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S04350 Summary:

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S04350 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         4350--A
 
                               2013-2014 Regular Sessions
 
                    IN SENATE
 
                                     March 21, 2013
                                       ___________
 
        Introduced  by  Sen.  FARLEY -- read twice and ordered printed, and when
          printed to be committed to the Committee on Banks  --  recommitted  to
          the  Committee  on  Banks  in accordance with Senate Rule 6, sec. 8 --
          committee discharged, bill amended, ordered reprinted as  amended  and
          recommitted to said committee
 

        AN ACT to amend the banking law, in relation to making certain technical
          corrections thereto
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Section 6-i of the banking law, as added by chapter 571  of
     2  the  laws  of  1986  and  as further amended by section 104 of part A of
     3  chapter 62 of the laws of 2011, is amended to read as follows:
     4    § 6-i. Mortgage loans. No person,  partnership,  corporation,  banking
     5  organization,  exempt  organization  as  defined in section five hundred
     6  ninety of this chapter or other entity shall make  a  mortgage  loan  as
     7  defined  in  section  five  hundred  ninety  of  this  chapter except in
     8  conformity with the requirements of article twelve-D and  in  compliance
     9  with such rules and regulations as may be promulgated by the superinten-

    10  dent  of  financial services [or prescribed by the superintendent] under
    11  this section. Nothing in this section shall be  construed  to  limit  or
    12  otherwise modify any otherwise applicable requirement of state or feder-
    13  al law.
    14    §  2. Subdivision 3 of section 7 of the banking law, as added by chap-
    15  ter 184 of the laws of 1978 and as further amended  by  section  104  of
    16  part A of chapter 62 of the laws of 2011, is amended to read as follows:
    17    3.  The superintendent of financial services may promulgate such regu-
    18  lations as [it] he or she deems necessary and proper  to  implement  and
    19  define the provisions of this section.
    20    §  3.  Subdivision  3 of section 9-f of the banking law, as amended by
    21  chapter 571 of the laws of 1986 and as further amended by section 104 of

    22  part A of chapter 62 of the laws of 2011, is amended to read as follows:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09332-03-4
        S. 4350--A                          2
 
     1    3. For the purposes of this section, the term (a) "prudent loan" means
     2  a loan upon the security of real property which is prudent by acceptable
     3  banking standards and is in compliance with all  of  the  provisions  of
     4  this  chapter[,]  and  rules  and  regulations  of the superintendent of
     5  financial  services  [and rules of the superintendent]; and (b) notwith-
     6  standing any other provision of this chapter or law to the contrary, the

     7  term banking institution when  used  in  this  section  shall  mean  and
     8  include  all  banks,  trust  companies,  savings banks, savings and loan
     9  associations, credit unions, mortgage bankers, exempt  organizations  as
    10  defined  in  article twelve-D of this chapter and foreign banking corpo-
    11  rations whether incorporated, chartered, organized or licensed under the
    12  laws of this state or any other state or the United States.
    13    § 4. Subdivision 2 of section 14-c of the banking  law,  as  added  by
    14  chapter  19 of the laws of 1978 and as further amended by section 104 of
    15  part A of chapter 62 of the laws of 2011, is amended to read as follows:
    16    2. The superintendent of financial services may alter or  amend  rules
    17  and  regulations  or promulgate additional rules and regulations as [it]
    18  he or she deems necessary and proper to  effectuate  the  provisions  of

    19  subdivision one.
    20    §  5.  Subdivision 10 of section 100-c of the banking law, as added by
    21  chapter 239 of the laws of 1986 and as further amended by section 104 of
    22  part A of chapter 62 of the laws of 2011, is amended to read as follows:
    23    10. The superintendent of financial  services  shall  promulgate  such
    24  regulations  and rules as [it] he or she considers appropriate to govern
    25  the administration of common  trust  funds  and  short  term  investment
    26  common trust funds.
    27    §  6.  Subdivision  4 of section 103 of the banking law, as amended by
    28  chapter 313 of the laws of 2001, the opening  paragraph  and  the  fifth
    29  undesignated  paragraph  as  further amended by section 104 of part A of
    30  chapter 62 of the laws of 2011, is amended to read as follows:
    31    4. Make a loan upon the security of real estate within or without this

    32  state which does not comply with any such rules or  regulations  as  the
    33  superintendent of financial services may prescribe.
    34    No  loan shall be made under the provisions of this subdivision except
    35  upon the written and signed certificate of an appraiser appointed pursu-
    36  ant to policies established by the board of directors, certifying to the
    37  value of the premises according to his judgment.
    38    The provisions of this subdivision shall not constitute the  authority
    39  to make a loan to a natural person upon the security of a mortgage which
    40  is not a first lien.
    41    Where the collateral for any loan consists partly of real estate secu-
    42  rity  and partly of other security, including a guarantee or endorsement
    43  by or an obligation or commitment of a person other than  the  borrower,
    44  only  the  amount  by  which the loan exceeds the value as collateral of

