan association, or branch of a foreign
banking corporation the deposits of which are  insured  by  the  federal
deposit  insurance corporation, which is incorporated, chartered, organ-
ized or licensed under the laws of this state or any other state of  the
United States, OR UNDER THE LAWS OF THE UNITED STATES.
  13.    THE  TERM "BRANCH" MEANS ANY OFFICE OF A BANKING INSTITUTION AT
WHICH DEPOSITS ARE RECEIVED, CHECKS PAID OR MONEY LENT. THE  TERM  SHALL
NOT  INCLUDE  AN  AUTOMATED TELLER MACHINE OR OTHER ELECTRONIC FACILITY.
FOR PURPOSES OF THIS ARTICLE, THE TERM "BRANCH" SHALL ALSO REFER TO  THE
PRINCIPAL OR MAIN OFFICE OF A BANKING INSTITUTION.
  14.  THE  TERM "TRUST OFFICE" MEANS AN OFFICE OF A BANKING INSTITUTION
OTHER THAN A BRANCH AT WHICH SUCH INSTITUTION MAY CONDUCT  ONE  OR  MORE
FIDUCIARY ACTIVITIES PERMITTED FOR A TRUST COMPANY.
  S 7. Section 223 of the banking law, as added by chapter 9 of the laws
of 1996, is amended to read as follows:
  S 223. [Initial entry by out-of-state banks] ESTABLISHMENT OF BRANCHES
OR TRUST OFFICES BY MEANS OF AN ACQUISITION TRANSACTION. An out-of-state
bank  [that does not operate a branch in this state] may maintain one or
more branches OR ONE OR MORE TRUST OFFICES located in  this  state  THAT
HAVE BEEN acquired by means of an acquisition transaction.
  S 8. Section 223-a of the banking law is REPEALED.
  S  9. Section 223-b of the banking law, as added by chapter 316 of the
laws of 2008, is amended to read as follows:
  S [223-b. Initial entry] 223-A. ESTABLISHMENT OF BRANCHES  by  out-of-
state  banks  by  de  novo branching. In addition to the authority of an
out-of-state bank to maintain a branch or branches by means of an acqui-
sition transaction, an out-of-state bank may [enter New York  by  estab-
lishing] ESTABLISH one or more de novo branches in this state; provided,
however,  that  [in each instance the laws of the jurisdiction where the
out-of-state bank has its principal office  expressly  authorize  a  New

S. 6777--A                          5

York  bank to establish one or more de novo branches under conditions no
more restrictive than those imposed by this section as so determined  by
the  superintendent]  AN OUT-OF-STATE STATE BANK SHALL OBTAIN THE SUPER-
INTENDENT'S  PRIOR  APPROVAL  IN  ACCORDANCE  WITH  THE  REQUIREMENTS IN
SECTION TWO HUNDRED TWENTY-FOUR OF THIS CHAPTER.
  S 10. Section 223-c of the banking law is REPEALED.
  S 11. Section 224 of the banking law, as amended by chapter 9  of  the
laws  of  1996  and  subdivision 1 as amended by section 26 of part O of
chapter 59 of the laws of 2006, is amended to read as follows:
  S 224. [Establishment of additional  branches  by  out-of-state  state
banks]  APPLICATION  FOR  THE ESTABLISHMENT OF BRANCHES OR TRUST OFFICES
NOT RESULTING FROM AN ACQUISITION TRANSACTION; RETENTION OF BRANCHES  OR
TRUST  OFFICES RESULTING FROM MERGER OR ACQUISITION.  1. [Subject to the
provisions of this article, an out-of-state state bank  which  maintains
one or more branches in this state may open and occupy one or more addi-
tional  de novo branches in this state with prior approval of the super-
intendent. An  application  for  approval  submitted  pursuant  to  this
section  shall  contain  such  information  as  the superintendent deems
necessary.] AN APPLICATION FOR APPROVAL TO THE SUPERINTENDENT CONTAINING
SUCH INFORMATION AS HE OR SHE DEEMS NECESSARY SHALL BE SUBMITTED  BY  AN
OUT-OF-STATE  STATE  BANK  PRIOR TO THE ESTABLISHMENT OF EACH BRANCH. At
the time of making such application, an investigation fee as  prescribed
pursuant  to  section  eighteen-a  of  this chapter shall be paid to the
superintendent for each branch [office] for which approval is sought. If
the superintendent finds that the opening of the branch [office] is  not
consistent  with  the  declaration of policy set forth in section ten of
this chapter, he or she shall notify the applicant that the  application
has been denied.  AN OUT-OF-STATE STATE BANK OR OUT-OF-STATE STATE-CHAR-
TERED  TRUST  COMPANY  SEEKING TO ESTABLISH ONE OR MORE TRUST OFFICES IN
THIS STATE SHALL COMPLY WITH THE NOTICE PROCEDURES SET FORTH IN SUBDIVI-
SION FOUR OF SECTION ONE HUNDRED THIRTY-ONE OF THIS CHAPTER.
  2. Subject to the provisions of this article, if the merger or  acqui-
sition agreement so provides, an out-of-state state bank may maintain as
a branch or branches OR TRUST OFFICE OR TRUST OFFICES the place or plac-
es  of  business  of  any banking institution which it has received into
itself as a result of an  acquisition  transaction  authorized  by  this
article.
  3.  No out-of-state state bank shall open, occupy or maintain a branch
in this state at a location not permitted to a like-type banking  organ-
ization.
  S  12.    The  banking law is amended by adding a new section 224-a to
read as follows:
  S  224-A.  CHANGE  OF  LOCATION  OF  BRANCHES  OR  TRUST  OFFICES   BY
OUT-OF-STATE  STATE  BANKS  OR OUT-OF-STATE STATE-CHARTERED TRUST COMPA-
NIES. AN APPLICATION FOR APPROVAL CONTAINING  SUCH  INFORMATION  AS  THE
SUPERINTENDENT  DEEMS  NECESSARY  SHALL  BE SUBMITTED BY AN OUT-OF-STATE
STATE BANK OR AN OUT-OF-STATE STATE-CHARTERED TRUST COMPANY PRIOR TO THE
RELOCATION OF A BRANCH OR TRUST OFFICE IN THIS STATE.  AT  THE  TIME  OF
MAKING  SUCH APPLICATION, AN INVESTIGATION FEE AS PRESCRIBED PURSUANT TO
SECTION EIGHTEEN-A OF THIS CHAPTER SHALL BE PAID TO  THE  SUPERINTENDENT
FOR  EACH  BRANCH  OR  TRUST OFFICE FOR WHICH APPROVAL IS SOUGHT. IF THE
SUPERINTENDENT SHALL BE SATISFIED THAT SUCH RELOCATION MAY BE  PERMITTED
UNDER  THE  TERMS  OF  THIS  CHAPTER  AND  THAT  THERE  IS NO REASONABLE
OBJECTION TO SUCH CHANGE, HE OR SHE SHALL APPROVE SUCH APPLICATION.

