N.Y. Banking Law § 235: Investment of funds

§ 235. Investment of funds. A savings bank may invest in the following

property and securities and no others:

1. Obligations of the United States, or those for which the faith of

the United States is pledged to provide for the payment of the interest

and principal, or those for which annual contributions to be paid

pursuant to contract by the United States government or any of its

instrumentalities in accordance with an act of congress entitled the

"Housing Act of 1949", are pledged as security for the payment of the

interest and principal.

2. Obligations of this state, issued pursuant to the authority of any

law of the state, or those for which the faith of this state is pledged

to provide for the payment of the interest and principal.

3. Obligations of any state of the United States, or those for which

the faith of any state of the United States is pledged to provide for

the payment of the interest and principal, upon which there is no

default and upon which there has been no default for more than ninety

days; provided, that within ten years immediately preceding the

investment such state has not been in default for more than ninety days

in the payment of any part of principal or interest of any debt duly

authorized by the legislature of such state to be contracted by such

state after the first day of January, eighteen hundred seventy-eight,

except debts representing a refunding or adjustment of any indebtedness

originally contracted or in existence at that date or prior thereto.

4. Obligations of or those for which the faith of any city, county,

town, village, school district, poor district, water district, sewer

district or fire district in this state is pledged to provide for the

payment of principal and interest, provided that they were issued

pursuant to law and the faith and credit of the issuing municipal

corporation or district is pledged for their payment, bonds and

debentures or other obligations of any public authority or commission or

similar body created or approved by the state of New York having assets

of not less than fifty million dollars; and bonds and debentures of any

other public authority, commission or similar body which is legally

obligated to establish rates which while any debt is outstanding will

provide sufficient revenues for the cost of operation, maintenance and

debt service, such debt service to include interest on all outstanding

obligations and serial maturities and sinking funds, provided such other

authority, commission or similar body shall issue financial statements

at least annually which shall be available to the public, shall have had

receipts from operations during each of the five fiscal years

immediately preceding date of investment sufficient after meeting

operation and maintenance expenses to cover debt service, and provided

further that the revenues available for debt service received during the

fiscal year immediately preceding investment or the average amount

available for debt service for the three fiscal years preceding

investment shall have been adequate to meet the maximum annual debt

service of the bonds outstanding, and said obligations have not been in

default as to principal or interest; and bonds, debentures or other

obligations of any public authority or commission or similar body

created by the state of New York, the average of receipts from the

operations of which, during the three years immediately preceding the

date of investment, after meeting operation and maintenance expenses,

were not less than one hundred twenty-five per cent of the maximum

annual debt service on the bonds outstanding and which obligations have

not been in default as to principal or interest.

5. (a) Obligations, excluding however, non-negotiable warrants, of any

city or of any school district coterminous with or which includes such

city, or of any county situated in one of the states of the United

States which adjoins the state of New York, provided said city or county

has a population, as shown by the last federal census next preceding

such investment, of not less than ten thousand inhabitants, and has not,

within twenty-five years preceding said investment, defaulted for more

than one hundred and twenty days in the payment of any part either of

principal or interest of any bond, note, or other evidence of

indebtedness. The term "city" in this paragraph shall include any city,

town, borough, village, township or other incorporated municipality. An

investment made before August first, nineteen hundred twenty-eight,

shall not under the population provision of this paragraph, as to the

then owner thereof, cease to be an authorized investment for the moneys

of savings banks.

(b) Obligations, excluding however, non-negotiable warrants, of any

city or of any school district or county coterminous with or which

includes such city, situated in any other of the states of the United

States the obligations of which state are an authorized investment for

the moneys of savings banks, provided said city has a population, as

shown by the last federal census next preceding said investment, of not

less than thirty thousand inhabitants, and was incorporated as a city at

least twenty-five years prior to the making of said investment, and has

not, within twenty-five years preceding said investment, defaulted for

more than one hundred and twenty days in the payment of any part either

of principal or interest of any bond, note, or other evidence of

indebtedness. Provided further, that obligations issued by a city having

a population of less than forty-five thousand inhabitants as shown by

said census or by a school district or county shall not be an authorized

investment for the moneys of savings banks unless the city, school

district or county has power to levy taxes on the taxable real property

therein for the payment of such obligations without limitation of rate

or amount.

(c) If at any time the indebtedness of any city described in

paragraphs (a) or (b) of this subdivision or in paragraph (c) of

subdivision twenty-five of this section, together with the indebtedness

of any district, municipal corporation or subdivision, except a county,

which is wholly within the boundaries of such city, and together with a

proportionate part of the indebtedness of any district, municipal

corporation or subdivision, except a county, which is partly within the

boundaries of such city, and together with so much of the indebtedness

of any county wholly within the boundaries of such city and a

proportionate part of so much of the indebtedness of any county partly

within the boundaries of such city, as shall be in excess of five per

centum of the valuation for the purposes of taxation of the real

property in any such county, shall exceed twelve per centum of the

valuation of real property in said city for the purposes of taxation,

the obligations of such city or of any school district or of any county

coterminous with or which includes such city, shall, thereafter, and

until such indebtedness shall be reduced to twelve per centum of the

valuation of real property in said city for the purposes of taxation,

cease to be an authorized investment for the moneys of savings banks. If

there is no county wholly or in part within such city or if the county

wholly or in part within such city has neither any indebtedness nor

power to incur indebtedness, the obligations of such city or of any

school district coterminous with or which includes such city, shall not

cease to be an authorized investment unless such indebtedness shall

exceed the percentage above provided plus an additional three per

centum. If at any time the indebtedness of any county described in

paragraphs (a) or (b) shall exceed five per centum of the valuation of

real property for the purposes of taxation, the obligations of such

county shall thereafter, and until such indebtedness shall be reduced to

five per centum of the valuation of real property for the purposes of

taxation, cease to be an authorized investment for the moneys of savings

banks. A proportionate part of any indebtedness for the purpose of this

paragraph shall be, unless otherwise apportioned by law, that proportion

which the valuation of taxable real property of a county, district,

municipal corporation or subdivision within the boundaries of a city

bears to the total valuation of all taxable real property of said

county, district, municipal corporation or subdivision. Contract

liability shall be excluded unless represented by stocks, bonds, notes,

certificates of indebtedness or other like instruments and water debt

shall be excluded and sinking funds applicable to debts not excluded

shall be deducted, in determining the amount of any indebtedness

hereunder.

(d) The provisions of paragraph (c) shall not apply to the obligations

of any city which has taxable real property with a valuation for the

purposes of taxation in excess of two hundred million dollars and which

has a population as shown by the last decennial federal census of not

less than one hundred fifty thousand inhabitants and shall not apply to

the obligations of any school district or county coterminous with or

which includes such city, provided that the city, school district, or

county, as the case may be, has power to levy taxes on the taxable real

property therein for the payment of such obligations without limitation

of rate or amount.

(e) The valuation of property for purposes of taxation under this

subdivision and under subdivision twenty-five of this section shall be

an official valuation duly made and recorded and in cases where the

assessed valuation is based on a percentage of such official valuation,

the percentage used shall have been authorized under statutory or

charter power prior to the determination of such assessed valuation.

(f) No obligations issued after the year nineteen hundred thirty-eight

by any city, county, school district or other municipality of any state

other than New York shall be an authorized investment for savings banks

unless such city, county, school district or other municipality shall

have power to levy taxes on the taxable real property therein for the

payment of such obligation without limitation of rate or amount.

(g) Obligations issued by a city, village, town, county, department,

agency, district, authority, commission or other public body in this

state or any other state of the United States payable out of the

revenues of a public utility system providing water, electricity, gas or

sewerage service, provided that if the public utility system is located

outside the state, it must serve an area having a population of not less

than one hundred thousand. Said city, village, town, county, department,

agency, district, authority, commission or other public body shall be

legally obligated by statute, charter, indenture or covenant to fix,

maintain and collect charges or taxes, or both, to provide net revenues

after operation and maintenance of the facilities used to provide such

service sufficient to meet maturing interest, principal and sinking fund

payments on such obligations or shall be empowered to require the

fixing, maintaining, and collecting of such charges or taxes, or both,

by duly authorized public officers or bodies, and shall be restrained by

statute, charter, indenture or covenant from disposing of all or any

substantial portion of such facilities unless provision is made for a

continuance of the interest, principal and sinking fund payments due on

such obligations, or for the retirement of such obligations, provided

said city, village, town, county, department, agency, district,

authority, commission or other public body shall have had net earnings

during each of the five years immediately preceding investment

sufficient to cover all debt service and further provided that the net

earnings available for debt service for the year immediately preceding

investment shall have been sufficient to meet the maximum annual debt

service of the obligations outstanding, and said obligations shall not

have been in default as to principal or interest.

