§ 258 — Prohibition of unauthorized savings banks and use of the word "savings"; exception as to school savings

§ 258. Prohibition of unauthorized savings banks and use of the word\n"savings"; exception as to school savings. 1. No individual,\npartnership, unincorporated association or corporation other than a\nsavings bank, state or federal chartered savings and loan association,\nbank, trust company, industrial bank, private banker, national bank,\nforeign banking corporation licensed pursuant to this chapter to\ntransact in this state the business of receiving deposits or state and\nfederal chartered credit unions shall make use of the word "saving" or\n"savings" or their equivalent in its banking or financial business, or\nuse any advertisement containing the word "saving" or "savings", or\ntheir equivalent in relation to its banking or financial business, nor\nshall any individual or corporation other than a savings bank in any way\nsolicit or receive deposits as a savings bank; but nothing herein shall\nbe construed to prohibit the use of the word "savings" in the name of\nthe Savings and Loan Bank of the State of New York or in the name of a\ntrust company all of the stock of which is owned by not less than twenty\nsavings banks. Any bank, trust company, industrial bank, private banker,\nnational bank, foreign banking corporation, state or federal chartered\ncredit unions, individual, partnership, unincorporated association or\ncorporation violating this provision shall forfeit to the people of the\nstate for every offense the sum of one hundred dollars for every day\nsuch offense shall be continued.\n 2. Any school in the state of New York may collect from time to time\namounts of money from the pupils of such school and any philanthropic\nagency incorporated for philanthropic purposes, if such agency be so\nauthorized by certificate of the superintendent of financial services,\nmay collect from time to time amounts of money from the children or\npersons under the direction or guidance of, or the promotion of whose\nwelfare is an object of, such philanthropic agency. As to each such\nschool, such money shall be collected by or under the supervision of,\nthe principal or superintendent of such school or by, or under the\nsupervision of, any person designated for that purpose by the board of\neducation or other authority having jurisdiction over such school. As to\neach such philanthropic agency, such money shall be collected by, or\nunder the supervision of, the superintendent or other designated head of\nsuch agency. All money so collected shall, not later than the day\nfollowing the day of collection, be deposited in some savings bank in\nthe state, be used for the purchase of shares in any savings and loan\nassociation organized under this law, or under the laws of the United\nStates, whose principal office is located in the state of New York, or\nbe deposited in any trust company or state or national bank located in\nthe state and having an interest department. All money so collected from\nany person shall be deposited, or used to purchase shares, in his name;\nprovided, however, that if the principal, superintendent, designated\nperson or agency head by whom, or under whose supervision, such money\nwas collected shall deem the amount of money so collected at any one\ntime to be insufficient for the opening of individual accounts, such\nmoney shall be deposited, or used to purchase shares, in the name of\nsuch principal, superintendent, designated person or agency head, in\ntrust, to be by him eventually transferred to the credit of the\nrespective persons to whom the same belongs, and pending such transfer,\nsaid principal, superintendent, designated person or agency head shall\nfurnish to the depositary institution or savings and loan association\nreceiving such money the name, signature, address, age and place of\nbirth of each person from whom such money was collected, and such other\ndata concerning such person as the institution may require. Any\ndepositary institution or savings and loan association authorized to\nreceive any amounts collected by a school or philanthropic agency in\naccordance with this subdivision, may, on the request of any person\nauthorized by this subdivision to collect such amounts for such school\nor philanthropic agency, send a collector to such school or\nphilanthropic agency to receive and receipt for same. Any certificate of\nauthorization issued to a philanthropic agency by the superintendent of\nfinancial services in accordance with this subdivision shall specify the\nperiod for which such authorization is to be effective and the area in\nwhich collections may be made, and may specify any other terms or\nconditions upon which such authorization is granted. Any such\nauthorization may be terminated by the superintendent of financial\nservices by written notice served upon the philanthropic agency or\nmailed to it at its last known address. As used in this subdivision with\nreference to the placing of amounts with a depositary institution or\nsavings and loan association, the words "the day following the day of\ncollection" shall mean the next day, after the day of collection, on\nwhich such institution or association is open for business. As used in\nthis subdivision, the words "philanthropic agency" shall be deemed to\ninclude, without limitation a corporation, not organized for profit,\nengaged in promoting the welfare of seamen.\n 3. Money, deposited pursuant to the provisions of subdivision two of\nthis section and held by such banking organizations in the name of such\nprincipal, superintendent, designated person or agency head in a school\ndistrict in a city having a population of more than one million, and\nunder whose custodial authority said money has remained for a period of\nthirty years may be used by such a school district to establish a trust\nfund after due and diligent effort by such principal, superintendent,\ndesignated person, or agency head to locate and notify any such persons\nentitled to receive such property. The income of said trust fund shall\nbe used to provide college scholarships to disadvantaged youth on a\ncompetitive basis pursuant to rules promulgated by the board of\neducation of said district provided however that such scholarships shall\nnot exceed the cost of attendance. Any person or persons entitled to\nreceive such property shall be reimbursed from funds held in trust\npursuant to this subdivision. A bank shall not be liable as a result of\naction taken under the provisions of this subdivision. Furthermore, no\nbanking organization acting on the instructions of or otherwise dealing\nwith any such principal, superintendent, designated person or agency\nhead shall be responsible for determining whether any such person is\nacting in accordance with this section or is obliged to inquire into the\nvalidity or propriety of the actions or instructions executed by any\nsuch person or is bound to see to the application of any funds.\n