§ 202-B — Maintenance of assets in this state

New York § 202-B

• Jurisdiction: New York
• Law BNK: Banking
• Art. 5: Foreign Banking Corporations and National Banks

Text

§ 202-b. Maintenance of assets in this state. * 1. Upon opening a\nbranch or agency and thereafter, a foreign banking corporation licensed\npursuant to article two of this chapter shall keep on deposit, in\naccordance with such rules and regulations as the superintendent shall\nadopt shall from time to time, with such banks or trust companies or\nprivate bankers or national banks in the state of New York as such\nforeign banking corporation may designate and the superintendent may\napprove, interest-bearing stocks and bonds, notes, debentures, or other\nobligations of the United States or any agency or instrumentality\nthereof, or guaranteed by the United States, or of this state, or of a\ncity, county, town, village, school district, or instrumentality of this\nstate or guaranteed by this state, or dollar deposits, or obligations of\nthe International Bank for Reconstruction and Development, or\nobligations issued by the Inter-American Development Bank, or\nobligations of the Asian Development Bank, or obligations issued by the\nAfrican Development Bank, or obligations issued by the International\nFinance Corporation, or bonds, notes, debentures, or other obligations\nissued by or guaranteed by the Federal Home Loan Mortgage Corporation\n(Freddie Mac) or by the Federal National Mortgage Corporation (Fannie\nMae), or bonds, notes, debentures, or other obligations issued by or\nguaranteed by the Student Loan Marketing Association (SALLIE MAE) or all\nbonds, notes, debentures, or other obligations issued by or guaranteed\nby a federal home loan bank, or bonds, notes, debentures or other\nobligations of any unaffiliated issuer provided that, at the time of\nsuch investment, the obligation has received the highest rating of an\nindependent rating service designated by the superintendent or, if the\nobligation is rated by more than one such service, the highest rating of\nat least two such services, or such other assets as the superintendent\nshall by rule or regulation permit, to an aggregate amount to be\ndetermined by the superintendent, based upon principal amount or market\nvalue, whichever is lower, in the case of the above-described\nsecurities, and subject to such limitations as the superintendent shall\nprescribe; provided, however, that the superintendent may determine, in\nthe superintendent's discretion, that any such bonds, notes, debentures\nor other obligations of a particular issuer are not acceptable for\npurposes of meeting the requirements of this subdivision. The\nsuperintendent may from time to time require that the assets deposited\npursuant to this subdivision may be maintained by the foreign banking\ncorporation at such amount, in such form and subject to such conditions\nas he or she shall deem necessary or desirable for the maintenance of a\nsound financial condition, the protection of depositors and the public\ninterest, and to maintain public confidence in the business of such\nbranch or branches or such agency or agencies. The superintendent may\ngive credit to reserves required to be maintained with a federal reserve\nbank in or outside the state of New York pursuant to federal law,\nsubject to such rules and regulations as the superintendent may from\ntime to time promulgate. So long as it shall continue business in the\nordinary course, such foreign banking corporation shall be permitted to\ncollect interest on the securities so deposited and from time to time\nexchange, examine and compare such securities.\n * NB Effective until notification of the superintendent of financial\nservices\n * 1. Upon opening a branch or agency and thereafter, a foreign banking\ncorporation licensed pursuant to article two of this chapter shall keep\non deposit, in accordance with such rules and regulations as the\nsuperintendent shall from time to time promulgate, with such banks or\ntrust companies or private bankers or national banks in the state of New\nYork as such foreign banking corporation may designate and the\nsuperintendent may approve, interest-bearing stocks and bonds, notes,\ndebentures, or other obligations of the United States or any agency or\ninstrumentality thereof, or guaranteed by the United States, or of this\nstate, or of a city, county, town, village, school district, or\ninstrumentality of this state or guaranteed by this state, or dollar\ndeposits, or obligations of the International Bank for Reconstruction\nand Development, or obligations issued by the Inter-American Development\nBank, or obligations of the Asian Development Bank, or obligations\nissued by the African Development Bank, or obligations issued by the\nInternational Finance Corporation, or bonds, notes, debentures, or other\nobligations issued by or guaranteed by the Federal Home Loan Mortgage\nCorporation (Freddie Mac) or by the Federal National Mortgage\nCorporation (Fannie Mae), or bonds, notes, debentures, or other\nobligations issued by or guaranteed by the Student Loan Marketing\nAssociation (SALLIE MAE) or all bonds, notes, debentures, or other\nobligations issued by or guaranteed by a federal home loan bank, or\nbonds, notes, debentures or other obligations of any unaffiliated issuer\nthat meet the standards of creditworthiness established by regulation by\nthe superintendent, or such other assets as the superintendent shall by\nrule