5-a. Bonds and mortgages and notes and mortgages on unimproved real

property in this state or outside this state, subject to such

limitations as the superintendent of financial services may prescribe.

6. Bonds and mortgages and notes and mortgages on improved real

property, including leasehold estates, in this state, and, subject to

such limitations and conditions as the superintendent of financial

services may prescribe by general regulation, in any other location

outside this state. The provisions of this subdivision shall not

constitute the authority to make a loan to a natural person upon the

security of a mortgage which is not a first lien.

(c) For the purposes of this subdivision real property upon which

there is a building in process of construction, which when completed

will constitute a permanent improvement with a value of more than

twenty-five per centum of the value of such real property shall be

considered improved real property, as shall real property with

improvements thereon that are capable of producing income sufficient to

pay all costs of operation and maintenance of such real property, all

taxes thereon and to effect full repayment of principal and interest in

accordance with the terms of the mortgage loan to be made pursuant to

this subdivision.

(e) Except as hereinafter provided no investment in any bond and

mortgage or any note and mortgage shall be made by any savings bank

except upon the written and signed certificate of an appraiser appointed

pursuant to policies established by the board of trustees stating that

in such appraiser's judgment it affords adequate security for such

investment. Such certificate shall be filed and preserved among the

records of the savings bank.

(f) For the purpose of protecting its interests a savings bank may

release any obligation to pay, or guarantee of the payment of, principal

or interest, or otherwise waive or modify any of the terms and

conditions of any bond and mortgage, and of any note and mortgage, and

may extend or reextend any bond and mortgage and any note and mortgage,

and may also accept a sum less than the principal amount thereof in full

payment and satisfaction of the same.

A savings bank may also waive its right to enforce payment of any bond

or note secured by a mortgage on real property and may waive its right

to obtain a deficiency judgment against the borrower in the event of

foreclosure of such mortgage.

(g) Every mortgage and every assignment of a mortgage taken or held by

a savings bank shall immediately be recorded or registered in the office

of the proper recording officer of the county in which the real property

described in the mortgage is located. This paragraph shall not apply to

a participating interest in any mortgage which shall have been acquired

by a savings bank under the provisions of subdivision fourteen of

section two hundred thirty-four, paragraph (h) of this subdivision, and

subdivision eighteen of section two hundred thirty-five.

(h) A savings bank may, subject to such regulations and restrictions

as the superintendent of financial services finds to be necessary and

proper, participate and invest in (1) loans of a type that it is

authorized to invest in pursuant to subparagraph (a) of paragraph four

of subdivision eight of section two hundred thirty-five of this chapter

and (2) in any bond and mortgage or note and mortgage on improved and

unencumbered real property including leasehold estates, in which it is

individually authorized to invest, which said mortgage is duly recorded

or registered in the office of the proper recording officer of the

county in which the real property described in the mortgage is located,

provided that no such investment shall be made by a savings bank in any

part interest in such mortgage which is junior or subordinate to any

other part interest nor if the aggregate amount of all part interests in

such mortgage when added together will exceed any percentage of the

appraised value of such real property by which the authority of a

savings bank to invest individually in such mortgage is limited.

Investments made by any savings bank in mortgage loans pursuant to this

subdivision and pursuant to subdivision twenty-eight of this section

shall be included in the computation of permissive investment in

mortgage loans pursuant to paragraph (d) of subdivision six of this

section.

(i) A mortgage loan upon a leasehold estate shall not be made unless

such leasehold estate shall have an unexpired term of not less than

twenty-one years, which term may include the term provided by an option

of renewal enforceable at the exclusive discretion of the savings bank.

No mortgage loan upon a leasehold estate shall be made or acquired by a

savings bank unless the terms thereof shall provide, regardless of the

period of the loan, for payments to be made by the borrower on the

principal thereof at least once in each year in amounts which would be

sufficient to completely amortize a loan whose period extended for

four-fifths of the unexpired term of the lease, which term may include

the term provided by an option of renewal enforceable at the exclusive

discretion of the savings bank; or, in the case of a mortgage loan upon

a leasehold estate in real property upon which there is a building in

process of construction, such payments of principal need not be required

during the period of construction or the first three years of the

mortgage, whichever is shorter. The provisions of paragraphs (c), (d),

(e), (f), (g), and (h) of this subdivision shall be applicable to loans

made upon leasehold estates.

6-a. A savings bank may, in addition to the authority granted under

any other subdivisions of this section, make a loan to a natural person

upon the security of a mortgage which is not a first lien at the rate or

rates agreed to by the savings bank and the borrower, subject to such

regulations as the superintendent of financial services may prescribe.

Such regulations by the superintendent of financial services may include

such restrictions as the superintendent of financial services finds

necessary or proper, including without limitation, a restriction as to

the percentage of total assets which may be invested in such loans or a

restriction on the loan to appraisal value of property securing such

loan.

For purposes of this subdivision, the term mortgage shall include a

lien on an existing ownership interest in certificates of stock or other

evidence of an ownership interest in, and a proprietary lease from, a

corporation or partnership formed for the purpose of the cooperative

ownership of real estate.

7. Railroad obligations as provided in this subdivision. (1)

Obligations issued, assumed or guaranteed as to principal and interest

by endorsement, or so guaranteed which guaranty has been assumed; or

(2) Obligations for the payment of the principal and interest of which

a railroad corporation such as is described in this paragraph is

obligated under the terms of a lease made or assumed; or

(3) Equipment obligations in respect of which liability has been

incurred: by a railroad corporation incorporated under the laws of the

United States, or any state thereof, and owning and operating within the

United States not less than five hundred miles of standard-gauge

railroad line, exclusive of sidings, or if the mileage so owned shall be

less than five hundred miles, the railroad operating revenues from the

operation of all railroad operated by it, including such revenues from

the operation of all railroad controlled through ownership of all

(except directors' qualifying shares) of the voting stock of the owning

corporation, shall have been not less than ten million dollars each year

for at least five of the six fiscal years next preceding such

investment; provided, however, (1) that in the five fiscal years next

preceding such investment, the amount of income of such railroad

corporation, available for its fixed charges, as hereinafter defined,

shall have averaged not less than two and one-half times the amount of

fixed charges at the time of investment, as hereinafter defined; (2)

that at no time within such period of five years such railroad

corporation, unless in process of reorganization or readjustment since

completed, pursuant to applicable law, shall have failed regularly and

punctually to pay the matured principal and interest on its mortgage and

funded indebtedness; and (3) that the security, if any, for such

obligations shall be property wholly or in part within the United States

and which obligations shall be

(a) fixed interest-bearing bonds secured by direct mortgage on

railroad owned or operated by such railroad corporation; or

(b) fixed interest-bearing bonds secured by first mortgage upon

terminal, depot or tunnel property, including lands, buildings and

appurtenances, used in the service of transportation by one or more such

railroad corporations, provided that such bonds be the direct obligation

of, or that payment of principal and interest thereof be guaranteed by

endorsement by, or guaranteed by endorsement which guaranty has been

assumed by, one or more such railroad corporations; or

(c) equipment obligations, comprising bonds, notes, certificates,

conditional sale agreements or assignments of conditional sale

agreements and participations therein, issued or made in connection with

the purchase for use on railroads of new standard-gauge rolling stock

through the medium of an equipment agreement, and which obligations, so

long as any thereof shall be outstanding and unpaid or unprovided for,

shall be secured by an instrument (1) vesting title to such equipment in

a trustee free of encumbrance, or (2) creating a first lien on such

equipment, or, pending such vesting of title, by the deposit of cash in

trust, which deposit may be invested in whole or in part in obligations

of the United States or obligations for which the faith of the United

States is pledged to provide for the payment of the interest and

principal, or obligations of any public housing agency as defined in the

United States housing act of nineteen hundred thirty-seven, as amended,

in the United States as are secured either (1) by an agreement between

the public housing agency and the public housing administration in which

the public housing agency agrees to borrow from the public housing

administration, and the public housing administration agrees to lend to

the public housing agency, prior to the maturity of such obligations,

which obligations shall have a maturity of not more than eighteen

months, moneys in an amount which, together with any other moneys

irrevocably committed to the payment of interest on such obligations,

will suffice to pay the principal of such obligations with interest to

maturity thereon, which moneys under the terms of said agreement are

required to be used for the purpose of paying the principal of and the

interest on such obligations at their maturity, or (2) by a pledge of

annual contributions under an annual contributions contract between such

public housing agency and the public housing administration if such

contract shall contain the covenant by the public housing administration

which is authorized by section 1421a(b) of Title 42, U.S. Code, and if

the maximum sum and the maximum period specified in such contract

pursuant to section 1421a(b) of Title 42, U.S. Code, shall not be less

than the annual amount and the period for payment which are requisite to

provide for the payment, when due, of all installments of principal and

interest on such obligations, to an amount equal to the face amount of

such equipment obligations issued in respect of such equipment title to

which is not yet so vested; provided further, that the maximum amount of

such obligations so issuable shall not exceed eighty per centum of the

cost of such equipment; and provided further, that the owner, purchaser

or lessee, or the owners, purchasers or lessees, of such equipment shall

be obligated by the terms of such obligations or of such instrument (a)

