§ 12-A — Power of state chartered banking institutions to exercise the rights of counterpart federally chartered banking institutions

New York § 12-A

• Jurisdiction: New York
• Law BNK: Banking
• Art. 2: Department of Financial Services; Superintendent of Financial Services; Supervisory and Regulatory Powers

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* § 12-a. Power of state chartered banking institutions to exercise\nthe rights of counterpart federally chartered banking institutions. 1.\nDefinitions. (a) As used in this section, "state chartered banking\ninstitution" shall mean any bank, trust company, private banker, savings\nbank, savings and loan association, foreign banking corporation, or\ncredit union.\n (b) As used in this section and as is applicable, "federally chartered\nbanking institution" shall mean (i) any national banking association\norganized pursuant to the National Bank Act of 1864, as amended, (12 USC\n21 et seq.); (ii) any federal savings association as such term is\ndefined by the Federal Deposit Insurance Act, as amended, (12 USC\n1813(b)(2)); (iii) a federal branch and agency of a foreign bank, as\nsuch terms are defined by the International Banking Act of 1978, as\namended, (122 USC 3101); or (iv) a federal credit union, as such term is\ndefined by the Federal Credit Union Act, as amended, (12 USC 1752(1)).\n (c) As used in this section, "charter" shall mean the organization\ncertificate or comparable document of a state banking institution, or\nthe license for a state branch or agency of a foreign banking\ncorporation, or a similar organizational document for a federal banking\ninstitution or a federal branch or agency, and "chartered" shall mean\nthe formal act of the state or appropriate federal regulatory agency in\napproving and conveying such charter of a banking institution.\n (d) As used in this section, "federally permitted power" shall mean\nany right, power, privilege or benefit, any activity, or any loan,\ninvestment or transaction which a federally chartered banking\ninstitution directly or through a subsidiary or subsidiaries, may\nlawfully exercise or into which it may lawfully engage or enter.\n (e) As used in this section "foreign banking corporation" shall mean a\nbanking corporation organized under the laws of a foreign country and\nacting through a branch or agency licensed pursuant to section\ntwenty-six of this article.\n (f) As used in this section, unless the context requires otherwise,\nthe term "subsidiary" shall have the same meaning as set forth in\nsubdivision five of section one hundred forty-one of this chapter,\nexcept that (i) any reference therein to "bank holding company" shall be\ndeemed to refer to a "state chartered banking institution" as defined in\nthis section, and (ii) with respect to a credit union, the term\n"subsidiary" as used in this section shall mean a "credit union\norganization".\n 2. Pursuant to this section and notwithstanding any other provision of\nlaw, except as otherwise provided in its charter, a state-chartered\nbanking institution may exercise any federally permitted power of its\ncounterpart federally chartered banking institution as herein set forth:\n (a) a bank, private banker, or trust company may exercise any\nfederally permitted power of a national banking association;\n (b) a savings bank or savings and loan association may exercise any\nfederally permitted power of a federal savings association;\n (c) a foreign banking corporation acting through a branch may exercise\nany federally permitted power of a foreign bank acting through a federal\nbranch;\n (d) a foreign banking corporation acting through an agency may\nexercise any federally permitted power of a foreign bank acting through\na federal agency;\n (e) a credit union may exercise any federally permitted power of a\nfederal credit union.\n Nothing contained in this section shall be deemed to permit a state\nchartered banking institution to exercise any federally permitted power\nexcept in a manner consistent with the following provisions of law, in\neach case, as the terms contained in such provisions may be amended from\ntime to time:\n (i) chapter one of the laws of nineteen hundred ninety-four;\n (ii) chapter nine of the laws of nineteen hundred ninety-six; and\n (iii) sections fourteen-c, twenty-eight-b, thirty-nine and forty-four\nof this article, and sections six hundred five through six hundred\nthirty-four of this chapter, and with respect to savings banks and\nsavings and loan associations, respectively, section two hundred forty\nand section three hundred ninety-six of this chapter.