NY-BNK Banking Law NY

Short title. This chapter, together with amendments thereof,

shall be known as the "banking law", and shall be applicable to all

corporations, partnerships and individuals defined in the next section

and to such other corporations, unincorporated associations,

partnerships and individuals as shall subject themselves to special

provisions thereof, or who shall, by violating any of its provisions,

become subject to the penalties provided therein.

Definitions. 1. Bank. The term, "bank," when used in this

chapter, unless a different meaning appears from the context, means any

corporation, other than a trust company, organized under or subject to

the provisions of article three of this chapter.

2. Trust company. The term, "trust company," when used in this

chapter, unless a different meaning appears from the context, means any

corporation or limited liability trust company organized under or

subject to the provisions of article three of this chapter, having, in

addition to the other powers specified in such article, the fiduciary

powers specified therein. The definitions set forth in section two-b of

this article shall be utilized when the provisions of this chapter are

applied to the formation and operation of limited liability trust

companies.

3. Private banker. The term, "private banker," when used in this

chapter, means an individual or partnership duly authorized by the

superintendent to engage in the business of a private banker pursuant to

the provisions of article four of this chapter.

4. Savings bank. The term, "savings bank," when used in this chapter,

means any corporation organized under or subject to the provisions of

article six of this chapter. Such term shall include stock-form savings

banks which shall be subject to the provisions of article six of this

chapter to the extent not otherwise provided by the superintendent of

financial services pursuant to regulations promulgated under section

fourteen-e of this chapter.

6. Safe deposit company. The term, "safe deposit company," when used

in this chapter, means any corporation organized under or subject to the

provisions of article eight of this chapter.

7. Licensed lender. The term, "licensed lender," when used in this

chapter, means any person or other entity duly authorized by the

superintendent to engage in business pursuant to the provisions of

article nine of this chapter. The terms, "licensee," and "licensees,"

when used in article nine of this chapter, mean a licensed lender or

licensed lenders.

8. Savings and loan association. The term, "savings and loan

association," when used in this chapter, means any corporation organized

under or subject to the provisions of article ten of this chapter. Such

term shall include stock-form savings and loan associations which shall

be subject to the provisions of article ten of this chapter to the

extent not otherwise provided by the superintendent of financial

services pursuant to regulations promulgated under section fourteen-e of

this chapter.

9. Credit union. The term, "credit union," when used in this chapter,

means any corporation organized under article eleven of chapter six

hundred eighty-nine of the laws of nineteen hundred nine, as amended by

chapter five hundred eighty-two of the laws of nineteen hundred

thirteen, or under article eleven of this chapter. Every such

corporation shall be a non-stock corporation.

10. Investment company. The term, "investment company," when used in

this chapter, means any corporation or limited liability investment

company organized under or subject to the provisions of article twelve

of this chapter. The definitions set forth in section two-a of this

article shall be utilized when the provisions of this chapter are

applied to the formation and operation of limited liability investment

companies.

10-a. Mutual trust investment company. The term "mutual trust

investment company" when used in this chapter, means an investment

company as defined by an act of congress entitled the "Investment

Company Act of 1940", approved August twenty-second, nineteen hundred

forty, as amended, provided that (a) such company is organized under or

subject to the provisions of article twelve-A of this chapter; and (b)

all of the stock and shares, other than stock or shares required by law

to qualify directors of such investment company, are or are to be owned

by trust companies or national banks having trust powers and having

their principal offices within the state of New York or their nominees

or the nominees of such corporate fiduciaries and individual

co-fiduciaries.

11. Banking organizations. The term, "banking organizations," when

used in this chapter, means and includes all banks, trust companies,

private bankers, savings banks, safe deposit companies, savings and loan

associations, credit unions and investment companies.

12. Time deposits. The term, "time deposits," when used in this

chapter, and except as provided otherwise by regulation of the

superintendent of financial services, means all deposits the payment of

which cannot legally be required within fourteen days.

13. Demand deposits. The term, "demand deposits," when used in this

chapter, and except as provided otherwise by regulation of the

superintendent of financial services, means deposits payment of which

can legally be required within fourteen days.

14. Net demand deposits. The term, "net demand deposits," when used in

this chapter, means the total of all deposits, and of all amounts due to

banking corporations and private bankers and of all amounts due on

certified and officers' checks, letters of credit and travelers' checks

sold for cash, and for unpaid dividends, less the following items:

(a) Time deposits;

(b) Amounts due on demand from banking corporations organized under

the laws of the United States or any state of the United States and

private bankers other than a federal reserve bank and reserve

depositaries.

15. Reserves on hand. The term, "reserves on hand," when used in this

chapter, means the reserves against deposits kept in the vault of any

banking organization.

16. Reserves on deposit. The term, "reserves on deposit," when used in

this chapter, means the reserves against deposits maintained with a

federal reserve bank located in this state and with reserve depositaries

by any banking organization, pursuant to the provisions of this chapter.

17. Total reserves. The term, "total reserves," when used in this

chapter, means the aggregate of reserves on hand and reserves on deposit

maintained pursuant to the provisions of this chapter.

18. Reserve depositary. The term, "reserve depositary," when used in

this chapter, means a banking corporation or private banker designated

by the superintendent as a depositary for reserves on deposit.

19. Stockholder. The term, "stockholder," when used in this chapter,

unless otherwise qualified, means a person who appears by the books of a

stock corporation to be the owner and holder of one or more shares of

the stock of such corporation.

20. Shareholder. The term, "shareholder," when used in this chapter,

means a member of a mutual savings and loan association or a member of a

credit union.

21. Population. The term, "population," when used in this chapter,

means population as determined by the latest federal census; or when

used in connection with the words "unincorporated village," as

determined by the superintendent from the best available sources of

information.

22. Capital stock. The term, "capital stock," when used in this

chapter in connection with any stock corporation subject to this

chapter, means the aggregate par value of all outstanding shares of

every class.

24. Deed of trust. The term "mortgage", when used in this chapter,

shall, unless the context otherwise requires, include a deed of trust

securing a loan; provided, however, that in applying the recording

provisions of this chapter in the case of any obligation secured by a

deed of trust, such provisions shall be deemed to require only that such

deed of trust be recorded in the name of the trustee or trustees

thereunder.

25. Bond and mortgage. The term "bond and mortgage", when used in this

chapter, in referring to investments in or loans secured by mortgages on

real estate, shall, unless the context otherwise requires, include a

note secured by such mortgage.

26. Minor or infant. The term, "minor" or "infant", when used in this

chapter, shall mean a person who has not attained the age of eighteen

years; provided, however, that such definition shall not be applicable

to any provision relating to the New York Uniform Transfers to Minors

Act.

27. Trust office. The term "trust office", when used in this chapter,

means an office of a trust company at which the activities conducted are

limited to one or more of the fiduciary activities permitted for a trust

company under this chapter and such non-fiduciary activities as may be

ancillary to those activities. A trust office shall not be considered to

be a branch office pursuant to any other provisions of this chapter.

(28) Department. The term "department" means the department of

financial services of this state.

(29) Superintendent. The term "superintendent" means the

superintendent of financial services of this state.

30. Consummation of a mortgage loan. The term "consummation of a

mortgage loan" means, for purposes of the act of congress entitled Truth

in Lending Act and the regulations thereunder and the Real Estate

Settlement Procedures Act of 1974, as amended, and the regulations

thereunder, when the applicant for the mortgage loan executes the

promissory note and mortgage including by electronic signature, in

accordance with applicable federal and state laws, rules, and

regulations.

31. Members of a borrower's social network. The term "members of a

borrower's social network" means a group of individuals authorized by a

borrower to be part of his or her social media communications and

network.

Limited liability investment company; definitions. When the

provisions of this chapter are applied to the formation and operation of

a limited liability investment company references to:

1. "Board of directors" shall include the managers charged with the

management of a limited liability investment company as set forth in its

articles of organization.

2. "By-laws" shall include the operating agreement of a limited

liability investment company.

3. "Capital stock" shall include the cash and property the members of

a limited liability investment company have contributed to the company,

but shall not include promissory notes, or other obligations to

contribute cash or property or to perform future services.

4. "Corporation" shall include an unincorporated investment company

formed as a limited liability investment company pursuant to the

provisions of article twelve of this chapter.

5. "Director" shall include one of the managers charged with the

management of a limited liability investment company as set forth in its

articles of organization.

6. "Dividend" shall include the distribution of a limited liability

investment company's cash or other assets to its members.

7. "Incorporator" shall include the person or persons who is or are

the organizer or organizers of a limited liability investment company.

8. "Organization certificate" shall include the articles of

organization of a limited liability investment company.

9. "Share" shall include the equity interest of a member of a limited

liability investment company as set forth in the company's articles of

organization or, in the absence of such a provision, the equity interest

represented by a member's right to a proportionate share of the profits

of the company.

10. "Stock" shall include the equity interest represented by the

percentage of the total votes a member may cast as set forth in the

articles of organization of a limited liability investment company or,

in the absence of such a provision, the equity interest represented by a

member's right to a proportionate share of the profits of the company.

11. "Stockholder" shall include a member of a limited liability

investment company who has an equity interest represented by his or her

right to a proportionate share of the profits or capital of the company.

12. "Voting stock" shall include the definition of stock as set forth

in this section.

Limited liability trust companies; definitions. When the

provisions of this chapter are applied to the formation and operation of

a limited liability trust company references to:

1. "Board of directors" shall include the managers charged with the

management of a limited liability trust company as set forth in its

articles of organization.

2. "By-laws" shall include the operating agreement of a limited

liability trust company.

3. "Capital stock" shall include the cash and property the members of

a limited liability trust company have contributed to the company, but

shall not include promissory notes or other obligations to contribute

cash or property or to perform future services.

4. "Corporation" shall include an unincorporated trust company formed

as a limited liability trust company pursuant to the provisions of

article three of this chapter.

5. "Director" shall include one of the managers charged with the

management of a limited liability trust company as set forth in its

articles of organization.

6. "Dividend" shall include the distribution of a limited liability

trust company's cash or other assets to its members.

7. "Incorporator" shall include the person or persons who is or are

the organizer or organizers of a limited liability trust company.

8. "Organization certificate" shall include the articles of

organization of a limited liability trust company.

9. "Share" shall include the equity interest of a member of a limited

liability trust company as set forth in the company's articles of

organization or, in the absence of such a provision, the equity interest

represented by a member's right to a proportionate share of the profits

of the company.

10. "Stock" shall include the equity interest represented by the

percentage of the total votes a member may cast as set forth in the

articles of organization of a limited liability trust company or, in the

absence of such a provision, the equity interest represented by a

member's right to a proportionate share of the profits of the company.

11. "Stockholder" shall include a member of a limited liability trust

company who has an equity interest represented by his, her, or its right

to a proportionate share of the profits or capital of the company.

12. "Voting stock" shall include the definition of stock as set forth

in this section.

Information to be given to social services officials, state

department of social services, state department of mental hygiene, the

mental hygiene legal service, representatives of boards of child welfare

and children's court by banking organizations. 1. If requested by an

authorized representative of the state department of mental hygiene, the

mental hygiene legal service, or of the state department of social

services, or by the authorities charged with the duty of administering

laws relating to public assistance or care or hospital care at public

expense in any town, city or county, the officials of any banking

organization shall furnish to such representative such information as

such officials have as to whether any inmate of any state institution,

or any applicant for or any person who is or was a recipient of hospital

care at public expense, or any applicant for or any person who is or was

a recipient of any form of public assistance or care under the social

services law, named in such request or the husband or wife, or other

relative legally responsible for the support of such inmate, applicant,

or recipient has or had funds, securities or other property on deposit

or in the custody of such banking organization, and the amount or

probable value thereof.

2. If requested by an authorized representative of the state office of

temporary and disability assistance, or a social services district child

support enforcement unit established pursuant to section one hundred

eleven-c of the social services law, the officials of any financial

institution, as defined in paragraph one of subdivision (d) of section

four hundred sixty-nine A of the federal social security act, shall

enter into an agreement with the state office of temporary and

disability assistance or a social services district child support

enforcement unit to develop and operate a data match system, using

automated data exchanges to the maximum extent feasible, in which each

such financial institution shall provide for each calendar quarter the

name, record address, social security number or other taxpayer

identification number, and other identifying information for each

individual who maintains a demand deposit account, checking or

negotiable withdrawal order account, savings account, time deposit

account, or money-market mutual fund account at such institution and who

owes past-due support, as identified by the state office of temporary

and disability assistance or a social services district child support

enforcement unit by name and social security number or other taxpayer

identification number. Nothing herein shall be deemed to limit the

authority of a local social services district support collection unit

pursuant to section one hundred eleven-h of the social services law.

3. No financial institution which discloses information pursuant to

subdivision two of this section, or discloses any financial record to

the state office of temporary and disability assistance or a child

support enforcement unit of a social services district for the purpose

of enforcing a child support obligation of such person, shall be liable

under any law to any person for such disclosure, or for any other action

taken in good faith to comply with subdivision two of this section.

Banks to display signs. Every banking organization having as

its purpose or among its purposes the receipt of deposits, shall

continuously display a sign, or signs, as prescribed by the

superintendent of financial services, at each station or window within

the state where deposits are usually and normally received in its

principal place of business and in all its branches indicating whether

deposits are insured, and if insured the name of the insurer and the

extent to which each depositor is insured. Signs in non-insured banking

organizations shall clearly and legibly state "DEPOSITS NOT INSURED",

all in letters of the same size and character. No sign shall appear in

any non-insured bank with regard to insurance or deposits except as

herein prescribed.

Advertising. Every such non-insured banking organization shall

include in all its advertising within the state with reference to

deposit accounts the statement substantially as follows: "DEPOSITS NOT

INSURED". Where such advertising is printed the statement shall be of

such size and print to be clearly legible, all letters in such statement

being of the same size and character. No further reference shall be

contained in the advertising of non-insured banking organizations with

reference to the insurance of depositors which shall tend to be

misleading in connection therewith. The non-English equivalent of the

insurance statement may be used in any advertisement provided that the

entire advertisement is in such language and that the translation has

had the prior approval of the superintendent of financial services.

Exemptions from certain provisions of chapter. Any uninsured

banking organization whose assets are in excess of two hundred million

dollars shall be exempt from compliance with the provisions of sections

four-a, four-b and four-c of this chapter unless otherwise directed by

the superintendent.

Loans pursuant to the "Servicemen's Readjustment Act of 1944." 1.

Subject to such regulations and restrictions as the superintendent of

financial services finds to be necessary and proper, (i) any loan at

least twenty per centum of which is guaranteed under title three of an

act of congress entitled the "Servicemen's Readjustment Act of 1944,"

may be made or invested in by any banking organization having the power

to make loans, and the savings and loan bank of the state of New York,

and (ii) any bank or trust company may make any loan made on the

security of a loan or loans eligible under the preceding subparagraph

(i), without regard to the limitations and restrictions of this chapter;

provided however, that

(a) No such loan upon the security of real estate shall be made or

invested in if the amount of such loan exceeds the appraised value of

such real estate, as improved or to be improved by the application of

the proceeds of such loan, or if the amount of such loan, when added to

the amount unpaid upon prior mortgages, liens and encumbrances upon such

real estate, exceeds such appraised value. Such appraised value shall be

determined by an appraiser appointed pursuant to policies established by

the board of directors or trustees of the corporation making or

investing in such loan, or, in the case of a private banker, shall be

determined by the private banker or by an appraiser appointed pursuant

to policies established by such private banker;

(b) Each such loan, if secured by real property, shall be subject to

the provisions of this chapter relating to the recording of mortgages

and assignments of mortgages upon real property;

(bb) The requirements of the foregoing paragraphs (a) and (b) shall

not apply when not less than ten such mortgages are assigned as security

for a loan made under paragraph (ii), providing the term of such loan

does not exceed twelve months;

(c) Each such loan shall be subject to the provisions of this chapter

prescribing the maximum limits, in amount, of (1) loans in the aggregate

to, or upon the net liability of, any one individual and (2) loans in

the aggregate secured by real property;

(d) Each such loan made or invested in by a savings bank, a savings

and loan association, or the savings and loan bank of the state of New

York shall be subject to the following additional provisions: (1) a loan

pursuant to section five hundred one, five hundred two or five hundred

three of the "Servicemen's Readjustment Act of 1944," for the purpose of

repairing, altering or improving a building or buildings, and a loan

pursuant to section five hundred five (a) of such act, need not be

secured by a lien on real property, but all other loans pursuant to such

act must be secured by a first lien on such property; and (2) in the

case of each loan for the acquisition or benefit of, or secured by, real

property, such real property must, if located without the state of New

York, be located, in the case of a savings bank, within twenty-five

miles of the principal office of such savings bank; in the case of a

savings and loan association, within fifty miles of the principal office

of such association; and, in the case of the savings and loan bank of

the state of New York, within fifty miles of the principal office of

such bank or the principal office of one of its member savings and loan

associations; except that, if the amount of a loan secured by real

property, after deducting therefrom the amount thereof which is

guaranteed pursuant to such act, is in excess of two-thirds of the

appraised value of such real property, as determined in accordance with

paragraph (a) of this subdivision, such real property must be located

within the state of New York and, in the case of a savings bank or a

savings and loan association, within one hundred miles of the principal

office of any such corporation which makes, and any such corporation

which invests in, such loan; and except that, in the case of a loan

pursuant to section five hundred five (a) of such act, the real property

for the acquisition or benefit of which such loan is made may be located

within the applicable and prescribed limits of this chapter as to the

location of real property securing a loan insured by the federal housing

commissioner.

(e) The authority provided in this subdivision to invest in any loan

secured by real property guaranteed pursuant to the provisions of the

act of congress entitled the "Servicemen's Readjustment Act of 1944",

shall include authority to acquire title to real property in connection

with investing in an installment contract for the sale of real property,

so guaranteed, where the purchaser under such contract is in possession

and control of the property, and title is acquired by the banking

organization solely as security for the obligations of the purchaser.

2. In complying with the provisions of this chapter which prescribe

the maximum limits, in amount, of loans in the aggregate to, or upon the

net liability of, any one individual, and loans in the aggregate secured

by real property, a banking organization or the savings and loan bank of

the state of New York may deduct from the total amount of each loan made

or invested in by it that portion of such loan which is guaranteed

pursuant to the "Servicemen's Readjustment Act of 1944", and, in the

case of each loan made or invested in by it which is secured by a loan

which is guaranteed pursuant to said act, may deduct that portion which

is equal to the portion of such security which is so guaranteed.

3. The foregoing provisions of this section shall not apply to loans

insured pursuant to section five hundred eight of the "Servicemen's

Readjustment Act of 1944," but the superintendent of financial services

shall have power to authorize banking organizations and the savings and

loan bank of the state of New York to make and invest in such loans upon

such terms and conditions as it shall prescribe. Nothing contained in

this section shall prevent loans guaranteed or insured pursuant to the

"Servicemen's Readjustment Act of 1944" from being made or invested in

under, and subject to the limitations and restrictions of, other

provisions of this chapter.

Investment in obligations of housing corporations indirectly

guaranteed pursuant to the "Servicemen's Readjustment Act of 1944".

Subject to such regulations and restrictions as the superintendent of

financial services finds to be necessary and proper, any bank, trust

company or savings bank may invest in obligations of any corporation

organized under any law of this state for the purpose of acquiring,

constructing, owning, maintaining, operating, selling or conveying a

housing project or projects (not including hotels but including

accommodations for retail stores, shops, offices and other community

services reasonably incident to such projects) located within this

state, which obligations are (a) secured by a first mortgage lien on

such project, or such part thereof, as was or is to be constructed or

acquired out of the proceeds of such obligations, either directly or by

issue under an indenture of mortgage from such corporation to a

corporate trustee having its principal office in this state, and (b)

guaranteed indirectly through the pledge as security therefor of

obligations directly guaranteed under title three of an act of congress

entitled the "Servicemen's Readjustment Act of 1944", in an aggregate

amount equal to at least thirty per centum of the principal amount of

all sums advanced to such corporation under the loan instrument or

indenture during the period of construction and, upon completion, to the

extent of at least forty per centum of the principal amount of such

obligations.

Investment in obligations of certain persons sixty-five years

of age or over incurred to satisfy real property tax indebtedness. 1.

Subject to such regulations and restrictions as the superintendent of

financial services finds to be necessary and proper and notwithstanding

any inconsistent provision of this chapter to the contrary, any bank,

trust company, savings bank, savings and loan association, or life

insurance company authorized to do business in this state may make loans

described in subdivision two of this section.

2. Banking institutions described in subdivision one may make loans

under this section to natural persons aged sixty-five or older subject

to the following conditions:

(a) the principal amount of the loan shall not exceed the aggregate

amount of all real property taxes, special ad valorem levies, and

special assessments paid or owing by the borrower for the current or

prior years or both with respect to real property owned individually or

jointly by such borrower which constitutes the principal residence of

such borrower; provided, however, that the loan agreement may provide

for such principal amount to be modified to include the amount of

additional real property taxes, special ad valorem levies, and special

assessments pertaining to such property as they are incurred; and

(b) such loan shall be secured by a first or second mortgage on the

property which mortgage expressly states in like or similar terms "this

mortgage is given to secure a loan made pursuant to the provisions of

section six-a of the banking law"; and

(c) the annual interest chargeable on such loan shall not exceed the

allowable interest chargeable by such lender to any other person, not

including a corporation, on an obligation secured by a first mortgage

lien; and

(d) a loan which is undertaken pursuant to this section shall not be

payable until the sale or other disposition of such property, provided

however that any borrower may discharge any indebtedness he has

undertaken pursuant to the provisions of this section at any time

without payment of any charges other than principal and interest.

3. Subject to regulations of the superintendent of financial services,

banking institutions described in subdivision one of this section which

make loans pursuant to this section may, pursuant to the loan agreement,

utilize part or all of the proceeds of such loan to make direct payment

of real property taxes, special ad valorem levies, and special

assessments on the property which secures such loan. Any such

institution which retains part or all of the proceeds of such loan for

the purpose of making direct payment of such real property taxes,

special ad valorem levies, and special assessments shall be liable to

such borrower, upon failure to pay such taxes, levies, and assessments

for the amount of such taxes, levies, and assessments plus penalties and

interest imposed thereon.

4. Every banking institution which makes direct payment of real

property taxes, special ad valorem levies, and special assessments

pursuant to subdivision three shall at least annually provide to the

borrower any paid bill it has received for the payment of such taxes,

levies, and assessments. Such bill shall be contained in a succeeding

loan statement as may be sent to such borrower. This section shall not

apply to billings for real property taxes, special ad valorem levies,

and special assessments transmitted by computer tape by a city with a

population of one million or more persons.

Application forms to be made available; certain cases. 1.

Every banking organization which originates loans secured by real

property located in this state shall provide at its principal place of

business and at all its branches except automated teller machines,

point-of-sale terminals or other similar facilities, application forms

for such loans which forms shall be made available upon request.

2. Every such organization shall be required, in such manner as the

superintendent shall determine, to maintain a record of such application

forms returned substantially completed and the last activity had with

respect thereto.

3. Every such organization shall inform any person making inquiry

regarding the origination of loans secured by real property located in

this state that written loan application forms are available at its

principal place of business and at all its branches except automated

teller machines, point-of-sale terminals or other similar facilities.

4. For purposes of this section "a loan secured by real property"

shall include any loan secured by a mortgage or other lien upon real

property including a leasehold estate and any cooperative apartment loan

subject to the provisions of subdivision five of section one hundred

three, subdivision eight-a of section two hundred thirty-five or

subdivision two-a of section three hundred eighty of this chapter.

Requirement to state in writing reason for denial of mortgage

loan. Every banking organization and licensed mortgage banker which

originates mortgage loans secured by real property located within New

York state which denies an application for such a loan or makes its

approval of such a loan conditional upon the applicant's agreement to

terms substantially different than those included in or contemplated by

the submitted application shall be required to notify, in writing, any

person or agent who returns a substantially completed written mortgage

loan application form of the reasons for the denial or conditioned

approval.

Graduated payment mortgages authorized. Notwithstanding any

inconsistent provision of this chapter or other law and in addition to

any other power exercisable by it, every banking organization, licensed

mortgage banker, national banking association, federal savings bank,

federal savings and loan association and federal credit union shall have

the power to offer graduated payment mortgages and loans which conform

to the provisions of section two hundred seventy-nine of the real

property law, subject to the rules and regulations prescribed by the

superintendent of financial services.

Alternative mortgage instruments made by banks, trust

companies, savings banks, savings and loan associations and credit

unions. 1. Notwithstanding any inconsistent provision of this chapter

or any other law of this state, the superintendent of financial services

is authorized to adopt such rules or regulations as shall permit banks,

trust companies, foreign banking corporations licensed to maintain a

branch or agency in this state, savings banks, savings and loan

associations, credit unions and persons and entities engaging in the

business described in section five hundred ninety of this chapter to

make residential mortgage loans and cooperative apartment unit loans

which provide for (a) periodic readjustments of the rate of interest

charged for the loan or successive terms of the loan or (b) terms of

loan which are shorter than the term of the mortgage or (c) repayment of

the principal amount of the loan by regular payments which are not equal

in amount throughout the term of the mortgage or (d) the lender thereof

to receive a share in the future appreciation of the property serving as

security for the loan under the circumstances set forth in the following

sentence or (e) any combination of paragraphs (a), (b), (c) and (d) of

this subdivision, subject to the provisions of subdivision two of this

section. Where the lender or holder of a residential mortgage loan or

cooperative apartment unit loan enters into a written agreement with the

borrower under which the lender or holder conditionally reduces an

amount of principal of such loan in order to assist a borrower at risk

of foreclosure to avoid such foreclosure, the lender or holder may enter

into a written agreement (a "shared appreciation agreement") with the

borrower under which the lender shall be entitled to share in the

appreciation of the market value of the real property or cooperative

shares and proprietary lease securing such loan between the effective

date of such reduction in principal amount until the date when the

property is sold, provided that the amount the lender is entitled to

receive under such shared appreciation agreement shall be the lesser of

(i) the amount of such reduction in principal, plus interest on such

amount from the date of such reduction to the date of payment at the

same rate of interest as applies to the remaining principal amount of

the residential mortgage loan, and (ii) fifty percent of the amount of

such appreciation. Such amounts shall be payable when the mortgagor

sells the residential real property or cooperative shares and

proprietary lease that secure the loan. Such shared appreciation

agreement shall expressly and conspicuously bear a legend at the top of

the agreement in at least fourteen-point type which shall include the

following: "In this agreement, you are giving away some of any future

increase in value of your home. Please read carefully." For purposes of

this subdivision, the appreciation of the property shall be measured as

the difference, if positive, between the gross sales proceeds (net of

any reasonable real estate commission) of the sale of the property and

the value of the property at the time of the closing of the shared

appreciation mortgage, as determined by an appraisal by an independent

New York state licensed real estate appraiser. Recovery of such

reduction in the principal amount shall not be deemed to be interest for

any purpose of the laws of this state.

Any shared appreciation agreement shall be accompanied by a notice,

which shall be on a separate page from the shared appreciation agreement

and shall contain the following heading in bold, fourteen-point type:

"Important disclosures about the contract in which you agree to give

away a part of any future increase in value of your home. Please read

carefully." The notice shall include the following disclosures:

(1) a statement that the lender will be entitled to share in any

appreciation of the market value of the mortgaged property that occurs

between the time of the loan modification and the time the property is

sold, up to the amount of principal forborne plus interest on such

amount at the applicable rate of interest on the mortgage but in no

event more than fifty percent of the amount of such appreciation, and

providing at least three examples of how such shared appreciation may

affect the borrower at the time the borrower sells the mortgaged

property, such examples to include (A) no appreciation in the value of

the mortgaged property, (B) appreciation of twenty percent and (C)

appreciation of fifty percent;

(2) a statement advising the borrower to seek independent counseling

from a lawyer, a HUD-certified mortgage counselor or a tax advisor

regarding (A) the trade-off between a current reduction in the size of

the mortgage, versus the promise to give up part of the future

appreciation of the home, and (B) the tax consequences of the principal

forgiveness and shared appreciation agreement, and providing a list of

the names and contact information of five HUD-certified mortgage

counselors in the county where the mortgaged property is located or, if

there are fewer than five such counselors in that county, the list may

include counselors in one or more neighboring counties;

(3) a statement on the potential effect of the shared appreciation

agreement on any future refinancing of the mortgage and the potential

effect of any prepayment or refinancing of the mortgage on the

appreciation sharing agreement; and

(4) such other disclosures as the superintendent of financial services

may require.

2. Any rules or regulations which are adopted by the superintendent of

financial services pursuant to subdivision one of this section:

(a) shall provide for disclosures and notices to the borrower with

respect to the terms and conditions of the loan and the mortgage, and

the superintendent of financial services may require the adoption of

uniform disclosure and notice forms for this purpose;

(b) shall provide for the conditions governing renewals of the term of

the loan;

(c) shall not permit any uninsured loan secured by residential real

property to be made in an amount exceeding ninety percent of the

appraised value of the property; and

(d) shall not allow, with respect to any specific alternative mortgage

instrument which permits a periodic readjustment of the rate charged on

the loan, for a greater change in rate than that permitted under federal

law or regulations to federally-chartered banking organizations located

in this state for loans made pursuant to an equivalent alternative

mortgage instrument.

Override of certain provisions of United States Public Law

97-320. 1. The provisions of Title VIII of an act of congress entitled

"Garn-St Germain Depository Institutions Act of 1982", United States

Public Law 97-320, and the preemption of state law provided in section

804 thereof, shall not apply with respect to residential real property

and cooperative apartment unit alternative mortgage transactions subject

to the laws of this state except as provided in this section.

2. With respect to a real property loan secured by a lien on

residential real property containing less than five dwelling units,

including a lien on the stock allocated to a dwelling unit in a

cooperative housing corporation or on a residential manufactured home, a

lender may not exercise its option pursuant to a "due-on-sale" clause

upon:

(a) A transfer by devise, descent, or operation of law on the death of

a joint tenant or tenant by the entirety;

(b) The granting of a leasehold interest of three years or less not

containing an option to purchase;

(c) A transfer to a relative resulting from the death of a borrower;

(d) A transfer where the spouse or children of the borrower become an

owner of the property;

(e) A transfer resulting from a decree of a dissolution of marriage,

legal separation agreement, or from an incidental property settlement

agreement, by which the spouse of the borrower becomes an owner of the

property; or

(f) A transfer into an inter-vivos trust in which the borrower is and

remains a beneficiary and that does not relate to a transfer of rights

of occupancy in the property.

Reverse mortgage loans authorized. Notwithstanding any

inconsistent provision of law, in addition to any other power exercised

by it, every authorized lender, as defined by section two hundred eighty

or two hundred eighty-a of the real property law, shall have the power

to offer reverse mortgage loans (1) which conform to the provisions of

section two hundred eighty or two hundred eighty-a of the real property

law and the rules and regulations promulgated by the superintendent of

financial services; or (2) which conform to the requirements of the

federal housing administration's home equity conversion mortgage

insurance demonstration program for as long as such program exists as

provided for in section 1715Z-20 of title 12 of the United States Code.

"Reverse mortgage" shall mean the mortgage, deed of trust or other

security instrument relating to a particular reverse mortgage loan

transaction.

The proceeds of a reverse mortgage shall not be considered as income

for the purposes of section four hundred sixty-seven of the real

property tax law; provided, however, that monies used to repay a reverse

mortgage may not be deducted from income, and provided additionally that

any interest or dividends realized from the investment of reverse

mortgage proceeds shall be considered income.

Mortgage loans. No person, partnership, corporation, banking

organization, exempt organization as defined in section five hundred

ninety of this chapter or other entity shall make a mortgage loan as

defined in section five hundred ninety of this chapter except in

conformity with the requirements of article twelve-D and in compliance

with such rules and regulations as may be promulgated by the

superintendent of financial services under this section. Nothing in this

section shall be construed to limit or otherwise modify any otherwise

applicable requirement of state or federal law.

Proof of insurance. 1. No exempt organization, as defined in

section five hundred ninety of this chapter, or licensed mortgage banker

which originates mortgage loans shall, at the time of title closing for

a loan secured by a one to four family residential real property, refuse

to accept a binder, issued by an insurer, or a duly authorized

representative of an insurer, licensed to do business in this state, as

evidence that hazard insurance has been procured for the mortgaged

premises. Nothing herein is intended to prohibit the mortgage banker or

exempt organization from requiring the borrower to also furnish a

receipt indicating that the annual or installment premium on such

insurance policy has been paid.

2. As used in this section, "binder" means a written document (a)

which includes the name and address of the insured and any additional

named insureds, mortgagees, or lienholders; a description of the

property insured; a description of the nature and amount of coverage

which shall be deemed to include the terms of the standard fire

insurance policy except as conspicuously noted on the binder; the

identity of the insurer and of the authorized representative executing

the binder; the effective date of coverage; the binder number or the

policy number where applicable to a policy extension, and (b) which

temporarily obligates the insurer to provide that insurance coverage

pending issuance of the insurance policy. The cancellation of such a

binder shall be governed at the minimum by the provisions of the

standard fire insurance policy and the provisions of the insurance law

applicable thereto.

Real property insurance escrow accounts. 1. Definitions. When

used in this section: (a) "Mortgage investing institution" means any

bank, trust company, national bank, savings bank, savings and loan

association, federal savings bank, federal savings and loan association,

private banker, credit union, federal credit union, investment company,

pension fund, licensed mortgage banker or any other entity which

maintains a real property insurance escrow account for real property

located in this state.

(b) "Mortgagor" means a person having title to and occupying a one to

four family residence which is located in this state and is subject to a

mortgage.

(c) "Real property insurance" means a policy of insurance issued, or

issued for delivery in this state, on a risk located or resident in this

state insuring the following contingency: loss or damage (including but

not limited to loss or damage on account of fire) to real property used

predominantly for residential purposes and consists of not more than

four dwelling units, other than motels or hotels.

(d) "Real property insurance escrow account" means an account

established by contract between a mortgagor of real property improved by

a one to four family residence and the mortgage investing institution

having a mortgage thereon, into which the mortgage investing institution

shall deposit money collected from the mortgagor for the purpose of

paying real property insurance premiums.

(e) "One to four family residence" means property used primarily for

residential purposes for one to four families, including property held

in condominium form of ownership, and which is occupied in whole or in

part by the owner.

2. Duties and responsibilities of mortgage investing institutions. (a)

Every mortgage investing institution shall make all payments for

insurance for which they hold real property insurance escrow accounts in

a timely manner.

(b) Every mortgage investing institution shall pay at least the

minimum rate of interest on each real property insurance escrow account

as prescribed therein.

(c) Every mortgage investing institution shall deposit funds from a

real property insurance escrow account of a mortgagor in a banking

institution whose deposits are insured by a federal agency or a licensed

branch of a foreign banking corporation whose deposits are insured by a

federal agency. Notwithstanding the foregoing provisions of this

subdivision, the superintendent shall have the power to exempt from the

requirements of this subdivision any banking organization which does not

receive deposits or share accounts from the general public.

(d) A mortgage investing institution may debit a mortgagor's real

property insurance escrow account for payments of insurance premiums

only if actual payment for such premiums is made within twenty-one days

after such debit.

(e) Every mortgage investing institution shall, at least annually,

provide to the mortgagor an analysis of the real property insurance

escrow account of the mortgagor. Such analysis shall contain, for the

twelve month period covered by the analysis, at least: (1) interest

earned; (2) the amount of insurance premiums paid from the real property

insurance escrow account; and (3) the account balance as of the

beginning of the period covered by the analysis and the ending account

balance as of a specified date within forty-five days preceding the date

of the analysis. In addition, the mortgage investing institution shall,

upon request by the mortgagor, provide to the mortgagor the date or

dates of the payment of insurance premiums from such real property

insurance escrow account. The information required by this paragraph may

be provided in notices otherwise required by federal or state law,

regulation or rule to be sent on at least an annual basis to the

mortgagor, including but not limited to notices under title three-A of

the real property tax law.

(f) The mortgage investing institution shall provide a written

disclosure, in at least eight point bold face type, to the mortgagor

with respect to the real property insurance escrow account. Such

disclosure shall be provided at the time of the establishment of the

real property insurance escrow account. In the case of accounts already

in existence on the effective date of this act, such disclosure shall be

provided to the mortgagor with the next annual analysis required by

paragraph (e) of this subdivision. The disclosure shall contain

substantially the following language:

(i) The mortgage investing institution is obligated to make all

payments for real property insurance for which the real property

insurance escrow account is maintained. If any such payments are not

timely, the mortgage investing institution is responsible for making

such payments including any penalties and interest and shall be liable

for all damages to the mortgagor resulting from its failure to make

timely payment.

(ii) In the event that a real property insurance premium notice is

sent directly to the mortgagor by the insurer, the mortgagor shall have

the obligation to promptly transmit such premium notice to the mortgage

investing institution, or such other institution or agent as may be

designated in writing by the mortgage investing institution, for

payment. Failure to do so may jeopardize the mortgagor's insurance

coverage and may excuse the mortgage investing institution from

liability for failure to timely make such real property insurance

payments.

(iii) The mortgagor is obligated to pay one-twelfth of the real

property insurance premiums each month to the mortgage investing

institution for deposit into the real property insurance escrow account,

unless there is a deficiency or surplus in the account, in which case a

greater or lesser amount may be required.

(iv) If the mortgage investing institution is subject to the

provisions of paragraph (c) of this subdivision, the mortgage investing

institution must deposit the escrow payments made by the mortgagor in a

banking institution or a licensed branch of a foreign banking

corporation whose deposits are insured by a federal agency.

(g) Every mortgage investing institution shall provide written notice

to a mortgagor no later than ten business days after the transfer to

another mortgage investing institution of the right to receive all

payments from the mortgagor, including payments made into the real

property insurance escrow account, which notice shall include the name,

address and telephone number of the mortgage investing institution to

which such rights have been transferred. Upon request by the mortgagor,

the mortgage investing institution shall advise the mortgagor of the

amount of money in such account as of the date of such transfer. Every

mortgage investing institution shall remain fully liable to pay any real

property insurance premiums which are due and payable prior to the date

of such transfer, and the mortgage investing institution to which such

rights have been transferred shall be liable to pay any real property

insurance premiums which are due and payable after the date of such

transfer, unless otherwise agreed among the parties to the transfer.

(h) Every mortgage investing institution shall, no later than thirty

days after the final payment of the mortgage loan, where the mortgagor

retains ownership of the property, send to the mortgagor a written

statement that shall include, but not be limited to the following

information: (i) that the real property insurance escrow account has

been or will be terminated (whichever is applicable); and (ii) that

unless the mortgagor establishes a new real property insurance escrow

account with a mortgage investing institution, the mortgagor will be

obliged to pay to the appropriate insurer real property insurance

premiums becoming due thereafter. The written notice shall also set

forth the effective date of the termination and shall provide the name

and address of each insurer and shall advise the mortgagor to contact

such insurer for billing information.

3. Mailing or delivery of bills to mortgage investing institutions. A

mortgagor who has entered into a real property insurance escrow account

may designate, in writing, a mortgage investing institution, and its

successors, agents or assigns to receive premium notices for real

property insurance. The mortgage investing institution shall advise the

insurer in writing within fifteen days after the termination of such

escrow account and shall inform the insurer that all future premium

notices should be sent directly to the insured. The mortgage investing

institution shall, upon the request of the insurer, provide any document

that clearly evidences its authorization to receive insurance premium

notices or obligation to pay real property insurance premiums.

4. Payments by mortgage investing institutions. A mortgage investing

institution may pay the real property insurance premiums due on more

than one parcel by a single instrument, provided that the mortgage

investing institution also provides to the insurer a detailed list of

the specific parcels to which the instrument is to be applied, each

parcel identification number (if any) and the amount of the real

property insurance premium to be paid with respect to each parcel.

5. Liabilities of mortgage investing institutions. (a) A mortgage

investing institution which receives moneys from a mortgagor for deposit

into a real property insurance escrow account shall be liable to such

mortgagor, upon failure to pay such real property insurance premiums,

for the amount of the real property insurance premiums plus penalties

and interest imposed thereon.

(b) In addition to any other remedies permitted by law, a mortgagor

whose real property insurance premiums are to be paid by means of a real

property insurance escrow account pursuant to this section may bring an

action against the mortgage investing institution maintaining such

account for the mortgagor under the provisions of this subdivision if

payments for real property insurance premiums have not been made for

thirty days after the date such insurance premiums have become due and

payable. If a court shall find, after considering the circumstances of

the failure of a mortgage investing institution to pay the real property

insurance premium of a mortgagor pursuant to an escrow agreement, that

such failure was due to the negligence or intentional acts of the

mortgage investing institution, its agent, or both, the court may award

the mortgagor injunctive relief and liquidated damages in an amount

equal to three times the real property insurance premium not paid, but

in no event greater than six thousand dollars.

(c) A mortgage investing institution shall be liable to the mortgagor

for all damages and shall bear all responsibility for failure to make

timely payment of insurance premiums.

(d) The mortgage investing institution shall have liability to the

mortgagor under this subdivision only if:

(i) the mortgage investing institution, or such other institution or

agent as designated in writing by the mortgage investing institution,

has received the real property insurance premium notice; and

(ii) the mortgagor has made required payments for deposit into the

real property insurance escrow account.

6. Separability. If any provision of this section or the application

of such provision in certain circumstances shall be held invalid, the

validity of the remainder of this section and its applicability to other

circumstances shall not be affected.

High-cost home loans. 1. Definitions. The following definitions

apply for the purposes of this section:

(a) "Affiliate" means any company that controls, is controlled by, or

is under common control with another company, as set forth in the Bank

Holding Company Act of 1956 (12 U.S.C. § 1841 et seq.), as amended from

time to time.