to maintain such equipment in proper repair; (b) to replace any thereof

that may be destroyed or released with other equipment of equal value,

or, if released in connection with a sale thereof, to deposit the

proceeds of such sale in trust for the benefit of the holders of such

obligations pending replacement of such equipment; (c) to pay any and

all taxes or other governmental charges that may be required by law to

be paid upon such equipment; (d) to pay, in accordance with the

provisions of such obligations or of such instrument, to holders, or to

such trustee for the benefit of holders, of such obligations the amount

of interest due thereon or of the dividends payable in respect thereof;

and (e) to pay the amount of the entire issue of such obligations in

such annual or semi-annual installment each year throughout a period of

not exceeding fifteen years from the first date of issue of any thereof

that the amount of the respective unmatured installments at any time

outstanding shall be approximately equal; provided, further, that unless

the owner, purchaser or lessee of such equipment or one or more of such

owners, purchasers or lessees shall be such railroad corporation as is

described in and meets the requirements of this subdivision preceding

paragraph (a), such obligations shall be guaranteed by endorsement as to

principal and as to interest or dividends by such railroad corporations;

or

(d) fixed interest-bearing bonds of such railroad corporation secured

by irrevocable pledge as collateral under a trust agreement of other

railroad bonds that are legal investments for savings banks under this

section, have a maturity not earlier than the bonds that they secure and

of a total face amount not less than the total face amount of the bonds

that they secure; or

(e) fixed interest-bearing mortgage bonds other than those described

in paragraphs (a) or (b) hereof, income mortgage bonds, collateral trust

bonds or obligations other than those described in paragraph (d) hereof,

or unsecured bonds or obligations, issued, assumed or guaranteed as to

principal and interest by endorsement by, or so guaranteed which

guaranty has been assumed by, such railroad corporation, provided that

(a) the annual fixed charges and contingent interest charges of such

railroad at the time of investment shall not exceed thirty per cent of

the average annual income available for such charges for the five fiscal

years next preceding, and (b) the net income of such railroad after all

taxes and charges shall have averaged not less than fifteen million

dollars annually in such period.

The amount of income available for fixed charges shall be the amount

obtained by deducting from gross income all items deductible in

ascertaining net income other than federal income taxes, contingent

income interest and those constituting fixed charges. Fixed charges

shall be: rent for leased roads, miscellaneous rents, fixed interest on

funded debt, interest on unfunded debt and amortization of discount on

funded debt.

Accounting terms used in the preceding paragraph shall be deemed to

refer to those used in the accounting reports prescribed by the

accounting regulations for common carriers subject to the provisions of

the interstate commerce act. If the interstate commerce commission shall

prescribe accounting regulations wherein shall be defined the term

income available for fixed charges and the term fixed charges, the

definitions thereof as so prescribed shall be taken and used in lieu of

the definitions set forth in the preceding paragraph of this subdivision

for all purposes hereof, except that federal income taxes shall not be

deducted, nor shall federal income tax credits be included, in computing

income available for fixed charges. In determining income available for

fixed charges and fixed charges pursuant to this paragraph or the

immediately preceding paragraph interest, dividends and rentals paid by

a railroad corporation and included in both such amounts shall be

eliminated.

For all purposes of this subdivision seven, the revenues, earnings,

income and fixed charges of, and dividends paid by, any railroad

corporation prior to the acquisition of all or substantially all of its

railroad lines by another railroad corporation, through merger,

consolidation, conveyance or lease, shall, while such lines remain in

the possession of the acquiring corporation, be deemed to have been

revenues, earnings, income and fixed charges of, and dividends paid by,

such acquiring corporation.

Whenever a railroad corporation shall own (directly or through a

subsidiary all of the stock of which, except directors' qualifying

shares, is owned by such corporation) at least ninety per cent of the

capital stock of one or more other railroad corporations, the property

of which is operated by it under lease, the consolidated statements of

all such railroad corporations may be used in determining the amount of

income available for fixed charges and the amount of fixed charges.

Obligations of a railroad corporation the railroad lines of which have

been so leased prior to April fifth, nineteen hundred twenty-nine, for

the payment of which the lessee is not obligated, that are outstanding

and officially listed by the department of financial services of the

state of New York as authorized investments prior to that date, shall be

and remain authorized investments hereunder; provided, that such

railroad lines shall be in the possession of and be operated by a

railroad corporation such as is described in and meets the requirements

of the provisions of this subdivision preceding paragraph (a).

Notwithstanding any other provisions of this subdivision, equipment

obligations described in paragraph (c) which shall have been issued,

assumed or guaranteed by any railroad corporation classified by the

interstate commerce commission as a class one railroad and which are not

in default, shall be authorized investments hereunder.

Notwithstanding any of the provisions of this subdivision, fixed

interest-bearing obligations of railroad corporations, excluding

terminal, depot and tunnel corporations, which are eligible for purchase

by savings banks on December thirty-first, nineteen hundred fifty-two

under the provisions of subdivisions seven or nineteen of this section,

or which shall thereafter become eligible pursuant to the provisions of

this subdivision seven, as amended, if not in default, shall be and

remain eligible hereunder, provided that the income available for fixed

charges, as herein defined, of the railroad corporation which has

issued, assumed or guaranteed such obligations, or which operates under

lease the railroad lines of the corporation which has issued, assumed or

guaranteed such obligations, shall have averaged for the five fiscal

years next preceding the time of investment not less than twice the

interest charges for the last such fiscal year on all equipment

obligations, and other obligations eligible hereunder, of such railroad

corporation which remain outstanding at time of investment.

Fixed interest-bearing bonds of terminal, depot and tunnel companies

which are eligible for purchase by savings banks on December

thirty-first, nineteen hundred fifty-two under the provisions of

subdivisions seven or nineteen of this section, or which shall

thereafter become eligible pursuant to the provisions of this

subdivision seven, as amended, shall be and remain eligible hereunder,

provided that the principal and interest thereof be guaranteed by

endorsement by, or guaranteed by endorsement which guaranty has been

assumed by, a railroad corporation which meets the requirements of the

preceding paragraph for continuing the eligibility of its own fixed

interest-bearing obligations.

Not more than twenty-five per centum of the assets of any savings bank

shall be loaned or invested in the bonds, notes, certificates,

conditional sale agreements, assignments of conditional sale agreements

and participations therein in this subdivision seven defined, and not

more than ten per centum of such assets shall be invested in such bonds,

notes, certificates, conditional sale agreements, assignments of

conditional sale agreements and participations therein for which any one

railroad corporation of this state shall be obligated, and not more than

five per centum of such assets shall be invested in the bonds, notes,

certificates, conditional sale agreements, assignments of conditional

sale agreements and participations therein for which any one railroad

corporation not of this state shall be obligated.

Street railroad corporations shall not be considered railroad

corporations within the meaning of this subdivision.

7-a. Any savings bank which prior to April first, nineteen hundred

thirty-eight acquired any railroad obligation eligible at the time of

acquisition for investment by savings banks may continue to hold such

obligation as though the same continue to be eligible by law for new

investment by such savings bank.

8. Promissory notes and other agreements as provided in this

subdivision.

(1) Promissory notes payable to the order of the savings bank which

are:

(a) Secured by one or more mortgages in which a savings bank may

invest; provided the amount loaned is not in excess of ninety per centum

of the principal sum secured by such mortgage or mortgages. The

assignment of every mortgage taken as security for any such note shall

be recorded or registered in the office of the proper recording officer

of the county in which the real property described in such mortgage is

located, unless such mortgage or mortgages have been so assigned by a

savings bank.

(b) Secured by any of the stocks and bonds in which a savings bank may

invest; provided that (1) the amount of the loan is not in excess of

ninety per centum of the market value of such stocks and bonds; and (2)

the term "stocks," as used in this paragraph, shall be deemed to refer

to stocks eligible for investment by a savings bank other than in

accordance with the provisions of subdivision twenty-six of this

section.

(c) Made by a savings and loan association which has been incorporated

three years or more and has an accumulated capital of at least fifty

thousand dollars.

(2) Promissory notes payable to the order of the savings bank which

are secured by the assignment of a deposit in any savings bank; provided

the amount of the loan is not in excess of the amount of such deposit.

(3) Any loan secured by not less than a like amount of direct

obligations of the United States or of this state, or of any city,

county, town, village or school district of this state or of any such

department, agency or instrumentality of the United States or this

state.