\n 3. Except with respect to a federally permitted power approved\npursuant to subdivision four of this section, prior to any state\nchartered banking institution initially exercising any federally\npermitted power pursuant to this section, such banking institution shall\nmake an application individually or with one or more state chartered\nbanking institutions to the superintendent indicating that such\ninstitution or institutions intend to exercise such federally permitted\npower and the basis on which such institution or institutions believe\nsuch power is a federally permitted power. The superintendent shall have\none hundred twenty days from receipt of the application to determine\nwhether it meets the requirements of this section, provided that such\nperiod may be extended for an additional period of time with the written\nconsent of the applicant or applicants. If such application meets the\nrequirements of this section, the superintendent shall post such\napplication upon the bulletin board of the department pursuant to\nsection forty-two of this article. If such application does not meet the\nrequirements of this section, the superintendent shall, within ten days\nof such determination, notify the applicant or applicants of the reasons\nwhy the application fails to meet the requirements. The superintendent\nshall determine, consistent with the standards set forth in subdivision\nfive of this section, whether to approve such application subject to\nsuch terms and conditions as the superintendent may deem appropriate, in\nthe superintendent's sole discretion. Such determination, shall be made\nby the superintendent within forty-five days after the posting of such\napplication, provided however that the superintendent may notify the\napplicant or applicants that the review of the application shall be\nextended for an additional period of time not exceeding sixty days after\nthe posting of such application, and provided further that such period\nof time may be extended for an additional period of time with the\nwritten consent of the applicant or applicants. The superintendent shall\nnot act upon the application prior to thirty days after such application\nhas been posted. If the superintendent approves such application, the\nsuperintendent shall, within ten days of approving the application,\nnotify the applicant or applicants in writing thereof, and the applicant\nor applicants may exercise such federally permitted power subject to\nsuch terms and conditions as the superintendent may have approved. If\nthe superintendent declines such application, the superintendent shall,\nwithin ten days of making such determination, notify the applicant or\napplicants in writing thereof. An applicant or applicants may, upon the\nsuperintendent's failure to comply with this section, petition the\nsuperintendent to act upon the application. The failure of the\nsuperintendent to act upon the application or notify the applicant or\napplicants, in writing, as to the reasons why action cannot be taken\nwithin thirty days of receipt of such petition shall be deemed a denial\nof the application, which shall be subject to judicial review.\nNotwithstanding any other law, the superintendent may make the approval\nof an application under this section applicable to one or more\nadditional state chartered banking institutions that are qualified to\nexercise the same federally permitted powers as the applicant or\napplicants pursuant to subdivision two of this section, subject to such\nterms and conditions as the superintendent shall find necessary and\nappropriate.\n 4. Notwithstanding any other law, the superintendent, in the\nsuperintendent's discretion, may, when the superintendent deems it\nnecessary and appropriate after considering the standards set forth in\nsubdivision five of this section, by order, authorize one or more state\nchartered banking institutions to exercise a federally permitted power,\nsubject to such terms and conditions as the superintendent shall find\nnecessary and appropriate. Prior to issuing such order, the\nsuperintendent shall post notice of the superintendent's intention to\nissue such order upon the bulletin board of the department pursuant to\nsection forty-two of this article, and shall not act upon such intention\nprior to thirty days after such notice has been posted.\n 5. Prior to approving any application or proposal pursuant to\nsubdivision three or four of this section, the superintendent shall make\na finding that the approval of such application or proposal is:\n (i) consistent with the policy of the state of New York as declared in\nsection ten of this article and thereby protects the public interest,\nincluding the interests of depositors, creditors, shareholders,\nstockholders and consumers; and\n (ii) necessary to achieve or maintain parity between state chartered\nbanking institutions and their counterpart federally chartered banking\ninstitutions with respect to rights, powers, privileges, benefits,\nactivities, loans, investments or transactions.\n 6. A federally permitted power authorized pursuant to this section\nshall not exceed and shall be limited by any conditions, qualifications\nor restrictions on the same when exercised by a counterpart federally\nchartered banking institution of a state chartered banking institution\nunless the state chartered banking institution is so authorized by other\nNew York state law, or a rule, regulation or policy adopted pursuant to\nsuch other New York state law, or by a judicial decision.