(b) "Annual percentage rate" means the annual percentage rate for the

loan calculated according to the provisions of the Federal

Truth-in-Lending Act (15 U.S.C. § 1601, et seq.), and the regulations

promulgated thereunder by the federal reserve board (as said act and

regulations are amended from time to time).

(c) "Bona fide loan discount points" means loan discount points

knowingly paid by the borrower funded through any source, for the

purpose of reducing, and which in fact result in a bona fide reduction

of, the interest rate or time-price differential applicable to the loan,

provided that the amount of the interest rate reduction purchased by the

discount points is reasonably consistent with established industry norms

and practices for secondary mortgage market transactions. For purposes

of this section, it shall be presumed that a point is a bona fide loan

discount point if it reduces the interest rate by a minimum of

twenty-five basis points provided all other terms of the loan remain the

same.

(d) A "High-cost home loan" means a home loan in which the terms of

the loan exceed one or more of the thresholds as defined in paragraph

(g) of this subdivision.

(e) "Home loan" means a loan, including an open-end credit plan, other

than a reverse mortgage transaction or a loan made or fully or partially

guaranteed by the state of New York mortgage agency, in which:

(i) The principal amount of the loan at origination does not exceed

the conforming loan size limit (including any applicable special limit

for jumbo mortgages) for a comparable dwelling as established from time

to time by the federal national mortgage association;

(ii) The borrower is a natural person;

(iii) The debt is incurred by the borrower primarily for personal,

family, or household purposes;

(iv) The loan is secured by a mortgage or deed of trust on real estate

improved by a one to four family dwelling, or by a condominium unit, or

by any certificate of stock or other evidence of ownership in, and a

proprietary lease from, a corporation, partnership or other entity

formed for the purpose of cooperative ownership of real estate, in

either case used or occupied or intended to be used or occupied, wholly

or partly, as the home or residence of one or more persons and which is

or will be occupied by the borrower as the borrower's principal

dwelling; and

(v) The property is located in this state.

(f) "Points and fees" means:

(i) All items listed in 15 U.S.C. § 1605(a)(1) through (4), except

interest or the time-price differential;

(ii) All charges for items listed under § 226.4(c)(7) of title 12 of

the code of federal regulations, as amended from time to time, but only

if the lender receives direct or indirect compensation in connection

with the charge or the charge is paid to an affiliate of the lender;

otherwise, the charges are not included within the meaning of the phrase

"points and fees";

(iii) All compensation paid directly or indirectly to a mortgage

broker, including a broker that originates a loan in its own name in a

table-funded transaction, not otherwise included in subparagraphs (i)

and (ii) of this paragraph;

(iv) The cost of all premiums financed by the lender, directly or

indirectly, for any credit life, credit disability, credit unemployment,

or credit property insurance, or any other life or health insurance, or

any payments financed by the lender directly or indirectly for any debt

cancellation or suspension agreement or contract, except that insurance

premiums calculated and paid on a monthly basis shall not be considered

financed by the lender.

(g) "Thresholds" means:

(i) For a first lien mortgage loan, the annual percentage rate of the

home loan at consummation of the transaction exceeds eight percentage

points over the yield on treasury securities having comparable periods

of maturity to the loan maturity measured as of the fifteenth day of the

month immediately preceding the month in which the application for the

extension of credit is received by the lender; or for a subordinate

mortgage lien, the annual percentage rate of the home loan at

consummation of the transaction equals or exceeds nine percentage points

over the yield on treasury securities having comparable periods of

maturity on the fifteenth day of the month immediately preceding the

month in which the application for extension of credit is received by

the lender; as determined by the following rules: if the terms of the

home loan offer any initial or introductory period, and the annual

percentage rate is less than that which will apply after the end of such

initial or introductory period, then the annual percentage rate that

shall be taken into account for purposes of this section shall be the

rate which applies after the initial or introductory period; or

(ii) The total points and fees exceed: five percent of the total loan

amount if the total loan amount is fifty thousand dollars or more; or

six percent of the total loan amount if the total loan amount is fifty

thousand dollars or more and the loan is a purchase money loan

guaranteed by the federal housing administration or the veterans

administration; or the greater of six percent of the total loan amount

or fifteen hundred dollars, if the total loan amount is less than fifty

thousand dollars; provided, the following discount points shall be

excluded from the calculation of the total points and fees payable by

the borrower:

(1) Up to and including two bona fide loan discount points payable by

the borrower in connection with the loan transaction, but only if the

interest rate from which the loan's interest rate will be discounted

does not exceed by more than one percentage point the yield on United

States treasury securities having comparable periods of maturity to the

loan maturity measured as of the fifteenth day of the month immediately

preceding the month in which the application is received;

(2) Any and all bona fide loan discount points funded directly or

indirectly through a grant from a federal, state or local government

agency or 501(c)(3) organization.

(h) "Total loan amount" means the principal of the loan minus those

points and fees as defined in paragraph (f) of this subdivision that are

included in the principal amount.

(i) "Lender" means a mortgage banker as defined in paragraph (f) of

subdivision one of section five hundred ninety of this chapter or an

exempt organization as defined in paragraph (e) of subdivision one of

section five hundred ninety of this chapter.

2. Limitations and prohibited practices for high-cost home loans. A

high-cost home loan shall be subject to the following limitations:

(a) No call provisions. No high-cost home loan may contain a provision

that permits the lender, in its sole discretion, to accelerate the

indebtedness. This provision does not prohibit acceleration of the loan

in good faith due to the borrower's failure to abide by the material

terms of the loan.

(b) No balloon payments. No high-cost home loan may contain a

scheduled payment that is more than twice as large as the average of

earlier scheduled payments, unless such balloon payment becomes due and

payable at least fifteen years after the loan's origination. This

provision does not apply when the payment schedule is adjusted to the

seasonal or irregular income of the borrower.

(c) No negative amortization. No high-cost home loan may contain a

payment schedule with regular periodic payments that cause the principal

balance to increase. A loan is considered to have such a schedule if the

borrower is given the option to make regular periodic payments that

cause the principal balance to increase, even if the borrower is also

given the option to make regular periodic payments that do not cause the

principal balance to increase. This paragraph shall not prohibit

negative amortization as a result of a temporary forbearance sought by a

borrower.

(d) No increased interest rate. No high-cost home loan may contain a

provision which increases the interest rate after default. This

provision does not apply to interest rate changes in a variable rate

loan otherwise consistent with the provisions of the loan documents;

provided that the change in the interest rate is not triggered by the

event of default or the acceleration of the indebtedness.

(e) Limitation on advance payments. No high-cost home loan may include

terms under which more than two periodic payments required under the

loan are consolidated and paid in advance from the loan proceeds

provided to the borrower.

(f) No modification or deferral fees. A lender may not charge a

borrower any fees to modify, renew, extend, or amend a high-cost home

loan or to defer any payment due under the terms of a high-cost home

loan if, after the modification, renewal, extension or amendment, the

loan is still a high-cost loan or, if no longer a high-cost home loan,

the annual percentage rate has not been decreased by at least two

percentage points. For purposes of this paragraph, fees shall not

include interest that is otherwise payable and consistent with the

provisions of the loan documents. This paragraph shall not prohibit a

lender from charging points and fees in connection with any additional

proceeds received by the borrower in connection with the modification,

renewal, extension or amendment (over and above the current principal

balance of the existing high-cost home loan) provided that the points

and fees charged on the additional sum must reflect the lender's typical

point and fee structure for high-cost home loans.

(g) No oppressive mandatory arbitration clauses. No high-cost home

loan may be subject to a mandatory arbitration clause that is

oppressive, unfair, unconscionable, or substantially in derogation of

the rights of consumers.

(h) No financing of insurance or other products sold in connection

with the loan. No high-cost home loan shall finance, directly or

indirectly, any credit life, credit disability, credit unemployment, or

credit property insurance, or any other life or health insurance

premiums, or any payments directly or indirectly for any debt

cancellation or suspension agreement or contract, or any product or

service that is not necessary or related to the high-cost home loan such

as auto club memberships or credit report monitoring, but not including

fees paid to the lender, broker, or closing agent, fees related to the

recording of the mortgage, title insurance or other settlement fees.

Insurance premiums or debt cancellation or suspension fees calculated

and paid on a monthly basis shall not be considered financed.

(i) No "loan flipping". No lender or mortgage broker making or

arranging a high-cost home loan may engage in the unfair act or practice

of "loan flipping". "Loan flipping" is making a home loan to a borrower

that refinances an existing home loan when the new loan does not have a

tangible net benefit to the borrower considering all of the

circumstances, including the terms of both the new and refinanced loans,

the cost of the new loan, and the borrower's situation.

(j) No refinancing of special mortgages. No lender or mortgage broker

making or arranging a high-cost home loan may refinance an existing home

loan that is a special mortgage originated, subsidized or guaranteed by

or through a state, tribal or local government, or nonprofit

organization, which either bears a below-market interest rate at the

time of origination, or has nonstandard payment terms beneficial to the

borrower, such as payments that vary with income, are limited to a

percentage of income, or where no payments are required under specified

conditions, and where, as a result of the refinancing, the borrower will

lose one or more of the benefits of the special mortgage, unless the

lender is provided prior to loan closing documentation by a HUD approved

housing counselor or the lender who originally made the special mortgage

that a borrower has received home loan counseling in which the

advantages and disadvantages of the refinancing has been received.

(k) No lending without due regard to repayment ability. A lender or

mortgage broker shall not make or arrange a high-cost home loan without

due regard to repayment ability, based upon consideration of the

resident borrower or borrowers' current and expected income, current

obligations, employment status, and other financial resources (other

than the borrower's equity in the dwelling which secures repayment of

the loan), as verified by detailed documentation of all sources of

income and corroborated by independent verification. However, a lender

making a high-cost home loan shall benefit from a rebuttable presumption

that the loan was made with due regard to repayment ability if the

lender demonstrates that at the time the loan is consummated, the

resident borrower or borrowers' total monthly debts, including amounts

owed under the loan, do not exceed fifty percent of the resident

borrower or borrowers' monthly gross income; and the lender follows the

residual income guidelines established in 38 C.F.R. § 36.4337(e) and VA

Form 26-6393.

(l) (i) No lending without counseling disclosure and list of

counselors. A lender or mortgage broker must deliver, place in the

mail, fax or electronically transmit the following notice in at least

twelve point type to the borrower at the time of application: "You

should consider financial counseling prior to executing loan documents.

The enclosed list of counselors is provided by the New York State

Department of Financial Services". In the event of a telephone

application, the disclosures must be made immediately after receipt of

the application by telephone. Such disclosure shall be on a separate

form. In order to utilize an electronic transmission, the lender or

broker must first obtain either written or electronically transmitted

permission from the borrower. A list of approved counselors, available

from the New York state department of financial servcies, shall be

provided to the borrower by the lender or the mortgage broker at the

time that this disclosure is given.

(ii) A lender or mortgage broker shall not make or arrange a high-cost

home loan unless either the lender or mortgage broker has given the

following notice in writing to the borrower within three days after

determining that the loan is a high-cost home loan, but no less than ten

days before closing:

"CONSUMER CAUTION AND HOME OWNERSHIP COUNSELING NOTICE

If you obtain this loan, which pursuant to New York State Law is a

High-Cost Home Loan, the lender will have a mortgage on your home. You

could lose your home, and any money you have put into it, if you do not

meet your obligations under the loan.

You should shop around and compare loan rates and fees. Mortgage loan

rates and closing costs and fees vary based on many factors, including

your particular credit and financial circumstances, your earnings

history, the loan-to-value requested, and the type of property that will

secure your loan. The loan rate and fees could vary based on which

lender or mortgage broker you select. Higher rates and fees may be

related to the individual circumstances of a particular consumer's

application.

You should consider consulting a qualified independent credit

counselor or other experienced financial adviser regarding the rate,

fees, and provisions of this mortgage loan before you proceed. The

enclosed list of counselors is provided by the New York State Department

of Financial Services.

You are not required to complete any loan agreement merely because you

have received these disclosures or have signed a loan application. If

you proceed with this mortgage loan, you should also remember that you

may face serious financial risks if you use this loan to pay off credit

card debts and other debts in connection with this transaction and then

subsequently incur significant new credit card charges or other debts.

If you continue to accumulate debt after this loan is closed and then

experience financial difficulties, you could lose your home and any

equity you have in it if you do not meet your mortgage loan obligations.

Your payments on existing debts contribute to your credit ratings. You

should not accept any advice to ignore your regular payments to your

existing creditors."

(m) Financing of points and fees. In making a high-cost home loan, a

lender shall not, directly or indirectly, finance any points and fees as

defined in paragraph (f) of subdivision one of this section, in an

amount that exceeds three percent of the principal amount of the loan.

(n) Restrictions on home improvement contracts. A lender shall not pay

a contractor under a home improvement contract from the proceeds of a

high-cost home loan other than: by an instrument payable to the borrower

or jointly to the borrower and the contractor; or at the election of the

borrower, through a third-party escrow agent in accordance with terms

established in a written agreement signed by the borrower, the lender,

and the contractor prior to the disbursement.

(o) No encouragement of default. In making or arranging a high-cost

home loan, a lender or mortgage broker shall not recommend or encourage

default on an existing loan or other debt prior to and in connection

with the closing or planned closing of a high-cost home loan that

refinances all or any portion of such existing loan or debt.

(p) Prohibited payments to mortgage brokers. In making or arranging a

high-cost home loan, no lender or mortgage broker shall accept or give

any fee, kickback, thing of value, portion, split or percentage of

charges, other than as payment for goods or facilities that were

actually furnished or services that were actually performed. Such

payment must be reasonably related to the value of the goods or

facilities that were actually furnished or services that were actually

performed.

(q) No points and fees when a lender refinances its own high-cost home

loan with a new high-cost home loan. A lender shall not charge a

borrower points and fees in connection with a high-cost home loan if the

proceeds of the high-cost home loan are used to refinance an existing

high-cost home loan held by the lender or an affiliate of the lender.

(r) No prepayment penalties. Notwithstanding paragraph b of

subdivision three of section 5-501 of the general obligations law, no

prepayment penalties or fees shall be charged or collected on a

high-cost home loan. A prepayment penalty in a high-cost home loan shall

be unenforceable.

(s) No yield spread premiums. In connection with the making or

brokering of a home loan, no person may provide, and no mortgage broker

or mortgage lender may receive, directly or indirectly, any compensation

that is based on, or varies with, the terms of any home loan. This

paragraph shall not prohibit compensation based on the principal balance

of the loan.

(t) Mandatory escrow of taxes and insurance. No high-cost home loan

shall be made after July first, two thousand ten unless the lender

requires and collects the monthly escrow of property taxes and hazard

insurance. With respect to a high-cost home loan, a borrower may waive

escrow requirements by notifying the lender in writing after one year

from consummation of the loan. The provisions of this paragraph shall

not apply to a high-cost home loan that is a subordinate lien when the

taxes and insurance are escrowed through another home loan or where the

borrower can demonstrate a record of twelve months of timely payments of

taxes and insurance on a previous home loan.

(u) Mandatory disclosure of taxes and insurance payments. With respect

to a high-cost home loan, the first time a borrower is informed of the

anticipated or actual periodic payment amount in connection with a

first-lien residential mortgage loan for a specific property, the lender

or mortgage broker shall inform the borrower that an additional amount

will be due for taxes and insurance and shall disclose to the borrower

as soon as reasonably possible the approximate amount of the initial

periodic payment for property taxes and hazard insurance.

(v) No teaser rates. No lender or mortgage broker shall make or

arrange a high-cost home loan which has an initial or introductory rate

with a duration of less than six months.

2-a. (a) High-cost home loan mortgages shall include a legend on top

of the mortgage in twelve-point type stating that the mortgage is a

high-cost home loan subject to this section.

(b) The lender shall report both the favorable and unfavorable payment

history of the borrower to a nationally recognized consumer credit

bureau at least annually during such period as the lender holds or

services the high-cost home loan.

3. The provisions of this section shall apply to any person who in bad

faith attempts to avoid the application of this section by any

subterfuge, including but not limited to splitting or dividing any loan

transaction into separate parts for the purpose of evading the

provisions of this section.

4. A lender of a high-cost home loan that, when acting in good faith,

fails to comply with the provisions of this section, will not be deemed

to have violated this section if the lender establishes that either:

(a) Within thirty days of the loan closing and prior to the

institution of any action under this section, the borrower is notified

of the compliance failure, appropriate restitution is made, and whatever

adjustments are necessary are made to the loan to either, at the choice

of the borrower, (i) make the high-cost home loan satisfy the

requirements of this section, or (ii) change the terms of the loan in a

manner beneficial to the borrower so that the loan is no longer a

high-cost home loan subject to the provisions of this section; or

(b) The compliance failure resulted from a bona fide error

notwithstanding the maintenance of procedures reasonably adapted to

avoid such errors and, within sixty days after the discovery of the

compliance failure and prior to the institution of any action under this

section or the receipt of written notice of the compliance failure, the

borrower is notified of the compliance failure, appropriate restitution

is made, and whatever adjustments are necessary are made to the loan to

either, at the choice of the borrower, (i) make the high-cost home loan

satisfy the requirements of this section, or (ii) change the terms of

the loan in a manner beneficial to the borrower so that the loan is no

longer a high-cost home loan subject to the provisions of this section.

Examples of a bona fide error include clerical, calculation, computer

malfunction and programming, and printing errors. An error of legal

judgment with respect to a person's obligations under this section is

not a bona fide error.

5. The attorney general, the superintendent, or any party to a

high-cost home loan may enforce the provisions of this section.

6. A private action against the lender or mortgage broker pursuant to

this section must be commenced within six years of origination of the

high-cost home loan.

7. Any person found by a preponderance of the evidence to have

violated this section shall be liable to the borrower for the following:

(a) actual damages, including consequential and incidental damages;

and

(b) statutory damages as follows (i) all of the interest, earned or

unearned, points and fees, and closing costs charged on the loan shall

be forfeited and any amounts paid shall be refunded; except that this

element of statutory damages shall not be awarded for violations of:

(1) paragraph (i) of subdivision two of this section regarding loan

flipping; and

(2) paragraph (k) of subdivision two of this section regarding

ensuring the borrower's ability to repay the loan, so long as the lender

demonstrates that at the time of the loan, it verified by detailed

documentation all sources of the borrower's income and corroborated it

with independent verification; or

(ii) five thousand dollars per violation or twice the amount of points

and fees and closing costs as defined in this section, whichever is

greater, for violations of:

(1) paragraph (i) of subdivision two of this section regarding loan

flipping; and

(2) paragraph (k) of subdivision two of this section regarding

ensuring the borrower's ability to repay the loan, where the borrower is

not entitled to relief under subparagraph (i) of this paragraph.

8. A court may also award reasonable attorneys' fees to a prevailing

borrower.

9. A borrower may be granted injunctive, declaratory and such other

equitable relief as the court deems appropriate in an action to enforce

compliance with this section.

10. Upon a finding by the court of an intentional violation by the

lender of this section, or regulation thereunder, the home loan

agreement shall be rendered void, and the lender shall have no right to

collect, receive or retain any principal, interest, or other charges

whatsoever with respect to the loan, and the borrower may recover any

payments made under the agreement.

11. Upon a judicial finding that a high-cost home loan violates any

provision of this section, whether such violation is raised as an

affirmative claim or as a defense, the loan transaction may be

rescinded. Such remedy of rescission shall be available as a defense

without time limitation.

12. The remedies provided in this section are not intended to be the

exclusive remedies available to a borrower of a high-cost home loan.

13. In any action by an assignee to enforce a loan against a borrower

in default more than sixty days or in foreclosure, a borrower may assert

any claims in recoupment and defenses to payment under the provisions of

this section and with respect to the loan, without time limitations,

that the borrower could assert against the original lender of the loan.

14. The provisions of this section shall be severable, and if any

phrase, clause, sentence, or provision is declared to be invalid, or is

preempted by federal law or regulation, the validity of the remainder of

this section shall not be affected thereby. If any provision of this

section is declared to be inapplicable to any specific category, type,

or kind of points and fees, the provisions of this section shall

nonetheless continue to apply with respect to all other points and fees.

Subprime home loans. 1. Definitions. The following definitions

apply for the purposes of this section:

(a) "Annual percentage rate" means the annual percentage rate for the

loan calculated according to the provisions of the Federal

Truth-in-Lending Act (15 U.S.C. § 1601, et seq.), and the regulations

promulgated thereunder by the federal reserve board (as said act and

regulations are amended from time to time).

(b) "Fully indexed rate" means: (i) for an adjustable rate loan based

on an index, the annual percentage rate calculated using the index rate

on the loan on the date the lender provides the "good faith estimate"

required under 12 USC §2601 et seq. plus the margin to be added to it

after the expiration of any introductory period or periods; or (ii) for

a fixed rate loan, the annual percentage rate on the loan disregarding

any introductory rate or rates and any interest rate caps that limit how

quickly the contractual interest rate may be reached calculated at the

time the lender issues its commitment.

(c) "Subprime home loan" means a home loan in which the initial

interest rate or the fully-indexed rate, whichever is higher, exceeds by

more than one and three-quarters percentage points for a first-lien

loan, or by more than three and three-quarters percentage points for a

subordinate-lien loan, the average commitment rate for loans in the

northeast region with a comparable duration to the duration of such home

loan, as published by the Federal Home Loan Mortgage Corporation (herein

"Freddie Mac") in its weekly Primary Mortgage Market Survey (PMMS)

posted in the week prior to the week in which the lender provides the

"good faith estimate" required under 12 USC §2601 et seq. The term

"subprime home loan" excludes a transaction to finance the initial

construction of a dwelling, i.e., a construction only loan, a temporary

or "bridge" loan with a term of twelve months or less, such as a loan to

purchase a new dwelling where the borrower plans to sell a current

dwelling within twelve months, or a home equity line of credit but shall

include any loan, however structured, that thereafter is converted into

a permanent loan.

(i) The comparable duration for a home loan shall be determined as

follows: for an adjustable or variable home loan with an initial rate

that is fixed for less than three years, the Freddie Mac survey result

for a one-year adjustable rate mortgage; for an adjustable or variable

home loan with an initial rate that is fixed for at least three years,

the Freddie Mac survey result for a five-year hybrid adjustable rate

mortgage; for a fixed rate home loan with a term of fifteen years or

less, the Freddie Mac survey result for a fifteen-year fixed rate

mortgage; and for a fixed rate home loan with a term of more than

fifteen years, the Freddie Mac survey result for a thirty-year fixed

rate mortgage. The superintendent may prescribe by regulation a

different comparable duration standard as necessary or appropriate to

reflect changes in the terms and types of mortgages included in the

Freddie Mac survey.

(ii) Notwithstanding the comparable rates set forth in this paragraph,

and notwithstanding any other law, if the superintendent determines that

by statute, rule or regulation, different thresholds for determining

underwriting standards for subprime loans become applicable to

nationally chartered lending institutions, or the provisions of this

section have had an unduly negative effect upon the availability or

price of mortgage financing in this state, the superintendent may from

time to time designate such other threshold rates as may be necessary to

achieve parity between such nationally chartered institutions and

banking organizations, mortgage banks and mortgage brokers in this state

or to alleviate such unduly negative effects. Such determination shall

promptly be published on the website of the department of financial

services.

(iii) Notwithstanding the thresholds set forth in this paragraph, if a

home loan is insured by the federal housing administration, and if

annual mortgage insurance premiums are collected by the federal housing

administration for the maximum duration permitted under federal statute,

and if such loan is not a Title 1 home improvement loan nor a home

equity conversion mortgage, then the term "subprime home loan" means a

home loan in which the initial interest rate or the fully-indexed rate,

whichever is higher, exceeds by more than two and a half percentage

points for a first-lien loan, or by more than four and a half percentage

points for a subordinate-lien loan, the average commitment rate for

loans in the northeast region with a comparable duration to the duration

of such home loan, as published by the Federal Home Loan Mortgage

Corporation (herein "Freddie Mac") in its weekly Primary Mortgage Market

Survey (PMMS) posted in the week prior to the week in which the lender

provides the "good faith estimate" required under 12 USC §2601 et seq.

(d) "Home loan" means a loan, including an open-end credit plan, other

than a reverse mortgage transaction or a loan made or fully or partially

guaranteed by the state of New York mortgage agency, in which:

(i) The principal amount of the loan at origination does not exceed

the conforming loan size limit (including any applicable special limit

for jumbo mortgages) for a comparable dwelling as established from time

to time by the federal national mortgage association;

(ii) The borrower is a natural person;

(iii) The debt is incurred by the borrower primarily for personal,

family, or household purposes;

(iv) The loan is secured by a mortgage or deed of trust on real estate

improved by a one to four family dwelling, or by a condominium unit, or

by any certificate of stock or other evidence of ownership in, and a

proprietary lease from, a corporation, partnership or other entity

formed for the purpose of cooperative ownership of real estate, in

either case, used or occupied or intended to be used or occupied, wholly

or partly, as the home or residence of one or more persons and which is

or will be occupied by the borrower as the borrower's principal

dwelling; and

(v) The property is located in this state.

(e) "Lender" means a mortgage banker as defined in paragraph (f) of

subdivision one of section five hundred ninety of this chapter or an

exempt organization as defined in paragraph (e) of subdivision one of

section five hundred ninety of this chapter.

(f) "Mortgage broker" means a mortgage broker as defined in paragraph

(g) of subdivision one of section five hundred ninety of this chapter

and a mortgage banker as defined in paragraph (f) of subdivision one of

section five hundred ninety of this chapter, when such mortgage banker

solicits, processes, places or negotiates a mortgage loan for others.

2. Limitations and prohibited practices for subprime home loans. A

subprime home loan shall be subject to the following limitations:

(a) No call provisions. No subprime home loan may contain a provision

that permits the lender, in its sole discretion, to accelerate the

indebtedness. This provision shall not prohibit acceleration of the loan

in good faith due to the borrower's failure to abide by the material

terms of the loan.

(b) No negative amortization. No subprime home loan may contain a

payment schedule with regular periodic payments that cause or may cause

the principal balance to increase. A loan is considered to have such a

schedule if the borrower is given the option to make regular periodic

payments that cause the principal balance to increase, even if the

borrower is also given the option to make regular periodic payments that

do not cause the principal balance to increase. This paragraph shall not

prohibit negative amortization as a result of a temporary forbearance

sought by a borrower.

(c) No increased interest rate. No subprime home loan may contain a

provision which increases the interest rate after default. This

provision shall not apply to interest rate changes in a variable rate

loan otherwise consistent with the provisions of the loan documents;

provided that the change in the interest rate is not triggered by the

event of default or the acceleration of the indebtedness.

(d) Limitation on advance payments. No subprime home loan may include

terms under which more than two periodic payments required under the

loan are consolidated and paid in advance from the loan proceeds

provided to the borrower.

(e) No modification or deferral fees. A lender may not charge a

borrower any fees to modify, renew, extend, or amend a subprime home

loan or to defer any payment due under the terms of a suprime home loan

if, after the modification, renewal, extension or amendment, the loan is

still a subprime home loan or, if no longer a subprime home loan, the

annual percentage rate has not been decreased by at least two percentage

points. For purposes of this paragraph, fees shall not include interest

that is otherwise payable and consistent with the provisions of the loan

documents. This paragraph shall not prohibit a lender from charging

points and fees in connection with any additional proceeds received by

the borrower in connection with the modification, renewal, extension or

amendment (over and above the current principal balance of the existing

subprime home loan) provided that the points and fees charged on the

additional sum must reflect the lender's typical point and fee structure

for subprime home loans. This paragraph shall not apply if the existing

subprime home loan is in default or is sixty or more days delinquent and

the modification, renewal, extension, amendment or deferral is part of a

work-out process.

(f) No oppressive mandatory arbitration clauses. No subprime home loan

may be subject to a mandatory arbitration clause that is oppressive,

unfair, unconscionable, or substantially in derogation of the rights of

consumers.

(g) No financing of insurance or other products sold in connection

with the loan. No subprime home loan shall finance, directly or

indirectly, any credit life, credit disability, credit unemployment, or

credit property insurance, or any other life or health insurance

premiums, or any payments directly or indirectly for any debt

cancellation or suspension agreement or contract, or any product or

service that is not necessary or related to the home loan such as auto

club memberships or credit report monitoring, but not including fees

paid to the lender, broker, or closing agent, fees related to the

recording of the mortgage, title insurance or other settlement fees.

Insurance premiums or debt cancellation or suspension fees calculated

and paid on a monthly basis shall not be considered financed.

(h) No "loan flipping". No lender or mortgage broker making or

arranging a subprime home loan may engage in the unfair act or practice

of "loan flipping". "Loan flipping" is making a home loan to a borrower

that refinances an existing home loan when the new loan does not have a

tangible net benefit to the borrower considering all of the

circumstances, including the terms of both the new and refinanced loans,

the cost of the new loan, and the borrower's situation.

(i) No refinancing of special mortgages. No lender making a subprime

home loan may refinance an existing home loan that is a special mortgage

originated, subsidized or guaranteed by or through a state, tribal or

local government, or nonprofit organization, which either bears a

below-market interest rate at the time of origination, or has

nonstandard payment terms beneficial to the borrower, such as payments

that vary with income, are limited to a percentage of income, or where

no payments are required under specified conditions, and where, as a

result of the refinancing, the borrower will lose one or more of the

benefits of the special mortgage, unless the lender is provided prior to

loan closing documentation by a HUD approved housing counselor or the

lender who originally made the special mortgage that the borrower has

received home loan counseling about the advantages and disadvantages of

the refinancing.

(j) No lending without providing information on the availability of

counseling. A lender or mortgage broker must deliver, place in the mail,

fax or electronically transmit the following notice in at least twelve

point type to the borrower of a subprime home loan at the time of

application: "You should consider financial counseling prior to

executing loan documents. The enclosed list of counselors is provided by

the New York State Department of Financial Services." In the event of a

telephone application, the disclosures must be made immediately after

receipt of the application by telephone. Such disclosure shall be on a

separate form. In order to utilize an electronic transmission, the

lender or broker must first obtain either written or electronically

transmitted permission from the borrower. A list of approved counselors,

available from the New York state department of financial services,

shall be provided to the borrower by the lender or the mortgage broker

at the time that this disclosure is given.

(k) No encouragement of default. In making or arranging a subprime

home loan, a lender or mortgage broker shall not recommend or encourage

default on an existing loan or other debt prior to and in connection

with the closing or planned closing of the subprime home loan that

refinances all or any portion of such existing loan or debt.

(l) Prohibited payments to mortgage bankers and brokers. In making or

arranging a subprime home loan, no lender, mortgage banker or mortgage

broker shall accept or give any fee, kickback, thing of value, portion,

split or percentage of charges, other than as payment for goods or

facilities that were actually furnished or services that were actually

performed. Such payment must be reasonably related to the value of the

goods or facilities that were actually furnished or services that were

actually performed.

(m) No prepayment penalties on subprime home loans. No prepayment

penalties or fees shall be charged or collected on a subprime home loan.

A prepayment penalty in a subprime home loan shall be unenforceable.

(n) No yield spread premiums. In connection with the making or

brokering of a home loan, no person may provide, and no mortgage broker

or mortgage lender may receive, directly or indirectly, any compensation

that is based on, or varies with, the terms of any home loan. This

paragraph shall not prohibit compensation based on the principal balance

of the loan.

(o) Mandatory escrow of taxes and insurance. No subprime home loan

shall be made after July first, two thousand ten unless the lender

requires and collects the monthly escrow of property taxes and hazard

insurance. With respect to a subprime home loan, a borrower may waive

escrow requirements by notifying the lender in writing after one year

from consummation of the loan. The provisions of this paragraph shall

not apply to a subprime home loan that is a subordinate lien when the

taxes and insurance are escrowed through another home loan or where the

borrower can demonstrate a record of twelve months of timely payments of

taxes and insurance on a previous home loan.

(p) Mandatory disclosure of taxes and insurance payments. With respect

to a subprime home loan, the first time a borrower is informed of the

anticipated or actual periodic payment amount in connection with a

first-lien residential mortgage loan for a specific property, the lender

or mortgage broker shall inform the borrower that an additional amount

will be due for taxes and insurance and shall disclose to the borrower

as soon as reasonably possible the approximate amount of the initial

periodic payment for property taxes and hazard insurance.

(q) No teaser rates. No lender or mortgage broker shall make or

arrange a subprime home loan which has an initial or introductory rate

with a duration of less than six months.

3. Certain loan provisions rendered void. Any provision in a subprime

home loan that violates subdivision two of this section shall be

rendered void.

4. Ability to repay. No lender or mortgage broker shall make or

arrange a subprime home loan unless the lender or mortgage broker

reasonably and in good faith believes at the time of the loan closing

that one or more of the borrowers, when considered individually or

collectively, has the ability to repay the loan according to its terms

and to pay applicable real estate taxes and hazard insurance premiums.

If a lender or mortgage broker making or arranging a subprime home loan

knows that one or more home loans secured by the same real property will

be made contemporaneously to the same borrower with the subprime home

loan being made or arranged by that lender or mortgage broker, the

lender or mortgage broker making or arranging the subprime home loan

must document the borrower's ability to repay the combined payments of

all loans on the same real property.

(a) A lender or mortgage broker's analysis of a borrower's ability to

repay a subprime home loan according to the loan terms and to pay

related real estate taxes and insurance premiums shall be based on a

consideration of the borrower's credit history, current and expected

income, current obligations, employment status, and other financial

resources other than the borrower's equity in the real property that

secures repayment of the subprime home loan.

(b) In determining a borrower's ability to repay a subprime home loan,

the lender or mortgage broker shall take reasonable steps to verify the

accuracy and completeness of information provided by or on behalf of the

borrower using tax returns, payroll receipts, bank records, reasonable

alternative methods, or reasonable third-party verification.

(c) In determining a borrower's ability to repay a subprime home loan

according to its terms when the loan has an adjustable rate feature, the

lender or mortgage broker shall calculate the monthly payment amount for

principal and interest by assuming (i) the loan proceeds are fully

disbursed on the date of the loan closing, (ii) the loan is to be repaid

in substantially equal monthly amortizing payments of principal and

interest over the entire term of the loan, with no balloon payment, and

(iii) the interest rate over the entire term of the loan is a fixed rate

equal to the higher of the initial interest rate or the fully indexed

rate at the time of the loan closing, without considering any initial

discounted rate.

(d) A lender or mortgage broker's analysis of a borrower's ability to

repay a subprime home loan may utilize reasonable commercially

recognized underwriting standards and methodologies, including automated

underwriting systems, provided the standards and methodologies comply

with the provisions of this section.

5. Required legend. Subprime home loan mortgages shall include a

legend on top of the mortgage in twelve-point type stating that the

mortgage is a subprime home loan subject to this section.

6. Evasion of statutory requirements. The provisions of this section

shall apply to any person who attempts to avoid the application of this

section by any subterfuge, including but not limited to, splitting or

dividing any loan transaction into separate parts for the purpose of

evading the provisions of this section.

7. Good faith errors. A lender of a subprime home loan that, when

acting in good faith, fails to comply with the provisions of this

section, shall not be deemed to have violated this section if, prior to

the institution of any action and before the borrower is prejudiced, the

lender notifies the borrower of the compliance failure, appropriate

restitution is made, and whatever adjustments that are necessary are

made to the loan to make the loan satisfy the requirements of this

section.

8. Enforcement. The attorney general or the superintendent may enforce

the provisions of this section.

9. Damages. Any person found by a preponderance of the evidence to

have violated this section shall be liable to the borrower of a subprime

home loan for actual damages.

10. Attorneys fees. A court may also award reasonable attorneys' fees

to a prevailing borrower in a foreclosure action.

11. Equitable relief. A borrower may be granted injunctive,

declaratory and such other equitable relief as the court deems

appropriate in an action to enforce compliance with this section.

12. Remedies not exclusive. The remedies provided in this section are

not intended to be the exclusive remedies available to a borrower of a

subprime home loan.

13. Defense to foreclosure. In any action by a lender or assignee to

enforce a loan against a borrower in default more than sixty days or in

foreclosure, a borrower may assert as a defense, any violation of this

section.

14. Severability. The provisions of this section shall be severable,

and if any phrase, clause, sentence, or provision is declared to be

invalid, or is preempted by federal law or regulation, the validity of

the remainder of this section shall not be affected thereby. If any

provision of this section is declared to be inapplicable to any specific

category, type, or kind of points and fees with respect to a home loan,

the provisions of this section shall nonetheless continue to apply with

respect to all other points and fees.

Responsibility of banks for mortgages being processed for

modification. 1. If a mortgage that is the subject of an application for

a modification of the mortgage terms is sold or transferred during the

modification process, the bank or financial institution selling or

transferring such mortgage shall provide the borrower with a written

list of all documents relating to such application for modification that

were provided to the bank or financial institution to which such

mortgage was sold or transferred.

2. If a borrower has been approved in writing for a first lien loan

modification or other modification to avoid foreclosure, and the

servicing of such borrower's loan is transferred or sold to another

mortgage servicer, the subsequent mortgage servicer shall assume all

duties and obligations related to any previously approved first lien

loan modification or other foreclosure prevention alternative in

accordance with the provisions of this section.

* § 6-o. Single point of contact for modifying delinquent home loans.

1. A lender shall provide to a borrower who is thirty or more days

delinquent on his or her home loan with such lender and who chooses to

pursue a loan modification or other foreclosure prevention alternative,

a single point of contact for the borrower to reach the lender regarding

pursuing a loan modification. If at any time the contact information

provided to the borrower changes, a notification of such change shall be

provided by the lender to the borrower within five business days of such

change. The duties imposed on a lender by this section may also be

performed by a mortgage servicer acting on behalf of such lender.

2. The single point of contact required by this act shall be

responsible for the following:

(a) communicating information regarding options the borrower may have

for modifying his or her delinquent home loan;

(b) assisting the borrower with identifying documents necessary for

pursuing a loan modification; and

(c) providing accurate information regarding the status of a

borrower's loan modification application should such borrower choose to

apply for a modification.

3. The single point of contact required by this section shall remain

assigned to the borrower's account until such time as the lender

determines that all loss modification options have been exhausted or

until the borrower's account becomes current.

4. For the purposes of this section, "home loan" shall have the same

meaning as defined in paragraph (e) of subdivision one of section six-l

of this article.

5. The superintendent of financial services is hereby authorized to

establish rules and regulations as he or she may deem necessary for the

single point contact required by this section.

* NB There are 2 § 6-o's

Loan counseling for mortgages guaranteed by the Servicemen's

Readjustment Act of 1944. Every mortgage lending institution and

mortgage banker which originates loans secured by real property used for

residential purposes located in this state which are to be guaranteed

under the Servicemen's Readjustment Act of 1944 shall provide a separate

disclosure form with each application stating that a veteran seeking a

housing loan under chapter 37 of title 38 of the United States Code has

been offered loan counseling services. Such loan counseling services

shall be provided by the department of veterans' services under section

twenty-nine-a of the veterans' services law upon request of an

applicant. The disclosure form required by this section shall be signed

by each applicant and shall include information detailing how to access

such counseling services.

Payment of dividends or interest upon unclaimed deposits or

shares; limitation of charges in connection with savings accounts. 1. No

banking organization or foreign banking corporation transacting business

in this state shall discontinue the payment of dividends or interest on

any deposit made with such organization or corporation, or reduce the

rate at which dividends or interest is paid, solely because such deposit

is inactive or unclaimed, except that payment of dividends or interest

may be discontinued for the period following June thirtieth of the year

in which the deposit is paid to the state comptroller pursuant to

section three hundred three of the abandoned property law. A share

issued by a savings and loan association or by a credit union shall be

deemed a deposit for the purposes of this section.

2. No banking organization or foreign banking corporation transacting

business in this state shall impose any service charge on an inactive

savings account which is higher than the service charge imposed by such

organization or corporation on an active savings account; provided,

however, that a banking organization or foreign banking corporation may

impose a reasonable charge on an inactive savings account for costs

related to or incurred as a result of the payment or delivery of

abandoned property to the state comptroller pursuant to the abandoned

property law.

3. The superintendent of financial services may promulgate such

regulations as he or she deems necessary and proper to implement and

define the provisions of this section.

Deposits by custodian designated by administrator of veterans'

affairs, or by person certified by social security administration. When

any deposit shall be made for the benefit of an individual by the person

who has been designated the custodian of such individual by the

administrator of veterans' affairs pursuant to the provisions of title

thirty-eight, United States code, "Veterans' Benefits", as amended, or

when a deposit shall be made for the benefit of an individual by a

person who has been certified by the social security administration as

the person to whom payment for the benefit of such individual should be

made pursuant to the provisions of an act of congress entitled the

"Social Security Act", the deposit, together with any interest or

dividends credited thereon, may be paid to such custodian or his

successor designated by the administrator of veterans' affairs or to

such person or his successor certified by the social security

administration, and the receipt or acquittance of such custodian or

person or such successor shall be a valid and sufficient release and

discharge to the depositary for any payment so made.

Checks drawn against corporate funds or payable to corporations;

no notice of defense against or claim to check. Notwithstanding section

3-304 of the uniform commercial code, the drawing of a check by an

officer or agent of a corporation against the account of, or in the name

of the corporation, whether the check is drawn against an account in the

name of the corporation, or in the name of such officer or agent of the

corporation as such, to himself as payee, or the endorsement of a check

in the name of the corporation, to himself as endorsee, and in either

case the cashing of such check or the deposit thereof to the credit of

his personal account, shall not constitute notice to a private banker,

banking organization or branch of a foreign banking corporation of any

defense against or claim to the check on the part of any person,

provided that the private banker, banking organization or branch has on

file an authorization from the corporation showing that the officer or

agent is authorized on behalf of the corporation to perform any of the

above acts for unlimited or limited amounts, and that the amount of the

check does not exceed the maximum limits of the amount so contained in

the authorization so filed for the officer or agent when such a

limitation is contained therein.