S. 6777--A                          6

  S 13. Section 225 of the banking law, as amended by chapter 9  of  the
laws  of  1996 and subdivisions 1 and 2 as amended by chapter 547 of the
laws of 2008, is amended to read as follows:
  S 225.  Interstate  acquisition transactions. 1. [Without limiting the
transactions permissible under section two hundred twenty-three of  this
article,  an]  AN  out-of-state bank may engage in an acquisition trans-
action with a New York bank OR WITH A BANKING INSTITUTION LOCATED IN NEW
YORK and may maintain as a branch or branches OR TRUST OFFICE  OR  TRUST
OFFICES,  THE  BRANCHES  OR  TRUST  OFFICES, RESPECTIVELY, [the place or
places of business] of any such New York  bank  OR  BANKING  INSTITUTION
which  it  has  received  into  itself  as a result of such transaction,
subject to the requirements of this article.
  2. Except when section twenty-nine of this  chapter  applies,  section
six  hundred  one  or six hundred one-a of this chapter, as the case may
be, and section six hundred one-b of this chapter  shall  apply  to  any
acquisition  transaction  [authorized  by  this  article]  in  which the
receiving corporation is a New York bank. In the case of [any other]  AN
acquisition   transaction   authorized  by  this  article  IN  WHICH  AN
OUT-OF-STATE BANK OR OUT-OF-STATE TRUST COMPANY IS THE RECEIVING  CORPO-
RATION,  the  out-of-state bank OR OUT-OF-STATE TRUST COMPANY shall file
with the superintendent a copy of any application filed with the  appro-
priate state supervisor and appropriate federal banking agency.
  3. At the time when a merger or consolidation authorized by this arti-
cle OR BY SECTION SIX HUNDRED OF THIS CHAPTER becomes effective:
  (a)  the resulting or consolidated corporation shall be considered the
same business and corporate entity as each  of  the  constituent  corpo-
rations;
  (b)  all  the  property,  rights, powers and franchises of each of the
constituent corporations shall vest in  the  resulting  or  consolidated
corporation  and  the  resulting  or  consolidated  corporation shall be
subject to and shall be deemed to have assumed all of the debts, liabil-
ities, obligations and duties of each  constituent  corporation  and  to
have  succeeded  to all of its relationships, fiduciary or otherwise, as
fully and to the same extent as if such property, rights, powers,  fran-
chises,  debts,  liabilities,  obligations, duties and relationships had
been originally acquired, incurred or entered into by the  resulting  or
consolidated corporation;
  (c)  any  reference to a constituent corporation in any contract, will
or document, whether executed or taking effect before or after the merg-
er or consolidation, shall be considered a reference to the resulting or
consolidated corporation if not inconsistent with the  other  provisions
of the contract, will or document; [and]
  (d)  a  pending  action  or  other  judicial  proceeding  to which any
constituent corporation is a party, shall not be deemed to  have  abated
or  to  have  discontinued by reason of the merger or consolidation, but
may be prosecuted to final judgment, order or decree in the same  manner
as if the merger or consolidation had not been made, or the resulting or
consolidated corporation may be substituted as a party to such action or
proceeding,  and  any  judgment,  order or decree may be rendered for or
against it that might have been rendered for or against such constituent
corporation if the merger or consolidation had not occurred[.]; AND
  (E) NOTHING IN THIS SUBDIVISION SHALL BE DEEMED TO AUTHORIZE A BANKING
INSTITUTION TO EXERCISE ANY POWER OR ENGAGE IN ANY ACTIVITY  NOT  OTHER-
WISE PERMITTED UNDER ITS CHARTER.
  4. In the case of a merger or consolidation authorized by this article
in  which  an  out-of-state  bank  OR  OUT-OF-STATE TRUST COMPANY is the

S. 6777--A                          7

resulting or consolidated corporation, the franchise of any  constituent
New  York  bank shall automatically terminate when the merger or consol-
idation is consummated.
  S  14.  Section 225-a of the banking law, as amended by chapter 454 of
the laws of 2006, is amended to read as follows:
  S 225-a. Power of superintendent to examine branches or trust  offices
of out-of-state state banks OR OUT-OF-STATE STATE-CHARTERED TRUST COMPA-
NIES.  The superintendent shall have the power at any time in his or her
discretion to examine every branch or trust office located in this state
of an out-of-state state  bank  OR  OUT-OF-STATE  STATE-CHARTERED  TRUST
COMPANY  for  the same purposes and to the same extent as is provided in
the case of banking organizations pursuant to  the  provisions  of  this
chapter.
  S  15.  Section 225-b of the banking law, as amended by chapter 217 of
the laws of 2010, is amended to read as follows:
  S 225-b. Applicability of certain sections to out-of-state banks.   1.
Except as otherwise provided in this section, nothing in article five or
article  five-B  of  this chapter shall apply to an out-of-state bank OR
OUT-OF-STATE TRUST COMPANY authorized to open,  occupy  and  maintain  a
branch  pursuant  to  the  provisions  of this article OR A TRUST OFFICE
PURSUANT TO THIS ARTICLE OR TO SUBDIVISION FOUR OF SECTION  ONE  HUNDRED
THIRTY-ONE OF THIS CHAPTER. Any reference in this chapter (other than in
article  five  or article five-B) to a foreign bank, foreign corporation
or foreign banking corporation shall be deemed to be a reference  to  an
out-of-state  bank  OR  OUT-OF-STATE  TRUST  COMPANY authorized to open,
occupy and maintain a branch pursuant to the provisions of this  article
OR  A  TRUST  OFFICE  PURSUANT TO THIS ARTICLE OR TO SUBDIVISION FOUR OF
SECTION ONE HUNDRED THIRTY-ONE  OF  THIS  CHAPTER.  Notwithstanding  the
foregoing,  [(a)] the provisions of [sections] SECTION two hundred two-h
(Repayment of deposits standing in the names of minors, trustees,  joint
depositors or custodians; interpleader in certain actions), [two hundred
three  (Change  of  location,  name  or  business)  and two hundred four
(Reports of foreign banking corporations; penalties)]  of  this  chapter
shall  apply  with  equal  force  and  effect  to  out-of-state banks OR
OUT-OF-STATE TRUST COMPANIES authorized  to  open,  occupy  or  maintain
branches pursuant to the provisions of this article[; and (b) the].
  2.  THE provisions of section three hundred ninety-nine-a, subdivision
three of section one hundred thirty,  subdivision  two  of  section  one
hundred forty-three, subdivision five of section two hundred forty-seven
and  subdivision five of section three hundred ninety-nine of this chap-
ter with respect to restrictions on executive officers or  directors  of
foreign  banking  corporations  and  the  provisions of sections twenty,
twenty-six, thirty, thirty-one and six hundred thirty-four, [subdivision
two of section thirteen,] subdivisions eleven and twelve of section  six
hundred  five, subdivision four of section six hundred six and paragraph
(a) of subdivision one of section fourteen of this  chapter,  shall  not
apply  to  out-of-state  banks  authorized  to  open, occupy or maintain
branches pursuant to the provisions of this article.
  S 16. Subdivisions 6 and 8 of section 600 of the banking law, subdivi-
sion 6 as amended by chapter 9 of the laws of  1996,  subdivision  8  as
amended by chapter 152 of the laws of 1993, as renumbered by chapter 455
of  the  laws of 2006 and as further amended by section 104 of part A of
chapter 62 of the laws of 2011, are amended to read as follows:
  (6) One or more banks, trust companies, stock-form  savings  banks  or
stock-form  savings and loan associations, with one or more out-of-state
banks OR OUT-OF-STATE TRUST  COMPANIES  as  such  [term  is]  TERMS  ARE