(4) (a) Promissory notes representing loans and advances of credit for

the purpose of financing alterations, repairs and improvements upon or

in connection with, or as the superintendent may authorize the equipping

of existing structures, and the building of new structures, upon urban,

suburban, or rural real property (including the restoration,

rehabilitation, rebuilding and replacement of such improvements which

have been damaged or destroyed by earthquake, conflagration, tornado,

hurricane, cyclone, flood or other catastrophe), by the owners thereof

or by lessees of such real property under a lease expiring not less than

six months after the maturity of the loan or advance of credit or by

lessees under proprietary leases from a corporation or partnership

formed for the purpose of the cooperative ownership of real estate,

provided: (1) the amount of such loan, advance of credit, or purchase

made for the purpose of financing the alteration, repair, equipping or

improvement of existing structure or the building of new structure does

not exceed twenty thousand dollars; (2) the maturity thereof does not

exceed one hundred twenty-one months; (3) the rate which may be paid by

the borrower for interest, discount, and fees of all kinds in connection

with the transaction shall be the rate or rates agreed to by the savings

bank and the borrower in the promissory note; and (4) the loan shall be

paid in equal or substantially equal monthly installments calculated

from the date of the note; provided, however, that in addition thereto

the savings bank may contract to charge the borrower: (i) the fees

payable to the appropriate public officer to perfect any lien or other

security interest taken to secure the loan or the premium, not in excess

of such filing fee, payable for any insurance in lieu of such filing;

(ii) in case of default, and in accordance with the provisions of the

instrument evidencing the obligation, either a fine in an amount not to

exceed five cents per dollar on any installment which has become due and

remained unpaid for a period in excess of ten days, but no such fine

shall exceed five dollars and only one fine shall be collected on any

such installment regardless of the period during which it remains in

default, and provided further that should the aggregate of such fines

collected in connection with any loan exceed two per centum of such

loan, or in any event twenty-five dollars, the savings bank shall refund

such excess to the borrower within sixty days after the loan is paid in

full, or subject to an allowance of unearned interest attributable to

the amount in default, interest on each amount past due at a rate not in

excess of the rate provided for in the instrument evidencing the

obligation; (iii) the actual expenditures, including reasonable

attorney's fees, for necessary court process; and (iv) in case the

savings bank insures a borrower under a credit unemployment insurance

policy, group life insurance policy, group health insurance policy,

group accident insurance policy, or group health and accident insurance

policy, or requires insurance on personal property securing any such

loan, an amount not in excess of the premiums chargeable in accordance

with rate schedules then in effect and on file with the superintendent

of financial services for such insurance by the insurer. No savings bank

shall require a borrower to place any sum on deposit, or to make

deposits in lieu of regular periodic installment payments, or to do or

refrain from doing any other act which would entail additional expense

or sacrifice, as a condition precedent to granting a loan or advance of

credit under the authority of this subdivision. Notwithstanding the

provisions of this paragraph no refund of excess fines shall be required

if it amounts to less than one dollar.

(b) Promissory notes representing loans and advances of credit for the

purpose of defraying the cost of attendance of one or more students the

income of whose family is fifteen thousand dollars or more per year at

the time the loan or loan commitment is made at a university or college

or for the purpose of defraying the cost of attendance of one or more

students at an elementary or secondary school providing education

required for minors; provided, however, that no such loan shall bring

the total unpaid principal balances of any one or more loans made by

such savings bank to the borrower pursuant to this subparagraph to an

amount in excess of thirty thousand dollars; and further provided that

the maturity of any such loan does not exceed eighty-five months; and

further provided that the rate which may be paid by the borrower for

interest, discount, and fees of all kinds in connection with the

transaction shall be the rate or rates agreed to by the savings bank and

the borrower in the promissory note, reckoned on each loan or advance

from the date thereof, calculated on any of the following bases: (i) on

the unpaid principal amount of such loans and advances from time to time

outstanding, or (ii) for each month on an average balance outstanding

determined by dividing by two the sum of the balances of unpaid

principal of such loans and advances outstanding on two dates during

such month, as specified in such agreement; the first of which dates

being not later than the fifteenth day of such month and the second

being not earlier than the sixteenth day of such month and not less than

ten nor more than twenty days after the first day, or (iii) for each

month on a fixed amount selected from a schedule, which fixed amount may

exceed the average daily balance under (i) above, or the average balance

if determined under (ii) above, by a differential of not more than five

dollars, provided the same fixed amount is also used for computing

interest for any month for which such balance exceeds said fixed amount

by any amount up to at least the same differential; and further provided

that the loan shall be paid in equal or substantially equal monthly

installments calculated from the date of the note. No fee, commission,

expense, or other charge whatsoever shall be taken, received, reserved

or contracted for in addition to the maximum rate of interest authorized

by this subparagraph except (i) the fees payable to the appropriate

public officer to perfect any lien or other security interest taken to

secure the loan or the premium, not in excess of such filing fee,

payable for any insurance in lieu of such filing; (ii) in case of

default, and in accordance with the provisions of the instrument

evidencing the obligation, either a fine in an amount not to exceed five

cents per dollar on any installment which has become due and remained

unpaid for a period in excess of ten days, but no such fine shall exceed

five dollars and only one fine shall be collected on any such

installment regardless of the period during which it remains in default,

and provided further that should the aggregate of such fines collected

in connection with any loan exceed two per centum of such loan, or in

any event twenty-five dollars, the savings bank shall refund such excess

to the borrower within sixty days after the loan is paid in full, or,

subject to an allowance of unearned interest attributable to the amount

in default, interest on each amount past due at a rate not in excess of

the rate provided for in the instrument evidencing the obligation; (iii)

the actual expenditures, including reasonable attorney's fees, for

necessary court process; and (iv) in case the savings bank insures a

borrower under a credit unemployment insurance policy, group life

insurance policy, group health insurance policy, group accident

insurance policy, or group health and accident insurance policy, or

requires insurance on personal property securing any such loan, an

amount not in excess of the premiums chargeable in accordance with rate

schedules then in effect and on file with the superintendent of

financial services for such insurance by the insurer. No savings bank

shall require a borrower to place any sum on deposit, or to make

deposits in lieu of regular periodic installment payments, or to do or

refrain from doing any other act which would entail additional expense

or sacrifice, as a condition precedent to granting a loan or advance of

credit under the authority of this subparagraph, except under such terms

and conditions as the superintendent may from time to time approve.

Notwithstanding the provisions of this subparagraph no refund of excess

fines shall be required if it amounts to less than one dollar.

(c) Promissory notes secured by mobile home chattel paper evidencing a

monetary obligation incurred to finance the purchase of a mobile home

located at the time of such purchase, or to be located within ninety

days, at a semipermanent site within the state or in a contiguous state

and to be maintained as a residence of the borrower, the borrower's

spouse, child, grandchild, parent or grandparent.

(1) For this subparagraph:

(i) "mobile home chattel paper" means written evidence of both a

monetary obligation and a security interest of first priority in a

mobile home and any equipment installed or to be installed therein; and

(ii) "mobile home" or "manufactured home" means a structure,

transportable in one or more sections, which in the traveling mode, is

eight body feet or more in width or forty body feet or more in length,

or when erected on site, is three hundred twenty or more square feet,

and which is built on a permanent chassis and designed to be used as a

dwelling with or without a permanent foundation when connected to

required utilities, and includes the plumbing, heating, air-conditioning

and electrical systems contained therein.

(2) If the loan is for the purpose of financing the purchase of a new

mobile home,

(i) it shall mature not later than two hundred forty months after the

date thereof, and

(ii) the amount advanced shall not exceed one hundred per cent of the

sum of (a) the purchase price of such mobile home (including any

installed equipment) plus (b) the price of any new equipment installed

or to be installed by the dealer.

(3) If the loan for the purpose of financing the purchase of a used

mobile home,

(i) it shall mature not later than two hundred forty months after the

date thereof, and

(ii) the amount advanced shall not exceed one hundred per cent of the

purchase price of the mobile home actually paid (including any installed

equipment).

(4) The loan shall be payable in equal or substantially equal monthly

installments calculated from the date of the loan. Interest, which may

be taken in advance, may be charged thereon, computed from the date of

the loan to the date of the last installment payable thereunder, if the

loan has a maturity (i) not exceeding thirty-seven months, at a rate not

to exceed six dollars per annum discount per one hundred dollars of the

face amount or ten dollars if the interest so computed is less than that

amount, or (ii) exceeding thirty-seven months, at a rate not to exceed

five dollars per annum discount, per one hundred dollars of the face

amount or ten dollars if the interest so computed is less than that

amount; provided that the interest which may be charged; if it exceeds

ten dollars, shall not exceed one per cent per month on the unpaid

principal balance.