Defense of ultra vires.

No act of a corporation formed under this chapter, or of a corporation

formed under any other statute or special act having as its purpose or

among its purposes a purpose for which a corporation may be formed under

this chapter, and no transfer of real or personal property to or by such

a corporation, otherwise lawful, shall be invalid by reason of the fact

that the corporation was without capacity or power to do such act or to

make or receive such transfer, but such lack of capacity or power may be

asserted:

1. In an action by a stockholder or member against the corporation to

enjoin the doing of any act or the transfer of real or personal property

by or to the corporation. If the unauthorized act or transfer sought to

be enjoined is being, or is to be, performed or made under any contract

to which the corporation is a party, the court may, if all of the

parties to the contract are parties to the action and if it deems the

same to be equitable, set aside and enjoin the performance of such

contract, and in so doing may allow to the corporation or to the other

parties to the contract, as the case may be, such compensation as may be

equitable for the loss or damage sustained by any of them from the

action of the court in setting aside and enjoining the performance of

such contract; provided that anticipated profits to be derived from the

performance of the contract shall not be awarded by the court as a loss

or damage sustained.

2. In an action by or in the right of the corporation to procure a

judgment in its favor against an incumbent or former officer or director

of the corporation for loss or damage due to his unauthorized act.

3. In an action or special proceeding by the superintendent or the

attorney-general to annul or dissolve the corporation or to enjoin it

from the doing of unauthorized business.

Actions or special proceedings by superintendent or

attorney-general.

1. In addition to any action or special proceeding which may be

maintained by either of them under any other section of this chapter,

the superintendent or the attorney-general may maintain an action or

special proceeding:

(a) To annul the corporate existence or dissolve a corporation formed

under any article of this chapter or formed under any other statute or

special act having as its purpose or among its purposes a purpose for

which a corporation may be formed under this chapter that has acted

beyond its capacity or power or to restrain it from the doing of

unauthorized business.

(b) To annul the corporate existence or dissolve any such corporation

that has not been duly formed.

(c) To restrain any person or persons from acting as such a

corporation within this state without being duly incorporated or from

exercising in this state any corporate rights, privileges or franchises

not granted to them by the law of the state.

(d) To dissolve a corporation under section nine-c.

2. In any action or special proceeding brought under this section:

(a) If an action, it is triable by jury as a matter of right.

(b) The court may confer immunity in accordance with the provisions of

section 50.20 of the criminal procedure law.

(c) A temporary restraining order to restrain the commission or

continuance of the unlawful acts which form the basis of the action or

special proceeding may be granted upon proof, by affidavit, that the

defendant or defendants have committed or are about to commit such acts.

Application for such restraining order may be made ex parte or upon such

notice as the court may direct.

(d) When final judgment in such action or special proceeding is

rendered against the defendant or defendants, the court may direct the

costs to be collected by execution against any or all of the defendants

or by order of attachment or other process against the person of any

director or officer of a corporate defendant.

(e) In connection with any such proposed action or special proceeding

the superintendent or the attorney-general may take proof and issue

subpoenas in accordance with the civil practice law and rules.

Superintendent's or attorney-general's action for judicial

dissolution.

1. The superintendent or the attorney-general may bring an action for

the dissolution of a corporation formed under any article of this

chapter or formed under any other statute or special act having as its

purpose or among its purposes a purpose for which a corporation may be

formed under this chapter upon one or more of the following grounds:

(a) That the corporation procured its formation through fraudulent

misrepresentation or concealment of a material fact.

(b) That the corporation has exceeded the authority conferred upon it

by law, or has violated any provision of law whereby it has forfeited

its charter, or carried on, conducted or transacted its business in a

persistently fraudulent or illegal manner, or by the abuse of its powers

contrary to the public policy of the state has become liable to be

dissolved.

2. An action under this section is triable by jury as a matter of

right.

3. The enumeration in subdivision one of grounds for dissolution shall

not exclude actions or special proceedings by the superintendent, the

attorney-general or other state officials for the annulment or

dissolution of a corporation for other causes as provided in this

chapter or in any other statute of this state.

Enforcement of section two hundred ninety-six-a of the

executive law. In addition to the powers conferred upon the

superintendent of financial services by this chapter, he shall enforce

section two hundred ninety-six-a of the executive law by taking such

action as is therein authorized.

Geographic discrimination in making mortgage loans prohibited.

1. No banking institution as such term is defined in this section shall

refuse to make a prudent loan upon the security of real property or

otherwise discriminate with respect thereto because of the geographic

location of such property if such property is located within the

geographic area ordinarily serviced by such bank or within the community

within which the principal or any branch office of such banks is

located. A violation of the provisions of this subdivision shall be

subject to the applicable provisions of sections thirty-nine and

forty-four of this chapter.

2. Any person who makes application for such a loan and is refused

such loan may request the superintendent to review the denial of such

application. If the superintendent determines that such loan was prudent

and was denied in violation of subdivision one hereof, the

superintendent shall certify such determination to the state of New York

mortgage agency created pursuant to title seventeen of article eight of

the public authorities law.

3. For the purposes of this section, the term (a) "prudent loan" means

a loan upon the security of real property which is prudent by acceptable

banking standards and is in compliance with all of the provisions of

this chapter and rules and regulations of the superintendent of

financial services; and (b) notwithstanding any other provision of this

chapter or 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, mortgage

bankers, exempt organizations as defined in article twelve-D of this

chapter and foreign banking corporations whether incorporated,

chartered, organized or licensed under the laws of this state or any

other state or the United States.

4. If any clause, sentence, paragraph, subdivision or part of this

section or the application thereof to any person, firm or corporation,

or circumstance shall be adjudged by any court of competent jurisdiction

to be invalid or unconstitutional, such judgment shall not affect,

impair or invalidate the remainder thereof, but shall be confined (i) in

its operation to the clause, sentence, paragraph, subdivision, or part

of this section, or (ii) in its application to the person, firm or

corporation, or circumstance, directly involved in the controversy in

which such judgment shall have been rendered.

Right of set off. 1. (a) No banking institution shall assert,

claim or exercise any right of set off against any deposit account into

which social security or supplemental security income payments are

deposited pursuant to an agreement with such banking institution which

provides that such payments be deposited directly into such deposit

account without presentation to the depositor at the time of deposit.

(b) No banking institution shall assert, claim or exercise any right

of set off against any payments referred to in subdivision (p) of

section fifty-two hundred five of the civil practice law and rules.

2. No banking institution shall assert, claim or exercise any right of

set off against any other deposit account held by such banking

institution unless, prior to or on the same business day of such action,

notice of the set off together with the reasons for the set off are

mailed to the depositor.

3. Failure to provide the notice required by this section shall not be

deemed to affect the validity of the right of set off.

4. "Banking institution" as used in this section shall have the same

meaning as used in section nine-f of this chapter.

5. "Depositor" as used in this section shall include shareholders in

state and federal savings and loan associations and state and federal

credit unions.

6. "Deposit account" as used in this section shall include shares and

share accounts of state and federal savings and loan associations and

state and federal credit unions.

7. If any provision of this section, or the application of such

provision to any bank, trust company, national bank, savings bank,

federal mutual savings bank, savings and loan association, federal

savings and loan association, credit union, federal credit union or

branch of a foreign banking corporation, shall be held invalid, the

remainder of this section, and the application of such section to banks,

trust companies, national banks, savings banks, federal mutual savings

banks, savings and loan associations, federal savings and loan

associations, credit unions, federal credit unions or branches of

foreign banking corporations other than those to which it is held

invalid, shall not be affected thereby.

Imposition of service charges prohibited. No banking

organization shall impose any service charge with respect to any deposit

account as a result of the loss of a check or money which is properly

deposited with the banking organization by delivery to an employee of

the banking organization for credit to the deposit account and for which

a written receipt is issued by the employee.

* § 9-i. Close-out fees prohibited in certain cases. No banking

institution, as that term is defined in section nine-f of this chapter,

shall charge its customers a fee for the withdrawal of all funds from

any account resulting in the closing of such account provided that such

account was opened for a period of at least one hundred eighty

consecutive days prior to its closing.

* NB There are 2 § 9-i's

Disposal of records; customer accounts. 1. Every banking

institution, which for purposes of this section means a bank, trust

company, savings bank, savings and loan association, licensed foreign

banks and credit unions, with respect to written records no longer

required or needed to be retained which contain information relating to

an identified customer or an identified customer's depository or loan

account, shall in disposing of such records provide procedures and

processes reasonably calculated to assure destruction or disposal in a

manner which prevents subsequent unauthorized review or reuse of the

record.

2. The superintendent shall enforce the provisions of this section by

appropriate rules, regulations and orders.

Sale of education loans. 1. "Banking institution" as used in

this section shall mean and include all banks, trust companies, savings

banks, savings and loan associations, credit unions and foreign banking

corporations whether incorporated, chartered, organized or licensed

under the laws of this state or any other state or the United States.

2. "Lender" as used in this section shall mean and include:

(a) a national or state chartered bank, mutual savings bank, savings

and loan association, or credit union that:

(1) is subject to examination and supervision in its capacity as a

lender by an agency of the United States or of the state in which its

principal place of operation is established; and

(2) does not make or hold loans to students under the federal

guaranteed student loan program that total more than one-half of its

consumer credit loan dollar volume, including home mortgages, unless it

is a bank that is wholly owned by a state; or

(b) a pension fund as defined in the federal employees retirement

income security act; or

(c) an insurance company that is subject to examination and

supervision by an agency of the United States or a state; or

(d) in any state, a single agency of the state or a single private

nonprofit agency designated by the state; or

(e) for purposes only of purchasing and holding loans made by other

lenders under the federal guaranteed student loan program, the student

loan marketing association or an agency of any state functioning as a

secondary market.

3. "Guaranteed education loan" as used in this section shall mean and

include any loan made for the purpose of financing higher education

which is made under the authority of Part B of Title IV of the Higher

Education Act of 1965 as amended or under the authority of section six

hundred eighty of the education law.

4. Whenever a banking institution or other eligible lender as such

terms are defined in this section sells a guaranteed education loan to

another banking institution or eligible lender, such selling institution

shall notify the borrower in writing within fifteen days of such sale.

Such notice shall include the name and address of the institution which

has purchased such loan. The selling institution shall also notify the

New York state higher education services corporation or other guarantor

of such sale. Notice shall include:

(a) the name and address of the institution which has purchased the

loan; and

(b) the name, address and social security number of the borrower and

the borrower's account number.

Return of checks. Any banking institution as that term is

defined in section nine-f of this chapter, except a credit union, and

any other financial institution which offers consumer accounts, meaning

accounts established by natural persons primarily for personal, family

or household purposes, which can be accessed by check, negotiable order

of withdrawal, or other similar written instrument, shall offer a

consumer account on which the cancelled checks, negotiable orders of

withdrawal, or other similar instruments drawn on that account are

returned to the customer with a periodic statement of the account.

Trust accounts; address of beneficiary. 1. Every banking

institution, which for the purposes of this section means a bank, trust

company, savings bank, savings and loan association, licensed foreign

bank or credit union, which shall hold accounts by depositors in such

depositor's own name and, further, in trust for a third party

beneficiary or beneficiaries, shall make a written record of the address

of any such beneficiary or beneficiaries at the time a trust account is

established.

2. The superintendent shall enforce the provisions of this section by

appropriate rules, regulations and orders.

Mortgage loans; disclosure form. 1. For the purpose of this

section, the following terms shall have the following meanings:

(a) "Mortgage lending institution" shall mean an insurance company,

banking organization, foreign banking corporation licensed by the

superintendent or the comptroller of the currency, to transact business

in this state, national bank, federal savings bank, federal savings and

loan association, federal credit union, or any bank, trust company,

savings bank, savings and loan association, or credit union organized

under the laws of any other state, or any instrumentality created by the

United States or any other state, with the power to make mortgage loans.

Mortgage lending institution shall include a subsidiary of such entity.

(b) "Mortgage banker" shall mean a person or entity who or which is

licensed pursuant to section five hundred ninety-one of this chapter to

make mortgage loans in this state.

2. Every mortgage lending institution and mortgage banker which

originates loans secured by real property used for residential purposes

located in this state shall provide a separate disclosure form with each

application that shall contain a provision stating whether the interest

rate of such loan shall be the interest rate in effect at the time of

application, the time of commitment, the time of closing or at such

other period of time as shall be determined by the lending institution.

The superintendent of financial services shall promulgate rules and

regulations to implement the provisions of this section.

Acceptance of certain checks for deposit. No banking

institution as that term is defined in section nine-f of this chapter

shall, as a policy or general practice, refuse to accept as a deposit

made with a teller by an account holder a check for the sole reason that

it contains two endorsements. Nothing contained herein shall prevent a

banking institution from requiring the approval of an officer or manager

as a condition of accepting a check with two endorsements for deposit or

from refusing to accept a deposit of a check with two endorsements that

is not made with a teller.

Geographic restrictions. 1. No banking institution shall have a

policy or general practice of refusing to open a deposit account solely

on the basis of the geographic location of the depositor's residence or

place of business; provided that the banking office at which the

depositor seeks to open the account is within the county or, in the case

of a county wholly contained within a city, the city in which such

residence or place of business is located. For purposes of this section,

"banking institution" means any bank, trust company, 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, organized or licensed

under the laws of this state or any other state or the United States.

2. Nothing herein contained shall prevent a banking institution from

requiring any person applying for a deposit account to demonstrate that

the residence or place of business of such person is located within the

same county or city, or prevent a banking institution from taking

actions necessary to verify such person's residence or place of

business, so as to avoid being considered in violation of any law of the

United States or of this state which has as its purpose the prevention

of money laundering or other criminal or fraudulent acts, including,

without limitation, 12 USC § 1829b (Bank Secrecy); 18 USC § 1341 (Frauds

and Swindles); 18 USC § 1342 (Fictitious Name or Address); 18 USC § 2113

(Bank Robbery and Incidental Crimes); 31 USC § 5311 through § 5326

(Records and Reports on Monetary Instruments Transactions).

Preauthorized electronic fund transfers. 1. Every banking

institution which provides preauthorized electronic fund transfers from

consumer accounts shall, in accordance with regulations adopted by the

superintendent of financial services, provide consumers with the right

to stop payment by giving written or oral notice within a specified

period of time prior to such transfer. For purposes of this section,

"banking institution" shall mean any state or federally chartered bank,

trust company, savings bank, savings and loan association or credit

union, and "consumer account" shall mean an account used primarily for

personal, family or household purposes.

2. No agreement for preauthorized electronic fund transfers entered

into on or after January first, two thousand thirteen shall permit or

require the transfer from a consumer account of any funds as a penalty

or a final payment after the consumer has given written or oral notice

to stop payment to his or her financial institution.

3. Any banking institution which complies with the stop payment

provisions of the federal Electronic Funds Transfer Act, as such act may

be amended from time to time, and any regulations adopted pursuant

thereto, shall be deemed to be in compliance with the provisions of this

section.

Unsolicited mail-loan checks. 1. For purposes of this section,

the following terms shall have the following meanings:

(a) "lending institution" shall mean a licensed lender or a state or

federally chartered bank, trust company, savings bank, savings and loan

association or credit union.

(b) "mail-loan check" shall mean a check, made out to and mailed to a

person by a lending institution, which, when cashed or deposited by such

person, obligates such person to repay to such lending institution the

amount of the proceeds of such check according to terms mailed to such

recipient with such check.

2. Any lending institution which issues mail-loan checks shall:

(a) include on the face of each check issued to a non-customer a

written statement, in legible type reading "ONE FORM OF VALID

PHOTOGRAPHIC ID NEEDED TO CASH OR DEPOSIT"; provided, however, that any

entity cashing or accepting a mail-loan check for deposit may require

more than one form of identification;

(b) make no reference on the outside of the envelope containing a

mail-loan check that indicates that a check is enclosed within such

envelope;

(c) provide that all mail-loan checks shall be non-transferable; and

(d) include the transaction fee and interest rate and an expiration

date of not more than six months on the mail-loan check, as well as any

additional information that the superintendent may require.

3. No lending institution shall issue a mail-loan check, except in

response to a request or application therefor.

4. Failure to destroy or return a mail-loan check shall not constitute

acceptance of the check.

5. Any lending institution which mails a mail-loan check in violation

of the provisions of this section shall be liable for a civil penalty

not to exceed five hundred dollars for each such violation.

ATM transactions by persons using foreign bank accounts. 1.

Subject to the requirements of section three hundred ninety-nine-y of

the general business law, as added by chapter four hundred ninety-five

of the laws of nineteen hundred ninety-nine, an agreement to operate or

share an automated teller machine shall not have the effect of

prohibiting, limiting or restricting the right of the operator or owner

of the automated teller machine to charge a customer who is conducting a

transaction using an account from a financial institution that is

located outside the United States an access fee or surcharge not

otherwise prohibited under state or federal law.

2. Nothing in this section shall be construed to prohibit or otherwise

limit the ability of an operator or owner of an automated teller machine

to voluntarily enter into an agreement regarding participation in a

surcharge free network.

Savings promotion prize giveaway. A banking organization

organized under or subject to the provisions of this chapter, federal

credit union, federal savings bank, federal savings and loan

association, or national bank association may conduct a savings

promotion in accordance with the provisions of this section, to the

extent it is not prohibited by federal law or regulation.

1. Definitions. As used in this section the following terms shall have

the following meanings:

a. The term "savings promotion" means a contest or promotion sponsored

by a banking organization, federal credit union, federal savings bank,

federal savings and loan association, or national bank association in

which a chance of winning designated prizes is obtained by its

depositors for the purposes of encouraging depositors to build and

maintain savings deposits.

b. The term "qualifying account" means a savings account, share

account, share certificate, or other savings product or program offered

by a banking organization, federal credit union, federal savings bank,

federal savings and loan association, or national bank association

through which depositors may obtain chances to win prizes in a savings

promotion.

c. The term "non-qualifying account" means a savings account, share

account, certificate of deposit, or other savings product or program

offered by a banking organization, federal credit union, federal savings

bank, federal savings and loan association, or national bank association

that is not a qualifying account.

2. Rules of operation. a. Participants in a savings promotion shall

not be required to provide any consideration in order to obtain entries

to win. For purposes of this paragraph, participants shall not be deemed

to have provided consideration due to the requirement that they deposit

money in a qualifying account to obtain entries to win, so long as: (i)

the interest rate associated with any such qualifying account is not

reduced when compared with other comparable non-qualifying accounts

offered by any banking organization, federal credit union, federal

savings bank, federal savings and loan association or national bank

association, to account for the possibility of depositors winning

specified prizes; and (ii) no banking organization, federal credit

union, federal savings bank, federal savings and loan association, or

national bank association may charge a fee for entry. All fees charged

in connection with such qualifying account shall be comparable with all

fees charged in connection with other comparable non-qualifying

accounts, if any, offered by any banking organization, federal credit

union, federal savings bank, federal savings and loan association, or

national bank association.

b. A savings promotion shall be conducted such that each entry in the

savings promotion has an equal chance of being drawn.

c. Participants in a savings promotion shall not be required to be

present at a prize drawing in order to win.

d. The offering of a savings promotion shall be subject to section

three hundred sixty-nine-e of the general business law in the same

manner as other promotions regulated thereunder. For purposes of the

general business law and the penal law, a savings promotion offered in

accordance with this chapter shall not be deemed to entail consideration

or the promotion of gambling or a lottery.

Standard financial aid award letter. The superintendent of

financial services in consultation with the president of the higher

education services corporation shall develop a standard financial aid

award letter which shall clearly delineate (a) the estimated cost of

attendance, including but not limited to, the cost of tuition and fees,

room and board, books, and transportation. Such standard letter shall

provide the estimated cost of attendance for the current academic year

as well as estimates for each academic year that the student would need

to attend to earn a degree at such institution with a disclaimer that

the cost of attendance for years other than the current academic year

are estimates and may be subject to change, (b) all financial aid

offered from the federal government, the state, and the institution with

an explanation as to which components will require repayment, (c) any

expected student and/or family contribution, (d) net costs, defined as

an estimate of the costs of attendance after financial aid which does

not require repayment, (e) campus-specific graduation, median borrowing,

and loan default rates, (f) options for loans which do require

repayment, and (g) any other information as determined by the

superintendent in consultation with the president. Such standard letter

shall include a glossary of standard terms and definitions used on such

standard letter. The superintendent shall publish and make available

such standard letter by December thirty-first, two thousand fifteen and

thereafter. Each college, vocational institution, and any other

institution that offers an approved program as defined in section six

hundred one of the education law shall utilize the standard letter

issued by the department of financial services in responding to all

undergraduate financial aid applicants for the two thousand sixteen--two

thousand seventeen academic year and thereafter. The superintendent

shall promulgate regulations implementing this section.

* § 9-x. Mortgage forbearance. 1. As used in this section, the

following terms shall have the following meanings:

(a) "Covered period" means March 7, 2020 until the later of December

31, 2021 or the date on which none of the provisions that closed or

otherwise restricted public or private businesses or places of public

accommodation, or required postponement or cancellation of all

non-essential gatherings of individuals of any size for any reason in

Executive Orders 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10,

202.11, 202.13 or 202.14, as extended by Executive Orders 202.28 and

202.31 and as further extended by any future Executive Order, issued in

response to the COVID-19 pandemic continue to apply in the county of the

qualified mortgagor's residence;

(b) "qualified mortgagor" means an individual (i) whose primary

residence is located in New York and is encumbered by a home loan

pursuant to paragraph (a) of subdivision six of section thirteen hundred

four of the real property actions and proceedings law or whose primary

residence is located in New York and is a co-operative unit whose shares

are encumbered by any loan otherwise meeting the requirements of a home

loan under paragraph (a) of subdivision six of section thirteen hundred

four of the real property actions and proceedings law, from or serviced

by a regulated institution; and (ii) who demonstrates financial hardship

as a result of COVID-19 during the covered period;

(c) "regulated institution" means any New York regulated banking

organization as defined in this chapter and any New York regulated

mortgage servicer entity subject to supervision by the department; and

(d) "trial period plan" means an agreement whereby the mortgagor is

required to make trial payments in full and on-time in order to be

considered for a permanent loan modification.

2. Notwithstanding any other provision of law, New York regulated

institutions shall:

(a) make applications for forbearance of any payment due on a

residential mortgage of a property located in New York widely available

to any qualified mortgagor who, during the covered period, is in arrears

or on a trial period plan, or who has applied for loss mitigation; and

(b) grant such forbearance of all monthly payments due with respect to

the mortgage secured by the qualified mortgagor's primary residence in

New York for a period of up to one hundred eighty days to any such

qualified mortgagor, with the option to extend the forbearance of such

monthly payments for up to an additional one hundred eighty days

provided that this extension is subject to the mortgagor demonstrating

continued financial hardship. If any qualified mortgagor has already

received a forbearance pursuant to executive order 202.9 of two thousand

twenty, the time of such forbearance shall be considered as part of the

requirement of this section to provide a forbearance of up to one

hundred eighty days, and any extension thereof pursuant to this section.

(c) Such forbearance may be backdated to March seventh, two thousand

twenty, provided that the maximum length of the forbearance may be no

longer than one hundred eighty days and any extension thereof pursuant

to this section.

3. Notwithstanding any other provision of law, any mortgage

forbearance granted by a regulated institution pursuant to executive

order number 202.9 of two thousand twenty, this section, or 3 NYCRR Part

119 to a qualified mortgagor as a result of financial hardship shall be

subject to the following provisions:

(a) the mortgagor shall have the option to extend the term of the loan

for the length of the period of forbearance. The regulated institution

shall not charge additional interest or any late fees or penalties on

the forborne payment; or

(b) the mortgagor shall have the option to have the arrears

accumulated during the forbearance period payable on a monthly basis for

the remaining term of the loan without being subject to penalties or

late fees incurred as a result of the forbearance; or

(c) the mortgagor shall have the option to negotiate a loan

modification or any other option that meets the changed circumstances of

the qualified mortgagor; or

(d) if the mortgagor and regulated institution cannot reasonably agree

on a mutually acceptable loan modification, the regulated institution

shall offer to defer arrears accumulated during the forbearance period

as a non-interest bearing balloon loan payable at the maturity of the

loan, or at the time the loan is satisfied through a refinance or sale

of the property. Any late fees accumulated as a result of the

forbearance shall be waived.

(e) The exercising of options provided for in paragraph (a), (b), (c)

or (d) of this subdivision by a qualified mortgagor shall not be

reported negatively to any credit bureau by any regulated institution.

4. Notwithstanding any other provision of law, adherence with this

section shall be a condition precedent to commencing a foreclosure

action stemming from missed payments which would have otherwise been

subject to this section. A defendant may raise the violation of this

section as a defense to a foreclosure action commenced on the

defendant's property when such action is based on missed payments that

would have otherwise been subject to this section.

5. Notwithstanding anything to the contrary in this section, this

section shall not apply to, and does not affect any mortgage loans made,

insured, purchased or securitized by any agency or instrumentality of

the United States, any government sponsored enterprise, or a federal

home loan bank, or a corporate governmental agency of the state

constituted as a political subdivision and public benefit corporation,

or the rights and obligations of any lender, issuer, servicer or trustee

of such obligations, including servicers for the Government National

Mortgage Association.

6. Notwithstanding any other provision of law or of this section, the

obligation to grant the forbearance relief required by this section

shall be subject to the regulated institution having sufficient capital

and liquidity to meet its obligations and to operate in a safe and sound

manner. Any regulated institution that determines that it is not able to

offer relief pursuant to this section to any qualified mortgagor must

notify the department within five business days of making such

determination. Any such notice filed with the department shall include

information about the qualified mortgagor, the reason the regulated

institution determined that it was unable to offer any relief pursuant

to this section, information about the regulated institution's financial

condition supporting the regulated institution's determination, and any

other information required by the department. At the same time that the

regulated institution provides notice to the department, it shall advise

the qualified mortgagor that the application for relief was denied and

provide a statement that the applicant may file a complaint with the New

York state department of financial services at 1-800-342-3736 or

http://www.dfs.ny.gov if the applicant believes the application was

wrongly denied.

* NB There are 2 § 9-x's

Order of payment of checks and other debits, insufficient funds

charges and return deposit item charges. 1. Order of paying checks. (a)

Notwithstanding any law, rule or regulation to the contrary, every

banking organization that provides checking services to consumer

accounts shall either pay checks in the order wherein they are received

or pay checks from smallest to largest dollar amount for each business

day's transactions.

(b) If a check is dishonored for insufficient funds and thereafter

smaller checks which could be paid are received, the smaller checks

shall be honored within amounts on deposit in the subject account.

(c) The banking organization shall disclose to consumers in writing

the order in which checks are drawn. The written disclosure shall be

provided to the consumer at the time the account is opened and prior to

any change in such policy.

(d) The superintendent shall promulgate rules and regulations

necessary for the implementation of this section.

2. Regulation of other consumer account transactions and associated

fees. (a) The superintendent shall have the power to prescribe by

regulation:

i. the manner in which banking organizations process debit and credit

transactions, other than those specified in subdivision one of this

section, for consumer accounts maintained at such organization;

ii. the charges that may be imposed in connection with a check drawn

or other written order upon, or electronic transfer sought to be

effectuated against, insufficient funds or uncollected balances in a

consumer account, whether or not the banking organization pays such

check, written order, or electronic transfer;

iii. the charges that may be imposed in connection with a check or

other written order received by a banking organization for deposit or

collection drawn against a consumer account and subsequently dishonored

and returned for any reason by the drawee;

iv. disclosures provided to consumers regarding the processing of

transactions in a consumer account and the associated fees; and

v. alerts, notices, and other disclosures relating to the imposition

or possible imposition of a charge as provided in subparagraphs ii and

iii of this paragraph.

(b) In prescribing regulations regarding the manner in which banking

organizations process debit or credit transactions, or the charges that

may be imposed pursuant to subparagraphs ii or iii of paragraph (a) of

this subdivision, the superintendent shall consider, at a minimum, the

following factors:

i. the cost incurred by the banking organization, in providing any

services associated with such charges;

ii. the competitive position of the banking organization; and

iii. the maintenance of a safe and sound banking organization that

protects the public interest.

3. Definition. As used in this section, "consumer accounts" means

accounts at banking organizations established by natural persons

primarily for personal, family or household purposes.

Cashing of certain checks. 1. No bank, trust company, savings

bank, savings and loan association or credit union shall, refuse to cash

a cashier's check, a payroll check, or a certified check in the amount

of five hundred dollars or less, drawn on accounts in such institution

or a branch as long as there are sufficient funds within the account on

which the check is drawn. Such institution may require, as a condition

for cashing such check, that the payee present a valid government-issued

photo identification and matching proof of address such as a bank

statement, utility bill or printed pay stub.

2. If a person presents such forms of identification, as provided in

subdivision one of this section, and a signature or mark, and the insti-

tution refuses to cash the check in the absence of suspected fraudulent

activity, such institution shall be guilty of a violation of this

section and shall be subject to penalties pursuant to section forty-four

of this chapter.

Declaration of policy. It is hereby declared to be the policy of

the state of New York that the business of all banking organizations

shall be supervised and regulated through the department of financial

services in such manner as to insure the safe and sound conduct of such

business, to conserve their assets, to prevent hoarding of money, to

eliminate unsound and destructive competition among such banking

organizations and thus to maintain public confidence in such business

and protect the public interest and the interests of depositors,

creditors, shareholders and stockholders.

Department of financial services; official documents;

destruction of documents; official communications. 1. The department

shall be charged with the execution of the laws relating to the

individuals, partnerships, corporations and other entities to which this

chapter is applicable and shall exercise such powers and perform such

duties as are conferred and imposed upon it by this chapter, or by any

law of this state.

2. (a) Except as specified in paragraph (b) or (c) of this

subdivision, any report expressly required to be rendered to the

superintendent under any provision of this chapter, any report of an

examination made in accordance with any provision of this chapter, and

any oath or declaration of office received by the department shall be

retained in such form and for such period as the superintendent finds

necessary and proper. After such period the superintendent shall

recommend disposal of such material in accordance with the provisions of

the arts and cultural affairs law.

(b) Reports made in accordance with section twenty-eight-b of this

article or pursuant to the rules and regulations of the superintendent

promulgated in connection with assessing a banking organization's record

of performance in meeting the credit needs of local communities within

the meaning of section twenty-eight-b of this article, including reports

expressly required to be rendered to the superintendent and reports of

examinations may be destroyed at the direction of the superintendent and

in accordance with the provisions of the arts and cultural affairs law

after three years from date of receipt thereof, provided any such report

has first been photographed, microphotographed or otherwise reproduced.

Each such reproduction shall be retained in the files of the department

for a period of at least fifteen years from the date of the last

received report, oath or declaration appearing thereon. After the

expiration of such period, such reproduction may be destroyed at the

direction of the superintendent and in accordance with the provisions of

the arts and cultural affairs law. Such reproduction thereof shall be

deemed, for any purpose, the equivalent of the original of such report.

Any such report not so reproduced shall be retained in the files of the

department for a period of at least fifteen years from the date of

receipt thereof, after which it may be destroyed at the direction of the

superintendent and in accordance with the provisions of the arts and

cultural affairs law.

(c) This subdivision shall not apply to any records, documents or

correspondence referred to in subdivision four of section six hundred

twenty-seven of this chapter.

4. Any communication from the department to any person, partnership,

corporation or other entity may contain a direction that such

communication shall be presented to the controlling owners or principal

management of such entity, members of such partnership or to the board

of directors or trustees of such corporation. A communication containing

such direction shall be for the purposes of this chapter an official

communication. The superintendent may, in his or her discretion, notify

in writing each owner or principal manager of such entity, every member

of such partnership and every director or trustee of such corporation of

the sending of such a communication and, in that event the notification

shall state the date of such communication.

* § 12-a. Power of state chartered banking institutions to exercise

the rights of counterpart federally chartered banking institutions. 1.

Definitions. (a) As used in this section, "state chartered banking

institution" shall mean any bank, trust company, private banker, savings

bank, savings and loan association, foreign banking corporation, or

credit union.

(b) As used in this section and as is applicable, "federally chartered

banking institution" shall mean (i) any national banking association

organized pursuant to the National Bank Act of 1864, as amended, (12 USC

21 et seq.); (ii) any federal savings association as such term is

defined by the Federal Deposit Insurance Act, as amended, (12 USC

1813(b)(2)); (iii) a federal branch and agency of a foreign bank, as

such terms are defined by the International Banking Act of 1978, as

amended, (122 USC 3101); or (iv) a federal credit union, as such term is

defined by the Federal Credit Union Act, as amended, (12 USC 1752(1)).

(c) As used in this section, "charter" shall mean the organization

certificate or comparable document of a state banking institution, or

the license for a state branch or agency of a foreign banking

corporation, or a similar organizational document for a federal banking

institution or a federal branch or agency, and "chartered" shall mean

the formal act of the state or appropriate federal regulatory agency in

approving and conveying such charter of a banking institution.

(d) As used in this section, "federally permitted power" shall mean

any right, power, privilege or benefit, any activity, or any loan,

investment or transaction which a federally chartered banking

institution directly or through a subsidiary or subsidiaries, may

lawfully exercise or into which it may lawfully engage or enter.

(e) As used in this section "foreign banking corporation" shall mean a

banking corporation organized under the laws of a foreign country and

acting through a branch or agency licensed pursuant to section

twenty-six of this article.

(f) As used in this section, unless the context requires otherwise,

the term "subsidiary" shall have the same meaning as set forth in

subdivision five of section one hundred forty-one of this chapter,

except that (i) any reference therein to "bank holding company" shall be

deemed to refer to a "state chartered banking institution" as defined in

this section, and (ii) with respect to a credit union, the term

"subsidiary" as used in this section shall mean a "credit union

organization".

2. Pursuant to this section and notwithstanding any other provision of

law, except as otherwise provided in its charter, a state-chartered

banking institution may exercise any federally permitted power of its

counterpart federally chartered banking institution as herein set forth:

(a) a bank, private banker, or trust company may exercise any

federally permitted power of a national banking association;

(b) a savings bank or savings and loan association may exercise any

federally permitted power of a federal savings association;

(c) a foreign banking corporation acting through a branch may exercise

any federally permitted power of a foreign bank acting through a federal

branch;

(d) a foreign banking corporation acting through an agency may

exercise any federally permitted power of a foreign bank acting through

a federal agency;

(e) a credit union may exercise any federally permitted power of a

federal credit union.

Nothing contained in this section shall be deemed to permit a state

chartered banking institution to exercise any federally permitted power

except in a manner consistent with the following provisions of law, in

each case, as the terms contained in such provisions may be amended from

time to time:

(i) chapter one of the laws of nineteen hundred ninety-four;

(ii) chapter nine of the laws of nineteen hundred ninety-six; and

(iii) sections fourteen-c, twenty-eight-b, thirty-nine and forty-four

of this article, and sections six hundred five through six hundred

thirty-four of this chapter, and with respect to savings banks and

savings and loan associations, respectively, section two hundred forty

and section three hundred ninety-six of this chapter.

3. Except with respect to a federally permitted power approved

pursuant to subdivision four of this section, prior to any state

chartered banking institution initially exercising any federally

permitted power pursuant to this section, such banking institution shall

make an application individually or with one or more state chartered

banking institutions to the superintendent indicating that such

institution or institutions intend to exercise such federally permitted

power and the basis on which such institution or institutions believe

such power is a federally permitted power. The superintendent shall have

one hundred twenty days from receipt of the application to determine

whether it meets the requirements of this section, provided that such

period may be extended for an additional period of time with the written

consent of the applicant or applicants. If such application meets the

requirements of this section, the superintendent shall post such

application upon the bulletin board of the department pursuant to

section forty-two of this article. If such application does not meet the

requirements of this section, the superintendent shall, within ten days

of such determination, notify the applicant or applicants of the reasons

why the application fails to meet the requirements. The superintendent

shall determine, consistent with the standards set forth in subdivision

five of this section, whether to approve such application subject to

such terms and conditions as the superintendent may deem appropriate, in

the superintendent's sole discretion. Such determination, shall be made

by the superintendent within forty-five days after the posting of such

application, provided however that the superintendent may notify the

applicant or applicants that the review of the application shall be

extended for an additional period of time not exceeding sixty days after

the posting of such application, and provided further that such period

of time may be extended for an additional period of time with the

written consent of the applicant or applicants. The superintendent shall

not act upon the application prior to thirty days after such application

has been posted. If the superintendent approves such application, the

superintendent shall, within ten days of approving the application,

notify the applicant or applicants in writing thereof, and the applicant

or applicants may exercise such federally permitted power subject to

such terms and conditions as the superintendent may have approved. If

the superintendent declines such application, the superintendent shall,

within ten days of making such determination, notify the applicant or

applicants in writing thereof. An applicant or applicants may, upon the

superintendent's failure to comply with this section, petition the

superintendent to act upon the application. The failure of the

superintendent to act upon the application or notify the applicant or

applicants, in writing, as to the reasons why action cannot be taken

within thirty days of receipt of such petition shall be deemed a denial

of the application, which shall be subject to judicial review.

Notwithstanding any other law, the superintendent may make the approval

of an application under this section applicable to one or more

additional state chartered banking institutions that are qualified to

exercise the same federally permitted powers as the applicant or

applicants pursuant to subdivision two of this section, subject to such

terms and conditions as the superintendent shall find necessary and

appropriate.

4. Notwithstanding any other law, the superintendent, in the

superintendent's discretion, may, when the superintendent deems it

necessary and appropriate after considering the standards set forth in

subdivision five of this section, by order, authorize one or more state

chartered banking institutions to exercise a federally permitted power,

subject to such terms and conditions as the superintendent shall find

necessary and appropriate. Prior to issuing such order, the

superintendent shall post notice of the superintendent's intention to

issue such order upon the bulletin board of the department pursuant to

section forty-two of this article, and shall not act upon such intention

prior to thirty days after such notice has been posted.

5. Prior to approving any application or proposal pursuant to

subdivision three or four of this section, the superintendent shall make

a finding that the approval of such application or proposal is:

(i) consistent with the policy of the state of New York as declared in

section ten of this article and thereby protects the public interest,

including the interests of depositors, creditors, shareholders,

stockholders and consumers; and

(ii) necessary to achieve or maintain parity between state chartered

banking institutions and their counterpart federally chartered banking

institutions with respect to rights, powers, privileges, benefits,

activities, loans, investments or transactions.

6. A federally permitted power authorized pursuant to this section

shall not exceed and shall be limited by any conditions, qualifications

or restrictions on the same when exercised by a counterpart federally

chartered banking institution of a state chartered banking institution

unless the state chartered banking institution is so authorized by other

New York state law, or a rule, regulation or policy adopted pursuant to

such other New York state law, or by a judicial decision.

Notwithstanding any other law, the superintendent may, at any time,

impose by order any other terms and conditions as he or she finds

necessary and proper including, but not limited to, a requirement that

any federally permitted power authorized by this section be exercised,

conducted or held in a subsidiary of a state chartered banking

institution. In the event that federally chartered banking institutions

located in the state of New York lose the authority to exercise a

federally permitted power, based upon which comparable authority was

granted to the counterpart state chartered banking institutions pursuant

to this section, then unless such authority is authorized by other New

York state law, or a rule, regulation or policy adopted pursuant to such

other New York state law, or by a judicial decision, the authorization

for such state chartered banking institutions pursuant to this section

shall be deemed revoked, provided, however, that any such revocation

shall be subject to such terms and conditions as may be imposed upon the

counterpart federally chartered banking institutions or by the

superintendent.

7. (a) In those instances where state chartered banking institutions

are permitted to engage in the business of insurance pursuant to this

section, they shall do so subject to all insurance laws, rules, and

regulations; provided, however, that the superintendent may exempt state

chartered banking institutions from any insurance law, rule or

regulation which has been preempted under federal law, rule or

regulation for federally chartered banking institutions if such law,

rule or regulation has been preempted because it applies to insurance

activities of federally chartered banking institutions and not to those

of other entities.

(b) In those instances where a federally permitted power authorized

pursuant to this section is subject to regulation by an agency, as

defined in subdivision one of section one hundred two of the state

administrative procedure act, other than the superintendent, then when a

state chartered banking institution exercises such federally permitted

power, unless it is so authorized by other New York state law, or a

rule, regulation or policy adopted pursuant to such other New York state

law, or by a judicial decision, it shall do so subject to such

regulation to the same extent and in the same manner as such agency

regulates entities other than state chartered banking institutions,

except to the extent that federally chartered banking institutions are

not subject to such regulation.

(c) Any state chartered banking institution or federally chartered

banking institution and any subsidiary or affiliate thereof which is

licensed to sell insurance in this state shall maintain separate and

distinct books and records relating to its insurance transactions,

including all files relating to and reflecting consumer complaints, and

such insurance books and records shall be made available to the

superintendent for inspection upon reasonable notice.

8. On or before June first of each year, the superintendent shall

submit a report to the governor, the speaker of the assembly, the

temporary president of the senate, the minority leaders of the senate

and assembly, and the chairs and ranking minority members of the senate

and assembly banks committees, which shall include, with respect to the

authority provided for in this section, with respect to the preceding

calendar year, (1) a listing of state chartered banking institutions

that were established, (2) a listing of institutions that have converted

to a federal charter or have been acquired by, or merged with, another

banking institution, (3) the number of New York banking institutions

exercising the insurance activities authorized by this section, (4) the

total number of New York chartered banking institutions located in this

state, and (5) the total amount of assets of such chartered banking

institutions by type.

