N.Y. Banking Law § 122: Examinations of banks and trust companies by directors; employment of assistants

§ 122. Examinations of banks and trust companies by directors;

employment of assistants. 1. It shall be the duty of the board of

directors of every bank and every trust company once in each calendar

year to examine, or cause a committee of at least three of its members

to examine, such bank or trust company for the purpose of determining

its financial condition and reviewing its investment, loan and audit and

control policies and in such examination particular attention shall be

given to the loans or discounts made directly or indirectly to its

officers or directors, or for the benefit of such officers or directors,

or for the benefit of other corporations of which such officers or

directors are also officers or directors, or in which they have a

beneficial interest as stockholders, creditors, or otherwise, with the

special view of ascertaining their safety and present value, and the

value of the collateral security, if any, held in connection therewith,

and to such other matters as the superintendent may require. Such

directors shall have the power to employ such assistants in making such

examination as they may deem necessary, and shall employ the assistance

of independent auditors if the superintendent deems inadequate the

internal auditing and control procedures established by such bank or

trust company. The various offices, departments and phases of business

of any such bank or trust company may be examined as of different dates

during the year.

2. With respect to any bank or trust company subject to the provisions

of section one hundred twelve of the Federal Deposit Insurance

Corporation Act of 1991, as implemented by the provisions of part three

hundred sixty-three of the rules and regulations of the Federal Deposit

Insurance Corporation, as they may be amended from time to time,

compliance with such provisions shall be deemed to satisfy the

examination requirement of this section.