(5) The authorized interest shall include all charges incident to

investigating and making any loan. No fee, commission, expense, or other

charge shall be permitted except that the savings bank may contract to

charge the borrower (i) the fees payable to a public officer to perfect

any lien or other security interest taken to secure the loan, or the

premium, not in excess of such fee, payable for any insurance in lieu of

such filing; (ii) in case of default, and in accordance with the

instrument evidencing the obligation, either a fine in an amount not to

exceed five per cent on any installment which has become due and

remained unpaid for a period in excess of ten days, but no such fine

shall exceed five dollars and only one fine shall be collected on any

such installment regardless of the duration of the default, and provided

further that should the aggregate of such fines collected in connection

with any loan exceed two per cent of such loan or twenty-five dollars,

the savings bank shall refund such excess within sixty days after the

loan is paid in full, or, subject to an allowance of unearned interest

attributable to the amount in default, interest on each amount past due

at a rate not in excess of one per cent per month during the

delinquency; (iii) the actual expenditures, including reasonable

attorney's fees for necessary court process, and (iv) in case the

savings bank insures a borrower under a credit unemployment insurance

policy, group life, health, accident, or group health and accident

insurance policy, or requires insurance on the property securing such

loan, an amount not in excess of the premiums lawfully chargeable. No

savings bank shall require a borrower to place any sum on deposit, or to

make deposits in lieu of regular periodic installment payments, or to do

or refrain from doing any other act which would entail additional

expense or sacrifice, as a condition to a mobile home loan except as the

superintendent may from time to time approve. No refund of excess fines

need be made if it amounts to less than one dollar.

(6) As a condition of any loan made pursuant hereto, the borrower

shall certify that the mobile home, against which the loan is made, is

intended to be maintained in the state or in a contiguous state as a

residence of the borrower, the borrower's spouse, child, grandchild,

parent or grandparent. If the mobile home shall not be so maintained on

the ninetieth day next succeeding the date of the loan or if it is

relocated so as to no longer be located in the state or a contiguous

state at any time before the first anniversary of the date of the loan,

then, in either event and notwithstanding anything to the contrary in

this subparagraph, the loan and all authorized charges shall become

immediately due and payable subject to the refund provisions of

subparagraph (c) of paragraph four and the borrower may, if the contract

so provides, be required to pay as an additional authorized charge, a

penalty in an amount not to exceed two per cent of the face amount of

the loan.

(7) No investment shall be made by a savings bank pursuant hereto if

the total amount invested by it pursuant to this subparagraph exceeds,

or by the making of such investment will exceed, an amount equal to

thirty per cent of the assets of the savings bank.

(8) Subject to such limitations and conditions as the superintendent

of financial services may prescribe by general regulation, a savings

bank may make a loan pursuant to this subparagraph which the federal

housing administrator has insured or has made a commitment to insure and

may receive and hold such debentures as are issued by the federal

housing administrator in payment of such insurance, or which is

guaranteed pursuant to the provisions of the act of congress entitled

the "Servicemen's Readjustment Act of 1944." No law of this state

prescribing the nature, amount or form of security or requiring security

upon which loans or advances of credit may be made or prescribing or

limiting the period for which loans or advances of credit may be made or

limiting the amount of any class of loans, advances of credit or

purchases which may be made shall be deemed to apply to loans, advances

of credit or purchases made or to loans acquired by purchase pursuant to

this item.

(d) A borrower may prepay in full any loan made pursuant to the

provisions of subparagraph (a), (b) or (c) of this paragraph or, with

the consent of the savings bank, may refinance the loan. In the event of

such prepayment or refinancing, the savings bank shall refund: (1) the

unearned portion of the interest to the borrower the amount of which

portion shall be determined according to a generally accepted actuarial

method; provided, however, that if the amount of interest previously

deducted (i) was less than ten dollars, no refund shall be required; or

(ii) exceeded the sum of ten dollars and the earned interest is less

than that amount, the savings bank may retain such an additional amount

as will bring the earned interest to the sum of ten dollars and refund

the remainder, and provided further, that unless the loan is refinanced,

no refund shall be required if it amounts to less than one dollar; and

(2) if a charge was made to the borrower for premiums for insuring the

borrower under a credit unemployment insurance policy, group life

insurance policy, or under a group health, group accident or group

health and accident insurance policy, the excess of the charge to the

borrower therefor over the premiums paid or payable by the savings bank,

if such premiums were paid or payable by the savings bank periodically

or the refund for such insurance premium received or receivable by the

savings bank, if such premium was paid or payable in a lump sum by the

savings bank, provided that no such refund shall be required if it

amounts to less than one dollar. In the event (i) the maturity of the

loan is accelerated due to the default of the borrower or otherwise and

judgment is obtained, or (ii) repayment is made pursuant to any such

insurance policy, the borrower or his legal representative, as the case

may be, shall be entitled to the same refund as if the loan had been

prepaid in full on the date of acceleration or repayment.

(5) Promissory notes from a resident of the state of New York provided

that payment of each such note is guaranteed by the New York Higher

Education Assistance Corporation, or promissory notes that are insured

or covered by a commitment to insure or are guaranteed or covered by a

commitment to guarantee issued by the Federal Education Commissioner in

accordance with the provisions of the act of congress entitled "Higher

Education Act of 1965".

8-a. Promissory notes representing loans for the purpose of financing

the purchase of or refinancing an existing ownership interest in

certificates of stock or other evidence of an ownership interest in, and

a proprietary lease from, a corporation or partnership formed for the

purpose of cooperative ownership of real estate within or without this

state, as provided in this subdivision.

A savings bank may, subject to such regulations as the superintendent

of financial services finds necessary and proper, invest to an amount

not exceeding the maximum per cent of the loan permitted to be made on

real estate improved by a single family residence occupied by the owner,

provided that for purposes of this section the amount of the purchase

price shall be deemed to equal the appraised value of such certificate

of stock or other evidence of an ownership interest, or, in the case of

a refinancing, the appraised value of certificates of stock or other

evidence of an ownership interest in and a proprietary lease from, a

corporation or partnership formed for the purpose of the cooperative

ownership of real estate within or without this state, for the purpose

of financing a purchase of or refinancing an existing ownership interest

in such a corporation or partnership, provided (a) such investment is

secured within ninety days from the making of the loan by an assignment

or transfer of the stock or other evidence of an ownership interest of

the borrower and a proprietary lease; and (b) repayment of principal and

interest shall be effected within the same number of years as a

conventional mortgage loan previously described in this subdivision. The

maximum rate of interest which may be charged, taken or received upon

any loan or forbearance made pursuant to this subdivision may exceed the

rate of interest prescribed by the superintendent of financial services

in accordance with section fourteen-a of this chapter by no more than

one and one-half per centum per annum.

8-b. Personal loan departments. Subject to such regulations as the

superintendent of financial services may prescribe, a savings bank may

operate a personal loan department under the same terms and conditions

as are provided under the provisions of subdivisions four and five of

section one hundred eight of this chapter.

The superintendent of financial services shall be empowered (a) to

prescribe the terms and conditions governing the conduct and operation

of personal loan departments including, the maximum amount, expressed as

a percentage of assets or otherwise, which a savings bank may invest

pursuant to the provisions of this subdivision or in the aggregate,

taking into account such other provisions of law authorizing investments

by savings banks, and (b) to prescribe such terms and conditions as may

be appropriate to effect or facilitate the transfer of accounts operated

pursuant to the provisions of any other section of this chapter to the

personal loan departments authorized to be operated hereunder.

In pursuance of the authority granted hereunder savings banks shall be

empowered to issue credit cards, extend credit in connection therewith,

and otherwise engage in or participate in credit card operations, and to

act as financing agency as defined in subdivision nine of section three

hundred one and subdivision eighteen of section four hundred one of the

personal property law.

8-c. Subject to such regulations as the superintendent of financial

services may prescribe, promissory notes and other evidences of

indebtedness representing commercial, corporate or business loans,

provided that the aggregate amount of all such loans outstanding at any

time to any borrower shall, if unsecured, not exceed fifteen per centum

of the net worth of such savings bank or, if secured, subject to the

same limitations as to amount in relation to net worth as are applicable

to banks and trust companies pursuant to article three of this chapter.

For purposes of this section the term "net worth" shall have the meaning

ascribed to it by subdivision four of section two hundred forty-four of

this chapter.

8-d. Subject to such regulations as the superintendent of financial

services may prescribe and subject to the limits of subdivision eight-c

of this section and any other applicable limits or requirements imposed

by law or regulation, promissory notes and other evidence of

indebtedness that represent linked loans, each authorized and approved

pursuant to article fifteen of the state finance law and each in an

amount equal to a corresponding linked deposit made pursuant to such

article.