\nNotwithstanding any other law, the superintendent may, at any time,\nimpose by order any other terms and conditions as he or she finds\nnecessary and proper including, but not limited to, a requirement that\nany federally permitted power authorized by this section be exercised,\nconducted or held in a subsidiary of a state chartered banking\ninstitution. In the event that federally chartered banking institutions\nlocated in the state of New York lose the authority to exercise a\nfederally permitted power, based upon which comparable authority was\ngranted to the counterpart state chartered banking institutions pursuant\nto this section, then unless such authority is authorized by other New\nYork state law, or a rule, regulation or policy adopted pursuant to such\nother New York state law, or by a judicial decision, the authorization\nfor such state chartered banking institutions pursuant to this section\nshall be deemed revoked, provided, however, that any such revocation\nshall be subject to such terms and conditions as may be imposed upon the\ncounterpart federally chartered banking institutions or by the\nsuperintendent.\n 7. (a) In those instances where state chartered banking institutions\nare permitted to engage in the business of insurance pursuant to this\nsection, they shall do so subject to all insurance laws, rules, and\nregulations; provided, however, that the superintendent may exempt state\nchartered banking institutions from any insurance law, rule or\nregulation which has been preempted under federal law, rule or\nregulation for federally chartered banking institutions if such law,\nrule or regulation has been preempted because it applies to insurance\nactivities of federally chartered banking institutions and not to those\nof other entities.\n (b) In those instances where a federally permitted power authorized\npursuant to this section is subject to regulation by an agency, as\ndefined in subdivision one of section one hundred two of the state\nadministrative procedure act, other than the superintendent, then when a\nstate chartered banking institution exercises such federally permitted\npower, unless it is so authorized by other New York state law, or a\nrule, regulation or policy adopted pursuant to such other New York state\nlaw, or by a judicial decision, it shall do so subject to such\nregulation to the same extent and in the same manner as such agency\nregulates entities other than state chartered banking institutions,\nexcept to the extent that federally chartered banking institutions are\nnot subject to such regulation.\n (c) Any state chartered banking institution or federally chartered\nbanking institution and any subsidiary or affiliate thereof which is\nlicensed to sell insurance in this state shall maintain separate and\ndistinct books and records relating to its insurance transactions,\nincluding all files relating to and reflecting consumer complaints, and\nsuch insurance books and records shall be made available to the\nsuperintendent for inspection upon reasonable notice.\n 8. On or before June first of each year, the superintendent shall\nsubmit a report to the governor, the speaker of the assembly, the\ntemporary president of the senate, the minority leaders of the senate\nand assembly, and the chairs and ranking minority members of the senate\nand assembly banks committees, which shall include, with respect to the\nauthority provided for in this section, with respect to the preceding\ncalendar year, (1) a listing of state chartered banking institutions\nthat were established, (2) a listing of institutions that have converted\nto a federal charter or have been acquired by, or merged with, another\nbanking institution, (3) the number of New York banking institutions\nexercising the insurance activities authorized by this section, (4) the\ntotal number of New York chartered banking institutions located in this\nstate, and (5) the total amount of assets of such chartered banking\ninstitutions by type.\n 9. Any rules or regulations promulgated by the banking board pursuant\nto former sections fourteen-g and fourteen-h of this chapter prior to\nSeptember first, two thousand seven, and any resolutions adopted by the\nbanking board pursuant to this section after September first, two\nthousand seven and before the effective date of the chapter of the laws\nof two thousand eleven which amended this subdivision, including any\nsuch rules, regulations and resolutions which in whole or in part impose\nconditions, qualifications or restrictions on any federally permitted\npowers authorized thereby which exceed the conditions, qualifications or\nrestrictions imposed on the same when exercised by a federally chartered\nbanking institution, shall remain in full force and effect on or after\nsuch date, unless any such rule, regulation or resolution is thereafter\nsuperseded, modified, or revoked by the superintendent pursuant to the\nprovisions of subdivisions three and four of this section.\n * NB Repealed September 10, 2029\n