    45  such other security, as found in good faith by a duly authorized officer
    46  of such bank or trust company, at the time of the making of the loan  or
    47  commitment  therefor,  shall  be  considered a loan upon the security of
    48  real estate, provided, that in no event shall a  loan  be  considered  a
    49  loan  upon the security of real estate (i) where the principal amount of
    50  any real estate security taken therefor is less than fifteen per  centum
    51  of  the amount of such loan or (ii) where the loan is payable in monthly
    52  or quarterly installments over a period not to exceed one hundred  twen-
    53  ty-one months and does not exceed twenty thousand dollars and is for the
    54  purpose  of  paying the cost of any repairs, alterations or improvements
    55  upon, or in connection with, or, as the  superintendent  may  authorize,
    56  the  equipping  of existing structures or the building of new structures

        S. 4350--A                          3
 
     1  by the owners thereof or by the lessees under a lease expiring not  less
     2  than  six  months after the maturity of the loan or (iii) where the loan
     3  is fully guaranteed or insured by the United States or a state,  or  any
     4  department,  agency  or  instrumentality thereof, and for the payment of
     5  which loan the full faith and credit of the United  States  or  of  such
     6  state  is  pledged  and  if under the terms of the guaranty or insurance
     7  agreement the bank or trust company will  be  assured  of  repayment  in
     8  accordance  with  the terms of the loan or (iv) where there is a binding
     9  and valid commitment or agreement by a financially  responsible  lender,
    10  purchaser  or  other  financially responsible party either directly with
    11  the lending bank or trust company or which is for the benefit of, or has

    12  been assigned to, the lending bank or  trust  company  and  pursuant  to
    13  which  commitment,  agreement  or  assignment,  the lender, purchaser or
    14  other party is required to advance to the lending bank or trust  company
    15  within  thirty  months from the date of such commitment or agreement the
    16  full amount of the loan to be made by the lending bank or trust  company
    17  upon the security of real estate improved by a building or buildings, or
    18  to   be   improved  by  a  building  or  buildings  in  the  process  of
    19  construction, the major portion of which building is  used,  or  in  the
    20  case  of  a  building under construction is to be used, for residential,
    21  business, manufacturing or agricultural purposes, and where pursuant  to
    22  the  terms  and  provisions of such commitment or agreement such advance
    23  shall be made prior to or upon the maturity of the loan by  the  lending

    24  bank or trust company.
    25    Real  estate  security  for purposes of this section shall not include
    26  (a) an assignment of rents under a lease, (b) a mortgage or  other  lien
    27  upon  a  leasehold, (c) a mortgage or other lien upon leasehold, royalty
    28  or other rights  in  oil,  gas,  minerals,  standing  timber,  or  other
    29  products  of  land, (d) a mortgage or other lien made or given upon real
    30  estate and taken  as  collateral  security  for  loans  to  a  borrower,
    31  provided,  that  at  the  time  of  the making of the loan or commitment
    32  therefor, repayment thereof is reasonably expected to be made out of the
    33  operations of such borrower or of the mortgagor, or (e)  such  mortgages
    34  or  other  liens  on  property  as may be specifically exempted from the
    35  limitations and restrictions of this subdivision by  the  superintendent

    36  of  financial  services by general or specific regulations [adopted by a
    37  three-fifths vote of all its members]. Nothing in this  paragraph  shall
    38  be construed to imply that security of a kind not mentioned herein is to
    39  be deemed real estate security.
    40    The  limitations  and restrictions contained in this subdivision shall
    41  not prevent the acceptance of any real estate  security  to  secure  the
    42  payment  of  a  debt previously contracted in good faith. Every mortgage
    43  and every assignment of a mortgage taken or held by such bank  or  trust
    44  company  shall  immediately be recorded or registered in its name in the
    45  office of the clerk or the proper recording officer  of  the  county  in
    46  which  the real estate described in the mortgage is located, except that
    47  where the underlying real estate is located outside  the  state  of  New

    48  York  such  mortgage  or assignment may be recorded or registered in the
    49  name of a duly authorized nominee, and except that if such  mortgage  or
    50  assignment  of  mortgage or of an interest therein shall be taken from a
    51  corporation organized under the banking law or all of the capital  stock
    52  of  which  is owned by not less than twenty savings banks of this state,
    53  the bank or trust company may hold such  mortgage  or  assignment  unre-
    54  corded  unless the superintendent shall direct the bank or trust company
    55  to record the same. The recording or registering of assignments of mort-
    56  gages shall not be  required  when  not  less  than  ten  mortgages  are
        S. 4350--A                          4
 
     1  assigned  as  security  for  a  loan,  the term of which does not exceed
     2  twelve months.