8-e. Subject to such regulations as the superintendent of financial

services may prescribe and subject to the limits of subdivision eight-c

of this section and any other applicable limits or requirements imposed

by law or regulation, promissory notes and other evidence of

indebtedness that represent linked loans, each authorized and approved

pursuant to article sixteen of the state finance law and each in an

amount equal to a corresponding linked deposit made pursuant to such

article.

9. Real estate as provided in this subdivision.

(a) A savings bank may purchase or acquire the following real estate:

(1) A plot whereon there is or may be erected a building suitable for

the convenient transaction of the business of the savings bank, from

portions of which not required for its own use a revenue may be derived,

and a plot whereon parking accommodations are, or are to be, provided,

with or without charge, primarily for its customers or employees or

both. The aggregate of all investments of a savings bank in such plots

and buildings shall not exceed five per centum of the assets of such

savings bank, except with the approval of the superintendent.

(2) Such as shall be conveyed to it in satisfaction of debts

previously contracted in the course of its business.

(3) Such as it shall purchase at sales under judgments, decrees or

mortgages held by it.

(4) In lieu of instituting an action to foreclose a mortgage lien, a

savings bank may purchase a deed to the underlying real property.

(5) A whole or part interest in a "project" as defined in the New York

state urban development corporation act, pursuant to sections six or

eight of such act. An investment by a savings bank in a single project

shall not exceed one per centum of the assets or ten per centum of the

net worth of such savings bank, whichever is less, and the aggregate of

all investments of a savings bank in such projects and investments in

securities pursuant to subparagraph one-a of paragraph (a) of

subdivision twenty-one of this section shall not exceed five per centum

of the assets or fifty per centum of the net worth of such savings bank,

whichever is less. For the purposes of this subdivision, "net worth" of

a savings bank shall mean the excess of its assets at book value, less

allocated reserves, over known liabilities.

* (6) Improved or unimproved real property (either by purchase, lease,

exchange or otherwise), or any interest therein, to erect, construct,

rebuild, enlarge, alter, improve, maintain, manage and operate buildings

or other improvements of any description thereon, to sell, lease,

sublet, mortgage, exchange or otherwise dispose of same and execute,

perform and carry out contracts for construction, alteration,

improvement, maintenance, management or repair thereof, to make loans in

connection therewith, as owner, co-owner or otherwise, subject to such

specific or general approvals and limitations as shall be required by

regulations promulgated from time to time by the superintendent of

financial services pursuant to this subparagraph; provided, however,

that no activity specified herein, shall be undertaken pursuant to the

authority contained in this subparagraph until the superintendent of

financial services shall have issued regulations specifying the

limitations and requirements which shall be imposed in connection with

the investments and activities referred to herein including, without

limitation, the consideration of such savings bank's record in meeting

the credit needs of local communities within the meaning of section

twenty-eight-b of this chapter.

* NB Expired June 30, 1988

(b) Every parcel of real estate acquired by a savings bank shall be

conveyed to it directly by name, or, subject to such regulations and

restrictions as the superintendent of financial services finds to be

necessary and proper, may be taken in the name of a duly authorized

nominee, and the conveyance shall be immediately recorded or registered

in the office of the proper recording officer of the county in which

such real estate is located.

10. Bonds and other obligations of Savings and Loan Bank of the State

of New York.

11. Farm loan bonds, including consolidated bonds, issued by federal

land banks, federal intermediate credit bank debentures, including

consolidated debentures, issued by federal intermediate credit banks and

bonds, debentures or other obligations of banks for cooperatives,

including consolidated debentures issued by banks for cooperatives

organized under the laws of the United States.

12. Bankers' acceptances and bills of exchange which are eligible for

purchase in the open market by federal reserve banks and which have been

accepted by a bank, a trust company, a private banker or an investment

company, as those terms are defined in this chapter, or by a banking

corporation which is organized under the laws of the United States or of

any state thereof and which is a member of the federal reserve system.

Aggregate liability of any bank, trust company, private banker,

investment company or banking corporation to any savings bank for

acceptances shall not exceed twenty-five per centum of the capital and

surplus of such bank, trust company, private banker, investment company

or banking corporation, or five per centum of the aggregate amount

credited to the depositors of such savings bank, whichever amount is

less.

12-a. * (a) Obligations of any corporation organized under the laws of

any state of the United States maturing within two hundred seventy days,

provided that such obligations receive the highest rating of an

independent rating service designated by the superintendent of financial

services.

* NB Effective until notification of the superintendent of financial

services

* (a) Obligations of any corporation organized under the laws of any

state of the United States maturing within two hundred seventy days,

provided that such obligations meet the standards of creditworthiness

established by regulation by the superintendent.

* NB Effective upon notification of the superintendent of financial

services

(b) Subject to such regulations as the superintendent of financial

services may impose, certificates of deposit issued by or accounts of

(1) a bank, trust company or national bank having a principal, branch or

trust office in this state, (2) a banking corporation organized under

the laws of the United States or of any state thereof whose deposits are

insured by an agency of the United States, or (3) an agency or branch

located within the United States of a foreign banking corporation with

total worldwide bank assets in excess of one billion dollars.

12-b. Advances of federal funds to designated depositaries, provided

such advances are made on the condition that they be repaid on the next

business day following the day on which the advance is made. For

purposes of this subdivision and subdivision twelve of this section, the

term "federal funds" shall mean funds which a savings bank has on

deposit at a depositary which are exchangeable for funds on deposit at a

federal reserve bank; and the term "business day" shall mean any day on

which the savings bank, the depositary and the federal reserve bank

where the funds are on deposit are all open for general business.

13. Bonds of any corporation which at the time of such investment is

incorporated under the laws of the United States or any state thereof,

or the District of Columbia, and transacting the business of supplying

electrical energy or artificial gas, or natural gas purchased from

another corporation and supplied in substitution for, or in mixture

with, artificial gas, for light, heat, power and other purposes, or

transacting any or all of such business, provided at least eighty per

centum of the gross operating revenues of any such corporation are

derived from such business, subject to the following conditions:

(a) Such corporation shall have all franchises necessary to operate in

territory in which at least seventy-five per centum of its gross income

is earned. Such corporation shall file with the superintendent of

financial services and make public in each year a statement and a report

giving the income account covering the previous fiscal year and a

balance sheet showing in reasonable detail the assets and liabilities at

the end of the year.

(b) Either the outstanding full paid capital stock together with

premiums thereon and the surplus of such corporation shall be not less

than two-thirds of the total debt secured by mortgage lien on any part

or all of its property, or the outstanding full paid capital stock

together with premiums thereon and surplus and unsecured debt not

maturing within five years and not in excess of fifty per centum of such

capital stock, premiums and surplus shall be equal to at least

three-fourths of the total debt secured by mortgage lien on any part or

all of its property, provided, however, that in case of a corporation

having no-par value shares, the amount of capital which such shares

represent shall be the capital as shown by the books of the corporation.

(c) Such corporation shall have been in existence for a period of not

less than eight fiscal years and at no time within such period of eight

fiscal years next preceding the date of such investment shall said

corporation have failed to pay promptly and regularly the matured

principal and interest of all its indebtedness direct, assumed or

guaranteed, but the period of life of the corporation, together with the

period of life of any predecessor corporation or corporations from which

a major portion of its property was acquired by consolidation, merger or

purchase shall be considered together in determining the required

period.

(d) For a period of five fiscal years next preceding such investment

the net earnings of such corporation shall have averaged per year not

less than two times the average annual interest charges on its total

funded debt applicable to that period, and for the last fiscal year

preceding such investment such net earnings shall have been not less

than twice the interest charges for a full year on its total funded debt

outstanding at the time of such investment, and for such period the

gross operating revenues of any such corporation shall have averaged per

year not less than two million dollars.

(e) In determining the qualifications of any bond under this

subdivision where a corporation shall have acquired its property or any

substantial part thereof within five years immediately preceding the

date of such investment by consolidation or merger, or by the purchase

of all or a substantial portion of the property of any other corporation

or corporations, the gross operating revenues, net earnings, and

interest charges of the several predecessor or constituent corporations

shall be consolidated and adjusted so as to ascertain whether the

requirements of paragraph (d) of this subdivision have been complied

with.

