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SECTION 247
Restrictions upon trustees and officers
Banking (BNK) CHAPTER 2, ARTICLE 6
§ 247. Restrictions upon trustees and officers. 1. A trustee of a
savings bank shall not

(a) Have any interest, direct or indirect, in the profits of the
savings bank, but may receive interest upon the amounts contributed by
him or her to the surplus fund, may make deposits in the savings bank
and receive interest thereon and may acquire from the life insurance
department of the savings bank, or through the savings bank as agent for
the life insurance department of another savings bank, life insurance
issued on his or her life, or that of another, in accordance with the
provisions of article six-A of this chapter and may receive dividends
thereon. Notwithstanding the provisions of this paragraph, an officer of
a savings bank who also serves as a trustee of such institution may
receive compensation as an officer of such institution, as approved by
the board of trustees, which in whole or in part is based upon the
financial performance of the institution.

(b) Become a member of the board of directors of a bank, trust company
or national bank of which board enough other trustees of the savings
bank are members to constitute with him a majority of the board of
trustees.

(c) Become a director or trustee of a bank, trust company or national
bank located in this state, operating a special interest department, or
of a mortgage or title company organized under the banking law or
insurance law, if, after election as such director or trustee a majority
of the trustees of the savings bank will be directors or trustees of
such other institutions.

2. Neither a trustee nor an executive officer of a savings bank shall

(a) Receive directly or indirectly and retain for his or her own use
any commission on or benefit from any loan made by the savings bank, or
any pay or emolument for services rendered to any borrower from the
savings bank in connection with such loan, except as provided in section
two hundred forty-nine of this article.

(b) Direct or require a borrower on a mortgage to negotiate any policy
of insurance on the mortgaged property through any particular insurance
broker or brokers, or attempt to divert to any particular insurance
broker or brokers the business of borrowers from the savings bank, or
refuse to accept any such insurance policy because it was not negotiated
through a particular insurance broker or brokers.

(c) Become an indorser, surety, or guarantor, or in any manner an
obligor, for any loan made by the savings bank.

(d) For himself or as agent or partner of another, directly or
indirectly borrow or use any of the funds of the savings bank or become
the owner of real property on which the savings bank holds a mortgage.

2-a. Notwithstanding paragraph (c) or (d) of subdivision two of this
section an executive officer of a savings bank may borrow from such
savings bank or become the owner of real property on which the savings
bank holds a mortgage if the loan is secured by (a) a first mortgage or
is a cooperative apartment unit loan, which property or apartment is to
be occupied as the executive officer's primary residence and is
specifically approved in writing by the board of trustees or (b) a
deposit maintained by the executive officer with the savings bank.

2-b. As used in subdivisions two and two-a of this section, the term
"executive officer" shall be defined as set forth in section 22(h)(9)(C)
of the Federal Reserve Act 12 U.S.C. 375b(9)(C), and regulations
promulgated thereunder, as amended.

3. A loan to or a purchase by a corporation in which he is a
stockholder to the amount of fifteen per centum of the total outstanding
stock, or in which he and other trustees of the savings bank hold stock
to the amount of twenty-five per centum of the total outstanding stock,
shall be deemed a loan to or a purchase by such trustee within the
meaning of this section; except when the loan to or purchase by such
corporation shall have occurred without his knowledge or against his
protest. A deposit with a banking corporation shall not be deemed a loan
within the meaning of this section.

4. This section shall not be construed to prohibit a savings bank from
making a loan to a religious corporation, club, or other membership
corporation of which one or more trustees of such savings bank may be
members or officers but in which they have no financial interest, nor
shall it be construed to prohibit a savings bank from making loans to or
purchasing guaranteed mortgages from any stock corporation, provided no
trustee owns more than fifteen per centum of the capital stock of such
corporation, and the total amount of such stock owned by all the
trustees of such savings bank is less than twenty-five per centum of
such capital stock.

5. (a) No executive officer of a savings bank may be an executive
officer, director or trustee of another savings bank, or of a bank or
trust company, savings and loan association, national bank, federal
savings bank or federal savings association, the principal office of
which institution is located in this state, bank holding company or
foreign banking corporation maintaining a branch in this state, unless
permission therefor has been granted by the superintendent pursuant to
the provisions of paragraph (b) of this subdivision.

(b) The superintendent shall have the power to determine by regulation
who shall be considered, under the provisions of this subdivision, to be
an executive officer, and by regulation, to grant permission to an
executive officer of a savings bank to be an executive officer, director
or trustee or both an executive officer and director or trustee of
another savings bank or a bank or trust company, savings and loan
association, national bank, federal savings bank or federal savings
association, the principal office of which institution is located in
this state, bank holding company or foreign banking corporation
maintaining a branch in this state. Such permission may be granted only
if in the judgment of the superintendent such service by the executive
officer will be consistent with the policy of the state of New York as
declared in section ten of this chapter. The superintendent shall have
the power to revoke such permission whenever the superintendent finds,
after reasonable notice and an opportunity to be heard, that the public
interest requires such revocation.

(c) For the purposes of this subdivision, the term "bank holding
company" shall be given the same meaning as is contained in section one
hundred forty-one of this chapter, and the definition of the term,
"banking institution" is modified to include a national bank, federal
savings bank or federal savings association, the principal office of
which institution is located in this state, and a foreign banking
corporation maintaining a branch in this state.

(d) All other restrictions and limitations imposed by this chapter on
officers and trustees of savings banks shall continue in effect.