N.Y. Banking Law § 12-a: Power of state chartered banking institutions to exercise the rights of counterpart federally chartered banking institutions

* § 12-a. Power of state chartered banking institutions to exercise

the rights of counterpart federally chartered banking institutions. 1.

Definitions. (a) As used in this section, "state chartered banking

institution" shall mean any bank, trust company, private banker, savings

bank, savings and loan association, foreign banking corporation, or

credit union.

(b) As used in this section and as is applicable, "federally chartered

banking institution" shall mean (i) any national banking association

organized pursuant to the National Bank Act of 1864, as amended, (12 USC

21 et seq.); (ii) any federal savings association as such term is

defined by the Federal Deposit Insurance Act, as amended, (12 USC

1813(b)(2)); (iii) a federal branch and agency of a foreign bank, as

such terms are defined by the International Banking Act of 1978, as

amended, (122 USC 3101); or (iv) a federal credit union, as such term is

defined by the Federal Credit Union Act, as amended, (12 USC 1752(1)).

(c) As used in this section, "charter" shall mean the organization

certificate or comparable document of a state banking institution, or

the license for a state branch or agency of a foreign banking

corporation, or a similar organizational document for a federal banking

institution or a federal branch or agency, and "chartered" shall mean

the formal act of the state or appropriate federal regulatory agency in

approving and conveying such charter of a banking institution.

(d) As used in this section, "federally permitted power" shall mean

any right, power, privilege or benefit, any activity, or any loan,

investment or transaction which a federally chartered banking

institution directly or through a subsidiary or subsidiaries, may

lawfully exercise or into which it may lawfully engage or enter.

(e) As used in this section "foreign banking corporation" shall mean a

banking corporation organized under the laws of a foreign country and

acting through a branch or agency licensed pursuant to section

twenty-six of this article.

(f) As used in this section, unless the context requires otherwise,

the term "subsidiary" shall have the same meaning as set forth in

subdivision five of section one hundred forty-one of this chapter,

except that (i) any reference therein to "bank holding company" shall be

deemed to refer to a "state chartered banking institution" as defined in

this section, and (ii) with respect to a credit union, the term

"subsidiary" as used in this section shall mean a "credit union

organization".

2. Pursuant to this section and notwithstanding any other provision of

law, except as otherwise provided in its charter, a state-chartered

banking institution may exercise any federally permitted power of its

counterpart federally chartered banking institution as herein set forth:

(a) a bank, private banker, or trust company may exercise any

federally permitted power of a national banking association;

(b) a savings bank or savings and loan association may exercise any

federally permitted power of a federal savings association;

(c) a foreign banking corporation acting through a branch may exercise

any federally permitted power of a foreign bank acting through a federal

branch;

(d) a foreign banking corporation acting through an agency may

exercise any federally permitted power of a foreign bank acting through

a federal agency;

(e) a credit union may exercise any federally permitted power of a

federal credit union.

Nothing contained in this section shall be deemed to permit a state

chartered banking institution to exercise any federally permitted power

except in a manner consistent with the following provisions of law, in

each case, as the terms contained in such provisions may be amended from

time to time:

(i) chapter one of the laws of nineteen hundred ninety-four;

(ii) chapter nine of the laws of nineteen hundred ninety-six; and

(iii) sections fourteen-c, twenty-eight-b, thirty-nine and forty-four

of this article, and sections six hundred five through six hundred

thirty-four of this chapter, and with respect to savings banks and

savings and loan associations, respectively, section two hundred forty

and section three hundred ninety-six of this chapter.

3. Except with respect to a federally permitted power approved

pursuant to subdivision four of this section, prior to any state

chartered banking institution initially exercising any federally

permitted power pursuant to this section, such banking institution shall

make an application individually or with one or more state chartered

banking institutions to the superintendent indicating that such

institution or institutions intend to exercise such federally permitted

power and the basis on which such institution or institutions believe

such power is a federally permitted power. The superintendent shall have

one hundred twenty days from receipt of the application to determine

whether it meets the requirements of this section, provided that such

period may be extended for an additional period of time with the written

consent of the applicant or applicants. If such application meets the

requirements of this section, the superintendent shall post such

application upon the bulletin board of the department pursuant to

section forty-two of this article. If such application does not meet the

requirements of this section, the superintendent shall, within ten days

of such determination, notify the applicant or applicants of the reasons

why the application fails to meet the requirements. The superintendent

shall determine, consistent with the standards set forth in subdivision

five of this section, whether to approve such application subject to

such terms and conditions as the superintendent may deem appropriate, in

the superintendent's sole discretion. Such determination, shall be made

by the superintendent within forty-five days after the posting of such

application, provided however that the superintendent may notify the

applicant or applicants that the review of the application shall be

extended for an additional period of time not exceeding sixty days after

the posting of such application, and provided further that such period

of time may be extended for an additional period of time with the

written consent of the applicant or applicants. The superintendent shall

not act upon the application prior to thirty days after such application

has been posted. If the superintendent approves such application, the

superintendent shall, within ten days of approving the application,

notify the applicant or applicants in writing thereof, and the applicant

or applicants may exercise such federally permitted power subject to

such terms and conditions as the superintendent may have approved. If

the superintendent declines such application, the superintendent shall,

within ten days of making such determination, notify the applicant or

applicants in writing thereof. An applicant or applicants may, upon the

superintendent's failure to comply with this section, petition the

superintendent to act upon the application. The failure of the

superintendent to act upon the application or notify the applicant or

applicants, in writing, as to the reasons why action cannot be taken

within thirty days of receipt of such petition shall be deemed a denial

of the application, which shall be subject to judicial review.