S. 6777--A                          8

defined  in  [subdivision one of] section two hundred twenty-two of this
chapter.
  (8)  Such  other mergers between and among banking institutions as the
superintendent of financial services may authorize.  THE  SUPERINTENDENT
MAY  PROMULGATE SUCH REGULATIONS AS HE OR SHE DEEMS NECESSARY AND PROPER
TO IMPLEMENT AND DEFINE THE PROVISIONS OF THIS PARAGRAPH.
  S 17. Paragraph (g) of subdivision 1 of section 601-a of  the  banking
law,  as  amended  by  chapter  152  of  the laws of 1993 and as further
amended by section 104 of part A of chapter 62 of the laws of  2011,  is
amended to read as follows:
  (g)  ONE  OR  MORE BANKS, TRUST COMPANIES, STOCK-FORM SAVINGS BANKS OR
STOCK-FORM SAVINGS AND LOAN ASSOCIATIONS, WITH ONE OR MORE  OUT-OF-STATE
BANKS  OR  OUT-OF-STATE  TRUST  COMPANIES  AS  SUCH TERMS ARE DEFINED IN
SECTION TWO HUNDRED TWENTY-TWO OF THIS CHAPTER.
  (H) One or more banking institutions by  another  banking  institution
[to  the  extent  permitted  under  regulations of the superintendent of
financial services] AS THE SUPERINTENDENT MAY AUTHORIZE. FOR PURPOSES OF
THIS PARAGRAPH, A BRANCH OR AGENCY  OF  A  FOREIGN  BANKING  CORPORATION
LICENSED  PURSUANT  TO  ARTICLE TWO OF THIS CHAPTER AND SEEKING APPROVAL
FOR A TRANSFER  OF  FIDUCIARY  RELATIONSHIPS  PURSUANT  TO  SECTION  SIX
HUNDRED  FOUR-A  OF  THIS CHAPTER SHALL BE CONSIDERED A BANKING INSTITU-
TION. THE SUPERINTENDENT MAY PROMULGATE SUCH REGULATIONS AS  HE  OR  SHE
DEEMS  NECESSARY  AND  PROPER  TO IMPLEMENT AND DEFINE THE PROVISIONS OF
THIS PARAGRAPH.
  S 18. Section 604-a of the banking law, as added by chapter 743 of the
laws of 1958, the section heading and subdivision 1 as amended by  chap-
ter  297 of the laws of 1993, subdivision 2 as amended by chapter 489 of
the laws of 1963 and subdivision 3 as amended by chapter 115 of the laws
of 1981, is amended to read as follows:
  S 604-a. Transfer of fiduciary relationships [of  a  banking  institu-
tion]. 1. If any banking institution, including a bank or trust company,
national  banking  association,  savings  bank, savings and loan associ-
ation, federally chartered savings  bank,  federally  chartered  savings
[and  loan]  association,  OR  A  BRANCH  OR AGENCY OF A FOREIGN BANKING
CORPORATION LICENSED PURSUANT TO ARTICLE TWO OF THIS CHAPTER, located in
this state, shall have transferred  all  or  substantially  all  of  its
assets  to  another banking institution in a transaction subject to this
chapter pursuant to a  written  agreement  between  the  transferor  and
transferee  [corporations]  whereby  the  transferee  [corporation]  has
assumed the deposit liabilities, if any, of the transferor [corporation]
and has agreed to assume all fiduciary relationships of  the  transferor
[corporation],  the  transferee  [corporation] may file in the office of
the superintendent a certificate in its name and under  its  [corporate]
seal,  signed  by  its  president, secretary or cashier, setting forth a
copy of such agreement and stating  that  the  transferee  [corporation]
assumes  all  of  the  fiduciary relationships of the transferor [corpo-
ration] pursuant to the provisions of this section;  provided,  however,
that  such  certificate  shall  not  be filed unless the approval of the
superintendent shall have  been  endorsed  thereon  or  annexed  thereto
before  filing.   IN THE CASE OF A BRANCH OR AGENCY LICENSED PURSUANT TO
ARTICLE TWO OF THIS CHAPTER THAT SEEKS TO PARTICIPATE IN  A  TRANSACTION
DESCRIBED IN THIS SECTION, SUCH BRANCH OR AGENCY SHALL BE SUBJECT TO THE
APPLICATION AND APPROVAL REQUIREMENTS GOVERNING ACQUISITION TRANSACTIONS
SET  FORTH  IN  SECTIONS SIX HUNDRED ONE-A AND SIX HUNDRED ONE-B OF THIS
ARTICLE.

S. 6777--A                          9

  2. Upon the filing of such certificate in the  office  of  the  super-
intendent,  all  of  the  property, rights, powers and franchises of the
transferor [corporation] as  fiduciary  shall  vest  in  the  transferee
[corporation]  and  the transferee [corporation] shall be deemed to have
assumed  all  of  the  debts, liabilities, obligations and duties of the
transferor [corporation] as fiduciary, and to have succeeded to all  the
fiduciary  relationships  of  the transferor [corporation], as fully and
with the same effect as is provided in sections one hundred thirty-six-c
and six hundred two OF THIS CHAPTER in the case of  a  merger,  and  any
reference  to the transferor [corporation] as fiduciary in any capacity,
contained in any contract, will or document, whether executed or  taking
effect  before  or after the filing of such certificate in the office of
the superintendent, shall be considered a reference  to  the  transferee
[corporation]  if  not  inconsistent  with  the  other provisions of the
contract, will or document.
  3. For [the] purposes of this section, the fiduciary relationships  of
the transferor shall include all relationships as agent, trustee, guard-
ian, receiver, committee, conservator, executor, administrator, or other
fiduciary  in  any  capacity or for any purpose mentioned in section one
hundred OF THIS CHAPTER, and all  relationships  of  the  transferor  as
bailee or depositary of personal property.
  4.  This section shall not be deemed to authorize a transferee [corpo-
ration] to assume any fiduciary relationship of a kind  which  it  would
not  otherwise  have  power  to  undertake  and perform. Nothing in this
section shall be deemed to authorize any such  transferee  [corporation]
to  maintain  as  its own office any office previously maintained by the
transferor [corporation], and authority, if any, to  maintain  any  such
office  shall be governed by the applicable provisions of law other than
this section. This section shall not be deemed to apply to contracts  of
the transferor for the leasing of safe deposit boxes or vaults.
  S 19. This act shall take effect immediately.

2011-S6777B (ACTIVE) - Details

See Assembly Version of this Bill:: A10515
Law Section:: Banking Law
Laws Affected:: Rpld §§223-a & 223-c, amd Bank L, generally

2011-S6777B (ACTIVE) - Summary

Relates to branches, trust offices and interstate branching transactions.

2011-S6777B (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S6777B

TITLE OF BILL:
An act to amend the banking law, in relation to branches, trust
offices and interstate branching transactions, and to repeal certain
provisions of such law relating thereto

PURPOSE:
This bill would amend various sections of the Banking Law ("BL") to
streamline and conform to existing law and practice, provisions
relating to interstate branching transactions as well as to the
establishment of branches and trust offices by both New York banks and
out-of-state banks and trust companies. Most importantly, it conforms
New York law to recent federal law amendments made by the Dodd Frank
Wall Street Reform and Consumer Protection Act (the "Dodd Frank Act")
which permitted nationwide interstate de novo branching.  Finally, the
bill would make amendments to update and clarify the sections in the
Banking Law relating to branch closings and make a clarifying
amendment to the community reinvestment act provision applicable to
insured branches of foreign banks.

SUMMARY OF PROVISIONS:
Section 1 of the bill would amend subdivision 4 of BL § 28-b, which
deals with community reinvestment act requirements, to clarify that
the management of a foreign branch subject to BL §28-b (i.e. an
FDIC-insured branch) shall establish a committee to function as the

board of directors for purposes of that section.  Section 2 of the
bill would amend BL § 28-c relating to branch closings to introduce
flexibility with respect to the information required to be provided by
banking institutions pursuant to that section. Subdivision 2 of BL
28-c would change a reference to the maximum advance notice of closing
that may be provided by a banking institution from 120 days to 180
days. This would conform the time period with the Department's
implementing regulation. Subdivision 3 of BL § 28-c would add language
to give the Superintendent authority to waive or modify certain
information, primarily of a statistical and comparative nature,
required in a report of planned branch closing to be submitted by a
banking institution. For example, the required analyses of deposits
and loans often create an unnecessary burden on an institution when
such information would not be useful or relevant to the
Superintendent's determination.

Section 3 of the bill would amend subdivision five of BL § 105 to
clarify that a bank or trust company may, if permitted by law,
maintain branches or trust offices it has acquired as a result of a
merger or acquisition transaction.

Section 4 of the bill would amend BL § 105-b to clarify that New York
bust companies may have trust offices in foreign countries.

Section 5 of the bill would amend subdivision 2 of BL § 202-a to
delete a reference to Puerto Rico. This would eliminate uncertainty as
to whether banks chartered under the laws of Puerto Rico are governed
by the foreign bank provisions of Banking Law Article 5 as opposed to
the domestic out-of-state bank provisions of Article 5-C (i.e., BL
222-227-c). The amendment is complementary to the clarification made


in BL § 222(7) regarding the definition of "state" and is intended to
clarify that banks chartered in Puerto Rico are considered domestic
out-of-state banks, consistently with how they are treated for Federal
Deposit Insurance Act purposes.

Section 6 of the bill would amend BL § 222 of the BL to add new
definitions for the terms "out-of-state federal savings association,"
"out-of-state trust company," "branch," and "trust office," for
purposes of the article. BL § 222 would also be amended to modify the
definitions of the terms "out-of-state bank," "out-of-state state
bank," "appropriate state supervisor," and "banking institution" to
broaden these terms, where applicable, to include out-of-state
state-chartered trust companies as well as federal institutions within
the definitions. Interstate transactions may involve both banks and
trust companies, whether state- or federally-chartered, resulting in
the maintenance of either interstate branches or trust offices. BL
222(7) would also be amended to modify the definition of "state" to
include Puerto Rico. This would bring the definition into conformity
with the definition of "state" under the Federal Deposit Insurance
Act.