9. Any rules or regulations promulgated by the banking board pursuant

to former sections fourteen-g and fourteen-h of this chapter prior to

September first, two thousand seven, and any resolutions adopted by the

banking board pursuant to this section after September first, two

thousand seven and before the effective date of the chapter of the laws

of two thousand eleven which amended this subdivision, including any

such rules, regulations and resolutions which in whole or in part impose

conditions, qualifications or restrictions on any federally permitted

powers authorized thereby which exceed the conditions, qualifications or

restrictions imposed on the same when exercised by a federally chartered

banking institution, shall remain in full force and effect on or after

such date, unless any such rule, regulation or resolution is thereafter

superseded, modified, or revoked by the superintendent pursuant to the

provisions of subdivisions three and four of this section.

* NB Repealed September 10, 2029

Additional powers of the superintendent. 1. For the purpose of

effectuating the policy declared in section ten of this article, without

limiting any other powers that the superintendent is permitted by law to

exercise, the superintendent shall have the power to make, alter and

amend orders, rules and regulations not inconsistent with law. Such

orders, rules and regulations shall be brought to the attention of those

affected thereby in a manner prescribed by law. Without limiting the

foregoing power, orders or rules or regulations may be so adopted for

the following specific purposes:

(a) To approve organization certificates and articles of association,

private bankers' certificates and applications of foreign corporations

for licenses to do business in this state, as provided in this article.

(b) To determine the purposes for which and the extent to which

capital notes or debentures shall be considered and treated as capital

stock of corporate banking organizations; but capital notes or

debentures shall not be considered or treated as capital stock for the

purposes of sections one hundred ten and one hundred eleven of this

chapter.

(c) To grant permission to a trust company, including a national bank,

to establish one or more common trust funds upon application and after

inquiry concerning the qualifications of such trust company to maintain

and manage the same, and to regulate the conduct and management of any

common trust fund and for such purpose, but not by way of limitation of

the foregoing power, to prescribe (1) the records and accounts to be

kept of such common trust funds; (2) the procedure to be followed in

adding moneys to or withdrawing moneys or investments from any such

common trust fund; (3) the methods and standards to be employed in

determining the value of such common trust funds and of the assets and

investments thereof; (4) the maximum amount of moneys of any estate,

trust or fund which may be invested in any common trust fund; and (5)

the maximum proportionate share of any such common trust fund which may

be apportioned to any estate, trust or fund; and in connection with such

powers to classify the corporations maintaining such common trust funds

according to the population of the city, town or village in which the

principal offices of such corporations are respectively located and to

prescribe the minimum total of any such common trust fund and the

permissible limits of investment therein in accordance with such

classification.

(cc) To approve the incorporation by or on behalf of trust companies

and national banks with trust powers of a mutual trust investment

company to form a medium for the common investment of funds held by

trust companies, including national banks, acting as executors,

administrators, guardians, inter-vivos or testamentary trustees or

committees or conservators either alone or with individual

co-fiduciaries, and any amendments of the certificate of incorporation

of such mutual trust investment company, and to regulate the conduct and

management of such mutual trust investment company and for such purpose,

but not by way of limitation of the foregoing power, to prescribe (1)

the records and accounts to be kept by such mutual trust investment

company; (2) the procedure to be followed in the sale or redemption of

stocks or shares therein; (3) the methods and standards to be employed

in determining the value of such shares in the mutual trust investment

company and the assets and investments thereof; and (4) the maximum

proportionate shares of any such mutual trust investment company which

may be apportioned or sold to any one trust company or national bank.

(d) To authorize a bank or a trust company to invest in the capital

stock of, or any other equity interest in, any corporation, partnership,

unincorporated association, limited liability company, or other entity

not included among the corporations or other entities for which

investment in the capital stock or other equity interest is expressly

authorized by this chapter.

(e) To authorize a savings bank to invest in the capital stock,

capital notes and debentures of a trust company or other corporation, as

provided in article six of this chapter.

(f) To authorize a savings and loan association to invest in the

capital stock, capital notes and debentures of a trust company or other

corporation, as provided in article ten of this chapter.

(g) To prescribe from time to time: (1) the rates of interest which

may be paid on deposits with any banking organization and with any

branch or agency of a foreign banking corporation; and (2) the rates of

dividends which may be paid on shares of any savings and loan

association or credit union, and to prohibit the payment of such

interest or such dividends by any banking organization or by any branch

of a foreign banking corporation. Interest or dividend rates so

prescribed need not be uniform.

(h) To limit and regulate withdrawals of deposits or shares from any

banking organization, if the superintendent shall find that such

limitation and regulation are necessary because of the existence of

unusual and extraordinary circumstances.

(i) To prescribe from time to time reserves against deposits to be

maintained by banks and trust companies pursuant to article three of

this chapter; provided that no reserve requirement imposed against

either time or demand deposits shall require any bank or trust company

to maintain total reserves in an amount greater than it would be

required to maintain if it were at the time a member of the federal

reserve system; and provided further, however, that a bank or trust

company not a member of the federal reserve system may be authorized to

maintain total reserves against deposits in an amount lower than the

reserves required by article three of this chapter to be maintained,

either in individual cases or by general regulations on such basis as

the superintendent may deem reasonable or appropriate in view of the

character of the business transacted by such bank or trust company.

(j) To grant permission to officers, directors, clerks or employees of

banks and trust companies to engage in the issue, flotation,

underwriting, public sale or distribution at wholesale or retail, or

through syndicate participation of stocks, bonds or other similar

securities, and to revoke such permission, both as provided in this

chapter.

(k) To prescribe the methods and standards to be used (1) in making

the examinations provided for in this chapter, and (2) in valuing the

assets of banking organizations.

(l) To prescribe the form and contents of periodical reports of

condition to be rendered to the superintendent by banks, trust

companies, private bankers and branches of foreign banking corporations,

and the manner of publication of such reports.

(m) To postpone or omit the calling for and rendering of reports

provided for by this chapter if the superintendent shall find that such

postponement or omission is necessary because of the existence of

unusual and extraordinary circumstances.

(n) To define what is an unsafe manner of conducting the business of

banking organizations.

(o) To define what is a safe or unsafe condition of a banking

organization.

(p) To make variations from the requirements of this chapter, provided

such variations are in harmony with the spirit of the law, if the

superintendent shall find that such variations are necessary because of

the existence of unusual and extraordinary circumstances.

(q) To establish safe and sound methods of banking and safeguard the

interests of depositors, creditors, shareholders and stockholders

generally in times of emergency.

(qq) To permit any banking organization, national banking association,

federal mutual savings bank, federal savings and loan association and

federal credit union to offer graduated payment mortgages which shall

conform to the provisions of section two hundred seventy-nine of the

real property law.

(s) To permit authorized lenders, as defined by section two hundred

eighty or two hundred eighty-a of the real property law, to offer

reverse mortgage loans which shall conform to the provisions of section

two hundred eighty or two hundred eighty-a of the real property law.

Rate of interest; superintendent of financial services to

adopt regulations. 1. The maximum rate of interest provided for in

section 5-501 of the general obligations law shall be sixteen per centum

per annum.

2. The rate of interest as so prescribed under this section shall

include as interest any and all amounts paid or payable, directly or

indirectly, by any person, to or for the account of the lender in

consideration for the making of a loan or forbearance as defined by the

superintendent pursuant to subdivision three of this section.

3. The superintendent shall have the power to adopt such regulations

as the superintendent shall deem necessary or proper to implement the

provisions of this section. The superintendent shall make available to

the public copies of all regulations adopted pursuant to this section.

4. Such regulations as shall have been adopted pursuant to the

provisions of this chapter and in effect immediately prior to the

effective date of this section, shall continue in effect until such time

as new regulations shall have been adopted by the superintendent and

shall become effective.

5. Whenever reference is made in this chapter or in any other law,

contract or document to the rate of interest prescribed or to be

prescribed by the superintendent pursuant to this section or any former

section fourteen-a of this chapter, such reference shall be deemed a

reference to the rate of interest prescribed in subdivision one of this

section.

6. Notwithstanding the provisions of subdivision five of this section,

the rate of interest charged, taken or received on any loan or

forbearance, which would have otherwise been subject to the provisions

of former section fourteen-a of this chapter, made or entered into

between the effective date of this section and the first day of

February, nineteen hundred eighty-one pursuant to a commitment which was

made or entered into prior to the effective date of United States Public

Law 96-161 and which provides for interest at the prevailing rate at the

time of closing shall not exceed the rate of eleven and one-quarter per

centum per annum.

7. Nothing contained in this section nor in any other provision of

this act whereunder this section is added to the banking law shall be

deemed to prohibit the charging of interest at the rates provided or

permitted by United States Public Laws 96-161, 96-221 and 96-399, where

applicable.

Power of the superintendent of financial services to prescribe

minimum rate of interest on mortgage escrow accounts. 1. The

superintendent shall have the power to prescribe, from time to time but

not more often than once in every three month period, by regulation a

minimum rate of, and method or basis of computing, interest that a

mortgage investing institution shall be required to pay on each escrow

account maintained with respect to a mortgage on a one to six family

residence occupied by the owner or on any property owned by a

cooperative apartment corporation, as defined in subdivision twelve of

section three hundred sixty of the tax law, (as such subdivision was in

effect on December thirtieth, nineteen hundred sixty), and located in

this state, which rate shall be greater than the rate of interest

required to be paid under section 5-601 or 5-602 of the general

obligations law.

2. In making such determination the superintendent shall consider

pertinent economic and cost factors including, but not limited to: (i)

current yields on short term investments, (ii) current dividend rates

paid on regular savings accounts throughout this state, (iii) currently

prevailing interest rates on conventional and insured or guaranteed

mortgage loans in this state, (iv) cost factors in maintaining escrow

accounts and (v) such other pertinent economic or cost factors that the

superintendent shall deem to be appropriate. Prior to the

superintendent's prescription of any such minimum rate of interest, the

superintendent shall issue a statement in writing setting forth the

economic and cost data and criteria upon which such determination is

based. Prior to making such determination, the superintendent may invite

presentation, by interested persons, of information and data relating to

economic and cost factors relevant to such minimum rate of interest.

3. The superintendent may promulgate such regulations as the

superintendent deems necessary and proper to implement and define the

provisions of this section. The superintendent may prescribe the minimum

rate of interest from time to time, but not more often than once in any

three-month period, and shall provide reasonable notice to the public of

any change in the rate of interest, of the effective date of such

change, which shall be not less than seven days following the adoption

of such change by the superintendent, and of any rule or regulation

adopted pursuant to this subdivision.

4. In no event shall interest be required to be paid on escrow

accounts where (i) there is a contract between the mortgagor and the

mortgage investing institution, entered into before the date this

subdivision shall have become a law which contains an express disclaimer

of an obligation on the part of the mortgage investing institution to

pay interest on such accounts, or (ii) the payment of such interest

would violate any federal law or regulation, or (iii) such accounts are

maintained with a mortgage servicing company, neither affiliated with

nor owned in whole or in part by the mortgage investing institution,

under a written contract, entered into before the date this subdivision

shall have become a law, which contract does not permit the mortgage

investing institution to earn or receive a return from the investment of

such accounts.

5. "Mortgage investing institution" as used in this section and in

section 5-601 or 5-602 of the general obligations law shall mean and

include any bank, trust company, national bank, savings bank, savings

and loan association, federal savings and loan association, private

banker, credit union, investment company, insurance company, pension

fund, mortgage company or other entity which makes, extends or holds a

mortgage on any one to six family residence occupied by the owner or any

property owned by a cooperative apartment corporation, as defined in

subdivision twelve of section three hundred sixty of the tax law, (as

such subdivision was in effect on December thirtieth, nineteen hundred

sixty), and located in this state.

6. "Escrow account" as used in this section and in section 5-601 or

5-602 of the general obligations law shall mean any account established

pursuant to an agreement between a mortgagor and a mortgage investing

institution whereby the mortgagor pays to the mortgage investing

institution or his designee amounts to be used for the payment of

insurance premiums, water rents or any similar charges, and shall also

include real property tax escrow accounts as defined in title three-A of

article nine of the real property tax law.

7. "One to six family residence" as used in this section and in

section 5-601 or 5-602 of the general obligations law shall mean

property used primarily for residential purposes for one to six

families, including property held in condominium form, and which is

occupied in whole or in part by the owner.

8. If any provision of this section, or the application of such

provision to any individual, company, corporation or circumstance, shall

be held invalid, the remainder of this section, and the application of

such section to individuals, companies, corporations, or circumstances

other than those to which it is held invalid, shall not be affected

thereby.

Power of the superintendent of financial services to prescribe

criteria for disclosure of information on savings and time accounts. 1.

The superintendent of financial services shall promulgate rules and

regulations with respect to the disclosure of information on savings and

time accounts by all banking organizations and out-of-state state banks

authorized to operate and maintain branches pursuant to article five-C

of this chapter. Such rules and regulations shall set forth guidelines

for, but not be limited to the following:

(a) disclosure of the annual rate of simple interest; the effective

annual yield; the formula used in calculating interest; the frequency of

compounding and crediting of interest; date on which a deposit begins to

earn interest; any delay in crediting a deposited instrument; grace

periods for deposits and withdrawals; the minimum balance required to

earn interest; the method of determining the balance on which interest

is paid; the minimum length of time funds must remain on deposit to earn

interest; any fees levied on inactive accounts; any charges, penalties

or other conditions imposed upon withdrawals; any penalties for the

closing of an account before a specific date; and any other fees,

charges or penalties.

(b) form, content and distribution of information.

2. The superintendent of financial services may alter or amend rules

and regulations or promulgate additional rules and regulations as he or

she deems necessary and proper to effectuate the provisions of

subdivision one.

Power of the superintendent of financial services to prescribe

a reasonable period of time permitting the drawing on items received for

deposit in a customer's account. 1. It is the public policy of this

state to provide all banking customers with the ability to draw against

items deposited for collection with any banking institution located in

this state within a reasonable period of time.

2. The superintendent of financial services shall promulgate

regulations, which may be amended from time to time, establishing a

reasonable period of time within which a banking institution must permit

a banking customer to draw, as of right, on an item which has been

received for deposit in the customer's account.

3. The superintendent is authorized to gather from banking

institutions such information as may be required by the superintendent

of financial services for the promulgation of the regulations required

by this section.

4. (a) Except as otherwise provided in paragraph (b) of this

subdivision, a provision in any agreement between a banking institution

and its banking customer which provides for a period of time longer than

the period prescribed under regulations promulgated pursuant to this

section is unreasonable for purposes of article four of the uniform

commercial code and, in lieu thereof, the maximum period of time

permitted in the regulation shall be deemed controlling. For all other

purposes the provisions of this section shall not be deemed or construed

to alter or impair any right or obligation under the uniform commercial

code.

(b) This section does not prohibit a banking institution and a banking

customer from agreeing in writing to a greater period of time than that

otherwise prescribed by regulation pursuant to this section for the

drawing against items because of special circumstances, provided that,

such agreement is not contained in a pre-printed form and is not a

usual, regular business practice of the institution.

5. Such regulations shall require every banking institution to notify

each of its banking customers, in writing, of the applicable time

limitations on the right to draw on items received for deposit in the

customer's account and to keep posted in a conspicuous place at each

branch, a notice substantially setting forth the generally applicable

time limitations of the banking institution's customers' rights to draw

on items deposited to their accounts.

6. The superintendent of financial services is empowered, upon a

determination that the uniform application of a regulation adopted

pursuant to this section would result in unsafe or unsound banking

practices, to issue such further regulation or order with respect

thereto as it deems appropriate.

7. In this section "banking institution" has the same meaning ascribed

to it by section nine-f of this chapter and "item" has the same meaning

ascribed to it by the uniform commercial code.

Power of the superintendent to authorize the operation of

savings banks and savings and loan associations in stock form.

1. Notwithstanding any other provision of law to the contrary, the

superintendent is authorized to promulgate such rules and regulations as

shall facilitate:

(a) The organization and operation of stock-form savings banks and

stock-form savings and loan associations,

(b) The conversion of mutual savings banks and savings and loan

associations to stock form, and

(c) Mergers and acquisitions of assets or of capital stock between and

among all of the foregoing banking institutions and between and among

such institutions and any other banking institution.

The superintendent is authorized to define and implement, by

regulation, the terms and provisions of this section. In adopting such

regulations, the superintendent shall take into account the declaration

of policy contained in section one of a chapter of the laws of nineteen

hundred eighty-four entitled "An Act to amend the banking law, in

relation to the organization and incorporation of stock-form savings

banks and stock-form savings and loan associations and the conversion of

mutual savings banks and mutual savings and loan associations to stock

form". In connection with such regulations, the superintendent is

empowered to apply to such stock-form organizations any provision of

this chapter, in whole or in part, as shall be applicable to any other

stock-form banking organization and to vary any condition, requirement

or provision of this article or article fifteen or sixteen of this

chapter.

2. Such applications as the superintendent may prescribe under

paragraph (a), (b) or (c) of subdivision one of this section shall each

be accompanied by an investigation fee as prescribed pursuant to section

eighteen-a of this article.

3. Without limiting the foregoing, the superintendent, if the

superintendent shall determine that unusual and extraordinary

circumstances exist, shall be authorized, by resolution or regulation,

to apply or to deem inapplicable to any banking institution referred to

in subdivision one of this section, such provisions of this chapter in

whole or in part, as it shall find appropriate in connection with the

organization, operation, conversion, merger or any other transaction

involving a stock-form savings bank or stock-form savings and loan

association, provided, however, that such actions are in harmony with

the spirit of the law and are necessary because of the existence of such

circumstances.

Power of the superintendent of financial services to require

the provision of basic banking services. 1. The legislature finds and

declares that certain consumers residing in this state may be unable to

afford, without undue financial hardship, the cost of maintaining a

consumer transaction account at a banking institution located in this

state. It is the policy of this state that, consistent with safe and

sound banking practices, banking institutions make available lower cost

banking services to consumers. It is further intended that no banking

institution be required to offer lower cost banking services at a cost

to account holders which is less than the actual cost to the banking

institution to provide such services.

2. Except as otherwise provided in this section, every banking

institution shall make available to consumers a consumer transaction

account, to be known as a "basic banking account", with the following

features to be prescribed by the superintendent of financial services by

regulation:

(a) the maximum amount which a banking institution may require as an

initial deposit, if any;

(b) the maximum amount a banking institution may require as a minimum

balance, if any, to maintain such account;

(c) eight withdrawal transactions for account holders under sixty-five

years of age, and twelve withdrawal transactions for account holders

sixty-five years of age or older, including those conducted at

electronic facilities, during any periodic cycle at no additional charge

to the account holder; and

(d) the maximum amount a banking institution may charge per periodic

cycle for the use of such account.

3. With respect to any transactions in excess of the number specified

in accordance with paragraph (c) of subdivision two of this section, (a)

a banking institution may impose a reasonable per-transaction charge, or

(b) it may impose the fees and charges normally applied to other

consumer transaction accounts available at that banking institution

provided that any charge per periodic cycle imposed hereunder must be

reduced by the charge imposed under paragraph (d) of subdivision two of

this section; provided however, that at no time shall the fees and

charges on the basic banking account exceed the amount that is normally

applied to other consumer transaction accounts available at that banking

institution.

4. A banking institution may require as a condition for opening or

maintaining a basic banking account, (a) that the holder of a basic

banking account be a resident of this state; and (b) the direct deposit

to the banking institution of recurring payments such as, but not

limited to, social security, wage, or pension payments where direct

deposit is available to both the consumer and the banking institution.

5. Except as provided in this section and any rules and regulations

promulgated hereunder, a basic banking account may be offered subject to

the same rules, conditions and terms normally applicable to other

consumer transaction accounts offered by the banking institution;

provided that the fees and charges for specific services other than

those otherwise provided in this section shall not exceed those imposed

by the banking institution for the same services in connection with

other consumer transaction accounts offered by the banking institution.

6. No banking institution shall be required to permit any person to

open or maintain a basic banking account pursuant to this section if

such person maintains another consumer transaction account either at

that banking institution or any other banking institution.

7. In lieu of the basic banking account required by this section, a

banking institution may make available an alternative account or other

banking services determined by the superintendent to be at least as

advantageous to consumers as the basic banking account.

8. (a) Where a banking institution posts in the public area of its

offices notice of the availability of its other consumer transaction

accounts, it shall also post equally conspicuous notice in such public

areas and in the same manner the availability of its basic banking

accounts. Where a banking institution makes available in such public

areas material describing the terms of its other consumer transaction

accounts, it shall also make comparable descriptive material available

in the same such areas and in the same manner for its basic banking

account.

(b) Where a banking institution posts in the public area of its

offices the notices for information required in paragraph (a) of this

subdivision, it shall also post equally conspicuous notice in such

public areas and in the same manner, of the department's toll free

consumer's hotline telephone number, where consumers can file complaints

if a consumer is not satisfied with the services a banking institution

provides.

9. For purposes of this section:

(a) "banking institution" means any bank, trust company, savings bank,

savings and loan association, or credit union, or branch of a foreign

banking corporation the deposits of which are insured by the Federal

Deposit Insurance Corporation, which is incorporated, chartered,

organized or licensed under the laws of this state or any other state or

the United States, and, in the ordinary course of its business, offers

consumer transaction accounts to the general public or, in the case of a

credit union, to its members;

(b) "consumer transaction account" means a demand deposit account,

negotiable order of withdrawal account, share draft account or similar

account used primarily for personal, family or household purposes.

10. For purposes of this section, any banking insititution which

offers share draft accounts shall use the term "basic share draft

account" instead of "basic banking account".

11. If any provision of this section, or the application of such

provision to any person or circumstance shall be held invalid, the

remainder of this section, and the application of such provisions

thereof to persons or circumstances other than those as to which it is

held invalid, shall not be affected thereby.

Fees for copies and certifications. Notwithstanding any

provision of this chapter to the contrary, for every copy of any paper

filed in the department and for the certification thereof, the

superintendent may charge such amounts by regulation as the

superintendent, in his or her discretion, determines to be fair and

reasonable.

Application fees. 1. The provisions of this section shall only

be applicable to applications for which a fee is authorized to be

imposed by any other provision of this chapter or regulations

promulgated thereunder.

2. The fees set forth in this section may be imposed notwithstanding

any fee amount set forth in any other provision of this chapter or the

regulations promulgated thereunder.

3. As used in this section, "applications" shall include notices and

similar filings.

4. The fee which shall be imposed for any application for an initial

license, registration, incorporation or for the formation of any other

entity pursuant to this chapter, or for a merger, acquisition, purchase

or sale of assets, change of control, or for any other application

requiring the approval of the superintendent that may necessitate, as

determined by the superintendent, a determination regarding the

character or fitness and/or the safety and soundness of such applicant

or a similar investigative undertaking by the department, shall be:

(a) twelve thousand five hundred dollars when such application relates

to a banking organization, bank holding company or, except as provided

in paragraph (b) of this subdivision, a foreign banking corporation;

(b) seven thousand five hundred dollars when such application relates

to licensing a branch, agency or representative office of a foreign

banking corporation;

(c) one thousand five hundred dollars when the application relates to

a mortgage broker; or

(d) three thousand dollars for all other such applications.

5. The fee for any other application requiring the approval of the

superintendent, including, but not limited to, any application required

to change the name of the applicant, open branches or offices or

additional locations, or relocate an existing branch, office, or

location, and any other application not subject to subdivision four of

this section, shall be:

(a) seven hundred fifty dollars when the application relates to a

banking organization, bank holding company, out-of-state state bank,

foreign credit union, or foreign banking corporation;

(b) two thousand dollars when the application relates to the licensing

of an additional location or change of location or the licensing of a

mobile unit of a licensed casher of checks; or

(c) five hundred dollars for all other such applications.

6. The superintendent, in his or her sole discretion, may waive or

reduce the amount of the fee to be imposed pursuant to this section,

either on a case-by-case basis or, by regulation, generally with respect

to a type of application, if the superintendent determines that:

(a) the payment of such fee would impose an economic hardship upon the

applicant;

(b) the amount of such fee is excessive with respect to the expenses

incurred by the department of financial services to investigate such

application; or

(c) such waiver or reduction (i) serves the interests of interstate

administrative reciprocity or multi-state regulatory cooperation; (ii)

facilitates the administration of the department of financial services;

or (iii) is otherwise appropriate.

Holocaust reparations payment fees. 1. For the purposes of

this section, "victims or targets of Nazi persecution" means any

individual, corporation, partnership, sole proprietorship,

unincorporated association, community, congregation, group,

organization, or other entity persecuted or targeted for persecution by

the Nazi Regime because of race, religion, ethnicity, sexual

orientation, national origin, or physical or mental disability or

handicap, or the heirs, successors, administrators, executors,

affiliates, or assignees of such victims or targets, or any other

claimant receiving funds from an eligible settlement fund, or from an

eligible grantor trust established for the benefit of such victims or

targets. An eligible settlement fund is an entity that is treated for

federal income tax purposes as a designated or qualified settlement

fund, as such term is defined in section 468B of the Internal Revenue

Code and the regulations thereunder, which is established for the

principal purpose of resolving and satisfying claims arising from or in

connection with any act or omission in any way relating to the

Holocaust, World War II and its prelude and aftermath, victims or

targets of Nazi persecution, transactions with or actions of the Nazi

Regime, or treatment of refugees fleeing Nazi persecution by or in the

Swiss Confederation. An eligible grantor trust is a grantor trust which

is established for the principal purpose of resolving and satisfying

such claims.

2. The superintendent shall maintain and annually update a list of

banks and other financial institutions doing business in the state that

voluntarily waive wire transfer fees and other processing fees imposed

for automated deposits or transfers of amounts received (including

accumulated interest) by victims or targets of Nazi persecution from an

eligible settlement fund, or from an eligible grantor trust established

for the benefit of such victims or targets. The department shall make

the list available to the public on the department's website.

Assessments for deficiency in reserves against deposits. If any

banking organization or branch of a foreign banking corporation shall

not maintain the total reserves prescribed by or pursuant to this

chapter, the superintendent may levy an assessment upon it for such

period as any deficiency in its total reserves amounting to one per

centum or more of its deposits against which reserves are required to be

maintained shall continue, at rates not in excess of the following:

(1) Six per centum per annum upon any such deficiency not exceeding

two per centum of such deposits.

(2) Eight per centum per annum upon any additional deficiency in

excess of two and not exceeding three per centum of such deposits.

(3) Ten per centum per annum upon any additional deficiency in excess

of three and not exceeding four per centum of such deposits.

(4) Twelve per centum per annum upon any additional deficiency

therein.

Assessments, penalties and forfeitures entitled to priority. In

case of the insolvency or voluntary or involuntary liquidation of any

person or entity licensed, registered, or incorporated or otherwise

formed pursuant to this chapter, all unpaid charges lawfully assessed

against such person or entity by the superintendent and all unpaid

penalties and forfeitures incurred by such person or entity under any

section of this chapter shall be entitled to priority of payment from

such person's or entity's assets on an equality with any other priority

given by this chapter.

Collection of assessments, penalties and forfeitures;

proceedings by attorney general. 1. When the superintendent, pursuant to

the powers conferred on him or her by this article, shall have duly

levied any assessment and shall have given due notification of the

amount thereof, the amount so assessed shall become a liability of, and

shall be paid to the superintendent by any person or entity licensed,

registered, or incorporated or otherwise formed pursuant to this chapter

upon which it was levied.

2. If any person or entity licensed, registered, or incorporated or

otherwise formed pursuant to this chapter shall not pay, after due

notice, any such assessment or any penalty or forfeiture incurred under

any section of this chapter, the superintendent may, in his or her

discretion, apply in payment thereof, with interest at the legal rate,

so much as may be necessary of the interest accruing on any stocks or

bonds deposited with him or her by such person or entity licensed,

registered, or incorporated or otherwise formed pursuant to this chapter

pursuant to any requirement of this chapter.

3. The superintendent may, in his or her discretion, report to the

attorney general any failure to make such payments or the failure of any

officer, director, trustee, or employee of any person or entity

licensed, registered, or incorporated or otherwise formed pursuant to

this chapter, after due notice, to pay any penalty or forfeiture

incurred by him or her under any provision of this chapter, or any

violation by any corporation, unincorporated association, partnership,

individual, or any other entity, of any provision of this chapter. The

attorney general shall thereupon, in the name of the superintendent, or

of the people of the state, institute such action or proceedings as the

facts may warrant.

4. The provisions of this section shall be applicable to any bank

holding company, as that term is defined in article three-A of this

chapter.

Fingerprints. (a) Notwithstanding any other provision of law,

every applicant for a license, authorization or registration under

articles nine, nine-A, eleven-B, twelve-B, twelve-C, twelve-D, twelve-E

and thirteen-B of this chapter and every applicant filing an application

to acquire control of any licensee or registrant, as the case may be,

under such articles shall submit simultaneously with an application, his

or her fingerprints in such form and in such manner as specified by the

division of criminal justice services, but in any event, no less than

two digit imprints. The superintendent shall submit such fingerprints to

the division of criminal justice services for the purpose of conducting

a criminal history search and returning a report thereon in accordance

with the procedures and requirements established by the division

pursuant to the provisions of article thirty-five of the executive law,

which shall include the payment of the prescribed processing fees. The

superintendent shall request that the division submit such fingerprints

to the federal bureau of investigation, together with the processing

fees prescribed by such bureau, for the purpose of conducting a criminal

history search and returning a report thereon. An applicant shall not be

required to submit his or her fingerprints as required by this

subdivision if such applicant (i) is already subject to regulation by

the department and the applicant has submitted such fingerprints to the

department, such fingerprints have been submitted to the division of

criminal justice services for the purpose of conducting a criminal

history search, and a report of such search has been received by the

department from such division; or (ii) is subject to regulation by a

federal bank regulatory agency and has submitted such fingerprints to

such agency which has had a criminal history search conducted of such

individual and has shared such information or its determination

resulting from such search with the department; or (iii) is an officer

or stockholder of a corporation whose common or preferred stock is

registered on a national securities exchange, as provided in an act of

congress of the United States entitled the "Securities Exchange Act of

1934", approved June sixth, nineteen hundred thirty-four, as amended, or

such other exchange or market system as the superintendent shall approve

by regulation, and has submitted such fingerprints to such exchange or

market system which has had a criminal history search conducted of such

individual and has shared such information or its determination

resulting from such search with the department; provided, however, that

the superintendent may subsequently require such applicant to submit his

or her fingerprints if the superintendent has a reasonable basis for

updating the information or determination resulting from the report of

the criminal history search conducted at the request of such federal

banking agency, exchange or market system.

(b) The superintendent shall also, concurrent with an investigation of

a licensee or registrant, or an authorized individual, pertaining to a

violation of this chapter, submit such fingerprints to the division of

criminal justice services for the purpose of conducting a criminal

history search and returning a report thereon and through the division

to the federal bureau of investigation for the purpose of a fingerprint

check of such licensee, registrant or authorized individual.

(c) For purposes of this section, "applicant" shall include a natural

person or such principal, officer, director, trustee or stockholder of

any other entity as may be designated by the superintendent.

Notwithstanding any other provision of this article, the superintendent

shall not access criminal history data or information, unless any agency

from which the superintendent receives directly criminal history data or

information has entered into a use and dissemination agreement with the

superintendent consistent with the provisions of this section.

Acceptance or rejection of certificate; investigation fees.

Within twenty days after the receipt by the superintendent of any

organization certificate of a corporation proposed to be organized under

this chapter, or any private banker's certificate together with such

documents as are required to be filed therewith, the superintendent

shall, if such certificate and such accompanying documents comply in

form and substance with the requirements of this chapter, file such

certificate for examination and note thereon the date of such filing. If

such certificate or such accompanying documents do not comply in all

respects with the requirements of this chapter, the superintendent

shall, within twenty days after receipt thereof, return them to the

persons from whom they were received, calling attention to the defect or

defects therein.

At the time of submission of the certificate and accompanying

documents an investigation fee as prescribed pursuant to section

eighteen-a of this article shall be paid to the superintendent, to be

retained by him or her if the certificate and accompanying documents are

filed. If the certificate and accompanying documents are not filed

because of defects therein, the investigation fee is to be returned with

such papers to the persons from whom they were received.

Investigation by superintendent; refusal or approval; filing

certificate. 1. Within ninety days after the date when any organization

certificate or private banker's certificate shall have been filed for

examination, the superintendent, if the superintendent shall find after

investigation and examination of what the superintendent deems to be the

best sources of information available that the character, responsibility

and general fitness of the person or persons named in such certificate

are such as to command confidence and warrant belief that the business

of the proposed corporation or private banker will be honestly and

efficiently conducted in accordance with the intent and purpose of this

chapter, and that the public convenience and advantage will be promoted

by allowing such proposed corporation or private banker to engage in

business, shall approve such certificate. An extension of such ninety

day period may be requested, by a written request executed by a majority

of the persons from whom the superintendent received such organization

certificate or private banker's certificate, for such additional

reasonable period of time as may be required for applicants to comply

with conditions precedent stipulated by the superintendent as being a

prerequisite to his or her approval. The superintendent, in the

superintendent's sole discretion, shall determine whether to grant such

an extension.

2. The superintendent shall also endorse upon each of the duplicates

the date of such approval. The superintendent shall forthwith cause

notice of such approval to be given to the proposed incorporators or

private banker and one of the duplicate certificates shall be filed in

the office of the department and the other in the office of the clerk of

the county in which the principal office of such proposed corporation or

private banker is to be located. In a case in which a private banker

certificate is submitted to the superintendent for the purpose of

continuing the business in connection with a change in its partnership,

the superintendent shall approve the private banker certificate upon

making a determination that the private banker should be permitted to

continue its business based upon the considerations set forth in

subdivision one of this section.

3. If the superintendent is not satisfied, upon the considerations set

forth in subdivision one of this section, that such proposed corporation

or private banker should be permitted to engage in business, the

superintendent shall refuse such certificate and shall endorse thereon

the date of such refusal and return one of the duplicates to the

proposed incorporators or private banker from whom such certificate was

received.

4. The provisions of this section shall not apply to any organization

certificate required to be filed in the office of the superintendent by

section one hundred thirty-six, by section two hundred sixty-b, by

section four hundred ten, by section four hundred eleven or by section

four hundred eighty-six of this chapter.

Authorization certificate; when and to whom issued; contents;

filing and recording. 1. If the superintendent shall find that a

corporation or private banker, the certificate of which has been

approved and filed as provided in section twenty-four of this article,

has in good faith complied with all the requirements of law and

fulfilled all the conditions precedent to commencing business imposed by

this chapter, the superintendent shall, within ninety days after the

date of such approval, issue and execute under the official seal of the

department, in triplicate, an authorization certificate to the person or

persons named in such organization certificate or private banker's

certificate. Notwithstanding the preceding sentence, if the

superintendent determines it is consistent with the declaration of

policy contained in section ten of this article, the superintendent may

extend the period within which the superintendent may issue the

authorization certificate by (i) an additional ninety days, provided,

however, that he or she shall have determined that such extension of

time is needed for raising capital, for fulfilling any other condition

precedent to the commencement of business or for satisfying any other

requirement of organization, whether imposed by statute or regulation or

otherwise, or (ii) such longer period of time as he or she shall deem

appropriate, provided, however, that he or she shall have determined

that extraordinary circumstances exist. Such authorization certificate

shall state that the corporation or private banker named therein has

complied with the provisions of this chapter and that it is authorized

to transact the business specified therein. Such authorization

certificate shall be conclusive evidence that all conditions precedent

have been fulfilled and that the corporation has been formed under this

chapter, except in an action or special proceeding brought by the

superintendent or the attorney general. The superintendent shall cause

one of the triplicate authorization certificates to be transmitted to

the corporation or private banker thereby authorized to commence

business, another to be filed in the office of the department, and the

third to be filed in the county clerk's office in which the organization

certificate or the private banker's certificate has been filed. The

copies of the authorization certificate filed in the offices of the

superintendent and the county clerk shall be attached to the copies of

the organization certificate or private banker's certificate previously

filed and such certificates shall be recorded in the records of

incorporation therein.

2. Any corporation which shall not receive an authorization

certificate within the time period provided by subdivision one of this

section shall forfeit its rights and privileges as a corporation and its

corporate powers shall cease and determine.

3. Any corporation which shall not commence business within six months

after the date on which its authorization certificate is issued by the

superintendent shall forfeit its rights and privileges as a corporation

and its corporate powers shall cease and determine unless the time

within which such business may be commenced has been extended by the

superintendent. Upon satisfactory cause being shown, the superintendent

may grant one or more extensions. Such extension shall be granted by

order executed, transmitted and filed in the manner provided for an

authorization certificate in subdivision one of this section.

* § 25-a. Authority of superintendent to file organization certificate

and issue authorization certificate under certain conditions. 1.

Notwithstanding any other provision of law to the contrary, the

superintendent is authorized to file and approve the organization

certificate of a bank or trust company and to issue an authorization

certificate to such bank or trust company in accordance with the

provisions of subdivision two of this section.

2. If the superintendent, after taking possession of the business and

property of any banking organization pursuant to section six hundred six

of this chapter, shall find that it is in the public interest for all or

a substantial part of the business or property of such banking

organization to be acquired by a bank or trust company to be organized

for such purpose, he may forthwith file and approve the organization

certificate of, and issue an authorization certificate to, such bank or

trust company and in connection therewith may waive any condition,

requirement or provision of articles two, three and fifteen of this

chapter, provided, however, that the superintendent shall be empowered

to impose such terms and conditions, if any, on the exercise of any

authority granted to any such bank or trust company as he may deem

appropriate to effectuate the declaration of policy contained in section

ten of this article.

* NB Expired March 31, 1982

Licenses to foreign banking corporations; renewal. Upon receipt

of an application in proper form of any foreign banking corporation for

leave to do business in this state under the provisions of article five

of this chapter, the superintendent, if he or she shall find after

investigation and examination of what he or she deems to be the best

sources of information that the character, responsibility and general

fitness of the person or persons named in such application are such as

to command confidence and warrant belief that the business of such

foreign banking corporation will be honestly and efficiently conducted

in accordance with the intent and purpose of this chapter and that the

public convenience and advantage will be promoted by granting such

foreign banking corporation leave to do business in this state, shall

execute and issue a license under the official seal of the department

authorizing such applicant to carry on such business at the place

designated in the license. Such license shall be executed in triplicate

and the superintendent shall cause one copy to be transmitted to the

applicant, another to be filed in the office of the department and the

third to be filed in the office of the clerk of the county in which the

place of business designated in such license is located. A license

issued to such foreign banking corporation pursuant to this section

shall remain in full force and effect until surrendered or revoked.

Exchange and examination of securities. 1. Any corporation,

unincorporated association, partnership or individual which shall have

deposited with the superintendent in trust any stocks or bonds in

pursuance of any requirement of this chapter, may be permitted by the

superintendent, so long as it shall continue business in the ordinary

course, from time to time to withdraw any of such stocks or bonds upon

depositing with the superintendent other stocks or bonds of the kind it

is required by this chapter to deposit with him and if the value of the

stocks or bonds so held by the superintendent exceeds the amount

required by this chapter to be so deposited, the stocks or bonds in

excess of such amount may be withdrawn without depositing others in

exchange therefor.

2. Any such corporation, unincorporated association, partnership or

individual may, at any time during ordinary business hours, examine such

stocks or bonds and compare them with the record on the books of the

department. Unless it shall deliver to the superintendent at least once

in each calendar year, a statement listing such stocks or bonds and the

amounts thereof, and stating that they are in the custody and possession

of the superintendent at the date of the statement, the state

comptroller and the superintendent shall appoint some suitable and

discreet person as agent for such corporation, unincorporated

association, partnership or individual, who shall make an examination of

such stocks or bonds. If such agent finds that the stocks or bonds held

by the superintendent agree with the records thereof on the books of the

department, he shall execute a statement in the form above described and

transmit a copy thereof to the corporation, unincorporated association,

partnership or individual in behalf of which it is made, and such

statement shall have the same force and effect as if executed by such

corporation, unincorporated association, partnership or individual.

Compensation for the services and expenses of such agent in making such

examination shall be paid as a general expense of the department.

Change of location; change of designation of principal office;

approval or refusal; certificate. Upon receipt by the superintendent of

a written application in proper form from any banking organization or

foreign corporation for leave to change its place or one of its places

of business to another place or from any banking organization for leave

to change the designation of its principal office to a branch office and

to change the designation of one of its branch offices to its principal

office, the superintendent shall, if he or she shall be satisfied that

such change may be permitted under the terms of this chapter and that

there is no reasonable objection to such change, execute and issue a

certificate under the official seal of the department authorizing such

change and specifying the date on or after which such change may be

made, and shall cause the original of such certificate to be transmitted

to the applicant, a copy to be filed in the office of the department and

a copy to be filed in the office of the clerk of the county in which the

principal office of the applicant is located, provided that if the

proposed principal office is in a different county than the county in

which the principal office is located at the time of the filing of the

application, the superintendent shall cause copies to be filed in the

offices of the clerks of both counties. If the superintendent shall be

satisfied in any case that such change is undesirable or inexpedient, he

or she shall refuse such application and notify the applicant of such

determination.