or regulation permit, to an aggregate amount to be determined by\nthe superintendent, based upon principal amount or market value,\nwhichever is lower, in the case of the above-described securities, and\nsubject to such limitations as he or she shall prescribe; provided,\nhowever, that the superintendent may determine, in his or her\ndiscretion, that any such bonds, notes, debentures or other obligations\nof a particular issuer are not acceptable for purposes of meeting the\nrequirements of this subdivision. The superintendent may from time to\ntime require that the assets deposited pursuant to this subdivision may\nbe maintained by the foreign banking corporation at such amount, in such\nform and subject to such conditions as he or she shall deem necessary or\ndesirable for the maintenance of a sound financial condition, the\nprotection of depositors and the public interest, and to maintain public\nconfidence in the business of such branch or branches or such agency or\nagencies. The superintendent may give credit to reserves required to be\nmaintained with a federal reserve bank in or outside the state of New\nYork pursuant to federal law, subject to such rules and regulations as\nthe superintendent may from time to time promulgate. So long as it shall\ncontinue business in the ordinary course, such foreign banking\ncorporation shall be permitted to collect interest on the securities so\ndeposited and from time to time exchange, examine and compare such\nsecurities.\n * NB Effective upon notification of the superintendent of financial\nservices\n 2. Each foreign banking corporation shall hold in this state currency,\nbonds, notes, debentures, drafts, bills of exchange or other evidences\nof indebtedness, including loan participation agreements or\ncertificates, or other obligations payable in the United States or in\nUnited States funds or, with the prior approval of the superintendent,\nin funds freely convertible into United States funds, or such other\nassets as the superintendent shall by rule or regulation permit, in an\namount which shall bear such relationship as the superintendent shall by\nregulation prescribe to liabilities of such foreign banking corporation\nappearing in the books, accounts or records of its agency, agencies,\nbranch or branches in this state as liabilities of such agency,\nagencies, branch or branches, including acceptances and such other\nliabilities (including contingent liabilities) as the superintendent\nshall determine, but excluding amounts due and other liabilities to\nother offices, agencies or branches of, and affiliates of, such foreign\nbanking corporation. As used in this subdivision, (i) "affiliate" shall\nmean any person or entity, or group of persons or entities acting in\nconcert, that controls, is controlled by or is under common control with\nsuch foreign banking corporation and (ii) "control" means any person, or\ngroup of persons acting in concert, directly or indirectly, owning,\ncontrolling or holding with power to vote, more than fifty percent of\nthe voting stock of a company, or having the ability in any manner to\nelect a majority of the directors of a company, or otherwise exercising\na controlling influence over the management and policies of a company as\ndefined by the superintendent by regulation. For purposes of this\nsubdivision, the term "person" shall mean a corporation, unincorporated\nassociation, partnership, or any other entity or individual. For the\npurposes of this subdivision, the superintendent shall value marketable\nsecurities at principal amount or market value, whichever is lower,\nshall have the right to determine the value of any non-marketable bond,\nnote, debenture, draft, bill of exchange, other evidence of\nindebtedness, including loan participation agreements or certificates,\nor of any other asset or obligation held by or owed to the foreign\nbanking corporation or its agency, agencies, branch or branches within\nthe state, and in determining the amount of assets for the purpose of\ncomputing the above ratio of assets to liabilities, shall have the power\nto exclude in whole or in part any particular asset. If, by reason of\nthe existence or the potential occurrence of unusual and extraordinary\ncircumstances, the superintendent deems it necessary or desirable for\nthe maintenance of a sound financial condition, the protection of\ndepositors, creditors and the public interest, and to maintain public\nconfidence in the business of the agency, agencies, branch or branches\nof a foreign banking corporation, the superintendent may, subject to\nsuch terms and conditions as the superintendent may prescribe, require\nsuch foreign banking corporation to deposit the assets required to be\nheld in this state pursuant to this subdivision two with such banks or\ntrust companies or private bankers or national banks located in this\nstate, as the superintendent may designate.\n 3. In the event that any of the deposits received within the state by\na foreign banking corporation are insured by the Federal Deposit\nInsurance Corporation, the superintendent shall specify what reasonable\npercentage of deposit liabilities may be excluded in determining the\naggregate amount of liabilities of such foreign banking corporation for\ndeposits received within the state for purposes of subdivision two of\nthis section by reason of the fact that all or a part of such deposit\nliabilities are insured by the Federal Deposit Insurance Corporation.\n