     3    Any  bank  or  trust company may renew from time to time any loan upon
     4  the security of real estate lawfully made by it prior to June thirtieth,
     5  nineteen hundred thirty-seven.
     6    None of the prohibitions and restrictions contained in  this  subdivi-
     7  sion shall apply to any corporation all of the capital stock of which is
     8  owned by not less than twenty savings banks of this state.
     9    § 7. Paragraph (d) of subdivision 8 of section 108 of the banking law,
    10  as  added by chapter 344 of the laws of 1974, such subdivision as renum-
    11  bered by chapter 512 of the laws of 1977,  and  as  further  amended  by
    12  section  104  of part A of chapter 62 of the laws of 2011, is amended to
    13  read as follows:
    14    (d) The superintendent of financial services may promulgate such regu-
    15  lations as [it] he or she deems necessary and proper  to  implement  and

    16  define  the provisions of this subdivision. The superintendent of finan-
    17  cial services may prescribe maximum charges from time to time,  but  not
    18  more  often than once in any six month period, and shall provide reason-
    19  able notice to the public of any change in such maximum charges, of  the
    20  effective  date  of such change, which shall not be less than seven days
    21  following the adoption of such change by the superintendent of financial
    22  services, and of any rule or regulation adopted pursuant to this  subdi-
    23  vision.
    24    § 8.  Section 111 of the banking law, as amended by chapter 360 of the
    25  laws  of 1984 and as further amended by section 104 of part A of chapter
    26  62 of the laws of 2011, is amended to read as follows:
    27    § 111. Profits; credits to surplus fund and to undivided  profits.  In
    28  any  case  where  the combined capital stock, surplus fund and undivided

    29  profits of a bank or trust company do not equal ten per  centum  of  its
    30  net deposit liabilities, the superintendent of financial services may in
    31  [its]  his  or  her discretion require such bank or trust company at the
    32  close of each accounting period  to  credit  its  surplus  fund  with  a
    33  portion of its net profits for such period, not to exceed ten per centum
    34  thereof,  until  its  combined capital stock, surplus fund and undivided
    35  profits equal ten per centum of its net  deposit  liabilities.  For  the
    36  purposes  of this section, the term "net deposit liabilities" shall mean
    37  total deposits including all amounts due to national banks, banks, bank-
    38  ers, trust companies and savings banks, the amounts due on certified and
    39  cashier's checks, and for unpaid dividends less the amounts of  balances
    40  due  from  national  banks, banks, bankers, and trust companies and cash

    41  items in process of collection payable immediately upon presentation  in
    42  the United States.
    43    §  9.    Paragraph  (b) of subdivision 3 of section 130 of the banking
    44  law, as amended by chapter 217 of  the  laws  of  2010  and  as  further
    45  amended  by  section 104 of part A of chapter 62 of the laws of 2011, is
    46  amended to read as follows:
    47    (b) The superintendent of financial services shall have the  power  to
    48  determine by regulation who shall be considered, under the provisions of
    49  this  subdivision,  to  be  an  executive  officer,  and by a general or
    50  specific regulation[, upon a three-fifths vote of all its  members,]  to
    51  grant  permission  to an executive officer of a bank or trust company to
    52  be an executive officer, director or trustee or both an executive  offi-
    53  cer  and director or a trustee of another bank or trust company, savings

    54  bank, or savings and loan association, national  bank,  federal  savings
    55  bank  or  federal  savings association, the principal office of which is
    56  located in this state, bank holding company, or foreign  banking  corpo-
        S. 4350--A                          5
 
     1  ration maintaining a branch in this state. Such permission may be grant-
     2  ed  only  if in the judgment of the superintendent of financial services
     3  such service by the executive officer will be consistent with the policy
     4  of the state of New York as declared in section ten of this chapter. The
     5  superintendent of financial services shall have the power to revoke such
     6  permission [by a like vote] whenever [it] he or she finds, after reason-
     7  able  notice  and  an  opportunity to be heard, that the public interest
     8  requires such revocation.