Temporary change of location; approval or refusal;

certificate. Notwithstanding any provisions of law limiting the number

of offices which may be maintained thereby, any banking organization or

foreign banking corporation may make a written application to the

superintendent for a temporary change of location of its authorized

place or one of its authorized places of business or a portion thereof

to another place within the state which shall be as near as practicable

to such authorized place of business. At the time of making the

application an investigation fee as prescribed pursuant to section

eighteen-a of this article shall be paid to the superintendent for each

temporary location for which leave to open is sought, except where (1)

the applicant would not be required to pay an investigation fee upon the

filing of an application for a change of location under provisions of

this chapter other than this section, or (2) said application is

necessitated by damage or destruction caused by flood, tidal wave,

earthquake, conflagration, tornado, hurricane, cyclone, windstorm or

other storm or such other event as shall have been declared a

catastrophe by the superintendent. If there is no reasonable objection

to such change, and if the superintendent finds that such change is

necessary or desirable during a period of construction, repair,

alteration, improvement, or reconstruction of the previously authorized

place of business, he or she shall issue a certificate under his or her

hand and the official seal of the department authorizing each such

change and specifying (a) the period during which such temporary

location may be maintained, (b) the date on or after which such change

may be made, and (c) the powers which may be exercised thereat. The

superintendent shall cause the original of such certificate to be

transmitted to the applicant, a copy to be filed in the office of the

department and a copy to be filed in the office of the clerk of the

county in which the principal office of the applicant is located. If the

superintendent shall be satisfied in any case that a change is

undesirable or inexpedient, he or she shall refuse such application and

notify the applicant of his or her determination. A temporary place of

business occupied pursuant to the provisions of this section shall be

closed as soon as practicable, and in no event later than the date

specified in its authorization certificate, unless the superintendent

shall have extended such time. The banking organization or corporation

shall notify the superintendent in writing prior to such closing as to

the date it intends to close the temporary place of business.

Credit needs of local communities. 1. Each banking institution

as defined in subdivision four of this section to which the Community

Reinvestment Act of 1977, United States P.L. 95-128, applies shall file

with the superintendent a copy of each report and document which it is

required to prepare for or file with one or more federal agencies

pursuant to the provisions of that law and the rules and regulations

promulgated thereunder. Where a banking institution has filed such

reports or documents with the superintendent, an update of the reports

or documents shall be required at such time as the banking institution

requests the superintendent to take any action on any application to

which the provisions of subdivision three of this section apply.

3. (a) When taking any action on an application or notice made by a

banking institution under (i) section one hundred five, two hundred

twenty-four, two hundred forty, or three hundred ninety-six of this

chapter for a branch office, (ii) section one hundred ninety-one of this

chapter for a public accommodation office, (iii) section six hundred

one-b of this chapter for approval of a merger or purchase of assets, or

(iv) under section one hundred five-a, two hundred forty-a or three

hundred ninety-six-a of this chapter for the use or installation of an

automated teller machine, point-of-sale terminal or similar electronic

facility or on any other application or notice to which the

superintendent of financial services shall by rule or regulation make

applicable the provisions of this section, the superintendent shall take

into account, among other factors, an assessment, in writing, of the

record of performance of the banking institution in helping to meet the

credit needs of its entire community, including low and moderate-income

neighborhoods and minority- and women-owned businesses, consistent with

safe and sound operation of the banking institution. Such assessment and

any written communications from the department of financial services to

a banking institution relating to such assessment shall be made

available to the public upon request, provided that nothing contained in

this subdivision shall be deemed to alter, amend or affect the

provisions of subdivision ten of section thirty-six of this chapter. In

making such assessment the superintendent shall review all reports and

documents filed with him or her pursuant to subdivision one of this

section and any signed, written comments received by the superintendent

which specifically relate to the banking institution's performance in

helping to meet the credit needs of its community. In addition, the

superintendent shall consider the following factors in assessing a

banking institution's record of performance, and include in its written

assessment required by this section the record of performance of such

banking institution as to each of the following factors:

(1) Activities conducted by the banking institution to ascertain

credit needs of its community, including the extent of the banking

institution's efforts to communicate with members of its community

regarding the credit services being provided by the banking institution;

(2) The extent of the banking institution's marketing and special

credit-related programs to make members of the community aware of the

credit services offered by the banking institution;

(3) The extent of participation by the banking institution's board of

directors or board of trustees in formulating the banking institution's

policies and reviewing its performance with respect to the purposes of

the Community Reinvestment Act of 1977;

(4) Any practices intended to discourage application for types of

credit set forth in the banking institution's Community Reinvestment Act

Statement(s);

(5) The geographic distribution of the banking institution's credit

extensions, credit applications and credit denials;

(6) Evidence of prohibited discriminatory or other illegal credit

practices;

(7) The banking institution's record of opening and closing offices

and providing services at offices;

(8) The banking institution's participation, including investments, in

local community development and redevelopment projects or programs and

in technical assistance programs for small businesses and minority- and

women-owned businesses;

(9) The banking institution's origination of residential mortgage

loans, housing rehabilitation loans, home improvement loans and small

business or small farm or minority- and women-owned business loans

within its community or the purchase of such loans originated in its

community;

(10) The banking institution's participation in

governmentally-insured, guaranteed or subsidized loan programs for

housing, small businesses or small farms;

(11) The banking institution's ability to meet various community

credit needs based on its financial condition, size, legal impediments,

local economic condition and other factors;

(11-a) The geographic distribution, availability and use of automated

teller machines, point-of-sale terminals, personal computer banking,

debit cards or similar electronic facilities or services; and any

training of customers thereon among every branch of the banking

institution, if the institution offers such services to any of its

customers; and

(12) Other factors that, in the judgment of the superintendent,

reasonably bear upon the extent to which a banking institution is

helping to meet the credit needs of its entire community, including,

without limitation, the banking institution's participation in credit

counseling services or participation in a banking development district

established pursuant to section ninety-six-d of this chapter by

establishing a branch in such district.

(b) In assessing the record of performance of a banking institution

pursuant to the provisions of paragraph (a) of this subdivision, the

superintendent may, where he or she deems it appropriate, provide for

public hearings when an objection to the banking institution's

application or notification has been submitted.

(c) An assessment of a banking institution's record of performance

under paragraph (a) of this subdivision may be the basis for denying an

application or notice under the provisions of this section.

(d) When taking any action pursuant to paragraph (a) of this

subdivision, the superintendent shall request from the applicant or

notificant banking institution and from the appropriate federal bank

regulatory authorities any documents, other than those required to be

filed with the superintendent by this section or by other applicable

statutes or regulations, which are (1) filed with the federal bank

regulatory authorities in connection with the application or notice or

(2) produced by the applicant or notificant banking institution or

others in connection with the application or notice.

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

corporations incorporated, chartered, organized or licensed under the

laws of this state. In the case of a foreign banking corporation

licensed pursuant to this article and maintaining a branch in this

state, the management 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.

5. The superintendent is hereby authorized and empowered to promulgate

rules and regulations effectuating the provisions of this section,

including any rules and regulations providing that the assessment of

banking institutions referred to in subdivision three of this section

shall be made on a graduated numerical basis.

6. If any clause, sentence, paragraph, subdivision or part of this

section or the application thereof to any person, firm, or corporation,

or circumstance shall be adjudged by any court of competent jurisdiction

to be invalid or unconstitutional, such judgment shall not affect,

impair or invalidate the remainder thereof, but shall be confined (i) in

its operation to the clause, sentence, paragraph, subdivision, or part

of this section or (ii) in its application to the person, firm or

corporation, or circumstance, directly involved in the controversy in

which such judgment shall have been rendered.

Credit needs of local communities; mortgage bankers. 1. When

taking any action on an application made by a mortgage banker licensed

pursuant to section five hundred ninety-one of this chapter for a change

in control under section five hundred ninety-four-b of this chapter, or

on any other application or notice to which the superintendent of

financial services shall by rule or regulation make applicable the

provisions of this section, the superintendent shall take into account,

among other factors, an assessment, in writing, of the record of

performance of the mortgage banker in helping to meet the credit needs

of its entire community, including low and moderate income

neighborhoods, and consistent with safe and sound operation of the

mortgage banker. Such assessment and any written communications from the

department of financial services to a mortgage banker relating to such

assessment shall be made available to the public upon request, provided

that nothing contained in this subdivision shall be deemed to alter,

amend or affect the provisions of subdivision ten of section thirty-six

of this article. In making such assessment of a mortgage banker, the

superintendent shall review all reports and documents filed by the

mortgage banker pursuant to section five hundred ninety-seven of this

chapter. In addition, the superintendent shall consider the following

factors in assessing a mortgage banker's record of performance, and

include in its written assessment required by this section the record of

performance of such mortgage banker as to each of the following factors:

(a) Activities conducted by the mortgage banker to ascertain credit

needs of its community, including the extent of the mortgage banker's

efforts to communicate with members of its community regarding the

services being provided by the mortgage banker;

(b) The extent of the mortgage banker's marketing and special programs

to make members of the community aware of the services offered by the

mortgage banker;

(c) The extent of the mortgage banker's participation in community

outreach, community development or redevelopment, and educational

programs;

(d) The extent of participation by the mortgage banker's board of

directors, advisory committee, managing members or executive management

or equivalent body or person, in formulating the mortgage banker's

policies and reviewing its performance with respect to the purposes of

this section;

(e) Any practices intended to discourage application for types of

credit offered by the mortgage banker;

(f) The geographic distribution of the mortgage banker's credit

extensions, credit applications, and credit denials;

(g) Evidence of prohibited discriminatory or other illegal credit

practices;

(h) The mortgage banker's record of opening and closing offices and

providing services at offices;

(i) The mortgage banker's participation in governmentally-insured,

guaranteed or subsidized loan programs for housing;

(j) The mortgage banker's ability to meet various community credit

needs based on its financial condition, size, legal impediments, local

economic condition and other factors; and

(k) Other factors that, in the judgment of the superintendent,

reasonably bear upon the extent to which a mortgage banker is helping to

meet the credit needs of its entire community.

2. In assessing the record of performance of a mortgage banker

pursuant to the provisions of subdivision one of this section, the

superintendent may, where he or she deems it appropriate, provide for

public hearings when an objection to the mortgage banker's application

or notice has been submitted.

3. An assessment of a mortgage banker's record of performance under

subdivision one of this section may be the basis for denying an

application under the provisions of this section.

4. Notwithstanding any other provision of this chapter or other law to

the contrary, the term mortgage banker when used in this section shall

mean and include mortgage bankers licensed pursuant to section five

hundred ninety-one of this chapter that originate a minimum number of

loans annually, such number to be set by regulation promulgated by the

superintendent.

5. The superintendent is hereby authorized and empowered to promulgate

rules and regulations effectuating the provisions of this section,

including any rules and regulations providing that the assessment of

mortgage bankers shall be made on a graduated numerical basis.

6. If any clause, sentence, paragraph, subdivision or part of this

section or the application thereof to any person, firm, or corporation,

or circumstance shall be adjudged by any court of competent jurisdiction

to be invalid or unconstitutional, such judgment shall not affect,

impair or invalidate the remainder thereof, but shall be confined (i) in

its operation to the clause, sentence, paragraph, subdivision, or part

of this section or (ii) in its application to the person, firm or

corporation, or circumstance, directly involved in the controversy in

which such judgment shall have been rendered.

Branch office closings; report to and action by the

superintendent. 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 banking 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;

(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 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 foregoing

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

statistical 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.

4. The superintendent shall make a finding as to whether or not the

proposed branch closing will result in a significant reduction of

financial services in the community to be affected. Such finding shall

be made public. If the superintendent finds that the availability of

financial services in a particular geographic area or community will be

significantly reduced by the closing of a particular branch office, he

or she shall conduct such meetings with banking organizations and

community leaders as are necessary, in his or her judgment, to explore

the feasibility of replacing such branch with other adequate banking

facilities.

5. In this section:

(a) "banking organization" includes each bank, trust company, savings

bank, and savings and loan association as those terms are defined in

section two of this chapter and each out-of-state state bank authorized

to operate and maintain a branch pursuant to article five-C of this

chapter;

(b) "branch office", "branch", or "office" shall not include

electronic facilities as defined by general regulation of the

superintendent of financial services, but shall include a public

accommodation office;

(c) "financial services" includes demand and time deposit accounts,

check cashing services, deposit and withdrawal transactions, sale of

bank or travellers checks and money orders, processing loan

applications, acceptance of loan repayments, and any related services;

and

(d) "facility" and "facilities" includes any building, structure,

vehicle, unit, machine, or device, permanent or temporary, mobile or

stationary, which provides or dispenses financial services of any kind

or description.

6. No provision of this section or any rule or regulation adopted

pursuant thereto shall be deemed or construed as impairing the ability

of any banking organization to close any branch office after complying

with the provisions of subdivision two of this section.

Branch offices; public accommodation offices; approval or

refusal; certificate; investigation fee. When a banking organization

seeks to open a branch office or public accommodation office, it shall

submit a written application to the superintendent. The application

shall contain such information as the superintendent deems necessary. At

the time of making such application, an investigation fee as prescribed

pursuant to section eighteen-a of this article shall be paid to the

superintendent for each branch office or public accommodation office for

which leave to open is sought. If the superintendent finds that the

opening of the branch office or public accommodation office is

consistent with the declaration of policy set forth in section ten of

this article and that the applicant is in compliance with section

twenty-eight-b of this article, he or she shall issue a certificate in

triplicate under his or her hand and the official seal of the department

authorizing the opening and occupation of such branch office or public

accommodation office and specifying the date on or after which and the

conditions under which it may be opened and the place where it shall be

located. The superintendent shall cause one of such triplicate

certificates to be transmitted to the applicant, another to be filed in

the office of the department and the third to be filed in the office of

the clerk of the county in which the principal office of the applicant

is located. If the superintendent shall not find that the opening of the

branch or public accommodation office is consistent with the declaration

of policy set forth in section ten of this article or that the applicant

is in compliance with section twenty-eight-b of this article, he or she

shall notify the applicant that the application has been denied.

No investigation fee for branch applications shall be collected from

applicants if such branch applications are filed in conjunction with

proceedings under section one hundred thirty-six, four hundred ten or

subdivision eight of section six hundred five of this chapter.

Unclaimed amounts; deposit by superintendent in trust;

preference; release of debtor. 1. After the completion of the voluntary

or involuntary liquidation of the business and property of any banking

organization or of the business and property in this state of any

foreign banking corporation, the superintendent may take and hold as

trustee for the owners thereof any amounts which remain due to and

unclaimed by any creditor, depositor, stockholder, shareholder, bailor

or depositor of property for hire or otherwise, or lessee of any safe,

vault or box. Whenever such amounts are received by the superintendent

and he is not in possession of the business and property of such banking

organization or corporation, he shall give his receipt for such amounts

and shall forthwith deposit them in one or more banks, trust companies,

or savings banks, to the credit of the superintendent of financial

services in trust for the persons entitled thereto. In a liquidation by

the superintendent he shall deposit such amounts in like manner at the

times provided in article thirteen of this chapter.

2. All such deposits by the superintendent shall be entitled to

priority of payment in case of the insolvency or voluntary or

involuntary liquidation of the depositary on an equality with any other

priority given by this chapter.

3. The superintendent shall before the close of each fiscal year pay

into the state treasury all interest received by him on such unclaimed

amounts since the last such payment.

4. Any banking organization or foreign banking corporation with

respect to which the superintendent has received unclaimed amounts as

trustee for the owners thereof pursuant to the provisions of this

section shall, from and after the date when such amounts are so

received, be relieved and held harmless from any and all liability for

any claim or claims which exist at such time with respect to such

unclaimed amounts, or which may thereafter be made or may come into

existence on account of or in respect of any such unclaimed amounts, and

no action shall be maintained against such banking organization or

corporation or any officer, partner, agent, employee, attorney,

shareholder or stockholder thereof for the recovery of any such

unclaimed amounts, or for interest thereon subsequent to the date of

receipt by the superintendent or for damages alleged to have resulted

from the payment thereof to the superintendent.

Index of persons entitled to unclaimed amounts; payment to

persons entitled; deduction of service charge. An index shall be kept in

the office of the department of the names of all persons for whom the

superintendent holds in trust any unclaimed amounts. The superintendent

may pay over any such amount which he holds in trust amounting to over

three dollars to any person who shall show by evidence satisfactory to

the superintendent that he is lawfully entitled to receive it. In cases

of doubt or conflicting claims, he may require of the claimant an order

of the supreme court authorizing and directing the payment thereof. The

superintendent shall be held harmless and shall not be liable to any

subsequent claimant for any payment made by him in good faith. The

superintendent shall deduct from the amount of any claim of fifty

dollars or more allowed by him or ordered by the court to be paid a

service charge of one percentum of the amount thereof, but in no event

less than one dollar and, in addition, any costs, disbursements and

legal fees which the court may allow. The amount so deducted shall be

paid into the state treasury in accordance with the provisions of

section seventeen of this chapter.

Insurance of deposits and share accounts.

1. Within one year from the date this section shall have become law,

every bank, trust company, savings bank, savings and loan association

and credit union shall obtain insurance of deposits and share accounts,

as the case may be:

(a) from the Federal Deposit Insurance Corporation, in the case of a

bank, trust company, savings bank or savings and loan association;

(b) from the Administrator of the National Credit Union

Administration, in the case of a credit union; or

(c) in the case of any such banking organization, from any other

insurer upon such terms and conditions as the superintendent shall

approve.

2. No banking organization whose deposit or share accounts are so

insured shall hereafter voluntarily terminate such insured status.

3. Notwithstanding the foregoing provisions of this section, the

superintendent shall have the power to promulgate such regulations as

the superintendent deems necessary and proper (a) to implement and

define the provisions of this section, (b) to exempt from the

requirements of this section any banking organization which does not

receive deposits or share accounts from the general public, and (c) for

good cause shown, to extend for up to two years the period within which

any banking organization must comply with the requirements of

subdivision one of this section.

Reserve depositaries. The superintendent shall, in his

discretion, upon the nomination of any bank, trust company, industrial

bank, foreign banking corporation authorized to maintain a branch or

branches in this state or private banker, designate as a depositary for

its reserves on deposit a bank, trust company, private banker or

national bank located in this state, or a banking corporation located

elsewhere in the United States if such banking corporation shall make

such reports as the superintendent may prescribe and shall submit to

such examinations as he may deem necessary. No such bank, trust

company, private banker, national bank or banking corporation may be a

depositary of any such reserves unless it shall have a combined capital

and surplus of at least

(1) One million dollars, if located in a borough in this state which

has a population of one million five hundred thousand or over;

(2) Seven hundred and fifty thousand dollars, if located in a borough

in this state which has a population of one million or over and less

than one million five hundred thousand or in a city in this state not

divided into boroughs which has a population of four hundred thousand or

over;

(3) Five hundred thousand dollars, if located elsewhere in this state;

(4) Two million dollars, if located outside this state.

No bank, trust company, private banker or national bank located in a

borough having a population of one million five hundred thousand or over

which does not have a combined capital and surplus of at least two

million dollars, may be a depositary for such reserves unless it shall

have a combined capital and surplus greater than the combined capital

and surplus of the bank, trust company, industrial bank, foreign banking

corporation authorized to maintain a branch or branches in this state or

private banker depositing such reserves.

Superintendent as attorney to accept service of process.

Whenever pursuant to any provision of this chapter, the superintendent

shall have been duly appointed attorney to receive service of process

for any individual, partnership, unincorporated association or

corporation, such service shall be made by personally delivering

duplicate copies of the process to and leaving them with the

superintendent or any deputy superintendent. Service of process so made

shall be deemed to have been made within the territorial jurisdiction of

any court in this state. The superintendent or deputy superintendent

shall forthwith forward by mail, postage prepaid, a copy of every

process served upon him in accordance with this section, directed to the

person last designated by such individual, partnership, unincorporated

association or corporation in accordance with the provisions of this

chapter to receive such process on his or its behalf. For each service

of process upon the superintendent or a deputy, he shall collect the sum

of two dollars, which shall be paid by the plaintiff or moving party at

the time of such service. The term process when used in this section,

includes any writ, summons, petition or order whereby any suit, action

or proceeding shall be commenced.

Information pamphlet for residential mortgage applicants. 1. The

superintendent shall develop a pamphlet known as "what mortgage

applicants need to know" and post such pamphlet on the department's web

site. Such pamphlet shall be posted and printed in the six most common

non-English languages spoken by individuals with limited-English

proficiency in New York state as based on the most recent census. The

department will notify mortgage bankers and banking organizations when

the pamphlet is posted on the department's web site and when any changes

to the pamphlet are made. A copy of such pamphlet shall be provided by

mortgage bankers and other banking organizations to each person applying

for a loan secured by a mortgage upon residential real estate in

accordance with the timing requirements under 12 CFR §

1026.19(e)(1)(iii). A mortgage banker or banking organization may

provide the applicant with the pamphlet via electronic communications,

including but not limited to, electronic mail or a hyperlink to the

pamphlet posted on the department's web site.

2. The pamphlet developed pursuant to this section shall be

substantially in the following form, along with other information added

at the discretion of the superintendent:

""WHAT MORTGAGE APPLICANTS NEED TO KNOW"

As an applicant for a residential mortgage you have the right to:

1. Compare and negotiate the charges of different mortgage brokers and

lenders to obtain the best loan possible.

2. Ask your mortgage broker to explain such person's responsibilities

within the mortgage lending process.

3. Know how much the mortgage broker is compensated by you and the

lender for your loan.

4. A clear and truthful explanation of the terms and conditions of the

loan.

5. Know if the loan being offered is a fixed or adjustable rate

mortgage loan, whether the loan can be transferred or refinanced, know

the exact amount of your monthly loan payments, including any projected

escrow payments, know the final annual percentage rate (APR) and the

amount of regular payments at the loan's closing.

6. Ask for an estimate detailing all loan and settlement charges

before you agree to the loan and pay any fees, including without

limitation loan application fees, title search and insurance fees,

lender's attorney fees, property appraisal charges, inspections,

recording fees, late payment fees, transfer taxes, point and origination

fees, escrow account balances, which services a loan applicant can shop

for and which they cannot, and you are entitled to receive such estimate

within three business days of applying for a loan.

7. Obtain credit counseling before closing a loan.

8. Decide whether or not to finance any portion of the points or fees.

9. Refuse to purchase credit insurance for any mortgage loan.

10. Have your property appraised by an independent licensed

professional and to receive a copy of the appraisal.

11. Not be subject to deceptive marketing practices.

12. Ask for the consumer financial protection bureau's booklet "Your

home loan toolkit".

13. Receive the following documents, and every document otherwise

required to be given to you at closing under federal and New York state

law:

a. Loan estimate or good faith estimate depending on the loan you are

applying for.

b. Closing disclosure.

14. Know what deposits and fees are not refundable if you decide to

cancel the loan agreement.

15. Receive in writing the reason for the denial or conditional

approval of your loan application.

16. If refinancing, you may cancel a loan within three days of the

closing by providing written notification of cancellation to the

licensed lender or banking institution.

17. Receive the closing disclosure three days before the closing takes

place.

18. Have any lending disputes resolved in a fair and equitable manner.

19. A credit decision that is not based upon your race, color,

national origin, religion, sex, family status, sexual orientation,

disability or whether any income is from public assistance.

20. File a complaint with the department or the Consumer Financial

Protection Bureau if you believe that a mortgage broker or any other

entity licensed by the department or the Consumer Financial Protection

Bureau has violated any rules, regulations or laws which govern such

person's conduct in working with you to get or process a mortgage loan.

21. File a complaint with the New York state department of state or

the Consumer Financial Protection Bureau if you believe that a real

estate broker has violated any rules, regulations or laws which govern

such person's conduct in working with you to purchase a home."

3. The superintendent may modify the language of the pamphlet to

ensure that the pamphlet is accurate and consistent with applicable law.

Examinations; right of inspection; penalties for refusing to

permit examination. * 1. The superintendent shall have the power to

examine every banking organization, every bank holding company and any

non-banking subsidiary thereof (as such terms "bank holding company" and

"non-banking subsidiary" are defined in article three-A of this chapter)

and every licensed lender at any time prior to its dissolution whenever

in his judgment such examination is necessary or advisable.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* 1. The superintendent shall have the power to examine every banking

organization, every bank holding company and any non-banking subsidiary

thereof (as such terms "bank holding company" and "non-banking

subsidiary" are defined in article three-A of this chapter) and every

licensed lender and licensed buy-now-pay-later lender at any time prior

to its dissolution whenever in the superintendent's judgment such

examination is necessary or advisable.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

2. At least once in each calendar year upon such date or dates within

each such period as in his or her discretion he or she deems proper, the

superintendent shall cause every banking organization to be examined;

provided, however, that:

(a) the provisions of this subdivision shall not be applicable to an

investment company unless (i) such investment company has been

authorized by the superintendent of financial services to receive

deposits, in accordance with the terms of subdivision three of section

five hundred eight of this chapter, (ii) a bank or trust company, or any

two or more of such organizations, shall own an aggregate of twenty-five

per centum or more of the capital stock of such investment company, or

(iii) such investment company is a corporation which, under the terms of

subdivision six of this section, is deemed for the purposes of this

section to be a corporation affiliated with a corporate banking

organization, and

(b) the superintendent may extend the examination interval from at

least once in each calendar year to at least once in each eighteen month

period if the banking organization to be examined:

(1) has total assets of less than one billion dollars;

(2) is well-capitalized, which for purposes of this paragraph is

defined as having capital which significantly exceeds the required

minimum level for each relevant capital measure or as having such

capital as the superintendent shall otherwise define by regulation;

(3) at its most recent examination, was found to be well-managed and

its composite condition was found to be outstanding or good;

(4) is not currently subject to a formal enforcement proceeding or

order by the superintendent, the federal deposit insurance corporation

or any other federal banking agency; and

(5) has not been acquired by any person during the twelve month period

in which an examination would be required but for this paragraph, and

(c) the superintendent may modify the examination intervals as

prescribed by this subdivision to the extent the superintendent deems

appropriate, in his or her sole discretion, in order to obtain the

efficient use of the personal and nonpersonal resources of the

department by maximizing coordination with identical or parallel

examinations having differing or varying intervals performed by federal

banking regulators, whether such examinations are performed in

conjunction with the department or on an alternating schedule with such

federal banking regulators; provided, that nothing in this paragraph

shall be deemed in any manner to lessen or modify the requirement

imposed pursuant to section ten of this article.

3. On every such examination of any banking organization inquiry shall

be made as to (a) its financial condition, (b) the security afforded to

those by whom its engagements are held, (c) the policies of its

management, (d) whether the requirements of law have been complied with

in the administration of its affairs, and (e) such other matters as the

superintendent may prescribe. Examination of a licensed lender shall be

made only for the purposes set forth in section three hundred

forty-eight of this chapter.

4. The superintendent shall also have power at any time to examine

every agency, branch or office located in this state of any foreign

banking corporation, including, but not limited to, all of the books,

accounts or records of every agency, branch or office located in this

state of such foreign banking corporation as well as all of the books,

accounts or records maintained in this state of any agency, branch or

office not located in this state of such foreign banking corporation for

the purpose of ascertaining whether it has violated any law and for any

other purpose.

5. The superintendent shall have the power to make such special

investigations as he shall deem necessary to determine whether any

individual, partnership, unincorporated association or corporation has

violated any of the provisions of this chapter; and to the extent

necessary for this purpose the superintendent shall have the power to

examine all relevant books, records, accounts and documents.

6. For the purpose of determining the financial condition of a banking

organization, the superintendent shall have the power, when in his or

her judgment it is necessary or advisable, to examine corporations or

any other entity affiliated with any such banking organization. The

following are deemed for the purposes of this section to be corporations

or other entities affiliated with a banking organization:

(a) (i) Any corporation or other entity, the capital stock of which

such banking organization directly or indirectly, or through a

subsidiary or subsidiaries, owns or controls ten per centum or more of

the voting shares of such corporation or other entity; or (ii) any

corporation or other entity the election of a majority of the board of

directors of which is in any manner directly or indirectly controlled by

such banking organization; or (iii) any corporation or other entity the

management or policies over which the banking organization has the

power, directly or indirectly, to exercise a controlling influence, as

determined by the superintendent; provided, however, the foregoing

definition of affiliate corporations and other entities shall not apply

to small business investment companies as defined in and operating

pursuant to the provisions of an act of congress entitled "Small

Business Investment Act of 1958," and such companies shall be deemed to

be corporations affiliated with the banking organization for the

purposes of this subdivision, if such banking organization directly or

indirectly owns or controls twenty-five per centum or more of the voting

shares or more than twenty-five per centum of the shares voted for the

election of directors at the preceding annual meeting of such small

business investment company; or any such small business investment

company the election of at least twenty-five per centum of the board of

directors of which is in any other manner directly or indirectly

controlled by such banking organization; or

(b) Any corporation or other entity which directly or indirectly, or

through a subsidiary or subsidiaries, owns or controls ten per centum or

more of the voting shares of capital stock of such banking organization;

or any corporation or other entity which in any manner directly or

indirectly controls the election of a majority of the board of directors

of such banking organization; or with respect to the management or

policies of such banking organization has the power, directly or

indirectly, to exercise a controlling influence, as determined by the

superintendent.

6-a. (a) For the purposes of determining the financial condition of a

banking organization, the superintendent shall have the power, when in

his or her judgment it is necessary or advisable, to examine a

non-banking subsidiary of a corporation or other entity which

corporation or other entity, pursuant to paragraph (b) of subdivision

six of this section, is deemed to be an affiliate of a banking

organization.

(b) For the purposes of this subdivision, a "subsidiary" of such

affiliated corporation or other entity shall mean:

(1) Any corporation or other entity ten per centum or more of whose

voting stock is directly or indirectly, or through a subsidiary or

subsidiaries, owned, controlled, or held with power to vote, by an

affiliated corporation or other entity; or (2) any corporation or other

entity, the election of a majority of whose directors is controlled in

any manner by an affiliated corporation or other entity; or (3) any

corporation or other entity, ten per centum or more of whose voting

stock is directly or indirectly owned, controlled, or held with power to

vote, by a trustee or trustees for the benefit of the stockholders or

members of an affiliated corporation or other entity; or (4) any

corporation or other entity, at least ten per centum of the voting stock

of which is directly or indirectly, or through a subsidiary or

subsidiaries, owned, controlled or held with power to vote by a

combination of an affiliated corporation or other entity and by a

trustee or trustees for the benefit of the stockholders or members of

such affiliated corporation or other entity; or (5) any entity,

corporate or unincorporated, with respect to the management or policies

of which such affiliated corporation or other entity has the power,

directly or indirectly, to exercise a controlling influence, as

determined by the superintendent, after notice and opportunity for a

hearing. For the purposes of this subdivision, voting stock shall not be

deemed to include voting stock owned by the United States or by any

corporation wholly owned by the United States.

(c) A "non-banking subsidiary" for the purposes of this subdivision

means one which is not a banking organization or which is not engaged in

the banking business as defined in subdivision one of section one

hundred thirty-one of this chapter.

(d) The superintendent may use the reports of regulatory agencies of

this state, of other states, of any foreign government, and of federal

regulatory agencies in making such examinations or in conjunction with

such examination. All regulatory agencies of this state, shall upon

request of the superintendent, furnish or make available to him or her

reports of examination made by them of any such non-banking subsidiary.

6-b. For purposes of subdivisions six and six-a of this section, any

references contained therein to "voting stock" or "voting shares" shall

be deemed to include any ownership interest with respect to any entity

other than a corporation, any references to "stockholders" or

"shareholders" shall include persons or entities who have an equity

interest in any entity other than a corporation, and any references to

"board of directors" shall be deemed to mean the governing body with

respect to any entity other than a corporation.

7. The superintendent may cause any corporation, association or

partnership having business transactions or relations with any corporate

banking organization to be examined if such examination is found by a

justice of the supreme court, on application of the superintendent and

on notice to such company, to be necessary or expedient in order to

ascertain whether the capital stock of such corporate banking

organization is impaired or whether safety of depositors with it has

been imperilled.

8. Examinations may be made and inquiries instituted or continued in

the discretion of the superintendent after he has taken possession of

the property and business of any banking organization or after it has

entered upon voluntary dissolution until it shall resume business or its

affairs shall be finally liquidated.

9. Any individual, partnership, unincorporated association or

corporation, or any other entity, which refuses to permit examination or

investigation in accordance with the terms of this section shall forfeit

to the people of the state an amount as determined pursuant to section

forty-four of this chapter for every day such refusal continues.

* 10. All reports of examinations and investigations, correspondence

and memoranda concerning or arising out of such examination and

investigations, including any duly authenticated copy or copies thereof

in the possession of any banking organization, bank holding company or

any subsidiary thereof (as such terms "bank holding company" and

"subsidiary" are defined in article three-A of this chapter), any

corporation or any other entity affiliated with a banking organization

within the meaning of subdivision six of this section and any

non-banking subsidiary of a corporation or any other entity which is an

affiliate of a banking organization within the meaning of subdivision

six-a of this section, foreign banking corporation, licensed lender,

licensed casher of checks, licensed mortgage banker, registered mortgage

broker, licensed mortgage loan originator, licensed sales finance

company, registered mortgage loan servicer, licensed student loan

servicer, licensed insurance premium finance agency, licensed

transmitter of money, licensed budget planner, any other person or

entity subject to supervision under this chapter, or the department,

shall be confidential communications, shall not be subject to subpoena

and shall not be made public unless, in the judgment of the

superintendent, the ends of justice and the public advantage will be

subserved by the publication thereof, in which event the superintendent

may publish or authorize the publication of a copy of any such report or

any part thereof in such manner as may be deemed proper or unless such

laws specifically authorize such disclosure. For the purposes of this

subdivision, "reports of examinations and investigations, and any

correspondence and memoranda concerning or arising out of such

examinations and investigations", includes any such materials of a bank,

insurance or securities regulatory agency or any unit of the federal

government or that of this state any other state or that of any foreign

government which are considered confidential by such agency or unit and

which are in the possession of the department or which are otherwise

confidential materials that have been shared by the department with any

such agency or unit and are in the possession of such agency or unit.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* 10. All reports of examinations and investigations, correspondence

and memoranda concerning or arising out of such examination and

investigations, including any duly authenticated copy or copies thereof

in the possession of any banking organization, bank holding company or

any subsidiary thereof (as such terms "bank holding company" and

"subsidiary" are defined in article three-A of this chapter), any

corporation or any other entity affiliated with a banking organization

within the meaning of subdivision six of this section and any

non-banking subsidiary of a corporation or any other entity which is an

affiliate of a banking organization within the meaning of subdivision

six-a of this section, foreign banking corporation, licensed lender,

licensed buy-now-pay-later lender, licensed casher of checks, licensed

mortgage banker, registered mortgage broker, licensed mortgage loan

originator, licensed sales finance company, registered mortgage loan

servicer, licensed student loan servicer, licensed insurance premium

finance agency, licensed transmitter of money, licensed budget planner,

any other person or entity subject to supervision under this chapter, or

the department, shall be confidential communications, shall not be

subject to subpoena and shall not be made public unless, in the judgment

of the superintendent, the ends of justice and the public advantage will

be subserved by the publication thereof, in which event the

superintendent may publish or authorize the publication of a copy of any

such report or any part thereof in such manner as may be deemed proper

or unless such laws specifically authorize such disclosure. For the

purposes of this subdivision, "reports of examinations and

investigations, and any correspondence and memoranda concerning or

arising out of such examinations and investigations", includes any such

materials of a bank, insurance or securities regulatory agency or any

unit of the federal government or that of this state any other state or

that of any foreign government which are considered confidential by such

agency or unit and which are in the possession of the department or

which are otherwise confidential materials that have been shared by the

department with any such agency or unit and are in the possession of

such agency or unit.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

Reports of lending by banking organizations. The

superintendent may require every banking organization to submit from

time to time data on its mortgage loans, home improvement loans, or

other loans and data on its deposits.

Preservation of books and records. When any provision of this

chapter or any rule or regulation adopted pursuant thereto requires that

books and records be preserved, such requirement may be satisfied by

maintenance of original papers or other records, photographic

reproductions, or records stored in electronic storage media. As used in

this chapter, "electronic storage media" means any digital storage

medium or system that meets the following conditions:

1. It must preserve the records exclusively in non-rewritable,

non-erasable format;

2. It must verify automatically the quality and accuracy of the

storage media recording process;

3. It must have the capacity to readily download indexes, metadata and

records preserved on the electronic storage media to any medium

acceptable to the superintendent; and

4. It must be immediately readable on equipment at all times available

to the superintendent for examination of such records.

Reports to superintendent. 1. The superintendent shall at least

two times in each year designate a past day as of which every bank,

trust company, private banker and, in the discretion of the

superintendent, a bank holding company and any non-banking subsidiary

thereof shall render a periodical report of condition to him. He shall

deliver or mail a notice designating such day to such bank, trust

company, private banker, bank holding company or any non-banking

subsidiary thereof at its principal office.

* 3. In addition to any reports expressly required by this chapter to

be made, the superintendent may require any banking organization,

licensed lender, licensed casher of checks, licensed mortgage banker,

foreign banking corporation licensed by the superintendent to do

business in this state, bank holding company and any non-banking

subsidiary thereof, corporate affiliate of a corporate banking

organization within the meaning of subdivision six of section thirty-six

of this article and any non-banking subsidiary of a corporation which is

an affiliate of a corporate banking organization within the meaning of

subdivision six-a of section thirty-six of this article to make special

reports to him at such times as he may prescribe.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* 3. In addition to any reports expressly required by this chapter to

be made, the superintendent may require any banking organization,

licensed lender, licensed buy-now-pay-later lender, licensed casher of

checks, licensed mortgage banker, foreign banking corporation licensed

by the superintendent to do business in this state, bank holding company

and any non-banking subsidiary thereof, corporate affiliate of a

corporate banking organization within the meaning of subdivision six of

section thirty-six of this article and any non-banking subsidiary of a

corporation which is an affiliate of a corporate banking organization

within the meaning of subdivision six-a of section thirty-six of this

article to make special reports to the superintendent at such times as

the superintendent may prescribe.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

4. The superintendent, except as otherwise expressly provided in this

chapter, may prescribe the form and contents of all periodical and all

special reports.

* 5. The superintendent may extend at his discretion the time within

which a banking organization, foreign banking corporation licensed by

the superintendent to do business in this state, bank holding company or

any non-banking subsidiary thereof, licensed casher of checks, licensed

mortgage banker, private banker or licensed lender is required to make

and file any report to the superintendent.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* 5. The superintendent may extend at the superintendent's discretion

the time within which a banking organization, foreign banking

corporation licensed by the superintendent to do business in this state,

bank holding company or any non-banking subsidiary thereof, licensed

casher of checks, licensed mortgage banker, private banker, licensed

buy-now-pay-later lender or licensed lender is required to make and file

any report to the superintendent.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

6. For purposes of this section thirty-seven the terms "bank holding

company" and "non-banking subsidiary" shall be defined as such terms are

defined in article three-A of this chapter.

Submission of annual reports by the Holocaust claims

processing office. The superintendent shall report annually to the

governor, the temporary president of the senate, the speaker of the

assembly, the chairs of the senate standing committees on finance and

banks, and the chairs of the assembly standing committees on ways and

means and banks on the fifteenth of January of each year, a statement of

condition with respect to the purpose, policies and activities of the

Holocaust claims processing office. Such report shall include the

following information:

1. such offices' operations and accomplishments; and

2. a schedule of expenses including, but not limited to personal

service costs, nonpersonal service costs and expenses related to the

recovery of properties belonging to Holocaust victim survivors.

Power of subpoena. 1. The superintendent shall have power at all

times, either personally or by his deputies, including special deputy

superintendents, or examiners, to subpoena witnesses, to compel their

attendance, to administer an oath, to examine any person under oath and

to require the production of any relevant books or papers. Such

examination may be conducted on any subject relating to the duties

imposed upon, or the powers vested in, the superintendent under the

provisions of this chapter. Any corporation, association, partnership or

individual which fails to obey the command of a subpoena without

reasonable excuse or refuses, without reasonable cause, to be sworn or

to be examined or to answer a question or to produce a book or paper

when ordered so to do by the officer duly conducting such inquiry, or

fails to perform any act required hereunder to be performed, shall be

guilty of a misdemeanor and shall also be subject to the compulsions

provided by the civil practice law and rules. Any officer participating

in such inquiry and any person examined as a witness upon such inquiry

who shall disclose to any person other than the superintendent the name

of any witness examined or any other information obtained upon such

inquiry, except as directed by the superintendent, shall be guilty of a

misdemeanor.

2. In any such investigation before the superintendent or before his

deputy or any other officer duly designated by him to conduct such

investigation, the superintendent or such deputy or officer may confer

immunity in accordance with the provisions of section 50.20 of the

criminal procedure law.

* § 39. Orders of superintendent. 1. To appear and explain an apparent

violation. Whenever it shall appear to the superintendent that any

banking organization, bank holding company, registered mortgage broker,

licensed mortgage banker, licensed student loan servicer, registered

mortgage loan servicer, licensed mortgage loan originator, licensed

lender, licensed casher of checks, licensed sales finance company,

licensed insurance premium finance agency, licensed transmitter of

money, licensed budget planner, out-of-state state bank that maintains a

branch or branches or representative or other offices in this state, or

foreign banking corporation licensed by the superintendent to do

business or maintain a representative office in this state has violated

any law or regulation, he or she may, in his or her discretion, issue an

order describing such apparent violation and requiring such banking

organization, bank holding company, registered mortgage broker, licensed

mortgage banker, licensed student loan servicer, licensed mortgage loan

originator, licensed lender, licensed casher of checks, licensed sales

finance company, licensed insurance premium finance agency, licensed

transmitter of money, licensed budget planner, out-of-state state bank

that maintains a branch or branches or representative or other offices

in this state, or foreign banking corporation to appear before him or

her, at a time and place fixed in said order, to present an explanation

of such apparent violation.