Section 7 of the bill would amend both the heading and the text of BL
§ 223-a to accurately describe that section as permitting the
establishment of either branches or trust offices in New York by
out-of-state banks (not necessarily constituting initial entry into
New York) by means of an acquisition transaction.

Section 8 of the bill would repeal BL § 223-a. That section, which
prohibited branching into New York as a result of the acquisition of a
New York chartered bank less than five years old that was directly or
indirectly established by the acquiring institution, is no longer
necessary as a result of de novo nationwide interstate branching
permitted by the Dodd Frank Act. BL §223-a was intended to prohibit
acquisition transactions designed to accomplish previously
unauthorized de novo interstate branching.

Section 9 of the bill would amend both the heading and the text of BL
§223-b, which was added in 2008 to authorize de novo branching into
New York on a reciprocal basis by out-of-state banks (i.e.. if the
home state of the branching bank would permit de novo entry by New
York banks). The language in BL §223-b requiring reciprocity should be
deleted as it is no longer consistent with federal law, as a result of
the Dodd Frank Act. The heading of the section would be amended to
eliminate the reference to "initial entry" as that section would
permit an out-of-state bank to establish not only an initial branch,
but also additional branches, in New York, without requiring an
acquisition transaction. This section would also be renumbered.

Section 10 of the bill would repeal BL § 223-c of the BL, which deals
with the application requirements for establishment of a de novo
branch by an out-of-state bank. It would be combined with BL § 224,
which deals with separate application requirements for additional
branches by out-of-state banks.

Section 11 of the bill would amend both the heading and the text of BL
§224. The heading would be amended to describe the scope of both
subdivisions of that section. Subdivision 1 would clarify the


application (or notice) requirements for branches and trust offices
established by out-of-state state banks and out-of-state
state-chartered trust companies not resulting from an acquisition
transaction. Subdivision 2 would address the authority of out-of-state
state banks to maintain existing branches and trust offices they have
acquired pursuant to the terms of a merger or acquisition agreement.

Section 12 would add a new BL §224-a to set forth application and
approval requirements for the relocation of either a New York branch
or trust office by an out-of-state state bank or out-of-state
state-chartered trust company.

Section 13 of the bill would amend BL .225 by adding language in BL
§225(1) to make clear that an out-of-state bank may engage in an
acquisition transaction not only with a New York bank, but with a
banking institution, as that term is defined in BL §222, which
includes non-New York chartered banks, including federally-chartered
banking institutions. Such transactions with non-New York-chartered
banks constitute a legitimate means by which an out-of-state bank may
acquire branches in New York. This language would bring the wording of
BL §255 into conformity with the definition of "acquisition
transaction" in BL § 222, which references the acquisition of all or
part of a "banking institution". This change would permit the
introductory phrase "Without limiting the transactions permissible
under section two hundred twenty-three of this article" to be deleted.
This language was added in 2008 in an attempt to clarify that, while
BL §225 only referenced acquisition transactions involving New York
banks, in fact, acquisition transactions involving non-New York
chartered banks located in New York also were permitted.  Subdivision
2 of BL § 225 would be amended by the addition and deletion of certain
language for accuracy and clarity. The phrase "authorized by this
article" would be deleted in the first sentence as it is an inaccurate
reference to acquisition transactions in which the receiving
corporation is a New York bank. Such transactions are actually
authorized by BL §§ 600 and 601-a. The second sentence, referencing
acquisition transactions in which the receiving corporation is an
out-of-state bank or trust company, would be further clarified.
Subdivision 3 of BL §225 would be clarified for accuracy by adding a
reference to BL §§ 600 and 601-a. Also, a new paragraph (e) would be
added to Subdivision 3 to clarify that a banking institution does not
acquire or gain powers it otherwise does not have under its own
charter, by virtue of a merger or purchase and assumption transaction
with another institution. Subdivision 4 of §225 would be amended to
add a reference to an out-of- state trust company.

Section 14 of the bill would amend both the heading and the text of BL
§225-a to add references to out-of-state state-chartered trust
companies.

Section 15 of the bill would amend BL §225-b to clarify those Banking
Law provisions in Articles 5 and 5-B of the Banking Law that are
applicable to out-of-state banks or out-of-state trust company
branches or trust offices in New York.

Section 16 would amend BL §600 to clarify the authority of New
York-chartered banking institutions to merge with either out-of-state
banks or out-of-state trust companies. Language clarifying the


Superintendent's rulemaking authority to authorize additional types of
mergers would be added to BL § 600(8).

Section 17 of the bill would amend BL § 601-a to clarify the authority
of New York-chartered banking institutions to engage in an acquisition
transaction with either out-of-state banks or out-of-state trust
companies. It would also clarify that New York licensed branches and
agencies of foreign banks are considered banking institutions subject
to the requirements of §601-a if they participate in an acquisition
transaction involving a bulk transfer of fiduciary relationships
authorized under BL §604-a. Language clarifying the Superintendent's
authority to authorize additional acquisition transactions, as well as
to implement this provision through rulemaking, would also be added.

Section 18 of the bill would amend BL §604-a to clarify that New York
licensed branches and agencies may engage in a transaction with
another banking institution involving transfer of all or substantially
all of the assets of the transferor institution, in which the
transferee institution agrees to assume all of the fiduciary
relationships of the transferor institution, and in which the
transferee files a certificate for approval and endorsement by the
superintendent, indicating that the transferee has succeeded to all
the rights and obligations of the transferor with respect to such
fiduciary relationships.

Section 19 would provide for an immediate effective date.

EXISTING LAW:

BL § 28-b sets forth Community Reinvestment Act requirements
applicable to banking institutions.
BL § 28-c contains requirements that must be followed by banking
organizations in connection with planned branch closings.
BL § 105(5) addresses the ability of a bank or trust company to
maintain branch offices as a result of a merger or acquisition
transaction.
BL § 105-b authorizes a New York trust company to establish or acquire
and maintain a trust once within New York state or in another state,
and provides the procedures for obtaining approval to do so.
BL §202-a addresses the authority of foreign banking corporations to
maintain branches and receive deposits in New York. Currently,
foreign banking corporations are described in this section as
including banking corporations organized under the laws of a foreign
country or Puerto Rico.
BL § 222 contains definitions for purposes of Article 5-C of the BL,
which relates to interstate branching.
BL § 223 authorizes an out-of-state bank to maintain one or more
branches in New York as a result of an acquisition transaction.
BL § 223-a prohibits an acquisition transaction which would result in
an out-of-state bank maintaining a branch or branches in New York if
the effect of such transaction would be to terminate the separate
existence of a less-than five year old banking institution that was
directly or indirectly chartered by the acquiring institution. Its
purpose was to prevent an acquisition transaction designed to
accomplish unauthorized de novo branching.
BL § 223-b authorizes de novo branching into New York by out-of-state
banks, on a reciprocal basis.


BL §223-c sets forth the application requirements for establishment of
a de novo branch in New York by an out-of-state state bank.
BL § 224 describes the processes by which an out-of-state bank may
maintain additional branch offices in New York.
BL §225 describes the application and approval procedures for
interstate merger and acquisition transactions between New York banks
and out-of-state banks. It also contains provisions describing the
legal effect of a merger or other consolidation.
BL § 225-a describes the power of the Superintendent to examine
branches or trust offices of out-of-state banks.
BL § 225-b sets forth the applicability of certain sections of
Articles 5 and 5-B of the BL to branches of out-of-state banks that
are established in New York under the authority in Article 5-C.
BL § 600 enumerates authorized merger transactions between two New
York banking institutions as well as between New York banking
institutions and other banking institutions.
BL § 601-a enumerates authorized acquisition transactions between two
New York banking institutions as well as between New York banking
institutions and other banking institutions.
BL §604-a authorizes a bulk transfer of fiduciary relationships as
part of a transaction between banking institutions in which the
transferee corporation is assuming all or substantially all of the
assets, as well as the deposit liabilities, if any, of the transferor
corporation.

PRIOR LEGISLATIVE HISTORY:

This is a new bill.