Notwithstanding any other law, the superintendent may make the approval

of an application under this section applicable to one or more

additional state chartered banking institutions that are qualified to

exercise the same federally permitted powers as the applicant or

applicants pursuant to subdivision two of this section, subject to such

terms and conditions as the superintendent shall find necessary and

appropriate.

4. Notwithstanding any other law, the superintendent, in the

superintendent's discretion, may, when the superintendent deems it

necessary and appropriate after considering the standards set forth in

subdivision five of this section, by order, authorize one or more state

chartered banking institutions to exercise a federally permitted power,

subject to such terms and conditions as the superintendent shall find

necessary and appropriate. Prior to issuing such order, the

superintendent shall post notice of the superintendent's intention to

issue such order upon the bulletin board of the department pursuant to

section forty-two of this article, and shall not act upon such intention

prior to thirty days after such notice has been posted.

5. Prior to approving any application or proposal pursuant to

subdivision three or four of this section, the superintendent shall make

a finding that the approval of such application or proposal is:

(i) consistent with the policy of the state of New York as declared in

section ten of this article and thereby protects the public interest,

including the interests of depositors, creditors, shareholders,

stockholders and consumers; and

(ii) necessary to achieve or maintain parity between state chartered

banking institutions and their counterpart federally chartered banking

institutions with respect to rights, powers, privileges, benefits,

activities, loans, investments or transactions.

6. A federally permitted power authorized pursuant to this section

shall not exceed and shall be limited by any conditions, qualifications

or restrictions on the same when exercised by a counterpart federally

chartered banking institution of a state chartered banking institution

unless the state chartered banking institution is so authorized by other

New York state law, or a rule, regulation or policy adopted pursuant to

such other New York state law, or by a judicial decision.

Notwithstanding any other law, the superintendent may, at any time,

impose by order any other terms and conditions as he or she finds

necessary and proper including, but not limited to, a requirement that

any federally permitted power authorized by this section be exercised,

conducted or held in a subsidiary of a state chartered banking

institution. In the event that federally chartered banking institutions

located in the state of New York lose the authority to exercise a

federally permitted power, based upon which comparable authority was

granted to the counterpart state chartered banking institutions pursuant

to this section, then unless such authority is authorized by other New

York state law, or a rule, regulation or policy adopted pursuant to such

other New York state law, or by a judicial decision, the authorization

for such state chartered banking institutions pursuant to this section

shall be deemed revoked, provided, however, that any such revocation

shall be subject to such terms and conditions as may be imposed upon the

counterpart federally chartered banking institutions or by the

superintendent.

7. (a) In those instances where state chartered banking institutions

are permitted to engage in the business of insurance pursuant to this

section, they shall do so subject to all insurance laws, rules, and

regulations; provided, however, that the superintendent may exempt state

chartered banking institutions from any insurance law, rule or

regulation which has been preempted under federal law, rule or

regulation for federally chartered banking institutions if such law,

rule or regulation has been preempted because it applies to insurance

activities of federally chartered banking institutions and not to those

of other entities.

(b) In those instances where a federally permitted power authorized

pursuant to this section is subject to regulation by an agency, as

defined in subdivision one of section one hundred two of the state

administrative procedure act, other than the superintendent, then when a

state chartered banking institution exercises such federally permitted

power, unless it is so authorized by other New York state law, or a

rule, regulation or policy adopted pursuant to such other New York state

law, or by a judicial decision, it shall do so subject to such

regulation to the same extent and in the same manner as such agency

regulates entities other than state chartered banking institutions,

except to the extent that federally chartered banking institutions are

not subject to such regulation.

(c) Any state chartered banking institution or federally chartered

banking institution and any subsidiary or affiliate thereof which is

licensed to sell insurance in this state shall maintain separate and

distinct books and records relating to its insurance transactions,

including all files relating to and reflecting consumer complaints, and

such insurance books and records shall be made available to the

superintendent for inspection upon reasonable notice.

8. On or before June first of each year, the superintendent shall

submit a report to the governor, the speaker of the assembly, the

temporary president of the senate, the minority leaders of the senate

and assembly, and the chairs and ranking minority members of the senate

and assembly banks committees, which shall include, with respect to the

authority provided for in this section, with respect to the preceding

calendar year, (1) a listing of state chartered banking institutions

that were established, (2) a listing of institutions that have converted

to a federal charter or have been acquired by, or merged with, another

banking institution, (3) the number of New York banking institutions

exercising the insurance activities authorized by this section, (4) the

total number of New York chartered banking institutions located in this

state, and (5) the total amount of assets of such chartered banking

institutions by type.

9. Any rules or regulations promulgated by the banking board pursuant

to former sections fourteen-g and fourteen-h of this chapter prior to

September first, two thousand seven, and any resolutions adopted by the

banking board pursuant to this section after September first, two

thousand seven and before the effective date of the chapter of the laws

of two thousand eleven which amended this subdivision, including any

such rules, regulations and resolutions which in whole or in part impose

conditions, qualifications or restrictions on any federally permitted

powers authorized thereby which exceed the conditions, qualifications or

restrictions imposed on the same when exercised by a federally chartered

banking institution, shall remain in full force and effect on or after

such date, unless any such rule, regulation or resolution is thereafter

superseded, modified, or revoked by the superintendent pursuant to the

provisions of subdivisions three and four of this section.

* NB Repealed September 10, 2029