STATE OF NEW YORK
________________________________________________________________________
3755
2017-2018 Regular Sessions
IN SENATE
January 26, 2017
___________
Introduced by Sen. SAVINO -- read twice and ordered printed, and when
printed to be committed to the Committee on Banks
AN ACT to amend the banking law, in relation to community bank service
corporations
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "community bank service corporation act".
3 § 2. The banking law is amended by adding a new article 2-D to read as
4 follows:
5 ARTICLE 2-D
6 COMMUNITY BANK SERVICE CORPORATIONS
7 Section 88. Service corporations owned by community banks; authorized
8 activities of such corporations; investments therein.
9 § 88. Service corporations owned by community banks; authorized activ-
10 ities of such corporations; investments therein. 1. A community bank may
11 invest in the stock, capital notes and debentures of one or more service
12 corporations organized under the laws of this state for the sole activ-
13 ities set forth in subdivision two of this section, to the extent and
14 upon such conditions as are or have been authorized by the superinten-
15 dent of financial services including but not limited to the following
16 activities:
17 (a) providing services primarily for other financial institutions
18 particularly accounting, auditing, clerical, compliance activities,
19 consulting, data storage and process, investment advisory, research
20 services, locator services, personnel training and support, marketing
21 services, employee leasing services, and managerial;
22 (b) originating, investing in, purchasing, selling, servicing or
23 otherwise dealing in directly or through participation, loans of any
24 type which may be made by a community bank;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08456-01-7
S. 3755 2
1 (c) providing insurance brokerage or agency services, including but
2 not limited to agency for sale of insurance, vehicle warranty programs,
3 group purchasing programs and real estate settlement programs;
4 (d) providing real estate services including but not limited to
5 brokerage, appraisal, inspection, property management, and leasing of
6 excess property;
7 (e) leasing of personal property to customers;
8 (f) providing loan support services including but not limited to debt
9 collection services, loan processing, service and sales, real estate
10 settlement services, purchasing and servicing of non-performing loans
11 and referral and processing of loan applications;
12 (g) record retention, security and disaster recovery services includ-
13 ing but not limited to alarm-monitoring and other security services,
14 disaster recovery services, microfilm, microfiche, optical and electron-
15 ic imaging, CD-ROM data storage and retrieval services, provision of
16 forms and supplies and record retention and storage;
17 (h) securities brokerage services;
18 (i) shared community bank branch operations;
19 (j) student loan origination, including the authority to buy and sell
20 participation interests in such loans;
21 (k) travel agency and tax preparation services;
22 (l) providing courier services;
23 (m) trust and trust related services including but not limited to
24 acting as administrator for prepaid legal service plans, acting as trus-
25 tee, guardian, conservator, estate administrator or in any other fiduci-
26 ary capacity and trust services;
27 (n) credit and loan origination;
28 (o) payroll processing services;
29 (p) issuing credit cards and engaging in credit card operations;
30 (q) issuing letters of credit; and
31 (r) sponsoring, organizing and advising open-ended mutual funds;
32 provided that all of the stock of such service corporations is, or is to
33 be, owned by one or more community banks; and provided further, that no
34 community bank may make any investment under this section if its aggre-
35 gate outstanding investment thereby, determined as prescribed by the
36 superintendent of financial services, would exceed five per centum of
37 its assets.
38 2. The activities of such service corporations, performed directly or
39 through one or more wholly owned subsidiaries, shall consist of render-
40 ing such services to community banks and making such investments for
41 itself and for community banks as are authorized services and invest-
42 ments for such community banks under the provisions of this chapter, as
43 well as such activities as may be prescribed by the general regulation
44 of the superintendent of financial services.
45 3. For purposes of this section, a community bank shall be defined as
46 a bank or trust company organized under or subject to the provision of
47 article three of this chapter or the comparable provision of the laws of
48 another state or a national banking association or a savings bank, a
49 savings and loan association or other savings institution chartered and
50 supervised as such under federal or state law where average value of
51 assets must not exceed eight billion dollars.
52 § 3. This act shall take effect on the sixtieth day after it shall
53 have become a law.