JUSTIFICATION:

The changes made by this bill streamline the branching processes for
banking institutions operating under the Banking Law. Changes are
also made in a number of cases (e.g. Sections 8, 9, 10) to conform to
changes made in federal law by the Dodd-Frank Act. These changes are
necessary to insure that New York law remains consistent with federal
law and state laws across the country.

FISCAL IMPLICATIONS:

There are no fiscal implications from this bill.

EFFECTIVE DATE:

Immediately.

2011-S6777B (ACTIVE) - Bill Text download pdf

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

                                 6777--B
    Cal. No. 898

                            I N  S E N A T E

                             March 21, 2012
                               ___________

Introduced  by  Sen.  GRIFFO -- read twice and ordered printed, and when
  printed to be committed to the Committee on Banks -- reported  favora-
  bly  from  said committee, ordered to first and second report, ordered
  to a third reading, amended and ordered reprinted, retaining its place
  in the order of third reading -- again amended and ordered  reprinted,
  retaining its place in the order of third reading

AN  ACT to amend the banking law, in relation to branches, trust offices
  and  interstate  branching  transactions,  and   to   repeal   certain
  provisions of such law relating thereto

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

  Section 1. Subdivision 4 of  section  28-b  of  the  banking  law,  as
amended  by  chapter  883  of  the  laws  of 1980, is amended to read as
follows:
  4. Notwithstanding any other provision of this chapter or OTHER 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 and foreign banking  corpo-
rations incorporated, chartered, organized or licensed under the laws of
this state. IN THE CASE OF A FOREIGN BANKING CORPORATION LICENSED PURSU-
ANT  TO THIS ARTICLE AND MAINTAINING A BRANCH IN THIS STATE, THE MANAGE-
MENT OF THE BRANCH SHALL ESTABLISH A COMMITTEE OF NOT FEWER  THAN  THREE
OFFICERS TO FUNCTION IN THE ROLE OF A BOARD OF DIRECTORS FOR PURPOSES OF
THIS SECTION.
  S  2.  Subdivisions 1, 2, and 3 of section 28-c of the banking law, as
added by chapter 362 of the  laws  of  1984,  are  amended  to  read  as
follows:
  1.  This  section  is  intended  to  provide  the  superintendent with
detailed information concerning the planned closing of branch offices by
state-chartered banking organizations, the availability  of  alternative
financial services within the general area served by such branch and the
economic  impact  upon the community resulting from such closing, and to
provide the superintendent with authority to conduct meetings with bank-
ing organizations and community groups in areas where a  branch  closing

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                      [ ] is old law to be omitted.
                                                           LBD14431-07-2

S. 6777--B                          2

is  planned.    THE  REQUIREMENTS OF THIS SECTION SHALL NOT APPLY TO THE
FOLLOWING:
  (A) BRANCH OFFICES LOCATED OUTSIDE THE STATE OF NEW YORK;
  (B)  A SALE OR OTHER TRANSFER OF A BRANCH OFFICE WHICH DOES NOT RESULT
IN ANY MATERIAL REDUCTION IN THE  FINANCIAL  SERVICES  OFFERED  AT  SUCH
LOCATION;
  (C)  THE  CLOSING OF A BRANCH OFFICE ACQUIRED FROM A FAILING OR FAILED
INSTITUTION, PROVIDED THAT SUCH CLOSING OCCURS WITHIN ONE HUNDRED EIGHTY
DAYS FROM THE DATE OF THE ACQUISITION; OR
  (D) THE CLOSING OF A BRANCH OFFICE WHEN UNEXPECTED CIRCUMSTANCES  MAKE
STRICT  COMPLIANCE IMPOSSIBLE, PROVIDED THAT SUCH DETERMINATION SHALL BE
SOLELY WITHIN THE DISCRETION OF THE SUPERINTENDENT AND PROVIDED  FURTHER
THAT  THE  SUPERINTENDENT MAY REQUIRE THE BANKING ORGANIZATION TO COMPLY
WITH THE REQUIREMENTS OF THIS SECTION TO THE EXTENT POSSIBLE.
  2. Every banking organization shall submit  to  the  superintendent  a
report  of its planned or intended closing of a branch office, and shall
give written notice to  any  person  who  maintains  a  banking  account
relationship  with  such  branch  office  which  is  the subject of such
planned or intended closing, no less than ninety days nor more than  one
hundred  [twenty]  EIGHTY  days prior to the date of actual closing. The
banking organization shall post and keep posted in a  conspicuous  place
notice  of such planned closing at such branch office, commencing on the
date the banking organization submits its report pursuant to the forego-
ing provision and until the proposed closing is effected or withdrawn.
  3. Such report shall be in writing and shall contain  a  statement  of
the  reasons leading to the decision to close the branch and any statis-
tical or other information in support thereof. Such report shall be  and
remain  at  all  times  subject  to the provisions of subdivision ten of
section thirty-six of this chapter. Such report shall also  contain  THE
FOLLOWING  INFORMATION,  PROVIDED  THAT  THE SUPERINTENDENT MAY WAIVE OR
MODIFY THESE REQUIREMENTS FOR GOOD CAUSE:
  (a) a past (at least three years),  present  and  projected  financial
analysis  of  deposits  at  such  branch  (giving number of accounts and
dollar amount, profits and losses);
  (b) a past (at least three years),  present  and  projected  financial
analysis  of  profits  and  losses relating to the loan activity at such
branch;
  (c) a detailed map of the general area served by such  branch  showing
the distance and direction of all remaining state or federally chartered
institutions  within  such area and any licensee of the department which
provides financial services of any kind; and
  (d) a description of any  planned  limited  or  full  service  banking
facility  to  be opened within such area by either the reporting banking
organization or, if known, to the reporting banking organization, by any
other banking institution.
  S 3. Paragraph (a) of subdivision 5 of section 105 of the banking law,
as amended by chapter 547 of the laws of 2008, is  amended  to  read  as
follows:
  (a) A bank or trust company may, if the merger or asset acquisition is
permitted  by  law,  and if the merger or asset acquisition agreement so
provides, maintain as a branch office or branch offices OR TRUST  OFFICE
OR  TRUST  OFFICES,  the  place or places of business of any bank, trust
company, safe deposit company,  national  banking  association,  out-of-
state  state bank OR OUT-OF-STATE TRUST COMPANY (as such [term is] TERMS
ARE defined in section two hundred twenty-two of this chapter),  savings
bank,  or  savings and loan association, federal savings bank or federal

S. 6777--B                          3

savings and loan association which it has received into itself by merger
or by acquisition of assets thereof pursuant to the provisions  of  this
chapter  and,  if  the  merger or acquisition agreement so provides, may
maintain,  as  its  principal  office  rather  than as a branch OR TRUST
office, the principal office of such banking institution with  which  it
has merged or from which it has acquired assets (so long as such princi-
pal  office is located in this state), in which event the former princi-
pal office of the receiving or acquiring bank or trust  company  may  be
maintained  as  a branch office. A state bank or trust company resulting
from the conversion of  a  national  banking  association  may,  if  the
conversion  agreement so provides, maintain as a branch office or branch
offices OR TRUST OFFICE OR TRUST OFFICES the place or places of business
of the national banking association. As used in  this  subdivision,  the
term  "place  or  places of business" shall include any branch office OR
TRUST OFFICE of the banking institution that was  converted,  merged  or
the  assets  of  which were acquired which has been approved pursuant to
this chapter or federal law or the law of another state, as the case may
be, even if such branch office OR TRUST OFFICE is not  in  operation  at
the time said merger, asset acquisition or conversion becomes effective.
  S  4.  Subdivision  1 of section 105-b of the banking law, as added by
chapter 209 of the laws of 2008, is amended to read as follows:
  1. A trust company may establish or acquire and maintain one  or  more
trust  offices anywhere in this state, or[, if and to the extent author-
ized by another state, in a state other than  this  state]  OUTSIDE  THE
STATE OF NEW YORK, EITHER IN THE UNITED STATES OR IN FOREIGN COUNTRIES.
  S  5. Subdivision 2 of section 202-a of the banking law, as amended by
chapter 288 of the laws of 1987, is amended to read as follows:
  2. A foreign banking corporation organized under the laws of a foreign
country [or of Puerto Rico] may be licensed pursuant to article  two  of
this  chapter  to  maintain  a  branch or branches in this state and may
engage in the business of receiving deposits in this state.
  S 6. Section 222 of the banking law, as amended by chapter  9  of  the
laws  of  1996 and subdivision 10 as added by chapter 217 of the laws of
2010, is amended to read as follows:
  S 222. Definitions. In this article, the following  definitions  shall
apply:
  1. The term "out-of-state bank" means an out-of-state state bank [or],
an  out-of-state national bank, OR AN OUT-OF-STATE FEDERAL SAVINGS ASSO-
CIATION.
  2. The term "out-of-state state bank" means a state bank, as such term
is defined in section 3(a)(2) of the Federal Deposit Insurance  Act  (12
U.S.C.  1813(a)(2)),  OR  AN OUT-OF-STATE STATE-CHARTERED TRUST COMPANY,
but such term shall not include a banking organization.
  3. The term "out-of-state national  bank"  means  a  national  banking
association the main office of which is located outside this state.
  4.  THE  TERM  "OUT-OF-STATE  FEDERAL  SAVINGS  ASSOCIATION" MEANS ANY
FEDERAL SAVINGS ASSOCIATION OR FEDERAL SAVINGS BANK WHICH  IS  CHARTERED
UNDER  SECTION  5  OF THE HOME OWNERS LOAN ACT (12 U.S.C. 1464) THE HOME
OFFICE OF WHICH IS LOCATED OUTSIDE THIS STATE.
  5. THE TERM "OUT-OF-STATE TRUST COMPANY"  MEANS  EITHER  A  NATIONALLY
CHARTERED TRUST COMPANY OR AN OUT-OF-STATE STATE-CHARTERED TRUST COMPANY
THAT  HAS  THE POWER TO EXERCISE FIDUCIARY POWERS, BUT IS NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION.
  [4.] 6. The term "New York bank" means  a  bank,  trust  company  [or]
savings  bank, OR SAVINGS AND LOAN ASSOCIATION as such terms are defined