(f) Such bonds shall be (1) bonds secured by a first or refunding

mortgage on property owned and operated, or controlled, by the

corporation issuing or assuming them, or underlying mortgage bonds

secured by a lien on property owned and operated, or controlled, by the

corporation issuing or assuming them, provided that such underlying

mortgage bonds are to be refunded by a junior mortgage providing for

their retirement, that the bonds under such junior mortgage comply with

the requirements of this subdivision, and that such underlying mortgage

is either a closed mortgage or remains open solely for the issue of

additional bonds which are to be pledged under such junior mortgage and

provided that the aggregate principal amount of bonds secured by such

first or refunding mortgage plus the principal amount of all the

underlying outstanding bonds shall not exceed two-thirds of the net

value of the physical property owned or controlled as shown by the books

of the owning corporation, and subject to the lien of such mortgage or

mortgages securing the total mortgage debt and provided further, that if

a refunding mortgage, it must provide for the retirement on or before

the date of their maturity of all bonds secured by prior liens on the

property, or (2) bonds, other than mortgage bonds, provided, that (a)

for a period of five fiscal years next preceding such investment the net

earnings of such corporation shall have averaged per year not less than

two and one-half times the average annual interest charges on its total

funded debt applicable to that period, and for the last fiscal year

preceding such investment such net earnings shall have been not less

than two and one-half times the interest charges for a full year on its

total funded debt outstanding at the time of such investment, and (b)

the capital stock together with premiums thereon and surplus of such

corporation shall not be less than two-thirds of its total funded debt

outstanding, and (c) such bonds, if issued for a term longer than

fifteen years, shall have been issued under an indenture containing a

covenant providing for the establishment of a sinking fund for the

benefit of such bonds whereby such bonds shall be redeemed at an annual

rate of not less than two per centum of the largest principal amount of

their issue at any one time outstanding, and (d) the mortgage bonds of

such corporation, if any, shall qualify under the provisions of this

subdivision.

(g) (1) The gross operating revenues and expenses of a corporation for

the purposes of this subdivision shall be, respectively, the total

amount earned from the operation of, and the total expense of

maintaining and operating, all property owned and operated, or leased

and operated, by such corporation, as determined by a system of accounts

adopted by a federal, state or municipal public service commission,

public utility commission or other similar regulatory body. The gross

operating revenues and expenses, as defined above, of subsidiary

companies may be included, provided all the mortgage bonds and a

controlling interest in stock or stocks of such subsidiary companies are

pledged as part security for the mortgage debt of the principal company.

The net value of any property shall be its value as shown by the books

of the corporation less the amounts of any reserves for depreciation,

retirement or amortization thereof. Property shall be deemed to be

controlled by a corporation if such corporation shall own not less than

ninety per cent of the capital stock of the corporation owning such

property.

(2) The net earnings of any corporation for the purposes of this

subdivision shall be the balance obtained by deducting from its gross

operating revenues, its operating and maintenance expenses, taxes other

than federal and state income taxes, rentals and provision for renewals

and retirements of the physical assets of the corporation, and by adding

to said balance its income from securities and miscellaneous sources but

not, however, to exceed fifteen per centum of said balance. The term

funded debt shall be construed to mean all interest-bearing debt

maturing more than one year from date of issue.

(3) In the computation for the purposes of this subdivision of the

ratio of mortgage debt to net mortgaged property value there shall be

excluded from the amount of outstanding mortgage bonds the amount of any

cash deposited with the trustee of the mortgage and held in trust

pursuant to the terms of such mortgage.

(h) Not more than twenty-five per centum of the assets of any savings

bank shall be loaned on or invested in bonds of such electric and gas

corporations, and not more than two per centum of the assets of any

savings bank shall be invested in the bonds of any one such corporation,

as authorized by this subdivision.

(i) As used in this subdivision, the term "bond" includes a note or

debenture.

14. Bonds of any corporation which at the time of such investment is

incorporated under the laws of the United States or any state thereof,

or the District of Columbia, and authorized to engage, and engaging, in

the business of furnishing telephone service in the United States,

subject to the following conditions:

(a) Such corporation shall have been in existence for a period of not

less than eight fiscal years and at no time within such period of eight

fiscal years next preceding the date of such investment shall said

corporation have failed to pay promptly and regularly the matured

principal and interest of all its indebtedness direct, assumed, or

guaranteed, but the period of life of the corporation, together with the

period of life of any predecessor corporation or corporations from which

a major portion of its property was acquired by consolidation, merger or

purchase, shall be considered together in determining the required

period; and such corporation shall file with the superintendent of

financial services and make public in each year a statement and a report

giving the income account covering the previous fiscal year and a

balance sheet showing in reasonable detail the assets and liabilities at

the end of the year.

(b) The outstanding full paid capital stock together with premiums

thereon and the surplus of such corporation shall at the time of such

investment be equal to at least two-thirds of the aggregate of its

funded debt and the total funded debt, exclusive of any such funded debt

held by such corporation, of every telephone corporation a majority of

the capital stock of which is owned by such corporation.

(c) For a period of five fiscal years next preceding such investment

the net earnings of such corporation shall have averaged per year not

less than two and one-half times the average annual interest charges on

its total debt applicable to that period, and for the last fiscal year

preceding such investment such net earnings shall have been not less

than twice the interest charges for a full year on its total funded debt

outstanding at the time of such investment, and for such period the

gross operating revenues of any such corporation shall have averaged per

year not less than five million dollars.

(d) In determining the qualifications of any bond under this

subdivision where a corporation shall have acquired its property or any

substantial part thereof within five years immediately preceding the

date of such investment by consolidation or merger, or by the purchase

of all or a substantial portion of the property of any other corporation

or corporations, the gross operating revenues, net earnings and interest

charges of the several predecessor or constituent corporations shall be

consolidated and adjusted so as to ascertain whether the requirements of

paragraph (c) of this subdivision have been complied with.

(e) The gross operating revenues and expenses of a corporation for the

purposes of this subdivision shall be, respectively, the total amount

earned from the operation of, and the total expense of maintaining and

operating, all property owned and operated, or leased and operated, by

such corporation, as determined by a system of accounts adopted by the

federal communications commission, a public service commission, or

public utility commission, or other similar federal or state regulatory

body.

(f) The net earnings of any corporation for the purposes of this

subdivision shall be the balance obtained by deducting from its gross

operating revenues, its operating and maintenance expenses, provision

for depreciation of the physical assets of the corporation, taxes other

than federal and state income taxes, rentals and miscellaneous charges,

and by adding to said balance its income from securities and

miscellaneous sources but not, however, to exceed fifteen per centum of

said balance. The term funded debt shall be construed to mean all

interest-bearing debt maturing more than one year from date of issue.

Whenever a corporation shall own a majority of the capital stock of

one or more other telephone corporations, the consolidated statements of

all such telephone corporations shall be used in determining the amount

of net earnings available for interest charges, and the amount of

interest charges, of such corporation.

(g) Not more than twenty-five per centum of the assets of any savings

bank shall be loaned on or invested in bonds of such telephone

corporations, and not more than three per centum of the assets of any

savings bank shall be invested in the bonds of any one telephone

corporation, as authorized by this subdivision.

(h) As used in this subdivision, the term "bond" includes a note or

debenture.

15. Bonds, debentures, consolidated debentures or other obligations of

any federal home loan bank or banks, or of Tennessee Valley Authority,

and obligations of, or instruments issued by or fully guaranteed as to

principal and interest by, the Federal National Mortgage Association, or

Federal Home Loan Mortgage Corporation, and notes, bonds, debentures,

mortgages and other evidences of indebtedness of the United States

Postal Service.

16. Stock of a federal reserve bank in the amount necessary to qualify

for membership in such bank.

17. Stock of a federal home loan bank in the amount necessary to

qualify for membership in such bank and in such additional amounts as

are approved by the superintendent of financial services.

19. Securities of corporations which securities are made eligible for

investment by savings banks by the superintendent of financial services.

20. Subject to such regulations and restrictions as the superintendent

of financial services finds to be necessary and proper, (a) (1) any bond

and mortgage insured by the federal housing commissioner, or for which a

commitment to insure has been made by the federal housing commissioner,

or (2) any bond and mortgage guaranteed pursuant to the provisions of

the act of congress entitled the "Servicemen's Readjustment Act of

1944", or (3) provided the mortgage is a first lien, any bond and

mortgage at least twenty per centum of which is guaranteed pursuant to

the provisions of such act, or (4) a participation in any loan or a part

interest in any bond and mortgage, secured by real property, to the

extent that the small business administration is committed to pay the

principal and interest thereof; (b) any whole or part interest in any

such bond and mortgage or in any whole or part interest in any such bond

and mortgage, which bond and mortgage is held for the benefit of the

holder or holders of a whole interest or part interests therein by any

entity or entities with which a savings bank is authorized to

participate pursuant to this paragraph, but no such investment shall be

made in any part interest which is junior or subordinate to any other

part interest therein; (c) any bond secured by any such mortgage or

mortgages, which mortgage is, or which mortgages are, held for the

benefit of the holder or holders of the bond or bonds secured thereby,

by a savings bank or bank or trust company; and (d) any property

improvement note issued pursuant to the provisions of the national

housing act, provided the savings bank investing in such note shall have

qualified for and received in connection therewith a contract of

insurance from the federal housing commissioner. A savings bank may

receive and hold such debentures as are issued in payment of any such

insurance. No law of this state prescribing or limiting the interest

rate upon loans or advances of credit or prescribing a penalty for

violation thereof or prescribing the nature, amount or form of security

or requiring security upon which loans or advances of credit may be made

or prescribing or limiting the period for which loans or advances of

credit may be made or limiting the amount of any class of loans,

advances of credit or purchases which may be made shall be deemed to

apply to loans, advances of credit or purchases made or to loans

acquired by purchase pursuant to this subdivision.