2. To discontinue unauthorized or unsafe and unsound practices.

Whenever it shall appear to the superintendent that any banking

organization, bank holding company, registered mortgage broker, licensed

mortgage banker, licensed student loan servicer, registered mortgage

loan servicer, licensed mortgage loan originator, licensed lender,

licensed casher of checks, licensed sales finance company, licensed

insurance premium finance agency, licensed transmitter of money,

licensed budget planner, out-of-state state bank that maintains a branch

or branches or representative or other offices in this state, or foreign

banking corporation licensed by the superintendent to do business in

this state is conducting business in an unauthorized or unsafe and

unsound manner, he or she may, in his or her discretion, issue an order

directing the discontinuance of such unauthorized or unsafe and unsound

practices, and fixing a time and place at which such banking

organization, bank holding company, registered mortgage broker, licensed

mortgage banker, licensed student loan servicer, registered mortgage

loan servicer, licensed mortgage loan originator, licensed lender,

licensed casher of checks, licensed sales finance company, licensed

insurance premium finance agency, licensed transmitter of money,

licensed budget planner, out-of-state state bank that maintains a branch

or branches or representative or other offices in this state, or foreign

banking corporation may voluntarily appear before him or her to present

any explanation in defense of the practices directed in said order to be

discontinued.

3. To make good impairment of capital or to ensure compliance with

financial requirements. Whenever it shall appear to the superintendent

that the capital or capital stock of any banking organization, bank

holding company or any subsidiary thereof which is organized, licensed

or registered pursuant to this chapter, is impaired, or the financial

requirements imposed by subdivision one of section two hundred two-b of

this chapter or any regulation of the superintendent on any branch or

agency of a foreign banking corporation or the financial requirements

imposed by this chapter or any regulation of the superintendent on any

licensed lender, registered mortgage broker, licensed mortgage banker,

licensed student loan servicer, licensed casher of checks, licensed

sales finance company, licensed insurance premium finance agency,

licensed transmitter of money, licensed budget planner or private banker

are not satisfied, the superintendent may, in the superintendent's

discretion, issue an order directing that such banking organization,

bank holding company, branch or agency of a foreign banking corporation,

registered mortgage broker, licensed mortgage banker, licensed student

loan servicer, licensed lender, licensed casher of checks, licensed

sales finance company, licensed insurance premium finance agency,

licensed transmitter of money, licensed budget planner, or private

banker make good such deficiency forthwith or within a time specified in

such order.

4. To make good encroachments on reserves. Whenever it shall appear to

the superintendent that either the total reserves or reserves on hand of

any banking organization, branch or agency of a foreign banking

corporation are below the amount required by or pursuant to this chapter

or any other applicable provision of law or regulation to be maintained,

or that such banking organization, branch or agency of a foreign banking

corporation is not keeping its reserves on hand as required by this

chapter or any other applicable provision of law or regulation, he or

she may, in his or her discretion, issue an order directing that such

banking organization, branch or agency of a foreign banking corporation

make good such reserves forthwith or within a time specified in such

order, or that it keep its reserves on hand as required by this chapter.

5. To keep books and accounts as prescribed. Whenever it shall appear

to the superintendent that any banking organization, bank holding

company, registered mortgage broker, licensed mortgage banker, licensed

student loan servicer, registered mortgage loan servicer, licensed

mortgage loan originator, licensed lender, licensed casher of checks,

licensed sales finance company, licensed insurance premium finance

agency, licensed transmitter of money, licensed budget planner, agency

or branch of a foreign banking corporation licensed by the

superintendent to do business in this state, does not keep its books and

accounts in such manner as to enable him or her to readily ascertain its

true condition, he or she may, in his or her discretion, issue an order

requiring such banking organization, bank holding company, registered

mortgage broker, licensed mortgage banker, licensed student loan

servicer, registered mortgage loan servicer, licensed mortgage loan

originator, licensed lender, licensed casher of checks, licensed sales

finance company, licensed insurance premium finance agency, licensed

transmitter of money, licensed budget planner, or foreign banking

corporation, or the officers or agents thereof, or any of them, to open

and keep such books or accounts as he or she may, in his or her

discretion, determine and prescribe for the purpose of keeping accurate

and convenient records of its transactions and accounts.

6. As used in this section, "bank holding company" shall have the same

meaning as that term is defined in section one hundred forty-one of this

chapter.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* § 39. Orders of superintendent. 1. To appear and explain an apparent

violation. Whenever it shall appear to the superintendent that any

banking organization, bank holding company, registered mortgage broker,

licensed mortgage banker, licensed student loan servicer, registered

mortgage loan servicer, licensed mortgage loan originator, licensed

lender, licensed buy-now-pay-later lender, licensed casher of checks,

licensed sales finance company, licensed insurance premium finance

agency, licensed transmitter of money, licensed budget planner,

out-of-state state bank that maintains a branch or branches or

representative or other offices in this state, or foreign banking

corporation licensed by the superintendent to do business or maintain a

representative office in this state has violated any law or regulation,

the superintendent may, in the superintendent's discretion, issue an

order describing such apparent violation and requiring such banking

organization, bank holding company, registered mortgage broker, licensed

mortgage banker, licensed student loan servicer, licensed mortgage loan

originator, licensed lender, licensed buy-now-pay-later lender, licensed

casher of checks, licensed sales finance company, licensed insurance

premium finance agency, licensed transmitter of money, licensed budget

planner, out-of-state state bank that maintains a branch or branches or

representative or other offices in this state, or foreign banking

corporation to appear before the superintendent, at a time and place

fixed in said order, to present an explanation of such apparent

violation.

2. To discontinue unauthorized or unsafe and unsound practices.

Whenever it shall appear to the superintendent that any banking

organization, bank holding company, registered mortgage broker, licensed

mortgage banker, licensed student loan servicer, registered mortgage

loan servicer, licensed mortgage loan originator, licensed lender,

licensed buy-now-pay-later lender, licensed casher of checks, licensed

sales finance company, licensed insurance premium finance agency,

licensed transmitter of money, licensed budget planner, out-of-state

state bank that maintains a branch or branches or representative or

other offices in this state, or foreign banking corporation licensed by

the superintendent to do business in this state is conducting business

in an unauthorized or unsafe and unsound manner, the superintendent may,

in the superintendent's discretion, issue an order directing the

discontinuance of such unauthorized or unsafe and unsound practices, and

fixing a time and place at which such banking organization, bank holding

company, registered mortgage broker, licensed mortgage banker, licensed

student loan servicer, registered mortgage loan servicer, licensed

mortgage loan originator, licensed lender, licensed buy-now-pay-later

lender, licensed casher of checks, licensed sales finance company,

licensed insurance premium finance agency, licensed transmitter of

money, licensed budget planner, out-of-state state bank that maintains a

branch or branches or representative or other offices in this state, or

foreign banking corporation may voluntarily appear before the

superintendent to present any explanation in defense of the practices

directed in said order to be discontinued.

3. To make good impairment of capital or to ensure compliance with

financial requirements. Whenever it shall appear to the superintendent

that the capital or capital stock of any banking organization, bank

holding company or any subsidiary thereof which is organized, licensed

or registered pursuant to this chapter, is impaired, or the financial

requirements imposed by subdivision one of section two hundred two-b of

this chapter or any regulation of the superintendent on any branch or

agency of a foreign banking corporation or the financial requirements

imposed by this chapter or any regulation of the superintendent on any

licensed lender, licensed buy-now-pay-later lender, registered mortgage

broker, licensed mortgage banker, licensed student loan servicer,

licensed casher of checks, licensed sales finance company, licensed

insurance premium finance agency, licensed transmitter of money,

licensed budget planner or private banker are not satisfied, the

superintendent may, in the superintendent's discretion, issue an order

directing that such banking organization, bank holding company, branch

or agency of a foreign banking corporation, registered mortgage broker,

licensed mortgage banker, licensed student loan servicer, licensed

lender, licensed buy-now-pay-later lender, licensed casher of checks,

licensed sales finance company, licensed insurance premium finance

agency, licensed transmitter of money, licensed budget planner, or

private banker make good such deficiency forthwith or within a time

specified in such order.

4. To make good encroachments on reserves. Whenever it shall appear to

the superintendent that either the total reserves or reserves on hand of

any banking organization, branch or agency of a foreign banking

corporation are below the amount required by or pursuant to this chapter

or any other applicable provision of law or regulation to be maintained,

or that such banking organization, branch or agency of a foreign banking

corporation is not keeping its reserves on hand as required by this

chapter or any other applicable provision of law or regulation, the

superintendent may, in the superintendent's discretion, issue an order

directing that such banking organization, branch or agency of a foreign

banking corporation make good such reserves forthwith or within a time

specified in such order, or that it keep its reserves on hand as

required by this chapter.

5. To keep books and accounts as prescribed. Whenever it shall appear

to the superintendent that any banking organization, bank holding

company, registered mortgage broker, licensed mortgage banker, licensed

student loan servicer, registered mortgage loan servicer, licensed

mortgage loan originator, licensed lender, licensed buy-now-pay-later

lender, licensed casher of checks, licensed sales finance company,

licensed insurance premium finance agency, licensed transmitter of

money, licensed budget planner, agency or branch of a foreign banking

corporation licensed by the superintendent to do business in this state,

does not keep its books and accounts in such manner as to enable the

superintendent to readily ascertain its true condition, the

superintendent may, in the superintendent's discretion, issue an order

requiring such banking organization, bank holding company, registered

mortgage broker, licensed mortgage banker, licensed student loan

servicer, registered mortgage loan servicer, licensed mortgage loan

originator, licensed lender, licensed buy-now-pay-later lender, licensed

casher of checks, licensed sales finance company, licensed insurance

premium finance agency, licensed transmitter of money, licensed budget

planner, or foreign banking corporation, or the officers or agents

thereof, or any of them, to open and keep such books or accounts as the

superintendent may, in the superintendent's discretion, determine and

prescribe for the purpose of keeping accurate and convenient records of

its transactions and accounts.

6. As used in this section, "bank holding company" shall have the same

meaning as that term is defined in section one hundred forty-one of this

chapter.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

Revocation of authorization certificate or license or suspension

of activities in certain cases. 1. If the superintendent shall find that

(i) any of the reasons for taking possession of the business and

property of a banking organization or of the business and property in

this state of a foreign banking corporation enumerated in section six

hundred six of this chapter, shall exist with respect to a private

banker to which the superintendent has issued an authorization

certificate or a foreign banking corporation to which the superintendent

has issued a license or (ii) any fact or condition exists which would be

grounds for denial of an application for such a license issued to a

foreign banking corporation, as defined by the superintendent of

financial services by regulation, he may, after notice and hearing

thereon, revoke such license or authorization certificate. Notice of

such revocation, under the superintendent's hand and the official seal

of the department, shall be executed in triplicate and one copy shall be

transmitted to such private banker or foreign corporation, another shall

be filed in the office of the department and the third shall be filed in

the office of the clerk of the county in which the authorization

certificate or license of such private banker or foreign corporation has

been filed. The superintendent may, in his discretion, publish a copy of

such notice, with such other facts as he may deem proper, in the state

register.

2. If the superintendent finds that any of the grounds for revocation

described in subdivision one of this section are present with respect to

a foreign banking corporation licensed pursuant to this chapter and in

addition the superintendent finds it necessary to protect the interest

of depositors or the public, the superintendent may issue, without

notice and hearing, an order suspending or otherwise limiting the

activities of the foreign banking corporation, for a period not to

exceed ninety days, pending investigation or hearing.

Removal and prohibition. 1. Grounds for enforcement action.

Whenever the superintendent has reason to believe that any director,

trustee, officer, member or partner, or, in the case of a foreign

banking corporation, the person in charge, or an officer, of a branch or

agency (for purposes of this section, each a "covered individual"), of

any bank, trust company, limited purpose trust company, private bank,

savings bank, safe deposit company, savings and loan association, credit

union, investment company, bank holding company (as such term is defined

in article three-A of this chapter), foreign banking corporation,

licensed lender, licensed casher of checks, budget planner, mortgage

banker, mortgage loan servicer, mortgage broker, licensed transmitter of

money or student loan servicer (for purposes of this section, each a

"covered entity") has, directly or indirectly: (a) caused, facilitated,

permitted or participated in any violation by a covered entity of a law

or regulation, order issued by the superintendent or any written

agreement between such covered entity or covered individual and the

superintendent; (b) engaged or participated in any unsafe or unsound

practice in connection with any covered entity; or (c) engaged or

participated in any willful material act or omitted to take any material

act that directly contributed to the failure of a covered entity; the

superintendent may bring an action to remove such covered individual

from office.

2. Notice and hearing. (a) Whenever the superintendent has reason to

believe that any grounds exist to remove a covered individual, the

superintendent may serve a statement of the charges against such covered

individual, either personally or, upon a finding that such individual

cannot be served personally within this state, by registered mail at the

last address of such individual shown on the department's records, and a

notice of an opportunity to appear before the superintendent to show

cause why such covered individual should not be removed from office. A

copy of such notice shall also be sent to any affected covered entity.

(b) If after notice and a hearing, the superintendent finds that the

covered individual has engaged in conduct described in subdivision one

of this section, or if such covered individual waives a hearing, or

fails to appear in person or by a duly authorized representative without

good cause shown at the time and place set for the hearing, the

superintendent may issue an order removing the covered individual from

office and prohibiting the covered individual's employment or the

performance of any contractual agreements with any covered entity.

(c) Such order and the findings of fact upon which it is based shall

be effective upon service on such covered individual personally or, upon

a finding that such individual cannot be served personally within this

state, by registered mail, and may not be made public or disclosed to

anyone, except as provided in subdivision ten of section thirty-six of

this article or in connection with proceedings relating to a violation

of this section. Such order shall also be served upon any affected

covered entity served with the statement of charges in the proceeding

resulting in the order. Any such order shall remain in effect, unless it

is amended or rescinded by the superintendent or a court of competent

jurisdiction, or replaced by an order issued pursuant to subdivision

three of this section.

(d) To the extent consistent with the requirements in this section, a

proceeding to remove a covered individual pursuant to this section shall

be conducted in accordance with the requirements of article three of the

financial services law and regulations promulgated pursuant thereto.

3. Suspension pending determination of charges. Upon, or at any time

after service of written notice pursuant to subdivision two of this

section, the superintendent may suspend, pending the determination of

the charges, a covered individual from office or prohibit such

individual from participating in any manner in the conduct of the

affairs of any covered entity for a period of up to one hundred eighty

days if the superintendent has reason to believe that by reason of the

conduct described in subdivision one of this section: (a) a covered

entity has suffered or will probably suffer financial loss that impacts

its ability to operate in a safe and sound manner; (b) the interests of

the depositors at a covered entity have been or could be prejudiced; or

(c) the covered individual demonstrates willful disregard for the safety

and soundness of a covered entity. The superintendent may extend the

suspension for additional periods of up to one hundred eighty days if

the hearing is not completed within the prior suspension period due to

the request of the covered individual.

4. Effect of order for removal or suspension. Any covered individual

subject to an order issued pursuant to this section shall be prohibited

from participating, in any manner, in the conduct of the affairs of any

covered entity unless permitted to, in writing, by the superintendent.

Any covered individual who thereafter, without permission of the

superintendent, participates in any manner in the management of a

covered entity shall be guilty of a misdemeanor.

5. Manner of review. Any order issued pursuant to this section may be

reviewed in the manner provided by article seventy-eight of the civil

practice law and rules.

Official acts of superintendent and details of department

business to be made public. The superintendent shall publish and make

available to the general public at the offices of the department and

also post on the department's internet website a bulletin at noon on

Friday of each week stating the following items of general information

with regard to the work of the department since the preceding statement:

* 1. The name and the location of the principal office of every

proposed corporation, private banker, licensed lender and licensed

casher of checks, the organization certificate, private banker's

certificate or application for license of which has been filed for

examination, and the date of such filing.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* 1. The name and the location of the principal office of every

proposed corporation, private banker, licensed lender, licensed

buy-now-pay-later lender and licensed casher of checks, the organization

certificate, private banker's certificate or application for license of

which has been filed for examination, and the date of such filing.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

* 2. The name and location of every licensed lender and licensed

casher of checks, and the name, location, amount of capital stock or

permanent capital and amount of surplus of every corporation and private

banker and the minimum assets required of every branch of a foreign

banking corporation authorized to commence business, and the date of

authorization or licensing.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* 2. The name and location of every licensed lender, licensed

buy-now-pay-later lender and licensed casher of checks, and the name,

location, amount of capital stock or permanent capital and amount of

surplus of every corporation and private banker and the minimum assets

required of every branch of a foreign banking corporation authorized to

commence business, and the date of authorization or licensing.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

* 3. The name of every proposed corporation, private banker, branch of

a foreign banking corporation, licensed lender and licensed casher of

checks to which a certificate of authorization or a license has been

refused and the date of notice of refusal.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* 3. The name of every proposed corporation, private banker, branch of

a foreign banking corporation, licensed lender, licensed

buy-now-pay-later lender and licensed casher of checks to which a

certificate of authorization or a license has been refused and the date

of notice of refusal.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

* 4. The name and location of every private banker, licensed lender,

licensed casher of checks, sales finance company and foreign corporation

the authorization certificate or license of which has been revoked, and

the date of such revocation.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* 4. The name and location of every private banker, licensed lender,

licensed casher of checks, sales finance company, licensed

buy-now-pay-later lender and foreign corporation the authorization

certificate or license of which has been revoked, and the date of such

revocation.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

* 5. The name of every banking organization, licensed lender, licensed

casher of checks and foreign corporation which has applied for leave to

change its place or one of its places of business and the places from

and to which the change is proposed to be made; the name of every

banking organization which has applied to change the designation of its

principal office to a branch office and to change the designation of one

of its branch offices to its principal office, and the location of the

principal office which is proposed to be redesignated as a branch office

and of the branch office which is proposed to be redesignated as the

principal office.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* 5. The name of every banking organization, licensed lender, licensed

casher of checks, licensed buy-now-pay-later lender and foreign

corporation which has applied for leave to change its place or one of

its places of business and the places from and to which the change is

proposed to be made; the name of every banking organization which has

applied to change the designation of its principal office to a branch

office and to change the designation of one of its branch offices to its

principal office, and the location of the principal office which is

proposed to be redesignated as a branch office and of the branch office

which is proposed to be redesignated as the principal office.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

* 6. The name of every banking organization, licensed lender, licensed

casher of checks and foreign corporation authorized to change its place

or one of its places of business and the date when and the places from

and to which the change is authorized to be made; the name of every

banking organization authorized to change the designation of its

principal office to a branch office and to change the designation of a

branch office to its principal office, the location of the redesignated

principal office and of the redesignated branch office, and the date of

such change.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* 6. The name of every banking organization, licensed lender, licensed

casher of checks, licensed buy-now-pay-later lender and foreign

corporation authorized to change its place or one of its places of

business and the date when and the places from and to which the change

is authorized to be made; the name of every banking organization

authorized to change the designation of its principal office to a branch

office and to change the designation of a branch office to its principal

office, the location of the redesignated principal office and of the

redesignated branch office, and the date of such change.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

7. The name of every banking organization and of every foreign banking

corporation which has applied for permission to open a branch office or

a public accommodation office, the date of such application and the

location of the proposed branch or public accommodation office.

8. The name of every banking organization and of every foreign banking

corporation authorized to open a branch office or a public accommodation

office, the date of approval and the location of such office.

9. The name and location of every banking organization authorized to

increase or reduce its capital stock or permanent capital, the date of

such authorization and the amount of the increase or reduction.

10. The names and locations of all banking organizations which have

merged pursuant to the provisions of this chapter and the dates upon

which such mergers became effective.

11. The name and city or town of residence of every person, whose

compensation is to be paid upon the audit and warrant of the

comptroller, who has been appointed deputy and of every person who has

been appointed to a position in the exempt class of the classified

service as such terms are defined in the civil service law, in the

department, and the title of the position to which he or she has been

appointed and the date of appointment. Such other information as the

superintendent deems appropriate.

12. The date on which a call pursuant to section thirty-seven of this

chapter for a periodical report of condition by banks, trust companies

and private bankers was issued and the day designated as the day as of

which such reports should be made.

13. The name and location of every banking organization and branch of

a foreign banking corporation of which the superintendent has taken

possession for the purpose of liquidation, the date of taking

possession, and the name and residence of any special deputy

superintendent appointed to assist in the liquidation thereof.

14. The name and location of every banking organization of which the

superintendent has surrendered possession pursuant to the provisions of

section six hundred seven of this chapter.

15. The name and location of every corporate banking organization the

creditors and depositors of which have been paid in full by the

superintendent and a meeting of stockholders of which has been called,

and the date of notice of meeting and date of meeting.

16. The name and location of every corporate banking organization the

affairs and business of which have been finally liquidated and which has

been dissolved.

17. The name and location of every private banker the liquidation of

the affairs of which has been completed by the superintendent.

18. The name and location of every corporate banking organization

which has applied for approval of a change of name, and the name

proposed.

* 19. a. The name of every state chartered banking institution, as

defined pursuant to section twelve-a of this article, which has applied

to exercise a federally permitted power pursuant to subdivision three of

section twelve-a of this article, a description of such power and the

date of such filing.

b. The intention of the superintendent to issue an order pursuant to

subdivision four of section twelve-a of this article, which shall

include a description of the proposed federally permitted power and a

reference to the state-chartered banking institutions which shall be

permitted to exercise such power.

* NB Repealed September 10, 2029

Every such statement after having been so posted for one week shall be

placed on file and kept in the office of the department. All such

statements shall be public documents and at all reasonable times shall

be open to public inspection.

Violations; penalties. 1. * (a) Without limiting any power

granted to the superintendent under any other provision of this chapter,

the superintendent may, in a proceeding after notice and a hearing,

require any safe deposit company, licensed lender, licensed casher of

checks, licensed sales finance company, licensed insurance premium

finance agency, licensed transmitter of money, licensed mortgage banker,

licensed student loan servicer, registered mortgage broker, licensed

mortgage loan originator, registered mortgage loan servicer or licensed

budget planner to pay to the people of this state a penalty for any

violation of this chapter, any regulation promulgated thereunder, any

final or temporary order issued pursuant to section thirty-nine of this

article, any condition imposed in writing by the superintendent in

connection with the grant of any application or request, or any written

agreement entered into with the superintendent.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* (a) Without limiting any power granted to the superintendent under

any other provision of this chapter, the superintendent may, in a

proceeding after notice and a hearing, require any safe deposit company,

licensed lender, licensed buy-now-pay-later lender, licensed casher of

checks, licensed sales finance company, licensed insurance premium

finance agency, licensed transmitter of money, licensed mortgage banker,

licensed student loan servicer, registered mortgage broker, licensed

mortgage loan originator, registered mortgage loan servicer or licensed

budget planner to pay to the people of this state a penalty for any

violation of this chapter, any regulation promulgated thereunder, any

final or temporary order issued pursuant to section thirty-nine of this

article, any condition imposed in writing by the superintendent in

connection with the grant of any application or request, or any written

agreement entered into with the superintendent.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

(b) The penalty for each violation prescribed in paragraph (a) of this

subdivision shall not exceed two thousand five hundred dollars for each

day during which such violation continues.

(c) Notwithstanding paragraph (b) of this subdivision, if the

superintendent determines (i) that any such licensee, registrant or safe

deposit company has committed a violation as described in paragraph (a)

of this subdivision, or has recklessly engaged in any unsafe and unsound

practice and (ii) that such violation or practice is part of a pattern

of misconduct, results or is likely to result in more than minimal loss

to such licensee, registrant or safe deposit company, or results in

pecuniary gain or other benefit to such licensee, registrant or safe

deposit company, then the penalty shall not exceed fifteen thousand

dollars for each day during which such violation or practice continues.

(d) Notwithstanding paragraphs (b) or (c) of this subdivision, if the

superintendent determines (i) that any such licensee, registrant or safe

deposit company has knowingly and willfully committed any violation as

described in paragraph (a) of this subdivision, or has knowingly and

willfully engaged in any unsafe and unsound practice, or (ii) that any

licensee, registrant or safe deposit company has knowingly committed any

violation described in paragraph (a) of this subdivision which

substantially undermines public confidence in any such licensee,

registrant or safe deposit company or in such licensees, registrants or

safe deposit companies generally, and, in either case, (iii) that such

licensee, registrant or safe deposit company has knowingly or recklessly

incurred so substantial a loss as a result of such violation or practice

as to threaten the safety and soundness of such licensee, registrant or

safe deposit company, then the penalty shall not exceed seventy-five

thousand dollars for each day during which such violation continues.

(e) The superintendent, in determining the amount of any penalty

assessed pursuant to this subdivision, shall take into consideration the

net worth and annual business volume of such licensees, registrants or

safe deposit companies.

2. (a) Without limiting any power granted to the superintendent under

any other provision of this chapter, the superintendent may, in a

proceeding after notice and hearing, require any banking organization,

bank holding company out-of-state state bank that maintains a branch or

branches or representative or other offices in this state, or foreign

banking corporation licensed by the superintendent to maintain a branch,

agency or representative office in this state to pay to the people of

this state a penalty for any violation of this chapter, any regulation

promulgated thereunder, any final or temporary order issued pursuant to

section thirty-nine of this article, any condition imposed in writing by

the superintendent in connection with the grant of any application or

request, or any written agreement entered into with the superintendent.

For purposes of this section, any reference to a "banking organization"

shall be deemed to exclude a safe deposit company and any reference to a

"foreign bank licensee" shall be deemed to include an out-of-state state

bank that maintains a branch or branches or representative or other

offices in this state and a foreign banking corporation licensed to

maintain a branch, agency or representative office in this state.

(b) The penalty for each violation prescribed in paragraph (a) of this

subdivision shall not exceed five thousand dollars for each day during

which such violation continues.

3. Notwithstanding paragraph (b) of subdivision two of this section,

if the superintendent determines: (a) that any banking organization,

bank holding company, or foreign bank licensee has committed any

violation described in subdivision two of this section or has recklessly

engaged in any unsafe and unsound practice, and

(b) that such violation or practice is part of a pattern of

misconduct, results or is likely to result in more than minimal loss to

the banking organization, bank holding company, or foreign bank

licensee, or results in pecuniary gain or other benefit to the banking

organization, bank holding company, or foreign bank licensee, then the

penalty shall not exceed twenty-five thousand dollars for each day

during which such violation or practice continues.

4. Notwithstanding paragraph (b) of subdivision two and subdivision

three of this section, if the superintendent determines: (a) (i) that

any banking organization, bank holding company, or foreign bank licensee

has knowingly and willfully committed any violation described in

subdivision two of this section or has knowingly and willfully engaged

in any unsafe and unsound practice, or (ii) that any banking

organization, bank holding company, or foreign bank licensee has

knowingly committed any violation described in subdivision two of this

section which substantially undermines public confidence in any such

banking organization, bank holding company, or foreign bank licensee or

in banking organizations, bank holding companies, or foreign bank

licensees generally, and, in either case, (b) that the banking

organization, bank holding company, or foreign bank licensee has

knowingly or recklessly incurred so substantial a loss as a result of

such violation or practice as to threaten the safety and soundness of

such banking organization, bank holding company, or foreign bank

licensee, then the penalty shall not exceed the lesser of (i) two

hundred fifty thousand dollars or (ii) one percent of the total assets

of such banking organization, or one percent of the total assets of the

banking subsidiaries, as such term is defined pursuant to section one

hundred forty-one of this chapter, of such bank holding company, or one

percent of the total assets in this state of such foreign bank licensee,

as applicable, for each day during which such violation or practice

continues.

5. In assessing any penalty against any entity listed in paragraph (a)

of subdivision one or paragraph (a) of subdivision two of this section,

the superintendent shall take into account, without limitation, factors

including: (a) the extent, if any, to which senior management or board

directors or trustees participated therein, (b) the extent to which the

entity has cooperated with the superintendent in the investigation of

such conduct, (c) any sanction imposed by any other regulatory agency,

(d) the financial resources and good faith of the entity, (e) the

gravity of the violation, (f) any history of prior violations, and (g)

such other matters as justice and the public interest may require.

6. Whenever the superintendent shall require the payment of such

penalty by any such entity, he shall forthwith execute in duplicate a

written order to that effect. On the date such order is executed, the

superintendent shall file one copy of such order in the office of the

department and serve the second copy upon such entity either personally

or by registered or certified mail, return receipt requested, directed

to the entity's principal place of business or, in the case of a

licensee or registrant, its last known address of record. Such order may

be reviewed in the manner provided by article seventy-eight of the civil

practice law and rules. Such special proceeding for review as authorized

by this section must be commenced within thirty days from the service of

such order.

7. The superintendent may compromise, modify, or remit any penalty

which he or she may assess or had already assessed under this section.

8. The superintendent may prescribe regulations to carry out the

provisions and purposes of this section.

9. As used in this section, "bank holding company" shall have the same

meaning as that term is defined in subdivision six of section

thirty-nine of this article.

Violations and penalties; failure to make reports. 1.

Notwithstanding any other provision of this chapter to the contrary:

a. any person or entity licensed, registered, or incorporated or

otherwise formed pursuant to this chapter, or an out-of-state state

bank, that inadvertently or unintentionally: (i) fails to make any

report required by the superintendent pursuant to this chapter, on or

before the day designated for the making thereof; (ii) fails to include

within such report any prescribed matter; or (iii) submits false or

misleading information therein, shall, after notice and hearing, forfeit

to the people of the state not more than two thousand dollars for each

day during which such report or omitted matter is delayed or withheld or

such false or misleading information is not corrected, unless the time

therefor shall have been extended by the superintendent, for good cause

shown, in his or her sole discretion;

b. notwithstanding the provisions of paragraph a of this subdivision

any person or entity licensed, registered, or incorporated or otherwise

formed pursuant to this chapter, or an out-of-state state bank, that

demonstrates by any pattern of behavior or other action that any of its

failures as described in paragraph a of this subdivision were not

inadvertent or unintentional shall, after notice and hearing, forfeit to

the people of the state not more than twenty thousand dollars for each

day during which such failures continue;

c. notwithstanding the provisions of paragraph a or b of this

subdivision, any person or entity licensed, registered, or incorporated

or otherwise formed pursuant to this chapter that demonstrates that any

of its failures as described in paragraph a of this subdivision

constitutes a pattern of behavior or other action performed knowingly

and with reckless disregard shall, after notice and hearing, forfeit to

the people of the state not more than two hundred fifty thousand dollars

or in the case of a banking organization, foreign bank licensee or an

out-of-state state bank, the lesser of two hundred fifty thousand

dollars or one percent of the total assets of such banking organization

or one percent of the total assets in this state of such foreign bank

licensee, as applicable for each day that its failures continue.

With respect to any amount assessed pursuant to this section against

any person or entity licensed or registered pursuant to this chapter,

but not with respect to a banking organization, foreign bank licensee or

out-of-state state bank, the superintendent in determining such amount,

shall take into consideration the net worth and annual business volume

of such licensed or registered person or entity.

2. In assessing any penalty pursuant to this section, the

superintendent shall take into account, without limitation, factors

including:

a. the extent, if any, to which senior management or board directors

or trustees participated therein,

b. the extent to which the entity has cooperated with the

superintendent in the investigation of such conduct,

c. any sanction imposed by any other regulatory agency,

d. the financial resources and good faith of the entity,

e. the gravity of the violation,

f. any history of prior violations, and

g. such other matters as justice and the public interest may require.

3. Whenever the superintendent shall require the payment of such

penalty by any such entity, he or she shall forthwith execute in

duplicate a written order to that effect. On the date such order is

executed, the superintendent shall file one copy of such order in the

office of the department and serve the second copy upon such entity

either personally or by registered or certified mail, return receipt

requested, directed to the entity's principal place of business or, in

the case of a licensee or registrant, its last known address of record.

Such order may be reviewed in the manner provided by article

seventy-eight of the civil practice law and rules. Such special

proceeding for review as authorized by this section must be commenced

within thirty days from the service of such order.

4. The superintendent may compromise, modify, or remit any penalty

which he or she may assess or had already assessed under this section.

5. The superintendent may prescribe regulations to carry out the

provisions and purposes of this section.

Export finance awareness program. There shall be created within

the department an export finance awareness program. Such program shall

provide in a manner prescribed by the superintendent, but not be limited

to, the following:

1. information to all the various banking corporations principally

engaged in doing business within the state, about the various methods

used by particular corporations which provide financing for businesses

engaged in the export of products or services to foreign countries;

2. information to such banking corporations about other state or

federal programs designed to promote or expedite financing of exports

that may be of value to them, specifically such programs that may be

targeted to the small and medium-size transactions; and

3. the use of seminars, workshops, written materials disseminated by

the department or any other methods the superintendent may deem

necessary or proper for the provision of such information.

Legislative intent. The legislature hereby finds that

automated teller machines are an integral part of consumers' lives and

that automated teller machines are used by millions of New Yorkers,

statewide, on a daily basis. It is the legislature's intent to ensure

the convenience and safety of automated teller machine use by

establishing security measures for automated teller machine facilities.

Definitions. For purposes of this article, the following terms

shall have the following meanings:

1. "Access device" means a card, code, or other means of access to a

consumer's account, or any combination thereof, that may be used by the

consumer for the purpose of initiating electronic fund transfers.

2. "Automated teller machine" means a device which is linked to the

accounts and records of a banking institution and which enables

consumers to carry out banking transactions, including, but not limited

to, account transfers, deposits, cash withdrawals, balance inquiries,

and loan payments.

3. "Automated teller machine facility" means an area within the

dominion and control of a banking institution comprised of one or more

automated teller machines and any adjacent space which is made available

to banking customers after regular banking hours.

4. "Adequate lighting" means (a) with respect to an automated teller

machine facility located within the interior of a building, lighting, on

a twenty-four hour basis, which permits a person entering such facility

to readily and easily see all persons occupying such facility, and which

permits a person inside such facility to readily and easily see all

persons at the entry door of such facility.

(b) with respect to an open and operating automated teller machine

facility open to the outdoor air, and any defined parking area, lighting

during nighttime hours according to the following standards:

(i) a minimum illuminance of five footcandles is maintained on a

horizontal plane at a point five feet outward from and five feet above

the ground surface from the automated teller machine;

(ii) a minimum illuminance of two footcandles is maintained on a

horizontal plane at a point thirty feet in all unobstructed directions

from the automated teller machine, measured at ground level; and

(iii) at sixty feet in all unobstructed directions from the automated

teller machine, a minimum illuminance of one footcandle is maintained,

measured on a vertical plane at five feet above ground level, with the

normal to the plane of measurement aimed at a light source; or

(iv) with respect to an automated teller machine facility that is not

in accordance with the standards set forth in either subparagraph (ii)

or (iii) of this paragraph, or both such subparagraphs, a minimum

illuminance of two footcandles is maintained, measured on a horizontal

plane at five feet above ground level, at fifty feet in all unobstructed

directions from the automated teller machine.

(c) with respect to an open and operating automated teller machine

facility located within the interior of a building, which facility

includes a defined parking area: (i) a minimum illuminance of two

footcandles is maintained on a horizontal plane at a point thirty feet

in all unobstructed directions from the entrance to the automated teller

machine facility, measured at ground level; and (ii) at sixty feet in

all unobstructed directions from the entrance to the automated teller

machine facility, a minimum illuminance of one footcandle is maintained,

measured on a vertical plane at five feet above ground level, with the

normal to the plane of measurement aimed at a light source; or (iii)

with respect to an automated teller machine facility that is not in

accordance with the standards set forth in either subparagraph (i) or

(ii) of this paragraph, or both such subparagraphs, a minimum

illuminance of two footcandles is maintained, measured on a horizontal

plane at five feet above ground level, at a point sixty feet in all

unobstructed directions from the entrance to the automated teller

machine facility.

5. "Banking institution" means any state or federally chartered bank,

trust company, savings bank, savings and loan association, or credit

union, whether headquartered within or outside of the state, that

operates one or more automated teller machine facilities within the

state.

6. "Footcandles" means the unit of illuminance equal to one lumen per

square foot.

7. "Regular banking hours" means the time at which an office of a

banking institution is open to the banking public for normal transaction

of business.

8. "Nighttime hours" means the period of time beginning thirty minutes

after sunset and ending thirty minutes before sunrise.

9. (a) "Defined parking area" means that portion of any parking area

open for and accessible to customers of a banking institution which is:

(1) contiguous to any paved walkway or sidewalk within fifty feet of

an automated teller machine facility;

(2) regularly, principally and lawfully used for parking by users of

the automated teller machine facility while conducting transactions at

such automated teller machine facility; and

(3) owned or leased by the operator of the automated teller machine

facility, or owned or otherwise controlled by the party leasing the

automated teller machine facility site to the banking institution.

(b) The term "defined parking area" does not include any parking area

which is not open or regularly used for parking by the users of the

automated teller machine facility or the conduct of transactions during

nighttime hours. For this purpose, the parking area is not open if it is

physically closed to access or if conspicuous signs indicate that it is

closed.

Security measures. Every banking institution shall maintain

the following security measures with respect to each of the automated

teller machine facilities within its dominion and control:

1. A surveillance camera or cameras, which shall view and record all

persons entering an automated teller machine facility located within the

interior of a building, or which shall view and record all activity

occurring within a minimum of three feet in front of an automated teller

machine located outside a building and open to the outdoor air. Such

camera or cameras need not record banking transactions made at the

automated teller machines. The recordings made by such cameras shall be

preserved by the banking institution for at least forty-five days.

2. Adequate lighting.

3. With respect to an indoor automated teller machine facility: (a)

entry doors equipped with locking devices which permit entry to such

facility only to persons using a magnetic-strip plastic card or similar

access device.

(b) To the extent practicable, as determined by an expert with

competence in such matters and as permitted by local building codes, at

least one exterior wall which provides an unobstructed view of the

interior of the automated teller machine facility.

(c) A reflective mirror or mirrors, as necessary, placed in such a

manner as to permit a person entering an indoor automated teller machine

facility to view areas within such facility that are otherwise concealed

to plain view.

(d) A clearly visible sign which, at a minimum, provides the following

information:

(1) the activity of the automated teller machine facility is being

recorded by a surveillance camera or cameras;

(2) customers should close the entry door completely upon entering and

exiting;

(3) customers should not permit any unknown persons to enter after

regular banking hours;

(4) customers should place withdrawn cash securely upon their person

before exiting the automated teller machine facility;

(5) complaints concerning security in the automated teller machine

facility should be directed to the banking institution's security

department or the department of financial services, together with

telephone numbers for such complaints, and that the nearest available

public telephone should be used to call the police if emergency

assistance is needed.

List of facilities. Any banking institution which operates an

automated teller machine facility shall file a list of such facilities

with the department, including the street addresses, intersecting

streets, hours of operation, and the telephone number of the banking

institution's security department. Such information shall also be filed

with the department with respect to each additional automated teller

machine facility within a reasonable time, as specified by the

superintendent, from the date upon which such facility commences

operation. The department shall make such list available on request of

local law enforcement agencies and other local governmental entities.

Consumer safety information. Upon the original issuance or

reissuance of an automated teller machine facility access device, the

issuing banking institution shall provide its customers with written

information concerning safety precautions to be employed while using an

automated teller machine facility. Such written information shall

include, at a minimum, the information described in paragraph (d) of

subdivision three of section seventy-five-c of this article.

Enforcement and statistics. 1. The department is authorized

to enforce this article.

2. Statistics of crimes associated with the use of automated teller

machine facilities compiled and maintained by any law enforcement agency

shall be made available upon the request of any banking institution or

the department.

Report of compliance. 1. By the fifteenth day of January and

July of each year (or the following business day if such day is not a

business day), every banking institution which had an automated teller

machine facility which was in operation on the fifteenth day of the

preceding month shall submit a written compliance report to the

department on a form prescribed by the superintendent, certifying that

such automated teller machine facility is in compliance with the

provisions of this article or any variance or exemption that has been

granted, or if such facility is not in compliance with such provisions,

stating the manner in which such facility fails to meet such

requirements. Notwithstanding article three of the state technology law

or any other law to the contrary, the superintendent may require that

such reports and any other reports required by this section shall be

made by electronic means, unless the superintendent, in his or her sole

discretion, grants a waiver of such electronic filing requirements, upon

good cause shown.

2. If any compliance report required by subdivision one of this

section indicates any failure to meet the requirements of this article,

such banking institution shall submit a written report to the

department, on a form prescribed by the superintendent, no later than

the eleventh business day following such compliance report, indicating

whether each such failure has been corrected and, for any failure that

has not been corrected, the reason for such failure and the expected

correction date. If any such failure shall not have been corrected

within ten business days of the filing date of the applicable compliance

report, such banking institution shall, promptly after correcting such

failure, submit a written report to the department with the date or

dates of each such correction.

Compliance with local building code and all other applicable

provisions of law. Unless otherwise provided in this article, nothing

contained in this article shall be construed to exempt or relieve any

banking institution from complying with all relevant provisions of the

local building code and all other applicable provisions of law.

Facilities not subject to this article. The provisions of

this article shall not apply to any unenclosed automated teller machine

located in any building, structure or space whose primary purpose or

function is unrelated to banking activities, including but not limited

to supermarkets, airports, school buildings, and public buildings,

provided that such automated teller machine shall be available for use

only during the regular hours of operation of the building, structure,

or space in which such machine is located.