S. 6777--B                          4

in subdivisions one, two [and], four AND EIGHT of section  two  of  this
chapter.
  [5.]  7.  The term "state" means any state of the United States (other
than this state), the District of Columbia, any territory of the  United
States,  PUERTO  RICO,  Guam, American Samoa, the Trust Territory of the
Pacific Islands, the United States  Virgin  Islands,  and  the  Northern
Mariana Islands.
  [6.]  8.  The  term "home state" means with respect to an out-of-state
state bank OR OUT-OF-STATE  STATE-CHARTERED  TRUST  COMPANY,  the  state
under  the  laws  of  which such out-of-state state bank OR OUT-OF-STATE
STATE-CHARTERED TRUST COMPANY is incorporated  or  otherwise  organized,
and  with respect to an out-of-state national bank OR TRUST COMPANY, the
state in which such out-of-state national bank's OR TRUST COMPANY'S main
office is located.
  [7.] 9. The term "acquisition transaction" means any  merger,  consol-
idation  or  purchase  of assets and assumption of liabilities of all or
part of a banking institution.
  [8.] 10. The term "like-type banking organization" means, with respect
to an out-of-state bank, a banking organization with the type of charter
that most nearly corresponds to the charter of such  out-of-state  bank,
as determined by the superintendent.
  [9.]  11. The term "appropriate state supervisor" means the home state
supervisor with supervisory and regulatory jurisdiction over an  out-of-
state  state  bank  OR OUT-OF-STATE STATE-CHARTERED TRUST COMPANY in its
home state.
  [10.] 12. The term "banking institution" means any bank, trust  compa-
ny,  savings  bank, savings and loan association, or branch of a foreign
banking corporation the deposits of which are  insured  by  the  federal
deposit  insurance corporation, which is incorporated, chartered, organ-
ized or licensed under the laws of this state or any other state of  the
United States, OR UNDER THE LAWS OF THE UNITED STATES.
  13.    THE  TERM "BRANCH" MEANS ANY OFFICE OF A BANKING INSTITUTION AT
WHICH DEPOSITS ARE RECEIVED, CHECKS PAID OR  MONEY  LENT.    EXCEPT  FOR
PURPOSES OF SUBDIVISION THREE OF SECTION TWO HUNDRED TWENTY-FOUR OF THIS
ARTICLE, THE TERM SHALL NOT INCLUDE AN AUTOMATED TELLER MACHINE OR OTHER
ELECTRONIC  FACILITY.  FOR  PURPOSES  OF THIS ARTICLE, THE TERM "BRANCH"
SHALL ALSO REFER TO THE PRINCIPAL OR MAIN OFFICE OF A  BANKING  INSTITU-
TION.
  14.  THE  TERM "TRUST OFFICE" MEANS AN OFFICE OF A BANKING INSTITUTION
OTHER THAN A BRANCH AT WHICH SUCH INSTITUTION MAY CONDUCT  ONE  OR  MORE
FIDUCIARY ACTIVITIES PERMITTED FOR A TRUST COMPANY.
  S 7. Section 223 of the banking law, as added by chapter 9 of the laws
of 1996, is amended to read as follows:
  S 223. [Initial entry by out-of-state banks] ESTABLISHMENT OF BRANCHES
OR TRUST OFFICES BY MEANS OF AN ACQUISITION TRANSACTION. An out-of-state
bank  [that does not operate a branch in this state] may maintain one or
more branches OR ONE OR MORE TRUST OFFICES located in  this  state  THAT
HAVE BEEN acquired by means of an acquisition transaction.
  S 8. Section 223-a of the banking law is REPEALED.
  S  9. Section 223-b of the banking law, as added by chapter 316 of the
laws of 2008, is amended to read as follows:
  S [223-b. Initial entry] 223-A. ESTABLISHMENT OF BRANCHES  by  out-of-
state  banks  by  de  novo branching. In addition to the authority of an
out-of-state bank to maintain a branch or branches by means of an acqui-
sition transaction, an out-of-state bank may [enter New York  by  estab-
lishing] ESTABLISH one or more de novo branches in this state; provided,

S. 6777--B                          5

however,  that  [in each instance the laws of the jurisdiction where the
out-of-state bank has its principal office  expressly  authorize  a  New
York  bank to establish one or more de novo branches under conditions no
more  restrictive than those imposed by this section as so determined by
the superintendent] AN OUT-OF-STATE STATE BANK SHALL OBTAIN  THE  SUPER-
INTENDENT'S  PRIOR  APPROVAL  IN  ACCORDANCE  WITH  THE  REQUIREMENTS IN
SECTION TWO HUNDRED TWENTY-FOUR OF THIS CHAPTER.
  S 10. Section 223-c of the banking law is REPEALED.
  S 11. Section 224 of the banking law, as amended by chapter 9  of  the
laws  of  1996  and  subdivision 1 as amended by section 26 of part O of
chapter 59 of the laws of 2006, is amended to read as follows:
  S 224. [Establishment of additional  branches  by  out-of-state  state
banks]  APPLICATION  FOR  THE ESTABLISHMENT OF BRANCHES OR TRUST OFFICES
NOT RESULTING FROM AN ACQUISITION TRANSACTION; RETENTION OF BRANCHES  OR
TRUST  OFFICES RESULTING FROM MERGER OR ACQUISITION.  1. [Subject to the
provisions of this article, an out-of-state state bank  which  maintains
one or more branches in this state may open and occupy one or more addi-
tional  de novo branches in this state with prior approval of the super-
intendent. An  application  for  approval  submitted  pursuant  to  this
section  shall  contain  such  information  as  the superintendent deems
necessary.] AN APPLICATION FOR APPROVAL TO THE SUPERINTENDENT CONTAINING
SUCH INFORMATION AS HE OR SHE DEEMS NECESSARY SHALL BE SUBMITTED  BY  AN
OUT-OF-STATE  STATE  BANK  PRIOR TO THE ESTABLISHMENT OF EACH BRANCH. At
the time of making such application, an investigation fee as  prescribed
pursuant  to  section  eighteen-a  of  this chapter shall be paid to the
superintendent for each branch [office] for which approval is sought. If
the superintendent finds that the opening of the branch [office] is  not
consistent  with  the  declaration of policy set forth in section ten of
this chapter, he or she shall notify the applicant that the  application
has been denied.  AN OUT-OF-STATE STATE BANK OR OUT-OF-STATE STATE-CHAR-
TERED  TRUST  COMPANY  SEEKING TO ESTABLISH ONE OR MORE TRUST OFFICES IN
THIS STATE SHALL COMPLY WITH THE NOTICE PROCEDURES SET FORTH IN SUBDIVI-
SION FOUR OF SECTION ONE HUNDRED THIRTY-ONE OF THIS CHAPTER.
  2. Subject to the provisions of this article, if the merger or  acqui-
sition agreement so provides, an out-of-state state bank may maintain as
a branch or branches OR TRUST OFFICE OR TRUST OFFICES the place or plac-
es  of  business  of  any banking institution which it has received into
itself as a result of an  acquisition  transaction  authorized  by  this
article.
  3.  No out-of-state state bank shall open, occupy or maintain a branch
in this state at a location not permitted to a like-type banking  organ-
ization.
  S  12.    The  banking law is amended by adding a new section 224-a to
read as follows:
  S  224-A.  CHANGE  OF  LOCATION  OF  BRANCHES  OR  TRUST  OFFICES   BY
OUT-OF-STATE  STATE  BANKS  OR OUT-OF-STATE STATE-CHARTERED TRUST COMPA-
NIES. AN APPLICATION FOR APPROVAL CONTAINING  SUCH  INFORMATION  AS  THE
SUPERINTENDENT  DEEMS  NECESSARY  SHALL  BE SUBMITTED BY AN OUT-OF-STATE
STATE BANK OR AN OUT-OF-STATE STATE-CHARTERED TRUST COMPANY PRIOR TO THE
RELOCATION OF A BRANCH OR TRUST OFFICE IN THIS STATE.  AT  THE  TIME  OF
MAKING  SUCH APPLICATION, AN INVESTIGATION FEE AS PRESCRIBED PURSUANT TO
SECTION EIGHTEEN-A OF THIS CHAPTER SHALL BE PAID TO  THE  SUPERINTENDENT
FOR  EACH  BRANCH  OR  TRUST OFFICE FOR WHICH APPROVAL IS SOUGHT. IF THE
SUPERINTENDENT SHALL BE SATISFIED THAT SUCH RELOCATION MAY BE  PERMITTED
UNDER  THE  TERMS  OF  THIS  CHAPTER  AND  THAT  THERE  IS NO REASONABLE
OBJECTION TO SUCH CHANGE, HE OR SHE SHALL APPROVE SUCH APPLICATION.