     9    § 10.  Subdivision 4 of section 234-b of the banking law, as added  by
    10  chapter 883 of the laws of 1980 and as further amended by section 104 of
    11  part A of chapter 62 of the laws of 2011, is amended to read as follows:
    12    4.  The  superintendent of financial services is authorized to promul-
    13  gate such regulations as [it] he or she may deem necessary or proper  to
    14  implement  the provisions of this section and the proper exercise of the
    15  powers granted by this section.
    16    § 11.  Section 380-h of the banking law, as added by  chapter  883  of
    17  the laws of 1980, subdivisions 1 and 4 as further amended by section 104
    18  of  part  A  of  chapter  62  of the laws of 2011, is amended to read as
    19  follows:
    20    § 380-h. Trust powers. 1. The superintendent of financial services  is
    21  authorized and empowered to grant permission to a savings and loan asso-

    22  ciation  to  exercise any or all of the powers specified in sections one
    23  hundred, one hundred-a, one hundred-b and one hundred-c of this chapter.
    24  In passing upon applications for permission to exercise any such powers,
    25  the superintendent of financial services may take into consideration the
    26  amount of surplus of the  applying  association,  whether  or  not  such
    27  surplus  is sufficient under the circumstances of the case, the needs of
    28  the community to be served and any other facts  and  circumstances  that
    29  seem [to it] proper, and may grant or refuse it permission accordingly.
    30    2. Whenever the laws of this state require a trust company acting in a
    31  fiduciary  capacity to deposit securities with the state authorities for
    32  the protection of private or court trusts, a savings  and  loan  associ-
    33  ation, so acting, is empowered to make similar deposits of securities.

    34    4.  The  superintendent of financial services is authorized to promul-
    35  gate such regulations as [it] he or she may deem necessary or proper  to
    36  implement  the provisions of this section and the proper exercise of the
    37  powers granted by this section.
    38    § 12.  Section 455 of the banking law, as added by chapter 608 of  the
    39  laws  of 1996, subdivisions 1 and 3 as further amended by section 104 of
    40  part A of chapter 62 of the laws of 2011, is amended to read as follows:
    41    § 455. Trust powers. 1. The superintendent of  financial  services  is
    42  authorized  and empowered to grant permission to a credit union to exer-
    43  cise any or all of the powers specified in  sections  one  hundred,  one
    44  hundred-a,  one  hundred-b and one hundred-c of this chapter. In passing
    45  upon applications for permission to exercise any such powers, the super-

    46  intendent of financial services may take into consideration  the  amount
    47  of net worth of the applying credit union, whether or not such net worth
    48  is  sufficient  under  the  circumstances  of the case, the needs of the
    49  community to be served and any other facts and circumstances  that  seem
    50  [to it] proper, and may grant or refuse it permission accordingly.
    51    2. Whenever the laws of this state require a trust company acting in a
    52  fiduciary  capacity to deposit securities with the state authorities for
    53  the protection of private or court trusts, a credit union, so acting, is
    54  required and empowered to make similar deposits of securities.
    55    3. The superintendent of financial services is authorized  to  promul-
    56  gate  such regulations as [it] he or she may deem necessary or proper to

        S. 4350--A                          6
 
     1  implement the provisions of this section and the proper exercise of  the
     2  powers granted by this section.
     3    §  13.  Paragraph  (a)  of subdivision 1 of section 595 of the banking
     4  law, as amended by chapter 571 of  the  laws  of  1986  and  as  further
     5  amended  by  section 104 of part A of chapter 62 of the laws of 2011, is
     6  amended to read as follows:
     7    (a) Through a course  of  conduct,  the  licensee  or  registrant  has
     8  violated  any  provisions  of  this  article,  or any rule or regulation
     9  promulgated by the superintendent of financial services[, or any rule or
    10  regulation prescribed  by  the  superintendent]  under  and  within  the
    11  authority  of  this  article  or of any other law, rule or regulation of
    12  this state or the federal government;

    13    § 14.  Subdivision 7 of section 600 of the banking law, as amended  by
    14  chapter 315 of the laws of 2008 and as further amended by section 104 of
    15  part A of chapter 62 of the laws of 2011, is amended to read as follows:
    16    (7)  One  or more subsidiaries or affiliates of a bank, trust company,
    17  savings bank or savings and loan association,  which  are  not  a  bank,
    18  trust  company,  savings  bank or savings and loan association, as those
    19  terms are defined in section two of this chapter, with the  bank,  trust
    20  company,  savings  bank or savings and loan association of which it is a
    21  subsidiary or affiliate, as the  superintendent  of  financial  services
    22  shall  approve and enter on its records; provided, however, that nothing
    23  in this subdivision shall be deemed to authorize a bank, trust  company,
    24  savings  bank  or  savings and loan association to exercise any power or

    25  engage in any activity that it may not exercise or engage in pursuant to
    26  this chapter. The superintendent of financial  services  may  promulgate
    27  such  regulations as [it] he or she deems necessary and proper to imple-
    28  ment and define the provisions of  this  subdivision.  Nothing  in  this
    29  subdivision  shall  alter, affect or impair any regulation or resolution
    30  adopted, or that may be adopted,  by  the  superintendent  of  financial
    31  services,  pursuant to section twelve-a or former sections fourteen-g or
    32  fourteen-h of this chapter.
    33    § 15.  This act shall take effect immediately.