Civil penalties. 1. Any banking institution found to be in

violation of any provision of section seventy-five-c of this article in

a compliance report under section seventy-five-g of this article or

otherwise found by the department to be in violation of any provision of

section seventy-five-c of this article shall correct the violation

within ten business days after such finding. Where a banking institution

fails to correct any violation of a provision of section seventy-five-c

of this article within ten business days after the filing of such report

or a finding of violation by the department, the superintendent may in a

proceeding after notice and a hearing, require such banking institution

to pay a civil penalty in an amount as determined pursuant to section

forty-four of this chapter, provided, however, that the aggregate

penalty for all offenses with respect to any one automated teller

machine facility in any one proceeding shall not exceed an amount as

determined pursuant to section forty-four of this chapter. For the

purposes of this article, each violation of section seventy-five-c of

this article shall be considered a separate and distinct violation.

2. Any banking institution found to be in violation of the provisions

of section seventy-five-g of this article shall be liable for a civil

penalty in an amount as determined pursuant to section forty-four-a of

this chapter for each automated teller machine facility for which a

report has not been filed. Any banking institution which makes a

material false statement or material omission in any report filed

pursuant to section seventy-five-g of this article shall be liable for a

civil penalty in an amount as determined pursuant to section

forty-four-a of this chapter for each such report.

3. Whenever payment of a civil penalty is required under this article,

the superintendent shall execute a written order to that effect. A copy

of such order shall be filed in the office of the department and a

second copy shall, within three days of execution, be served upon such

banking institution either personally or by registered or certified

mail, return receipt requested, directed to the banking institution's

principal place of business. Such order may be reviewed in the manner

provided by article seventy-eight of the civil practice law and rules.

Such special proceedings for review as authorized by such section must

be commenced within thirty days from the service of such order. Such

section shall in no way limit any of the powers granted to the

superintendent under any provision of this chapter.

Collection of penalties. The superintendent shall have the

discretion to report to the attorney general any failure, after due

notice, to make payments of penalties incurred under this article. The

attorney general shall, thereupon, in the name of the superintendent, or

of the people of the state, institute such actions or proceedings as the

facts may warrant.

Preemption. 1. Except as provided in subdivision two of this

section, this article shall supersede and preempt all rules,

regulations, codes, statutes or ordinances of all cities, counties,

municipalities, and local agencies regarding customer safety at

automated teller machine facilities.

2. To the extent that any security measures inconsistent with or in

addition to the provisions of section seventy-five-c of this article are

in effect, on the date on which this article becomes a law, in any city

having a population of one million or more, pursuant to any rules,

regulations, codes, statutes or ordinances regarding customer safety at

automated teller machine facilities duly enacted by such city on or

before the date on which this article becomes a law, such security

measures shall continue to be required within such city; provided,

however, that the enforcement of any such security measures shall be

enforced by the superintendent.

Variances and exemptions from automated teller machine

security measures. 1. Except in cities having a population of one

million or more, and in accordance with the guidelines set forth in this

article, the superintendent, pursuant to rules and regulations

promulgated by the superintendent, and upon written request of a banking

institution, may approve variances which provide substitute security

measures that are substantially as safe as the requirements of any of

the security measures contained in this article, or exemptions from such

measures, with respect to an automated teller machine facility or

facilities operated by such banking institution;

2. In no event, however, shall the superintendent vary or exempt any

such measures unless he or she shall have received the following items,

in form and substance satisfactory to him or her:

(a) a resolution or declaration of the governing body of the city,

village, or town in which such automated teller machine facility is

located consenting to any such variance or exemption; and

(b) written certification from the banking institution's security

officer, appointed in accordance with federal law, that, in his or her

professional judgment, either the variance will provide security

measures which are substantially as safe as those which are otherwise

required by this article or the exemption is warranted, as applicable;

and

(c) in the event the request for any such variance or exemption is

premised upon the impracticability or burdensome expense that would

result from compliance with the security provisions contained in this

article, and such impracticability or expense is attributable to the

manner in which the building in which such automated teller machine

facility is, or is to be, located, constructed, configured or otherwise

situated, written certification to such effect from an expert with

competence in the areas of renovation and/or design, as may be

appropriate; and

(d) such other evidence or information as the superintendent may, in

his or her sole discretion, deem appropriate or necessary.

Rules and regulations. The superintendent shall promulgate

such rules and regulations as necessary to define and implement the

provisions of this article.

Severability. If any word, phrase, clause, sentence,

paragraph, section or part of this article shall be adjudged by any

court of competent jurisdiction to be invalid, such judgment shall not

affect, impair or invalidate the remainder thereof, but shall be

confined in its operation to the word, phrase, clause, sentence,

paragraph, section or part thereof directly involved in the controversy

in which judgment shall have been rendered.

Powers with respect to certain crimes and frauds. If the

superintendent has a reasonable suspicion that a person or entity is

engaging in or has engaged in fraud (as interpreted under this chapter,

the insurance law or the financial services law) or a misdemeanor or

felony under this chapter or one of the articles of the penal law

enumerated in this section in connection with activities regulated by

the superintendent pursuant to this chapter or involving a product

regulated pursuant to this chapter, the superintendent may undertake

such investigation as is deemed necessary, and in the enforcement of

this chapter, determine whether any such person or entity has violated

or is about to violate this chapter or any such enumerated articles. The

applicable articles of the penal law are article one hundred fifty-five,

one hundred seventy, one hundred seventy-five, one hundred seventy-six,

one hundred eighty, one hundred eighty-five, one hundred eighty-seven,

one hundred ninety, two hundred, two hundred ten or four hundred

seventy. Notwithstanding the above-referenced laws or articles, the

scope of authority set forth in this section shall not be deemed to

otherwise limit or impair the ability of the department to assist any

other entity in an investigation involving a violation of law.

Community bank deposit program; purpose. In recognition of the

economic benefits and stimulus which result from the placement of

deposits in local banks, the community bank deposit program is hereby

created to authorize and encourage the state comptroller and the

commissioner of taxation and finance to deposit a portion of the funds

under their control into community banking institutions.

Eligibility. 1. To be eligible to receive deposits, or to renew

existing deposits under this program, a bank, trust company, savings

bank or savings and loan association: (a) must be chartered under the

provisions of this chapter and (b) must have a current CRA rating of

satisfactory or better. The superintendent shall, if requested by the

state comptroller or the commissioner of taxation and finance, confirm

whether a particular banking institution meets the criteria specified in

this section.

2. A federal bank, trust company, savings bank or savings and loan

association may also be eligible to receive deposits, or to renew

existing deposits, under this program if: (a) its principal office is

located in this state; (b) it has a current CRA rating of satisfactory

or better; and (c) it meets any additional criteria established by the

comptroller and the commissioner of taxation and finance to determine

eligibility for participation in the program. Such criteria may include

an institution's loan to deposit ratio, its record of small business

lending, and the impact such deposits would have on an area's economic

activity.

Deposits. 1. Notwithstanding any provisions of law to the

contrary, the state comptroller and the commissioner of taxation and

finance shall, for the purposes of administering moneys in accordance

with the provisions of sections ninety-eight-a and one hundred five of

the state finance law, give consideration to depositing funds into those

community banking institutions which are deemed eligible to receive

deposits pursuant to section eighty-six of this article.

2. The maximum amount of funds which the state comptroller and the

commissioner of taxation and finance may deposit under this program

shall not exceed two hundred fifty million dollars each. The maximum

amount of funds on deposit at a community banking institution shall not

exceed twenty million dollars.

3. Notwithstanding any provision of law to the contrary, any deposits

made pursuant to this article shall be made at rates, and for such

periods of time, as may be agreed to by the state comptroller or the

commissioner of taxation and finance and the eligible community banking

institution.

4. Any deposits made pursuant to this article may be secured by an

irrevocable letter of credit issued by a federal home loan bank.

Change from bank to trust company; from trust company to bank.

A bank complying with the minimum capital stock requirements specified

in subdivision nine of section four thousand one of this chapter may

become a trust company by filing a certificate pursuant to subdivision

two of section eight thousand one of this chapter to provide that it

shall have the powers specified in section one hundred of this article.

A trust company may become a bank by filing a certificate pursuant to

subdivision two of section eight thousand one of this chapter to provide

that it shall not have the powers specified in section one hundred of

this article. Prior to or simultaneously with the filing of such

certificate, such trust company shall if its title contains the term

"trust company" file a certificate pursuant to subdivision two of

section eight thousand one of this chapter for the purpose of omitting

such term from its title.

General powers. Every bank and every trust company shall,

subject to the restrictions and limitations contained in this chapter,

have the following powers:

1. To discount, purchase and negotiate promissory notes, drafts, bills

of exchange, other evidences of debt, and obligations in writing to pay

in installments or otherwise all or part of the price of personal

property or that of the performance of services; purchase accounts

receivable, whether or not they are obligations in writing; lend money

on real or personal security; borrow money and secure such borrowings by

pledging assets; buy and sell exchange, coin and bullion; and receive

deposits of moneys, securities or other personal property upon such

terms as the bank or trust company shall prescribe; and exercise all

such incidental powers as shall be necessary to carry on the business of

banking. For purposes of this subdivision, the term "accounts

receivable" shall not include the right to receive payment for property

to be sold at a future date or services to be rendered at a future date.

2. To accept for payment at a future date, drafts drawn upon it by its

customers and to issue letters of credit authorizing the holders thereof

to draw upon it or its correspondents at sight or on time.

3. (a) To receive upon deposit for safe-keeping for hire upon terms

and conditions to be prescribed by the bank or trust company, money,

securities, papers of any kind and any other personal property;

(b) To engage in the safe deposit business by renting vaults, safe

deposit boxes and other receptacles upon premises occupied by the bank

or trust company, upon such terms and conditions as may be prescribed by

the bank or trust company.

4. To issue by its board of directors capital notes or debentures,

when so specifically authorized by the superintendent, and, when so

specifically authorized by the superintendent, to receive in payment

therefor, in whole or in part, mortgages, interests therein or other

property and to retain, unrecorded or unregistered, assignments or

conveyances of such mortgages, interests therein or other property,

provided that the superintendent shall not approve the retention of any

assignment of mortgage or interest therein or any conveyance of other

property, which may be recorded or registered, without record or

registration thereof, except where such mortgage, interest therein or

other property is assigned or conveyed by a corporation organized under

the banking law or by a corporation wholly owned by not less than twenty

savings banks of this state.

5. To become a member of a federal reserve bank, and to have and

exercise all powers, not in conflict with the laws of this state, which

are conferred upon any such member by the federal reserve act. Such bank

or trust company and its directors, officers and stockholders shall

continue to be subject, however, to all liabilities and duties imposed

upon them by any law of this state and to all the provisions of this

chapter relating to banks and trust companies.

6. To assume and discharge such obligations to Federal Deposit

Insurance Corporation as may be necessary or required for the purpose of

maintaining deposit insurance in such corporation.

7. (a) To act as financial agent of the United States Government and

as depositary of public money of the United States (including, without

being limited to, revenues and funds of the United States, and any funds

the deposit of which is subject to the control or regulation of the

United States or any of its officers, agents, or employees, and Postal

Savings funds); and to perform all such reasonable duties as depositary

of such public money and as financial agent of the United States

Government as may be required of it; and to pledge assets or furnish

other security, satisfactory in form and amount to the Secretary of the

Treasury of the United States, for the safekeeping and prompt payment of

such public money deposited with it and for the faithful performance of

its duties as financial agent of the United States Government.

(b) To pledge assets or furnish other security, satisfactory in form

and amount to judges of courts of bankruptcy, for the repayment of

deposits of the money of estates under the national bankruptcy act.

(c) To pledge assets or furnish other security, satisfactory in form

and amount to the depositor, for the repayment of moneys held in the

name of any state (which term shall include every territory of the

United States, the District of Columbia, and the Commonwealth of Puerto

Rico), or of any foreign nation, or of any Indian nation or tribe, or of

any political subdivision or instrumentality or authority of any of

them, when required to be secured by applicable law, decree, regulation

or resolution, and to pledge assets or furnish other security for the

repayment of moneys held as fiduciary, or in the name of a fiduciary, of

any trust created by any such state, foreign nation, Indian nation or

tribe, political subdivision, instrumentality or authority as required

by the terms of such trust; provided, however, that before any pledge or

security is made or furnished to any depositor other than this state or

a political subdivision, instrumentality or authority of this state, the

bank or trust company shall obtain a certified or official copy of such

law, decree, regulation, or resolution or trust requiring such pledge or

other security, and an opinion of counsel that such pledge or security

is required by such law, decree, regulation, or resolution or by the

terms of such trust.

9. To execute and deliver such guaranties as may be incidental to

carrying on the business of a bank or trust company.

10. To exercise, subject to such regulations as may be issued from

time to time by the superintendent, through any foreign branch office

(other than one opened or occupied in another state of the United

States, the District of Columbia, any territory of the United States,

Guam, American Samoa, the United States Virgin Islands, and the Northern

Mariana Islands) opened and occupied with the approval of the

superintendent as provided in section one hundred five of this article,

such further powers as may be usual in connection with the transaction

of the business of banking in the place where such foreign branch office

shall transact business, provided that no such foreign branch office

shall engage in the general business of producing, distributing, buying

or selling goods, wares, or merchandise, nor, except with respect to

securities issued by any foreign nation or any political subdivision,

agency or instrumentality thereof, engage or participate, directly or

indirectly, in the business of underwriting, selling or distributing

securities.

11. To designate one or more agents (except its employees) to issue or

sell its travelers checks or money orders at locations other than its

principal office or branch offices authorized pursuant to section one

hundred five of this chapter, subject to such rules and regulations as

the superintendent may make from time to time.

12. To acquire and lease personal property, or to acquire personal

property subject to an existing lease together with the lessor's

interest therein, subject to such limitations and conditions as the

superintendent of financial services may from time to time prescribe by

general regulation.

13. To reserve or order transportation, travel accommodations or other

travel services.

14. To arrange, purchase or sell loans secured by liens on interests

in real estate, subject to such terms, conditions and limitations as may

be prescribed by the superintendent by regulation.

15. To engage in a "savings promotion" in accordance with section

nine-v of this chapter and subject to any regulations promulgated by the

superintendent. The superintendent shall consult with the state gaming

commission before proposing any such regulations or any amendments

thereto. Such regulations shall ensure that:

a. no participant in a savings promotion is charged any fee that would

constitute, directly or indirectly, consideration for participation in

such savings promotion; and

b. no participant in a savings promotion foregoes, directly or

indirectly, any interest that would constitute consideration for

participation in such savings promotion.

* 16. In addition to such authority as is contained in section

ninety-eight of this chapter and notwithstanding any limitations set

forth therein, to purchase, lease, exchange or otherwise acquire real

property, improved or unimproved, or any interest therein, to erect,

construct, rebuild, enlarge, alter, improve, maintain, manage and

operate buildings or other improvements of any description thereon, to

sell, lease, sublet, mortgage, exchange or otherwise dispose of same and

execute, perform and carry out contracts for construction, alteration,

improvement, maintenance, management or repair thereof, to make loans in

connection therewith, as owner, co-owner or otherwise, subject to such

specific or general approvals and limitations as shall be required by

regulations promulgated from time to time by the superintendent of

financial services pursuant to this subdivision; provided, however, that

no activity specified herein shall be undertaken pursuant to the

authority contained in this subdivision until the superintendent of

financial services shall have issued regulations specifying the

limitations and requirements which shall be imposed in connection with

the investments and activities referred to herein, including, without

limitation, the consideration of such bank or trust company's record in

meeting the credit needs of local communities within the meaning of

section twenty-eight-b of this chapter.

* NB Expired June 30, 1988

Servicing of mortgages by banks. 1. Every bank shall, subject

to the restrictions and limitations contained in this article, have the

power to service mortgages, and the superintendent shall have the power

to prescribe, by specific or general regulation, the extent to which,

and the conditions upon which, mortgages may be serviced.

2. No bank shall, by virtue of the provisions contained in this

section, be deemed to have the powers defined and described in

subdivision two of section one hundred of this article.

3. The grant of powers to banks by or pursuant to this section shall

not be deemed to limit or restrict any other banking organizations,

heretofore or hereafter organized, in the exercise of their lawful

powers.

Payroll payment by banks or trust companies. l. Every bank

and trust company shall have the power to enter into contracts with any

municipal corporation, school district, district corporation, town or

county improvement district, public authority, or public corporation to

receive in a single payment, for each pay period, the total payroll of

such corporations, districts or authorities and deposit the same in

accordance with the terms of such contract, which shall include

provision for deposits for withholding, retirement and insurance, if

any.

2. The amount due each employee shall be disbursed or credited in

accordance with the directions of each employee to saving or checking

accounts, or loan or mortgage accounts within such bank or trust company

or to a single account in another bank or trust company or savings bank

or savings and loan association or may be payable in cash or by check to

such employee.

Power to act as trustee under self-employed retirement trust

or individual retirement trust. Every bank without fiduciary powers may,

subject to any regulations and restrictions prescribed by the

superintendent of financial services, act as trustee under a retirement

plan established pursuant to the provisions of the act of congress

entitled "Self-employed Individuals Tax Retirement Act of 1962" as such

provisions may be amended from time to time, and under an individual

retirement account plan established pursuant to the amendments to the

provisions of the Internal Revenue Code contained in the act of congress

entitled "Employee Retirement Income Security Act of 1974" as such

provisions may be amended from time to time, provided that the

provisions of such retirement or individual retirement account plan

require the funds of such trust to be invested exclusively in deposits

in banks, trust companies, savings banks, savings and loan associations

or federal savings and loan associations whose principal offices are

located in this state. In the event that any such retirement or

individual retirement account plan, which in the judgment of the bank,

constituted a qualified plan under the provisions of the applicable act

of congress hereinabove mentioned and the regulations promulgated

thereunder at the time the trust was established and accepted by the

bank is subsequently determined not to be such a qualified plan or

subsequently ceases to be such a qualified plan, in whole or in part,

the bank may, nevertheless, continue to act as trustee of any deposits

theretofore made under such plan and to dispose of the same in

accordance with the directions of the depositor and the beneficiaries

thereof. No bank, in respect to deposits made under this section, shall

be required to segregate such deposits from other deposits of such bank,

provided, however, that the bank shall keep appropriate records showing

in proper detail all transactions engaged in under the authority of this

section.

Banking development districts. 1. There is hereby created a

banking development district program, the purpose of which is to

encourage the establishment of bank branches in geographic locations

where there is a demonstrated need for banking services. The

superintendent of financial services shall, in consultation with the

department of economic development, promulgate rules and regulations,

after public hearing and comment, which set forth the criteria for the

establishment of banking development districts. Such criteria shall

include, but not be limited to, the following:

(a) the location, number, and proximity of sites where banking

services are available within the district;

(b) the identification of consumer needs for banking services within

the district;

(c) the economic viability and local credit needs of the community

within the district;

(d) the existing commercial development within the district;

(e) the impact additional banking services would have on potential

economic development in the district;

(f) whether a community is identified as unbanked or underbanked by

the superintendent; and

(g) such other criteria which the superintendent in his or her

discretion shall identify as appropriate.

2. A local government, in conjunction with a bank, trust company or

national bank, may submit an application to the superintendent for the

designation of a banking development district. The superintendent shall

issue a determination on such an application within sixty days of

receiving such application. If an application is approved, the

superintendent shall transmit notification of the designation of a

banking development district to the local government, the bank, trust

company or national bank, the state comptroller, the commissioner of

taxation and finance, the commissioner of the department of economic

development, the temporary president of the senate and the speaker of

the assembly. The designation of a banking development district shall be

valid for fourteen years. Prior to the expiration of a banking

development district designation, the superintendent may extend the

designation for one or more additional five or ten year periods.

2-a. Notwithstanding any other provision of law, an application may be

submitted by a local government in conjunction with a bank, trust

company or national bank which has already opened a bank branch within

such area. In considering the criteria authorized pursuant to

subdivision one of this section, the superintendent shall also take into

account the importance and benefits of preserving the banking services

offered by the existing branch.

3. The establishment of a branch in a banking development district by

a bank, trust company or national bank shall be subject to all

applicable state and federal laws regarding the establishment of branch

offices, including the provisions of section one hundred five of this

article, provided however that the branch application fee required

pursuant to section twenty-nine of this chapter shall be waived for any

such branch. A bank or trust company may submit an application to open a

branch office simultaneously with the submission of the application for

the designation of a banking development district.

4. For the purposes of this section, the term "local government" shall

mean a county, town, city or village.

* 5. (a) Notwithstanding the provisions of subdivision two of section

two hundred thirty-seven of this chapter; for the purposes of this

section, paragraph c of subdivision two of section ten of the general

municipal law, subdivision six of section one hundred five of the state

finance law and section four hundred eighty-five-f of the real property

tax law, any reference to a bank, trust company or national bank shall

be deemed to include a savings bank, savings and loan association,

federal savings and loan association, federal savings bank, credit

union, or federal credit union; provided, however, that such provisions

of law do not grant a savings bank, savings and loan association,

federal savings and loan association, federal savings bank, credit

union, or federal credit union eligibility to accept municipal or public

funds or municipal or public moneys other than for the limited purposes

of the establishment of a branch in a banking development district

pursuant to this section. Any such municipal or public funds or moneys

shall be deposited only at the branch established pursuant to this

section, and any municipal funds or moneys may be deposited only by the

sponsoring municipality in which the branch and banking development

district are located; provided further that any such municipal or public

funds or moneys shall be subject to the same requirements which apply to

municipal or public funds or moneys deposited in a bank, trust company

or national bank and shall also be subject to the provisions of section

one hundred five of the state finance law or section ten of the general

municipal law relating to such deposits.

(b) Notwithstanding any other provision of law, the superintendent of

financial services shall promulgate rules and regulations to authorize

the participation of savings banks, savings and loan associations,

federal savings banks, federal savings and loan associations, credit

unions, and federal credit unions in the program established pursuant to

this section.

* NB Repealed January 1, 2029

6. For the purposes of this section, nothing shall preclude a bank,

trust company or national bank from seeking approval to establish one or

more branches in an existing banking development district where it or

another bank has or is authorized to have a branch. The department shall

have the authority to approve any bank, trust company or national bank

for participation in the banking development district program, and any

branch approved pursuant to this section shall operate in accordance

with this section and is eligible for all the rights and privileges

authorized by this section.

Power to purchase securities and stocks. Subject to the

restrictions and limitations contained in this chapter, a bank or trust

company may invest in and have and exercise all rights of ownership with

respect to:

1. Bonds, notes, debentures and other obligations for payment of

money, which are not in default as to either principal or interest when

acquired.

2. Stocks of any city, county, town or village of this state which are

not in default as to either principal or interest when acquired.

3. Stock of a federal reserve bank in the amount necessary to qualify

for membership in such reserve bank.

4. Stock of each of the following to an amount not in excess of ten

per centum of the capital stock, surplus fund and undivided profits of

such bank or trust company:

(a) Any safe deposit company which does business on premises owned or

leased by the bank or trust company or the vaults of which are connected

with or adjacent to an office of such bank or trust company; provided

that the purchase and holding of such stock is first duly authorized by

resolution of the board of directors of the bank or trust company and by

written approval of the superintendent, stating the number and amount of

the shares which may be so purchased and held, excepting that the bank

or trust company may, without the written approval of the

superintendent, acquire the stock owned by a former director of the safe

deposit company at the time that he ceased to be a director. The bank or

trust company may not pay, without the prior written approval of the

superintendent, more for such stock than the cost thereof to the

director.

(b) Any investment company qualified to exercise the powers specified

in subdivision two of section five hundred eight of this chapter;

(c) The Bank for International Settlements.

4-a. Subject to such restrictions as the superintendent of financial

services may prescribe, stock or other equity investments in subsidiary

corporations, partnerships, unincorporated associations, limited

liability companies, or other entities engaged in, or to be organized to

engage in the following activities:

(a) To acquire and lease personal property under the same terms and

conditions as provided in subdivision twelve of section ninety-six of

this article;

(b) To purchase accounts receivable as provided in subdivision one of

section ninety-six of this article;

(c) To be a corporation organized pursuant to the provisions of

section twenty-five (a) of an act of congress entitled the "Federal

Reserve Act";

(d) To own or operate real or personal property acquired through

foreclosure or in settlement or reduction of debts due it;

(e) To own or operate real or personal property for use as bank

premises; or

(f) To transact any other business in which the bank or trust company

may engage directly.

4-b. Common or preferred stock of any corporation created or existing

under the laws of the United States or of any state, district or

territory thereof, or of the commonwealth of Puerto Rico, provided that:

(a) such common or preferred stock is registered on a national

securities exchange, as provided in an act of congress of the United

States entitled the "Securities Exchange Act of 1934", approved June

sixth, nineteen hundred thirty-four, as amended, or such other exchange

or market system as the superintendent shall approve by regulation; (b)

the aggregate amount of all investments in common and preferred stock as

permitted by this subdivision shall at no time exceed two percent of the

assets or twenty percent of the capital, surplus and undivided profits

of the bank or trust company, whichever is less, provided however that

the superintendent may, upon the request of a bank or trust company,

approve an increase in such aggregate amount to a maximum of five

percent of the assets or one hundred percent of the capital, surplus and

undivided profits of such bank or trust company, whichever is less,

subject to any limitations or conditions prescribed by the

superintendent; (c) the aggregate amount of all investments in the

common and preferred stock of any one issuer pursuant to this

subdivision, together with the aggregate amount of all investments in

the bonds, debentures, notes or other obligations of such issuer made

pursuant to paragraph (i) of subdivision one of section one hundred

three of this chapter, shall at no time exceed one percent of the assets

or fifteen percent of the capital, surplus and undivided profits of the

bank or trust company, whichever is less; and (d) no bank or trust

company shall at any time hold pursuant to this subdivision more than

two percent of the total issued and outstanding shares of stock of any

one issuer.

4-c. Subject to such restrictions as the superintendent of financial

services may prescribe, stock or other equity interest in one or more

small business investment companies, as authorized pursuant to the

provisions of an act of congress entitled "Small Business Investment Act

of 1958," as amended, or in any entity established to invest solely in

such small business investment companies, except that in no event shall

the total amount of such investments exceed five percent of the capital

stock, surplus fund and undivided profits of such bank or trust company.

5. So much of the capital stock of, or any other equity interest in,

any other corporations, partnerships, unincorporated associations,

limited liability companies, or other entities as may be specifically

authorized by the laws of this state or by the superintendent, or

regulations promulgated by the superintendent.

The superintendent is authorized to adopt such rules and regulations

as shall permit banks and trust companies to make a loan which provides

for receipt of shares of stock of or any other equity interest in, or a

share of the profits, income or earnings of, a borrower in consideration

for making the loan.

A bank or trust company may acquire stock or any other equity interest

in settlement or reduction of a loan, or advance of credit or in

exchange for an investment previously made in good faith and in the

ordinary course of business, where such acquisition of stock or any

other equity interest is necessary in order to minimize or avoid loss in

connection with any such loan, advance of credit or investment

previously made in good faith. A trust company may acquire stock or any

other equity interest from any estate, trust or fund with respect to

which such trust company is acting in a fiduciary capacity, if a claim

is asserted or may be asserted against it with respect to the purchase

or retention of such stock or equity interest for such estate, trust or

fund, (a) where such acquisition by the trust company has been

authorized or directed by a court, or (b) where such trust company has

been advised by its counsel in writing that it has incurred a contingent

or potential liability with respect to the purchase or retention of such

stock or equity interest and such trust company desires to relieve

itself from such liability. Stocks or any other equity interest acquired

pursuant to the provisions of this paragraph may be held for such period

as the board of directors deems advisable.

A bank or trust company may continue to hold any bonds or other

securities or stock which it holds in accordance with the provisions of

law at the time this act takes effect.

No bank or trust company shall purchase, acquire, or hold any stock

of, or any other equity interest in, any corporation or any other

entity, except as provided in this section.

Power to take and hold real estate; restrictions. 1. A bank or

trust company may purchase, hold, lease and convey real property as

follows:

(a) A plot whereon there is or may be erected a building suitable for

the convenient transaction of its business, from portions of which not

required for its own use a revenue may be derived, and a plot whereon

parking accommodations are, or are to be, provided, with or without

charge, primarily for its customers or employees or both, and a building

or a portion or portions thereof for use by the bank or trust company in

its business, provided that the aggregate of all investments of any bank

or trust company in such plots and buildings and in a leased building or

a portion or portions thereof or in the stock, debentures or other

obligations of any corporation holding such plots or buildings and of

all loans to or upon the security of the stock of any such corporation

shall not exceed forty per centum of the aggregate of the capital stock,

surplus fund and undivided profits of such bank or trust company, except

with the approval of the superintendent. Any bank or trust company

having, prior to April twenty-third, nineteen hundred thirty-four, made

loans and investments in excess of the limitations prescribed by this

paragraph may retain any such loans and investments notwithstanding such

limitations.

(b) Such as shall be conveyed to it in satisfaction of debts

previously contracted in the course of its business.

(c) Such as it shall purchase at sales under judgments, decrees or

mortgages held by it.

(d) Such purchase, lease, conveyance or other acquisition or sale of

real property which is located outside the United States, its

territories and possessions, and which is used principally as the

residence of one or more directors, officers, or employees of the bank

or trust company as may be specifically approved by the superintendent.

(e) A whole or part interest in a "project", as defined in the New

York state urban development corporation act, pursuant to sections six

or eight of such act. An investment by a bank or trust company in a

single project shall not exceed one per centum of the assets or fifteen

per centum of the combined capital stock, surplus fund and undivided

profits of such bank or trust company, whichever is less, and the

aggregate of all investments of a bank or trust company in such projects

and investments in securities of any "subsidiary" of the New York state

urban development corporation, as defined in the New York state urban

development corporation act, shall not exceed five per centum of the

assets or seventy-five per centum of the combined capital stock, surplus

fund and undivided profits of such bank or trust company, whichever is

less.

2. All real estate purchased by any bank or trust company or taken by

it in settlement of debts due it, shall be conveyed to it in its name

or, subject to such regulations and restrictions as the superintendent

of financial services finds to be necessary and proper, may be taken in

the name of a duly authorized nominee. All such conveyances shall be

immediately recorded or registered in the office of the proper recording

officer of the county in which such real estate is located.

Club accounts. 1. No contract under which a bank or trust

company agrees to repay deposits of fixed sums made at regular intervals

at a given time with all interest or dividends credited thereon, or to

repay said deposits when, together with interest or dividends credited

thereon, they shall equal a specified sum, may provide for any

forfeiture of the sums deposited in the event of the discontinuance of

the regular payments. Interest or dividends on club accounts, if

offered, must be credited at least quarterly and may not be forfeited

once credited, in the event of the discontinuance of regular payments.

2. Any bank which provides for deposits in club accounts shall, in all

advertising, announcements or brochures pertaining to such accounts,

state whether or not interest or dividends are paid thereon and, if

interest or dividends are paid, shall state the rate or form of interest

or dividends so paid in accordance with any rules and regulations that

may be prescribed by the superintendent.

Fiduciary powers. Every trust company shall have, subject to

the restrictions and limitations contained in this chapter, the

following powers:

1. To act as the fiscal or transfer agent of the United States, any

state, municipality, body politic or corporation; and in such capacity

to receive and disburse money, to transfer, register and countersign

certificates of stock, bonds or other evidences of indebtedness or other

securities, and to act as attorney in fact or agent of any person or

corporation, foreign or domestic, for any lawful purpose.

2. To act as trustee under any mortgage or bonds issued by any

municipality, body politic or corporation, foreign or domestic, and

accept and execute any other municipal or corporate trust not prohibited

by the laws of this state.

3. To be appointed and to act under the order or appointment of any

court of competent jurisdiction:

(a) As guardian, receiver, trustee, committee or conservator of the

estate of any minor, person with a mental disability, or conservatee or

in any other fiduciary capacity;

(b) As receiver, trustee, or committee of the property or estate of

any person in insolvency or bankruptcy proceedings.

4. To be appointed and to accept the appointment of executor or of

trustee under the last will and testament or administrator with or

without the will annexed of the estate of any deceased person.

5. To take, accept and execute any and all such trusts, duties and

powers of whatever nature or description as may be conferred upon or

entrusted or committed to it by any person or persons, or any body

politic, corporation, domestic or foreign, or other authority by grant,

assignment, transfer, devise, bequest or otherwise, or which may be

entrusted or committed or transferred to it or vested in it by order of

any court of competent jurisdiction, or any surrogate, and to receive,

take, manage, hold and dispose of according to the terms of such trust,

duty or power, any property or estate, real or personal, which may be

the subject of any such trust, duty or power.

Provided that no trust company shall have any right or power to make

any contract, or to accept or execute any trust whatever, which it would

not be lawful for any individual to make, accept or execute.

Fiduciary capacities; appointment by court authorized; bond;

oath; accounting. 1. Executor. When any trust company is appointed

executor in any last will and testament, the court or officer authorized

to grant letters testamentary in this state, shall, upon the proper

application, grant letters testamentary thereon to such trust company or

to its successors by merger.

2. Guardian, trustee or administrator.

(a) Any trust company may be appointed guardian, trustee or

administrator, on the application or consent of any person acting as

such or as an executor or entitled to such appointment irrespective of

whether such person would himself or herself be disqualified from acting

by reason of his or her being a noncitizen or non-resident of this

state, and in the place and stead of such person, or such trust company

may be joined with any person so acting or entitled to such appointment;

but such appointments shall be made upon such notice, as is required by

law, to the persons interested in the estate or fund and on the consent

of such of the principal legatees or other persons interested in the

estate or fund as the court, surrogate or judge making the appointment

shall deem proper. No appointment so made shall be deemed to increase

the number of persons entitled to full compensation beyond the number so

entitled under the terms of the will or deed creating the trust or

appointing a guardian or authorized by law. Whenever a person is joined

with such trust company in any appointment as guardian, trustee or

administrator, his or her appointment may be under such limitation of

powers and upon such terms and conditions as to deposit of assets by

such person, with such trust company, or otherwise, and upon such

reduced bond or security to be given by such person, as the court,

surrogate or judge, making the appointment shall prescribe.

(b) When application is made to any court or officer having authority

to grant letters of administration with the will annexed upon the estate

of any deceased person, and there is no person entitled to such letters

who is qualified, competent, willing and able to accept such

administration, such court or officer may at the request of any party

interested in the estate, grant such letters of administration with the

will annexed, to any trust company.

(c) Any court or officer having authority to grant letters of

guardianship of any infant may upon the same application as is required

by law for the appointment of a guardian for such infant, appoint any

trust company as the guardian of the estate of such infant.

3. Committee of incompetent or conservator of a conservatee. Any court

having jurisdiction to appoint a trustee, guardian, receiver, committee

of the estate of a person with a mental disability, or conservator of

the estate of a conservatee, or to make any fiduciary appointment, may

appoint any trust company to be such trustee, guardian, receiver,

committee or conservator, or to act in any other fiduciary capacity.

4. Receiver, trustee or committee. Any court, having jurisdiction to

appoint a committee or trustee or a receiver in insolvency or bankruptcy

proceedings or in any other proceeding, or action, under state or

federal law, may appoint any trust company to be such receiver, trustee

or committee.

5. Bonds. No bond or other security, except as hereinafter provided,

shall be required from any trust company for or in respect to any trust,

nor when appointed executor, administrator, guardian, trustee, receiver,

committee or depositary or in any other fiduciary capacity nor when

receiving commissions under the provisions of SCPA 2310 or 2311. The

court, or officer making such appointment may, upon proper application,

require any trust company, which shall have been so appointed to give

such security as to the court or officer shall seem proper, or upon

failure of such trust company to give security as required, may remove

such trust company from and revoke such appointment.

6. Court orders, accounts. Such court or officer may make orders

respecting such trusts and require any such trust company to render all

accounts, which such court or officer might lawfully require if such

executor, administrator, guardian, trustee, receiver, committee,

depositary or such trust company acting in any other fiduciary capacity,

were a natural person.

7. No official oath required. Upon the appointment of such trust

company as such executor, administrator, guardian, trustee, receiver or

committee, no official oath shall be required.

Investments as fiduciary; when interest is to be paid;

preference. 1. Investments. All investments of money received by any

trust company as executor, administrator, guardian, trustee of a trust

of any kind, receiver, committee, conservator or depositary, shall be at

its sole risk, and for all losses of such money the capital stock,

property and effects of the trust company shall be absolutely liable,

unless the investments are such as are proper when made by an individual

acting as trustee, executor, administrator, guardian, receiver,

committee, conservator or depositary, or such as are permitted in and by

the instrument or words creating or defining the trust. But no corporate

fiduciary shall purchase securities from itself. Any moneys of any such

estate or fund awaiting investment or distribution may be held on

deposit by such trust company in its own name, subject to the provisions

of subdivision four of this section; provided that appropriate entries

showing the share or interest of each such estate or fund in the moneys

so held on deposit shall, at all times, appear upon the records of such

trust company.

2. On and after September first, nineteen hundred thirty-six, no trust

company shall invest in any part interest in a bond and mortgage or note

and mortgage on behalf of any estate or fund held by such trust company

as executor, administrator, guardian, personal or testamentary trustee,

receiver, committee, conservator or depositary except that if the

instrument creating such estate or fund has authorized such trust

company as executor, administrator, guardian, personal or testamentary

trustee, receiver, committee, conservator or depositary to invest in any

part interest in a bond and mortgage or note and mortgage insured by the

federal housing commissioner such trust company may so invest and if the

instrument creating an employee benefit trust has authorized such trust

company to invest in any part interest in a bond and mortgage or note

and mortgage, such trust company may so invest. Any part interest in a

bond and mortgage or note and mortgage heretofore apportioned to any

estate or fund and held by such trust company as executor,

administrator, guardian, personal or testamentary trustee, receiver,

committee, conservator or depositary, and outstanding at any time in the

hands of any estate, fund or person may be repurchased at its face value

by such corporation individually. Such trust company, in any case where

it shall have apportioned or transferred a part interest in any bond and

mortgage or note and mortgage whether to any estate or fund held by it

alone or in conjunction with another person or otherwise, shall be

authorized and empowered, in behalf of all persons interested therein,

to collect the principal and interest and to satisfy and discharge the

mortgage on receiving payment thereof in the amount and in the manner

specified in the bond and mortgage or note and mortgage, to pay the said

principal and interest to the persons entitled thereto and generally to

exercise all of the options reserved to the mortgagee, to enforce in its

own name by appropriate action or proceeding, including foreclosure, any

and all of the covenants in the said bond and mortgage or note and

mortgage, to take such other measures for the protection of the mortgage

loan and the preservation of the security and the management of,

utilization and sale of any real estate which may be acquired on

foreclosure as may be necessary and appropriate and to exercise all

other rights of ownership in respect of the entire bond and mortgage or

note and mortgage. In case any bond, note or mortgage shall be held by,

or in the name of, such trust company and it shall hold any part

interest therein, acting as a fiduciary, whether alone, or in

conjunction with another person or otherwise, it may, prior to April

first, nineteen hundred sixty-nine, waive or modify or agree to waive or

modify, either with or without consideration and prior or subsequent to

maturity, any terms and conditions thereof, including the rate of

interest, and extend or re-extend or agree to extend or re-extend such

bond and mortgage or note and mortgage, for a period of not more than

five years from the time of such extension, by agreement with the owner

of the real property subject to the lien thereof, upon the consent of

the holders of such part interests to the extent of sixty-six and

two-thirds per centum of the whole amount of such bond and mortgage or

note and mortgage, notwithstanding that, at the time of such waiver,

modification, extension or agreement, the value of such real property

may be less than that required by law for an original investment of such

an amount therein by such holder and, in case any such investment is

guaranteed, such trust company may also extend or re-extend or agree to

extend or re-extend the time of payment under the guaranty for a like

period from its due date, and may release or agree to release such

guaranty or from time to time waive or modify or agree to waive or

modify any terms and conditions thereof, including the rate of interest;

provided however, that no such waiver, modification, extension or

agreement shall be made or agreed to unless, at least fifteen days prior

thereto, such trust company shall have notified each holder of such a

part interest in such bond and mortgage or note and mortgage of the

terms and conditions of such contemplated waiver, modification,

extension or agreement. Such notice shall be given by mailing the same

by registered mail to the address or place of residence of each holder

according to the records of such trust company. The notice hereinbefore

provided for shall not be required to be given to any holder of such a

part interest in such bond and mortgage or note and mortgage (1) who, at

the time of the mailing of such notice to holders of part interests in

such bond and mortgage or note and mortgage, was not shown on the

records of such trust company to be such holder, or (2) who, at any time

whether before or after any such waiver, modification, extension or

agreement shall have been made or agreed to, shall have consented to

such waiver, modification, extension or agreement. Any such consent

shall also be binding upon and shall be deemed to be the consent also of

each and every holder of the part interest in such bond and mortgage or

note and mortgage or of any part of such part interest with respect to

which such consent was given who, at the time such consent was given,

was not shown on the records of such trust company to be such holder

whether or not such holder shall have become such holder before or after

such consent was given. Any holder to whom the notice hereinbefore

provided for is required to be given as hereinbefore provided and who

objects to such waiver, modification, extension or agreement shall have

the right to apply, within fifteen days after such notice shall have

been mailed to such holder as hereinbefore provided, to the supreme

court of the county in which the real property securing such mortgage is

located and, subject to the discretion of the supreme court in the

premises, to obtain an order enjoining such waiver, modification,

extension or agreement. In the event of the granting of such an order,

any holder shall have the right to apply to such supreme court and,

subject to the discretion of the supreme court in the premises, to

obtain an order directing a partition of such bond and mortgage or note

and mortgage by a judicial sale thereof. Such sale shall be upon such

notice and advertisement and at such time and place and in such manner

as the court or a justice thereof may direct, but at least fifteen days'

notice thereof shall be given to each holder. The proceeds of the sale

of such bond and mortgage or note and mortgage after deducting the

expenses of such sale, shall be paid into the supreme court and shall be

distributed among such holders according to their respective interests

therein. Such trust companies shall have all the powers heretofore had

under this section or any other provision of law with respect to

investments in part interests in bonds and mortgages or notes and

mortgages for the protection, preservation and liquidation of the trust

property. It is the intent of this subdivision to prohibit after August

thirty-first, nineteen hundred thirty-six, any future apportionments or

investments of any part interests in bonds and mortgages and notes and

mortgages to or investments in part interests of bonds and mortgages and

notes and mortgages for any estate or fund of which such trust company

is executor, administrator, guardian, personal or testamentary trustee,

receiver, committee, conservator or depositary, except as permitted by

this subdivision. Such trust company, however, shall not transfer to any

estate or fund any part interests in bonds and mortgages or notes and

mortgages heretofore purchased, or invested in, from itself or from any

other estate or fund.