S. 6777--B                          6

  S 13. Section 225 of the banking law, as amended by chapter 9  of  the
laws  of  1996 and subdivisions 1 and 2 as amended by chapter 547 of the
laws of 2008, is amended to read as follows:
  S 225.  Interstate  acquisition transactions. 1. [Without limiting the
transactions permissible under section two hundred twenty-three of  this
article,  an]  AN  out-of-state bank may engage in an acquisition trans-
action with a New York bank OR WITH A BANKING INSTITUTION LOCATED IN NEW
YORK and may maintain as a branch or branches OR TRUST OFFICE  OR  TRUST
OFFICES,  THE  BRANCHES  OR  TRUST  OFFICES, RESPECTIVELY, [the place or
places of business] of any such New York  bank  OR  BANKING  INSTITUTION
which  it  has  received  into  itself  as a result of such transaction,
subject to the requirements of this article.
  2. Except when section twenty-nine of this  chapter  applies,  section
six  hundred  one  or six hundred one-a of this chapter, as the case may
be, and section six hundred one-b of this chapter  shall  apply  to  any
acquisition  transaction  [authorized  by  this  article]  in  which the
receiving corporation is a New York bank. In the case of [any other]  AN
acquisition   transaction   authorized  by  this  article  IN  WHICH  AN
OUT-OF-STATE BANK OR OUT-OF-STATE TRUST COMPANY IS THE RECEIVING  CORPO-
RATION,  the  out-of-state bank OR OUT-OF-STATE TRUST COMPANY shall file
with the superintendent a copy of any application filed with the  appro-
priate state supervisor and appropriate federal banking agency.
  3. At the time when a merger or consolidation authorized by this arti-
cle OR BY SECTION SIX HUNDRED OF THIS CHAPTER becomes effective:
  (a)  the resulting or consolidated corporation shall be considered the
same business and corporate entity as each  of  the  constituent  corpo-
rations;
  (b)  all  the  property,  rights, powers and franchises of each of the
constituent corporations shall vest in  the  resulting  or  consolidated
corporation  and  the  resulting  or  consolidated  corporation shall be
subject to and shall be deemed to have assumed all of the debts, liabil-
ities, obligations and duties of each  constituent  corporation  and  to
have  succeeded  to all of its relationships, fiduciary or otherwise, as
fully and to the same extent as if such property, rights, powers,  fran-
chises,  debts,  liabilities,  obligations, duties and relationships had
been originally acquired, incurred or entered into by the  resulting  or
consolidated corporation;
  (c)  any  reference to a constituent corporation in any contract, will
or document, whether executed or taking effect before or after the merg-
er or consolidation, shall be considered a reference to the resulting or
consolidated corporation if not inconsistent with the  other  provisions
of the contract, will or document; [and]
  (d)  a  pending  action  or  other  judicial  proceeding  to which any
constituent corporation is a party, shall not be deemed to  have  abated
or  to  have  discontinued by reason of the merger or consolidation, but
may be prosecuted to final judgment, order or decree in the same  manner
as if the merger or consolidation had not been made, or the resulting or
consolidated corporation may be substituted as a party to such action or
proceeding,  and  any  judgment,  order or decree may be rendered for or
against it that might have been rendered for or against such constituent
corporation if the merger or consolidation had not occurred[.]; AND
  (E) NOTHING IN THIS SUBDIVISION SHALL BE DEEMED TO AUTHORIZE A BANKING
INSTITUTION TO EXERCISE ANY POWER OR ENGAGE IN ANY ACTIVITY  NOT  OTHER-
WISE PERMITTED UNDER ITS CHARTER.
  4. In the case of a merger or consolidation authorized by this article
in  which  an  out-of-state  bank  OR  OUT-OF-STATE TRUST COMPANY is the

S. 6777--B                          7

resulting or consolidated corporation, the franchise of any  constituent
New  York  bank shall automatically terminate when the merger or consol-
idation is consummated.
  S  14.  Section 225-a of the banking law, as amended by chapter 454 of
the laws of 2006, is amended to read as follows:
  S 225-a. Power of superintendent to examine branches or trust  offices
of out-of-state state banks OR OUT-OF-STATE STATE-CHARTERED TRUST COMPA-
NIES.  The superintendent shall have the power at any time in his or her
discretion to examine every branch or trust office located in this state
of an out-of-state state  bank  OR  OUT-OF-STATE  STATE-CHARTERED  TRUST
COMPANY  for  the same purposes and to the same extent as is provided in
the case of banking organizations pursuant to  the  provisions  of  this
chapter.
  S  15.  Section 225-b of the banking law, as amended by chapter 217 of
the laws of 2010, is amended to read as follows:
  S 225-b. Applicability of certain sections to out-of-state banks.   1.
Except as otherwise provided in this section, nothing in article five or
article  five-B  of  this chapter shall apply to an out-of-state bank OR
OUT-OF-STATE TRUST COMPANY authorized to open,  occupy  and  maintain  a
branch  pursuant  to  the  provisions  of this article OR A TRUST OFFICE
PURSUANT TO THIS ARTICLE OR TO SUBDIVISION FOUR OF SECTION  ONE  HUNDRED
THIRTY-ONE OF THIS CHAPTER. Any reference in this chapter (other than in
article  five  or article five-B) to a foreign bank, foreign corporation
or foreign banking corporation shall be deemed to be a reference  to  an
out-of-state  bank  OR  OUT-OF-STATE  TRUST  COMPANY authorized to open,
occupy and maintain a branch pursuant to the provisions of this  article
OR  A  TRUST  OFFICE  PURSUANT TO THIS ARTICLE OR TO SUBDIVISION FOUR OF
SECTION ONE HUNDRED THIRTY-ONE  OF  THIS  CHAPTER.  Notwithstanding  the
foregoing,  [(a)] the provisions of [sections] SECTION two hundred two-h
(Repayment of deposits standing in the names of minors, trustees,  joint
depositors or custodians; interpleader in certain actions), [two hundred
three  (Change  of  location,  name  or  business)  and two hundred four
(Reports of foreign banking corporations; penalties)]  of  this  chapter
shall  apply  with  equal  force  and  effect  to  out-of-state banks OR
OUT-OF-STATE TRUST COMPANIES authorized  to  open,  occupy  or  maintain
branches pursuant to the provisions of this article[; and (b) the].
  2.  THE provisions of section three hundred ninety-nine-a, subdivision
three of section one hundred thirty,  subdivision  two  of  section  one
hundred forty-three, subdivision five of section two hundred forty-seven
and  subdivision five of section three hundred ninety-nine of this chap-
ter with respect to restrictions on executive officers or  directors  of
foreign  banking  corporations  and  the  provisions of sections twenty,
twenty-six, thirty, thirty-one and six hundred thirty-four, [subdivision
two of section thirteen,] subdivisions eleven and twelve of section  six
hundred  five, subdivision four of section six hundred six and paragraph
(a) of subdivision one of section fourteen of this  chapter,  shall  not
apply  to  out-of-state  banks  authorized  to  open, occupy or maintain
branches pursuant to the provisions of this article.
  S 16. Subdivisions 6 and 8 of section 600 of the banking law, subdivi-
sion 6 as amended by chapter 9 of the laws of  1996,  subdivision  8  as
amended by chapter 152 of the laws of 1993, as renumbered by chapter 455
of  the  laws of 2006 and as further amended by section 104 of part A of
chapter 62 of the laws of 2011, are amended to read as follows:
  (6) One or more banks, trust companies, stock-form  savings  banks  or
stock-form  savings and loan associations, with one or more out-of-state
banks OR OUT-OF-STATE TRUST  COMPANIES  as  such  [term  is]  TERMS  ARE

S. 6777--B                          8

defined  in  [subdivision one of] section two hundred twenty-two of this
chapter.
  (8)  Such  other mergers between and among banking institutions as the
superintendent of financial services may authorize.  THE  SUPERINTENDENT
MAY  PROMULGATE SUCH REGULATIONS AS HE OR SHE DEEMS NECESSARY AND PROPER
TO IMPLEMENT AND DEFINE THE PROVISIONS OF THIS PARAGRAPH.
  S 17. Paragraph (g) of subdivision 1 of section 601-a of  the  banking
law,  as  amended  by  chapter  152  of  the laws of 1993 and as further
amended by section 104 of part A of chapter 62 of the laws of  2011,  is
amended to read as follows:
  (g)  ONE  OR  MORE BANKS, TRUST COMPANIES, STOCK-FORM SAVINGS BANKS OR
STOCK-FORM SAVINGS AND LOAN ASSOCIATIONS, WITH ONE OR MORE  OUT-OF-STATE
BANKS  OR  OUT-OF-STATE  TRUST  COMPANIES  AS  SUCH TERMS ARE DEFINED IN
SECTION TWO HUNDRED TWENTY-TWO OF THIS CHAPTER.
  (H) One or more banking institutions by  another  banking  institution
[to  the  extent  permitted  under  regulations of the superintendent of
financial services] AS THE SUPERINTENDENT MAY AUTHORIZE. FOR PURPOSES OF
THIS PARAGRAPH, A BRANCH OR AGENCY  OF  A  FOREIGN  BANKING  CORPORATION
LICENSED  PURSUANT  TO  ARTICLE TWO OF THIS CHAPTER AND SEEKING APPROVAL
FOR A TRANSFER  OF  FIDUCIARY  RELATIONSHIPS  PURSUANT  TO  SECTION  SIX
HUNDRED  FOUR-A  OF  THIS CHAPTER SHALL BE CONSIDERED A BANKING INSTITU-
TION. THE SUPERINTENDENT MAY PROMULGATE SUCH REGULATIONS AS  HE  OR  SHE
DEEMS  NECESSARY  AND  PROPER  TO IMPLEMENT AND DEFINE THE PROVISIONS OF
THIS PARAGRAPH.
  S 18. Section 604-a of the banking law, as added by chapter 743 of the
laws of 1958, the section heading and subdivision 1 as amended by  chap-
ter  297 of the laws of 1993, subdivision 2 as amended by chapter 489 of
the laws of 1963 and subdivision 3 as amended by chapter 115 of the laws
of 1981, is amended to read as follows:
  S 604-a. Transfer of fiduciary relationships [of  a  banking  institu-
tion]. 1. If any banking institution, including a bank or trust company,
national  banking  association,  savings  bank, savings and loan associ-
ation, federally chartered savings  bank,  federally  chartered  savings
[and  loan]  association,  OR  A  BRANCH  OR AGENCY OF A FOREIGN BANKING
CORPORATION LICENSED PURSUANT TO ARTICLE TWO OF THIS CHAPTER, located in
this state, shall have transferred  all  or  substantially  all  of  its
assets  to  another banking institution in a transaction subject to this
chapter pursuant to a  written  agreement  between  the  transferor  and
transferee  [corporations]  whereby  the  transferee  [corporation]  has
assumed the deposit liabilities, if any, of the transferor [corporation]
and has agreed to assume all fiduciary relationships of  the  transferor
[corporation],  the  transferee  [corporation] may file in the office of
the superintendent a certificate in its name and under  its  [corporate]
seal,  signed  by  its  president, secretary or cashier, setting forth a
copy of such agreement and stating  that  the  transferee  [corporation]
assumes  all  of  the  fiduciary relationships of the transferor [corpo-
ration] pursuant to the provisions of this section;  provided,  however,
that  such  certificate  shall  not  be filed unless the approval of the
superintendent shall have  been  endorsed  thereon  or  annexed  thereto
before  filing.   IN THE CASE OF A BRANCH OR AGENCY LICENSED PURSUANT TO
ARTICLE TWO OF THIS CHAPTER THAT SEEKS TO PARTICIPATE IN  A  TRANSACTION
DESCRIBED IN THIS SECTION, SUCH BRANCH OR AGENCY SHALL BE SUBJECT TO THE
APPLICATION AND APPROVAL REQUIREMENTS GOVERNING ACQUISITION TRANSACTIONS
SET  FORTH  IN  SECTIONS SIX HUNDRED ONE-A AND SIX HUNDRED ONE-B OF THIS
ARTICLE.

S. 6777--B                          9

  2. Upon the filing of such certificate in the  office  of  the  super-
intendent,  all  of  the  property, rights, powers and franchises of the
transferor [corporation] as  fiduciary  shall  vest  in  the  transferee
[corporation]  and  the transferee [corporation] shall be deemed to have
assumed  all  of  the  debts, liabilities, obligations and duties of the
transferor [corporation] as fiduciary, and to have succeeded to all  the
fiduciary  relationships  of  the transferor [corporation], as fully and
with the same effect as is provided in sections one hundred thirty-six-c
and six hundred two OF THIS CHAPTER in the case of  a  merger,  and  any
reference  to the transferor [corporation] as fiduciary in any capacity,
contained in any contract, will or document, whether executed or  taking
effect  before  or after the filing of such certificate in the office of
the superintendent, shall be considered a reference  to  the  transferee
[corporation]  if  not  inconsistent  with  the  other provisions of the
contract, will or document.
  3. For [the] purposes of this section, the fiduciary relationships  of
the transferor shall include all relationships as agent, trustee, guard-
ian, receiver, committee, conservator, executor, administrator, or other
fiduciary  in  any  capacity or for any purpose mentioned in section one
hundred OF THIS CHAPTER, and all  relationships  of  the  transferor  as
bailee or depositary of personal property.
  4.  This section shall not be deemed to authorize a transferee [corpo-
ration] to assume any fiduciary relationship of a kind  which  it  would
not  otherwise  have  power  to  undertake  and perform. Nothing in this
section shall be deemed to authorize any such  transferee  [corporation]
to  maintain  as  its own office any office previously maintained by the
transferor [corporation], and authority, if any, to  maintain  any  such
office  shall be governed by the applicable provisions of law other than
this section. This section shall not be deemed to apply to contracts  of
the transferor for the leasing of safe deposit boxes or vaults.
  S 19. This act shall take effect immediately.

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Senate Bill S6777

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Sponsored By

Joseph A. Griffo

Archive: Last Bill Status Via A10567 - Signed by Governor

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