Nothing contained in this act shall be construed to affect any

investments in part interest in bonds and mortgages apportioned or

transferred, prior to September first, nineteen hundred thirty-six, to

any estate or fund of which such trust company is executor,

administrator, guardian, personal or testamentary trustee, receiver,

committee, conservator or depositary, nor to affect any action

heretofore taken in accordance with law with respect to such bonds and

mortgages or part interests in said bonds and mortgages; nor to affect

the right of any such trust company to transfer or apportion any such

investment from an estate or fund to a succeeding interest created by

the same instrument under which the investment was made; nor shall it be

construed to impair or otherwise affect the power of such trust company

to apportion to any estate, fund or person interested in such mortgage

its or his proportionate share of the consideration, consisting in whole

or in part of evidences of indebtedness secured by mortgages on real

property received by such trust company on the sale of real property

acquired by foreclosure of such mortgage, or otherwise, and to exercise

with respect to such mortgages on behalf of such estates, funds, or

persons the same powers reserved with respect to the original mortgage.

3. Preference. If dissolved by the legislature or the court, or

otherwise, or liquidated by the superintendent or otherwise, the debts

from any trust company as guardian, trustee, executor, administrator,

committee, conservator or depositary, shall be entitled to priority of

payment from the assets of such trust company on an equality with any

other priority given by this chapter.

4. Interest. On all sums of money not less than one thousand dollars,

which shall be collected, received and held as principal by a trust

company acting as executor, administrator, guardian, trustee, receiver,

committee or conservator under the appointment of any court or officer,

or in any fiduciary capacity under such appointment, or as a depositary

of moneys paid into court, interest shall be paid by such trust company

from sixty days after the receipt thereof until the moneys so received

shall be duly expended or distributed, at a rate equal to the maximum

rate per annum then being paid by such trust company on savings

deposits, except that in the case of a trust company acting as executor

or administrator interest shall not be paid, and the grace period of

sixty days herein provided for shall not be deemed to begin, until five

months after the date of issuance of letters testamentary or of

administration to it; provided however that such trust company shall not

be required to allow any interest upon any such moneys payment of which

is prohibited under any order, regulation or ruling issued under or

pursuant to the "Trading with the Enemy Act" and any amendments thereto,

or under or pursuant to any other law, so long as such prohibition shall

remain in force and effect. If income be accumulated for a minor or

surplus income in excess of expenditures be held for investment by the

committee of an incompetent or the conservator of a conservatee, but not

otherwise, any uninvested balance of such income shall be treated as

principal upon which interest shall be paid as provided in this

subdivision. If interest moneys payable hereunder or any part thereof

shall not annually be expended or distributed pursuant to the terms or

provisions of the trust under which such moneys are held, the amount

thereof not so expended or distributed shall be accumulated by such

trust company for the benefit of the parties interested in such trust

fund, and shall be added to the principal to constitute a new principal

upon which interest shall thereafter be computed. The word "trustee" as

used in this subdivision shall mean a trustee appointed by will or by

any court, and the words "savings deposits" as used in this subdivision

shall mean time deposits with respect to which the depositor is not

required by the deposit contract, but may at any time be required by

such trust company, to give notice in writing of an intended withdrawal

not less than fourteen days before such withdrawal is made, and which is

not payable on a specified date or at the expiration of a specified time

after the date of deposit. For the purposes of this subdivision only,

moneys on which interest is payable as provided herein shall not be

deemed to be demand deposits.

Common trust funds. 1. For the purpose of investment and

reinvestment of moneys received and held by any trust company as

executor, administrator, guardian, trustee, donee of power during

minority to manage property vested in an infant, custodian under any

Uniform Gifts to Minors Act, any Uniform Transfers to Minors Act or The

New York Uniform Transfers to Minors Act, conservator or committee, such

trust company may establish and maintain common trust funds and short

term investment common trust funds. In any case where the instrument or

the order, decree or judgment under which such moneys are held does not

forbid, such trust company, either alone or in conjunction with one or

more other persons acting with it in any fiduciary capacity, may invest

and reinvest such moneys or any part thereof by adding the same to any

such common trust funds and short term investment common trust funds.

Such trust company shall have the same power to invest common trust

funds in securities of any management type investment company or

investment trust, registered pursuant to the federal investment company

act of nineteen hundred forty, as is set forth in, and subject to the

provisions of, sections 11-2.2 and 11-2.3 of the estates, powers and

trusts law.

2. Notwithstanding any other provision of law, a trust company may

deposit securities investments of a common trust fund, or arrange for

the deposit of such investments through a subcustodian, (a) with a

clearing corporation pursuant to EPTL 11-1.9, (b) with a federal reserve

bank pursuant to EPTL 11-1.8, or (c) with a securities depository,

clearing agency, or bank, whether or not subject to the laws of a

jurisdiction other than the United States of America, or any state or

subdivision thereof, for the account of the trust company and such

investments shall be deemed for the purposes of this section to be in

the custody of such trust company.

3. A common trust fund shall not be deemed a separate trust fund on

which commissions or other compensation is allowable and no trust

company maintaining such a fund shall make any charge against such fund

for the management thereof. Provided, however, that in those instances

where a trust company invests common trust funds in securities of any

management type investment company or investment trust pursuant to the

provisions of subdivision one of this section, such trust company may

charge the common trust fund for the fees and expenses of such

securities pursuant to and consistent with the provisions of sections

11-2.2 and 11-2.3 of the estates, powers and trusts law.

4. If money of an estate, trust or fund or any part thereof held by a

trust company in conjunction with one or more other persons in any

fiduciary capacity is invested in a common trust fund, the participating

interest therein so acquired shall be withdrawn therefrom upon the

written request of any such other person acting in such fiduciary

capacity with such trust company.

5. If any investment held in a common trust fund shall cease to be

eligible as a new investment of such common trust fund, the trust

company maintaining the common trust fund, prior to any further

additions to or withdrawals from such fund, either shall sell such

investment or shall set the same apart in a liquidating account for the

benefit ratably of each participant then interested in such common trust

fund.

6. At least once every ten years, each trust company maintaining a

common trust fund shall file an account of its proceedings in respect

thereof either in the office of the clerk of the supreme court or in the

office of the surrogate in any county in which such trust company

maintains an office.

Upon the filing of the petition for the settlement of such account,

the court shall assign a time and place for a hearing on the settlement

of such account and order notice thereof by: (a) one publication not

less than twenty days prior to the date of such hearing, of a notice in

a newspaper to be designated by the court, and (b) mailing on or before

the day of publication a copy of the notice to all persons whose names

and addresses appear, at the close of the period accounted for, upon the

records maintained by the trust company pertaining to the common trust

fund as well as to any estate, trust or fund, any part of which shall

have been invested in the common trust fund and who at the close of the

period accounted for were known by such trust company to be or to claim

to be included in any of the following classes of persons: (i) those who

at any time during the period accounted for were entitled to share in

the income of any estate, trust or fund invested in the common trust

fund at any time during the period accounted for; (ii) those who became

entitled to share in the principal of any estate, trust or fund invested

in the common trust fund which became distributable in whole or in part

during the period accounted for; (iii) those who at the close of the

period accounted for would have been entitled to share in the principal

of any estate, trust or fund invested in the common trust fund if the

event upon which such estate, trust or fund would become distributable

in whole or in part had occurred at the close of the period accounted

for, provided, however, that in the case of a trust which at the close

of the period accounted for can be revoked in its entirety in favor of

and by the grantor, donor, trustor or creator, it shall not be necessary

for such trust company to include the names and addresses of any persons

interested in the principal of such trust other than the grantor, donor,

trustor, or creator; (iv) those living at the close of the period

accounted for who had any interest in the income or principal, or both,

of any estate, trust or fund invested in the common trust fund, and who

prior to the close of the period accounted for shall have notified the

trust company in writing to send a copy of the notice or citation of any

proceeding for the settlement of any account or the trustee of such

common trust fund to such person at an address furnished to the trust

company by such person; (v) those who at any time during the period

accounted for were acting with the trust company in a fiduciary capacity

with respect to any such estate, trust or fund; (vi) the guardian of any

infant, the committee of any incompetent and the conservator of any

conservatee included among the persons hereinbefore described; (vii) the

personal representative of any deceased person included among the

persons hereinbefore described in class (i), (ii), (iii), or (v).

Upon the filing of such petition, the court shall appoint a person to

appear as guardian ad litem for each person who has or who may

thereafter have any interest in the income of such common trust fund and

a person to appear as guardian ad litem for each person who has or who

may thereafter have any interest in the principal of such common trust

fund. Each such interested person may appear in such accounting

proceeding and on his failure to appear shall be deemed to be

represented in such proceeding by the person designated respectively as

such guardian ad litem.

Except as otherwise herein provided, such proceeding shall be

conducted in the same manner as any other proceeding for the voluntary

judicial settlement of the account of a testamentary trustee. The decree

in such proceeding shall be thereafter binding and conclusive in respect

of any matter embraced in the account or in such decree upon all persons

having or who may thereafter have any interest in such common trust fund

or in any participating estate, trust or fund.

7. As used in this section, subject to subdivision eight of this

section the term "trust company" shall mean any trust company, any bank

duly authorized to exercise fiduciary powers and any national bank

having a principal, branch or trust office in this state and duly

authorized to exercise fiduciary powers; the term "estate" shall mean

the assets held by an executor or an administrator, with or without the

will annexed, of the goods, chattels and credits of a decedent, but not

a temporary administrator; the term "trust" shall mean the assets of any

trust however created held by the trustee thereof, including, but

without limitation, any assets held by a fiduciary as donee of a power

during minority to manage property vested in an infant; the term "fund"

shall include the assets of an infant held by the guardian thereof, the

assets of an incompetent person held by the committee thereof, and the

assets of a conservatee held by the conservator thereof. The term "donee

of a power during minority to manage property vested in an infant" shall

for the purposes of this section include only a fiduciary who has power

during a period measured by a minority to hold and invest moneys under

the terms of an instrument under which the fiduciary had theretofore

held such moneys as executor or as personal or testamentary trustee.

8. (a) A trust company, at least ninety per centum of the capital

stock of which is directly or indirectly, or through a subsidiary or

subsidiaries, owned, controlled or held with power to vote by a bank

holding company may establish and maintain one or more common trust

funds and short term investment common trust funds, or may utilize one

or more common trust funds and short term investment common trust funds

previously established by it, for funds held in any of the fiduciary

capacities mentioned in subdivision one of this section, by itself and

by other trust companies at least ninety per centum of the capital stock

of each of which is directly or indirectly, or through a subsidiary or

subsidiaries, owned, controlled or held with power to vote by such bank

holding company. Each trust company, the capital stock of which is so

owned, controlled or held, may invest and reinvest in one or more of

such common trust funds and short term investment common trust funds

moneys held in any of the fiduciary capacities mentioned in subdivision

one of this section. The trust company establishing, maintaining, or so

utilizing any such common trust funds and short term investment common

trust funds shall comply with, and be subject to, all of the provisions

of this section as though such trust company and the other trust

companies participating in such fund were one and the same corporate

entity.

(b) For the purpose of this subdivision, (i) the term "bank holding

company" shall be given the same meaning as is contained in the

definition of such term in section one hundred forty-one of this

chapter, and (ii) the term "trust company" shall be given the same

meaning as is contained in the definition of such term in subdivision

seven of this section, except that such term shall be deemed to include,

in addition to the entities listed in such subdivision, any banking,

trust or financial company, corporation or association, organized under

the laws of the United States, whether or not having its principal

office outside this state, or of any state of the United States, which

is duly authorized to exercise fiduciary powers.

9. (a) As used in this subdivision, unless the context otherwise

required:

(i) "Short term investment common trust fund" means a common trust

fund maintained and administered by a trust company exclusively for the

collective investment and reinvestment of moneys contributed thereto

which are invested and reinvested in any short term investment by a

trust company, in its capacity as a fiduciary or co-fiduciary.

(ii) "Short term investment" means bonds, notes or other evidences of

indebtedness which are payable upon demand (including variable amount

notes) or which have a maturity date of one year or less from the date

of purchase, or which may be prescribed, from time to time, by rules or

regulations promulgated by the superintendent of financial services, and

which are acquired or held by a trust company in a short term investment

common trust fund.

(iii) "Participant" means any estate, trust, donee of a power during

minority, guardianship, committeeship, conservatorship, or custodian

under any Uniform Transfers to Minors Act administered by a trust

company, as fiduciary or co-fiduciary, having a participation.

(iv) "Participation" means the interest of a participant in a short

term investment common trust fund.

(b) Any trust company may administer one or more short term investment

common trust funds.

(c) Any trust company shall, at least once each year, cause an audit

of each short term investment common trust fund administered by the

trust company to be made by auditors who are independent certified

public accountants. A copy of such audit shall be available at the

office of the trust company maintained for the transaction of trust

business, during all regular business hours, for inspection by any

person having an interest in any participant, and upon request a copy of

any such audit shall be furnished without any cost to such person. The

reasonable expenses of any such audit made by independent certified

public accounts or of any examination by the superintendent may be

charged to the income of the short term investment common trust fund.

(d) A trust company administering a short term investment common trust

fund shall not be required to render a court accounting with regard to

such fund.

10. The superintendent of financial services shall promulgate such

regulations and rules as he or she considers appropriate to govern the

administration of common trust funds and short term investment common

trust funds.

Foreign common trust funds. Any banking corporation or trust

company incorporated under the laws of another state which is qualified

to act as executor or testamentary trustee in this state pursuant to

subdivision three of section one hundred thirty-one of the banking law

may, when acting in either such capacity, invest any moneys received and

held by it in such capacity, either alone or in conjunction with one or

more other persons acting with it in such capacity, in any common trust

fund or funds maintained by it in accordance with the laws of the state

of its incorporation; provided that the will under which it is acting

does not specifically prohibit such investment and that the will under

which it is acting shall authorize the investment of such moneys in any

of the following; (a) in such a common trust fund; (b) in such

investments as such fiduciary or fiduciaries under such will may select

in the discretion of such fiduciary or fiduciaries; (c) generally in

investments other than those in which trustees are by law authorized to

invest trust funds; and provided that any banking corporation or trust

company incorporated under the laws of this state is permitted by the

laws of the state of incorporation of such foreign banking corporation

or trust company, when acting in similar fiduciary capacity in that

state, to invest any moneys received and held by it in such capacity in

any common trust fund or funds maintained by it in accordance with the

laws of this state.

Additional powers of certain trust companies. Every trust

company which at the time this act takes effect lawfully possesses and

exercises the power, for hire, to examine titles to real estate, to

procure and furnish information in relation thereto, and to guarantee or

insure the title to real estate to persons interested, in such real

estate or in mortgages thereon, against loss, by reason of defective

title or other encumbrances of or upon, such real estate, shall continue

to possess such power, but no other trust company shall hereafter have

or exercise such power.

Powers of specially chartered trust companies. Every trust

company incorporated by a special law shall possess the powers of trust

companies incorporated under this chapter and shall be subject to such

provisions of this chapter as are not inconsistent with the special laws

relating to such specially chartered company.

Limited liability trust companies. 1. Trust companies which

(a) do not receive deposits from the general public and (b) have been

exempted by the superintendent of financial services from the

requirements of section thirty-two of this chapter, may be formed and

operated as limited liability trust companies. Such limited liability

trust companies shall be formed in accordance with, shall operate in

compliance with, and shall meet all of the requirements of the limited

liability company law and this chapter, except that to the extent any

provision of the limited liability company law shall be inconsistent

with the provisions of this chapter, the provisions of this chapter

shall govern; provided, however, that limited liability trust companies

shall not have perpetual existence.

2. Notwithstanding any other provision of this chapter, a limited

liability trust company shall dissolve and its affairs shall be wound up

upon the occurrence of any event specified in section seven hundred one

of the limited liability company law. Upon such a dissolution, the

provisions of this chapter shall govern the winding up of the affairs of

the limited liability trust company and the distribution of its assets.

Further, upon such a dissolution, if the members of a limited liability

trust company wish to continue the existence of the company and meet the

requirements of section seven hundred one of the limited liability

company law, they shall apply for and may receive the approval of the

superintendent for new articles of organization and a new authorization

certificate.

3. Trust companies which have been formed and are operating pursuant

to this article and article fifteen of this chapter on the effective

date of this section, and which meet the requirements of subdivision one

of this section, may, with the approval of the superintendent of

financial services, convert into limited liability trust companies,

provided that they meet all of the other requirements of this chapter as

if they were newly formed companies.

4. The superintendent is hereby authorized and empowered to make such

general rules and regulations as may be necessary and proper to

effectuate the provisions of this chapter relating to the formation and

operation of limited liability trust companies.

* Restrictions on loans, purchases of securities and total

liabilities to bank or trust company of any one person.

* NB Effective until notification of the superintendent of financial

services

* Restrictions on loans, purchases of securities, total liabilities

and other credit exposures to a bank or trust company of any one person.

* NB Effective upon notification of the superintendent of financial

services

No bank or trust company shall:

1. Lend to any person (which term shall mean, for the purposes of this

subdivision, any individual, partnership, unincorporated association,

corporation or body politic) an amount which will exceed fifteen per

centum of the capital stock, surplus fund and undivided profits of such

bank or trust company. Any extension of credit to a person by means of

the issue or confirmation of irrevocable sight letters of credit upon

the responsibility of such person, or by means of the discount or

purchase of, or investment in, bills of exchange, notes, bonds,

debentures or other obligations made, drawn or accepted by such person,

shall be considered a loan to such person for the purposes of this

subdivision except that (1) in the case of an accepted bill of exchange,

the loan shall be considered, subject to clause (2) below, to be made to

the acceptor and not to the drawer; and (2) if any bill of exchange,

note, bond, debenture or other obligation is endorsed without limitation

or guaranteed by any person and discounted with, or sold to, such bank

or trust company by such person, the loan shall be considered a loan to

such person and not to the maker, drawer or acceptor of such bill of

exchange, note, bond, debenture or other obligation. The foregoing

limitation is subject to the following exceptions:

(a) The limitations in this subdivision shall not apply to (1) any

loan to the extent that the United States, this state or any city,

county, town, village or school district of this state, or any

department, agency or instrumentality of the United States or this state

designated by the superintendent by general or specific regulation, has

agreed to pay the principal and interest thereof, or has guaranteed

payment (by guaranty or commitment to purchase or otherwise) of such

principal and interest, or is committed to supply, by loan, subsidy or

otherwise, funds sufficient to pay such principal and interest, or has

otherwise pledged its faith and credit for the payment of such principal

and interest; or (2) any loan secured by not less than a like amount

(based on their principal amount or market value, whichever is lower, at

the time the loan is made) of direct obligations of the United States or

of this state or of any city, county, town, village or school district

of this state or of any such department, agency or instrumentality of

the United States or this state or by obligations otherwise fully

guaranteed as to principal and interest by the United States.

(b) The limitations in this subdivision shall not apply to any loan to

the extent such loan is secured by cash collateral which is not subject

to withdrawal.

In addition, the limitations in this subdivision shall not apply (i)

to loans arising from the discount of commercial or business paper

evidencing an obligation to the person negotiating it with recourse;

(ii) to loans to the student loan marketing association; (iii) to loans

to any financial institution or to any receiver, conservator,

superintendent of financial services, or other agent in charge of the

business and property of such financial institutions when such loans are

approved by the superintendent; (iv) to the purchase of bankers'

acceptances of the kind described in section 13 of an act of congress

entitled the "Federal Reserve Act" and issued by other banking

corporations; and (v) to loans made to facilitate prompt clearance or

settlement arising from the purchase or sale of readily marketable

securities which loans (A) are secured by readily marketable securities

having a market value or a principal face amount (whichever is less) at

the time the loan is made of not less than the principal amount of said

loan, and (B) shall be required to be repaid upon settlement of such

purchase or sale.

(c) Loans (exclusive of any loan described in paragraph (a) of this

subdivision) to any state other than the state of New York, or to any

foreign nation, the New York State thruway authority, the Triborough

bridge and tunnel authority, The Port of New York Authority, a railroad

corporation, a municipal corporation of this state, a corporation

subject to the jurisdiction of a public service commission of this

state, or any international lending facility or public benefit

corporation designated by the superintendent by regulation, may equal

but not exceed twenty-five per centum of the capital stock, surplus fund

and undivided profits of such bank or trust company.

(d) Loans to any person, other than loans described in paragraph (a),

(b) or (c) of this subdivision, may equal but not exceed twenty-five per

centum of the capital stock, surplus fund and undivided profits of such

bank or trust company, provided such loans either in whole or in part,

but in any event that part thereof in excess of fifteen per centum of

such capital stock, surplus fund and undivided profits:

(1) are upon, or with respect to, drafts or bills of exchange drawn in

good faith against actually existing values, or upon bankers'

acceptances or bills of exchange of the kinds and maturities made

eligible by law for purchase in the open market by federal reserve

banks; or

(2) are secured by collateral having an ascertained market value, or

otherwise having a value as collateral as found in good faith by an

officer of such bank or trust company, at least equal to the excess of

such loans over fifteen per centum of such capital stock, surplus fund

and undivided profits.

(d-1) Loans secured by bills of lading, warehouse receipts, or similar

documents transferring or securing title to readily marketable staples

shall be subject to a limitation of thirty-five per centum of the

capital stock, surplus fund and undivided profits of such bank or trust

company in addition to the general limitations if the market value of

the staples securing each additional loan at all times equals or exceeds

one hundred fifteen per centum of the outstanding amount of such loan.

The staples shall be fully covered by insurance whenever it is customary

to insure such staples.

(d-2) Loans secured by shipping documents or instruments transferring

or securing title covering livestock or giving a lien on livestock when

the market value of the livestock securing the obligation is not at any

time less than one hundred fifteen per centum of the face amount of the

note covered, shall be subject to a maximum limitation equal to

twenty-five per centum of the capital stock, surplus fund and undivided

profits of such bank or trust company.

In addition, loans which arise from the discount by dealers in dairy

cattle of paper given in payment for dairy cattle, which paper carries a

full recourse endorsement or unconditional guarantee of the seller, and

which are secured by the cattle being sold, shall be subject to a

limitation of twenty-five per centum of the capital stock, surplus fund

and undivided profits of such bank or trust company.

(e) In computing the total loans by any bank or trust company (i) to

any individual, there shall be included all loans by the bank or trust

company to any partnership or unincorporated association of which he is

a member, and all loans made for his benefit or for the benefit of such

partnership or association; (ii) to any partnership or unincorporated

association, there shall be included all loans by the bank or trust

company to its individual members and all loans made by the bank or

trust company for the benefit of such partnership or unincorporated

association or any member thereof; and (iii) to any corporation, there

shall be included all loans made by the bank or trust company for the

benefit of the corporation. A loan shall be deemed to be made for the

benefit of a corporation only to the extent that the proceeds of such

loan (1) are to be loaned to the corporation; (2) are to be used for the

acquisition (otherwise than in connection with a public offering) from

the corporation by a person in control of, or under common control with,

the corporation, of any stock or other securities issued by the

corporation, or (3) are to be transferred to the corporation without

fair and adequate consideration, and the discharge of an equivalent

amount of debt previously incurred in good faith and for value shall be

considered fair and adequate consideration. A loan shall not be deemed

to be made for the benefit of a corporation if such loan is made to a

person other than the corporation and is secured as provided in

subdivision four of this section or is secured by collateral having an

ascertained market value, or otherwise having a value as collateral as

found in good faith by an officer of such bank or trust company, at

least equal to the amount of the loan; provided that stock or other

securities issued by, or a lien on property of, such corporation shall

not be considered collateral for the purposes of this provision.

(f) The limitations in this subdivision shall not apply to the

acceptance of bills of exchange or the issue or confirmation of letters

of credit calling for acceptances by a bank or trust company, but no

bank or trust company shall make acceptances, or issue letters of credit

calling for acceptances, upon the responsibility of any person to an

amount in excess of fifteen per centum of the capital stock, surplus

fund and undivided profits of such bank or trust company, unless that

part thereof in excess of fifteen per centum of such capital stock,

surplus fund and undivided profits is, and will remain, secured either

by accompanying documents or by some other actual security growing out

of the same transaction as the acceptance or by substituted security of

similar character.

(g) Loans arising from the discount of negotiable or non-negotiable

installment consumer paper which carries a full recourse endorsement or

unconditional guarantee by the transferor of such paper shall be subject

to a limitation of twenty-five per centum of the capital stock, surplus

fund and undivided profits of such bank or trust company. Within the

meaning of this subdivision, the liability to such bank or trust company

of any individual, partnership, unincorporated association or

corporation as endorser or guarantor of negotiable or non-negotiable

instalment consumer paper shall not be deemed a loan to such individual,

partnership, unincorporated association or corporation to the extent of

the value of the obligation thereon of the maker of such instalment

consumer paper, as found in good faith in writing by an officer of such

bank or trust company, designated to make such evaluation and

certification by the board of directors of the bank or trust company,

and upon the further certification by the said officer that the bank or

trust company is relying primarily on the maker of the instalment

consumer paper for the payment of an amount owing upon the instalment

consumer paper upon the security of which the bank or trust company is

making the loan or in which it is making the investment. The

certifications are to be made at the time of making the loan or

investment, and are to be based on information contained in the files of

the bank or trust company, or on the personal knowledge of the

designated officer. Instalment consumer paper, for the purposes of this

section, shall mean retail instalment contracts and retail instalment

obligations as defined in subdivisions six and six-a of section four

hundred ninety-one of this chapter, and similar agreements entered into

outside of this state.

(h) The limitations in this subdivision shall not apply to any advance

of federal funds by such bank or trust company to a commercial bank,

provided such advance is made on the condition that it be repaid on the

next business day following the day on which the advance is made. For

purposes of this paragraph, the term "federal funds" shall mean funds on

deposit at a federal reserve bank or funds on deposit at a commercial

bank which are exchangeable for funds on deposit at a federal reserve

bank; the term "commercial bank" shall mean any bank, trust company,

private banker, national banking association, any banking corporation

organized under the laws of the United States or any state of the United

States and engaged in a commercial banking business, or any banking

corporation organized under the laws of any foreign country and engaged

in the commercial banking business that maintains a branch or agency

licensed by any state of the United States or the comptroller of the

currency; and the term "business day" shall mean any day on which the

bank or trust company making the advance, the commercial bank obtaining

the advance and any federal reserve bank or banks through which such

advance was effected are all open for general business.

* (i) The limitations in this subdivision shall not apply to the

investment of such bank or trust company in the bonds, debentures, notes

or other obligations of any person, provided: (i) such bonds,

debentures, notes or other obligations mature not less than one year

after their respective dates of issuance, and, at the time of such

investment, are rated in one of the three highest rating grades by an

independent rating service designated by the superintendent of financial

services; (ii) such investment does not exceed fifteen per centum of the

capital stock, surplus fund and undivided profits of such bank or trust

company; and (iii) such investment complies with such additional

limitations and conditions as the superintendent of financial services

from time to time may prescribe by general regulation.

* NB Effective until notification of the superintendent of financial

services

* (i) The limitations in this subdivision shall not apply to the

investment of such bank or trust company in the bonds, debentures, notes

or other obligations of any person, provided: (i) such bonds,

debentures, notes or other obligations mature not less than one year

after their respective dates of issuance, and, at the time of such

investment, meet the standards of creditworthiness established by

regulation by the superintendent; (ii) such investment does not exceed

fifteen per centum of the capital stock, surplus fund and undivided

profits of such bank or trust company; and (iii) such investment

complies with such additional limitations and conditions as the

superintendent from time to time may prescribe by regulation.

* NB Effective upon notification of the superintendent of financial

services

* (j) In the case of a trust company which (1) does not receive

deposits from the general public and (2) has been exempted by the

superintendent of financial services from the requirements of section

thirty-two of this chapter, the limitations of this subdivision shall

not apply to the investment of such trust company in the bonds,

debentures, notes or other obligations of, any foreign nation, or any

political subdivision, agency or instrumentality thereof, provided: (i)

at the time of such investment, such bonds, debentures, notes or other

obligations are rated in one of the three highest rating grades by an

independent rating service designated by the superintendent of financial

services; (ii) for any such bonds, debentures, notes or other

obligations, the foreign nation, or any political subdivision, agency or

instrumentality thereof, has guaranteed payment (by guaranty or

commitment to purchase or otherwise) of such principal and interest, or

is committed to supply, by loan, subsidy or otherwise, funds sufficient

to pay such principal and interest, or has otherwise pledged its faith

and credit for the payment of such principal and interest; (iii) such

investments do not exceed the per centum applicable to such obligor of

the capital stock, surplus fund and undivided profits of such bank or

trust company as the superintendent shall approve, and (iv) such

investments comply with such limitations and conditions as the

superintendent may from time to time prescribe.

* NB Effective until notification of the superintendent of financial

services

* (j) In the case of a trust company which (1) does not receive

deposits from the general public and (2) has been exempted by the

superintendent from the requirements of section thirty-two of this

chapter, the limitations of this subdivision shall not apply to the

investment of such trust company in the bonds, debentures, notes or

other obligations of, any foreign nation, or any political subdivision,

agency or instrumentality thereof, provided: (i) at the time of such

investment, such bonds, debentures, notes or other obligations meet the

standards of creditworthiness established by regulation by the

superintendent; (ii) for any such bonds, debentures, notes or other

obligations, the foreign nation, or any political subdivision, agency or

instrumentality thereof, has guaranteed payment (by guaranty or

commitment to purchase or otherwise) of such principal and interest, or

is committed to supply, by loan, subsidy or otherwise, funds sufficient

to pay such principal and interest, or has otherwise pledged its faith

and credit for the payment of such principal and interest; (iii) such

investments do not exceed the per centum applicable to such obligor of

the capital stock, surplus fund and undivided profits of such bank or

trust company as the superintendent shall approve; and (iv) such

investments comply with such limitations and conditions as the

superintendent may from time to time prescribe.

* NB Effective upon notification of the superintendent of financial

services

* (k) In the case of a trust company which (1) does not receive

deposits from the general public and (2) has been exempted by the

superintendent of financial services from the requirements of section

thirty-two of this chapter, the limitations of this subdivision shall

not apply to the purchase of securities under repurchase agreement

provided that the repurchase agreement relates to not less than a like

amount of direct obligations (based on their principal amount or market

value, whichever is lower, at the time the purchase occurs) of any

foreign nation, or any political subdivision, agency or instrumentality

thereof, provided: (i) at the time of such purchase, such direct

obligations are rated in one of the three highest rating grades by an

independent rating service designated by the superintendent of financial

services; (ii) for any such direct obligations, the foreign nation, or

any political subdivision, agency or instrumentality thereof, has

guaranteed payment (by guaranty or commitment to purchase or otherwise)

of the principal and interest thereof, or is committed to supply, by

loan, subsidy or otherwise, funds sufficient to pay such principal and

interest, or has otherwise pledged its faith and credit for the payment

of such principal and interest; (iii) the purchase price of such

securities does not exceed the per centum applicable to the obligor of

such securities of the capital stock, surplus fund and undivided profits

of such bank or trust company as the superintendent shall approve; and

(iv) such purchase complies with such limitations and conditions as the

superintendent may from time to time prescribe.

* NB Effective until notification of the superintendent of financial

services

* (k) In the case of a trust company which (1) does not receive

deposits from the general public and (2) has been exempted by the

superintendent from the requirements of section thirty-two of this

chapter, the limitations of this subdivision shall not apply to the

purchase of securities under repurchase agreement provided that the

repurchase agreement relates to not less than a like amount of direct

obligations (based on their principal amount or market value, whichever

is lower, at the time the purchase occurs) of any foreign nation, or any

political subdivision, agency or instrumentality thereof, provided: (i)

at the time of such purchase, such direct obligations meet the standards

of creditworthiness established by regulation by the superintendent;

(ii) for any such direct obligations, the foreign nation, or any

political subdivision, agency or instrumentality thereof, has guaranteed

payment (by guaranty or commitment to purchase or otherwise) of the

principal and interest thereof, or is committed to supply, by loan,

subsidy or otherwise, funds sufficient to pay such principal and

interest, or has otherwise pledged its faith and credit for the payment

of such principal and interest; (iii) the purchase price of such

securities does not exceed the per centum applicable to the obligor of

such securities of the capital stock, surplus fund and undivided profits

of such bank or trust company as the superintendent shall approve; and

(iv) such purchase complies with such limitations and conditions as the

superintendent may from time to time prescribe.

* NB Effective upon notification of the superintendent of financial

services

* The superintendent of financial services shall be empowered to

promulgate rules and regulations as shall be appropriate to carry out

the purposes of this subdivision.

* NB Effective until notification of the superintendent of financial

services

* The superintendent shall be empowered to promulgate rules and

regulations as shall be appropriate to carry out the purposes of this

subdivision.

* NB Effective upon notification of the superintendent of financial

services

* The superintendent also shall be authorized to determine the manner

and extent to which credit exposure resulting from derivative

transactions, repurchase agreements, reverse repurchase agreements,

securities lending transactions and securities borrowing transactions

shall be taken into account for purposes of this section. As used in

this section, the term "derivative transaction" includes any transaction

that is a contract, agreement, swap, warrant, note or option that is

based, in whole or in part, on the value of, any interest in, any

quantitative measure of, or the occurrence of any event relating to, one

or more commodities, securities, currencies, interest or other rates,

indices or other assets. In making such determinations, the

superintendent may, but is not required to, act by order or regulation.

* NB Effective upon notification of the superintendent of financial

services

4. Make a loan upon the security of real estate within or without this

state which does not comply with any such rules or regulations as the

superintendent of financial services may prescribe.

No loan shall be made under the provisions of this subdivision except

upon the written and signed certificate of an appraiser appointed

pursuant to policies established by the board of directors, certifying

to the value of the premises according to his judgment.

The provisions of this subdivision shall not constitute the authority

to make a loan to a natural person upon the security of a mortgage which

is not a first lien.

Where the collateral for any loan consists partly of real estate

security and partly of other security, including a guarantee or

endorsement by or an obligation or commitment of a person other than the

borrower, only the amount by which the loan exceeds the value as

collateral of such other security, as found in good faith by a duly

authorized officer of such bank or trust company, at the time of the

making of the loan or commitment therefor, shall be considered a loan

upon the security of real estate, provided, that in no event shall a

loan be considered a loan upon the security of real estate (i) where the

principal amount of any real estate security taken therefor is less than

fifteen per centum of the amount of such loan or (ii) where the loan is

payable in monthly or quarterly installments over a period not to exceed

one hundred twenty-one months and does not exceed twenty thousand

dollars and is for the purpose of paying the cost of any repairs,

alterations or improvements upon, or in connection with, or, as the

superintendent may authorize, the equipping of existing structures or

the building of new structures by the owners thereof or by the lessees

under a lease expiring not less than six months after the maturity of

the loan or (iii) where the loan is fully guaranteed or insured by the

United States or a state, or any department, agency or instrumentality

thereof, and for the payment of which loan the full faith and credit of

the United States or of such state is pledged and if under the terms of

the guaranty or insurance agreement the bank or trust company will be

assured of repayment in accordance with the terms of the loan or (iv)

where there is a binding and valid commitment or agreement by a

financially responsible lender, purchaser or other financially

responsible party either directly with the lending bank or trust company

or which is for the benefit of, or has been assigned to, the lending

bank or trust company and pursuant to which commitment, agreement or

assignment, the lender, purchaser or other party is required to advance

to the lending bank or trust company within thirty months from the date

of such commitment or agreement the full amount of the loan to be made

by the lending bank or trust company upon the security of real estate

improved by a building or buildings, or to be improved by a building or

buildings in the process of construction, the major portion of which

building is used, or in the case of a building under construction is to

be used, for residential, business, manufacturing or agricultural

purposes, and where pursuant to the terms and provisions of such

commitment or agreement such advance shall be made prior to or upon the

maturity of the loan by the lending bank or trust company.

Real estate security for purposes of this section shall not include

(a) an assignment of rents under a lease, (b) a mortgage or other lien

upon a leasehold, (c) a mortgage or other lien upon leasehold, royalty

or other rights in oil, gas, minerals, standing timber, or other

products of land, (d) a mortgage or other lien made or given upon real

estate and taken as collateral security for loans to a borrower,

provided, that at the time of the making of the loan or commitment

therefor, repayment thereof is reasonably expected to be made out of the

operations of such borrower or of the mortgagor, or (e) such mortgages

or other liens on property as may be specifically exempted from the

limitations and restrictions of this subdivision by the superintendent

of financial services by general or specific regulations. Nothing in

this paragraph shall be construed to imply that security of a kind not

mentioned herein is to be deemed real estate security.

The limitations and restrictions contained in this subdivision shall

not prevent the acceptance of any real estate security to secure the

payment of a debt previously contracted in good faith. Every mortgage

and every assignment of a mortgage taken or held by such bank or trust

company shall immediately be recorded or registered in its name in the

office of the clerk or the proper recording officer of the county in

which the real estate described in the mortgage is located, except that

where the underlying real estate is located outside the state of New

York such mortgage or assignment may be recorded or registered in the

name of a duly authorized nominee, and except that if such mortgage or

assignment of mortgage or of an interest therein shall be taken from a

corporation organized under the banking law or all of the capital stock

of which is owned by not less than twenty savings banks of this state,

the bank or trust company may hold such mortgage or assignment

unrecorded unless the superintendent shall direct the bank or trust

company to record the same. The recording or registering of assignments

of mortgages shall not be required when not less than ten mortgages are

assigned as security for a loan, the term of which does not exceed

twelve months.

Any bank or trust company may renew from time to time any loan upon

the security of real estate lawfully made by it prior to June thirtieth,

nineteen hundred thirty-seven.

None of the prohibitions and restrictions contained in this

subdivision shall apply to any corporation all of the capital stock of

which is owned by not less than twenty savings banks of this state.

4-a. A bank or trust company may, in addition to the authority granted

under any other provisions of this article, make a loan to a natural

person upon the security of a mortgage which is not a first lien at the

rate or rates agreed to by the bank or trust company and the borrower,

subject to such regulations as the superintendent of financial services

may prescribe. Such regulations by the superintendent of financial

services may include such restrictions as the superintendent of

financial services finds necessary or proper, including without

limitation, a restriction as to the percentage of total assets which may

be invested in such loans or a restriction on the loan to appraisal

value of property securing such loan.

For purposes of this subdivision, the term mortgage shall include a

lien on an existing ownership interest in certificates of stock or other

evidence of an ownership interest in, and a proprietary lease from, a

corporation or partnership formed for the purpose of the cooperative

ownership of real estate.

5. Make any loan for the purpose of financing the purchase of or

refinancing an existing ownership interest in certificates of stock or

other evidence of an ownership interest in, and a proprietary lease

from, a corporation or partnership formed for the purpose of the

cooperative ownership of real estate, unsecured except to the extent of

an assignment or transfer of the stock certificates or other evidence of

ownership interest of the borrower and the proprietary lease within

ninety days from the making of the loan, which shall exceed the maximum

per cent of the loan permitted to be made on real estate improved by a

single family residence occupied by the owner, provided that for

purposes of this section the amount of the purchase price shall be

deemed to equal the appraised value of such certificate of stock or

other evidence of an ownership interest, or, in the case of a

refinancing, the appraised value of such certificates of stock or other

evidence of an ownership interest and which shall fail to provide for

full repayment of principal and interest within the same number of years

as a conventional mortgage loan previously described in this

subdivision, provided that all real estate owned by such corporation or

partnership shall be located within the state; and provided, further,

that such loan shall be subject to such regulations as the

superintendent of financial services may from time to time promulgate.

The maximum rate of interest which may be charged, taken or received

upon any loan or forbearance made pursuant to this subdivision may

exceed the rate of interest prescribed by the superintendent of

financial services in accordance with section fourteen-a by no more than

one and one-half per centum per annum.

6. Make any loan or discount on the security of the shares of its own

capital stock, or, except as provided in section five thousand twelve of

this chapter, be the purchaser of any such shares, unless such security

or purchase shall be necessary to minimize or avoid loss upon a debt

previously contracted in good faith, and stock so purchased shall be

sold at public or private sale, or otherwise disposed of, within six

months from the time of its purchase unless the superintendent shall

authorize such bank or trust company in writing to hold such shares for

a longer period. Any bank or trust company violating any of the

provisions of this subdivision shall forfeit to the people of the state

twice the amount of the loan or purchase.

7. Knowingly lend, directly or indirectly, any money or property for

the purpose of enabling any person to pay for or hold shares of its

stock, unless the loan is made upon security having an ascertained

market value of at least fifteen per centum more than the amount of the

loan. Any bank or trust company violating the provisions of this

subdivision shall forfeit to the people of the state twice the amount of

the loan.

8. Except in conformity with such rules and regulations as may be