The provisions of subdivision six of this section, except those of

paragraph (f) thereof, shall not apply to investments made pursuant to

this subdivision by any savings bank. Paragraphs (a), (b) and (c) of

section one of chapter eight hundred ninety-seven of the laws of

nineteen hundred thirty-four as amended shall not apply to savings

banks. The term "bond", as used in this subdivision, includes a note.

The authority provided in this subdivision to invest in any bond and

mortgage guaranteed pursuant to the provisions of the act of congress

entitled the "Servicemen's Readjustment Act of 1944", shall include

authority to acquire title to real property in connection with investing

in an installment contract for the sale of real property, so guaranteed,

where the purchaser under such contract is in possession and control of

the property, and title is acquired by the savings bank solely as

security for the obligations of the purchaser.

21. (a) Subject to such regulations and restrictions as the

superintendent of financial services finds to be necessary and proper:

(1) Stock and obligations, not otherwise eligible for investment by

the savings bank, of any corporation organized under any law of this

state for the purpose of acquiring, constructing, owning, maintaining,

operating, selling or conveying a housing project or projects (not

including hotels but including accommodations for retail stores, shops,

offices and other community services reasonably incident to such

projects) located within this state, provided that all the stock and

obligations of any such corporation have been or are originally issued

to one or more savings banks of this state.

(1-a). Stock and obligations, not otherwise eligible for investment by

the savings bank, of any "subsidiary" of the New York state urban

development corporation, as defined in the New York state urban

development corporation act, provided that all the stock and obligations

of any such subsidiary is or is to be owned by one or more savings banks

of this state, or by such other owners of such stock and obligations as

may be approved by the superintendent of financial services.

(2) Corporate interest-bearing securities, other than those issued by

any corporation organized under the laws of a foreign country except

Canada whose securities are not registered with the United States

Securities and Exchange Commission or listed on a national securities

exchange in accordance with the Securities Exchange Act of 1934, as

amended, and interest-bearing securities of any state in the United

States or of any public authority, commission or instrumentality

organized under the laws of any state of the United States or of any

political subdivision of any such state, not otherwise eligible for

investment by the savings bank, which are not in default as to either

principal or interest when acquired, provided that no investment shall

be made pursuant to this subparagraph (2) in the securities of any

corporation if the total direct liabilities of such corporation to the

savings bank exceed, or by the making of such investment will exceed,

ten per centum of the total direct liabilities of such corporation or

one per centum of the assets of the savings bank, whichever amount is

less. The term "securities", as used in this subparagraph (2), means

such bonds, notes, debentures and other obligations for payment of money

as are negotiable, or conditional sale agreements, assignments of

conditional sale agreements and participations therein which are issued

or made by railroads for the purchase of rolling stock, and which have a

maturity of not less than five years from the date of issue or making,

or, if issued or made in a series or repayable in installments, an

average maturity of not less than five years from the date of issue or

making.

(b) No investment shall be made by a savings bank pursuant to

subparagraphs one and two of paragraph (a) of this subdivision if the

total amount invested by it pursuant to such paragraph, together with

the total amount invested by it pursuant to any provisions of any law

other than the banking law, exceeds, or by the making of such investment

will exceed, an amount equal to ten per centum of the assets of the

savings bank. An investment by a savings bank in a single subsidiary of

the New York state urban development corporation pursuant to

subparagraph one-a of paragraph a of this subdivision shall not exceed

one per centum of the assets or ten per centum of the net worth of such

savings bank, whichever is less, and the aggregate of all investments of

a savings bank in such subsidiaries and investments in securities

pursuant to subparagraph five of paragraph (a) of subdivision nine of

this section shall not exceed five per centum of the assets or fifty per

centum of the net worth of such savings bank, whichever is less. For the

purposes of this paragraph, "net worth" of a savings bank shall mean the

excess of its assets at book value, less allocated reserves, over known

liabilities.

(d) For the purposes of sections two hundred seventy-four, two hundred

eighty-five and four hundred thirty-five of this chapter, investments

authorized by this subdivision shall not be deemed investments in which

savings banks may legally invest, except that investments authorized by

subparagraph one-a of paragraph (a) of this subdivision shall be deemed

investments in which savings banks may legally invest for the purposes

of section three hundred seventy-nine of this chapter.

(e) For the purposes of section three hundred fifty-nine-f of the

general business law, investments authorized by sub-paragraph (2) of

paragraph (a) of this subdivision shall not be deemed investments in

which savings banks may legally invest.

* 21-a. Interest-bearing obligations payable in United States funds

which at the time of investment are rated in one of the three highest

rating grades by each rating service, designated by the superintendent

of financial services, which has rated such obligations, provided that

the aggregate amount invested in the obligations of any single issuer

pursuant to this subdivision and pursuant to subparagraph (2) of

paragraph (a) of subdivision twenty-one of this section may not exceed

one per centum of the assets of the savings bank, and provided further

that the aggregate amount invested in the interest-bearing obligations

of any single issuer pursuant to this subdivision and pursuant to any

provision of this section specifically authorizing such investment, may

not exceed the percentage limitations contained in any such provision.

* NB Effective until notification of the superintendent of financial

services

* 21-a. Interest-bearing obligations payable in United States funds

which at the time of investment meet the standards of creditworthiness

established by regulation by the superintendent, provided that the

aggregate amount invested in the obligations of any single issuer

pursuant to this subdivision and pursuant to subparagraph (2) of

paragraph (a) of subdivision twenty-one of this section may not exceed

one per centum of the assets of the savings bank, and provided further

that the aggregate amount invested in the interest-bearing obligations

of any single issuer pursuant to this subdivision and pursuant to any

provision of this section specifically authorizing such investment, may

not exceed the percentage limitations contained in any such provision.

* NB Effective upon notification of the superintendent of financial

services

22. Certificates of investment in savings banks life insurance fund.

23. Certificates representing advances to the surplus fund of its life

insurance department.

24. Obligations issued or guaranteed by the international bank for

reconstruction and development.

24-a. Obligations issued or guaranteed by the inter-American

development bank.

24-b. Obligations issued or guaranteed by the Asian development bank.

24-c. Obligations issued or guaranteed by the African Development

Bank.

24-d. Obligations guaranteed by the youth facilities project guarantee

fund and participations therein.

24-e. Obligations issued or guaranteed by the International Finance

Corporation.

25. Obligations of the Dominion of Canada, or of any province or city

of the Dominion of Canada, as provided in this subdivision. (a)

Obligations of the Dominion of Canada, or those for which the faith of

the Dominion of Canada is pledged to provide for the payment of the

interest and principal, provided that the principal and interest of such

obligations are payable in United States funds.

(b) Obligations of any province of the Dominion of Canada or those for

which the faith of any such province is pledged to provide for the

payment of the interest and principal upon which there is no default and

upon which there has been no default for more than ninety days;

provided, that within ten years immediately preceding the investment

such province has not been in default for more than ninety days in the

payment of any part of principal or interest of any debt duly authorized

by the legislature of such province; and provided that the principal and

interest of such obligations are payable in United States funds; and

provided further, that if at any time the net debt, as hereinafter

defined, of any such province shall exceed twenty-five per centum of the

valuation of real property in such province for the purposes of

taxation, the obligations of such province shall, thereafter, and until

such net debt shall be reduced to twenty-five per centum of the

valuation of real property in such province for the purposes of

taxation, cease to be an authorized investment for the moneys of savings

banks. The term "net debt" as used in this paragraph shall mean the

aggregate of all direct obligations funded and unfunded of any such

province and all other obligations excluding any on which interest is

being paid out of other than the ordinary revenues of such province;

less sinking funds applicable to such obligations.

(c) Obligations of any city in Canada, provided that said city has a

population, according to the last federal census of Canada next

preceding said investment, of not less than one hundred fifty thousand

inhabitants, and has not, within twenty-five years preceding said

investment, defaulted for more than one hundred and twenty days in the

payment of any part either of principal or interest of any bond, note,

or other evidence of indebtedness, provided that the indebtedness of

such city does not exceed the limitations imposed by paragraph (c) of

subdivision five of this section if applicable; and provided further

that the principal and interest of such obligations are payable in

United States funds. No obligations of any such city shall be an

authorized investment for savings banks unless such city shall have

power to levy taxes on the taxable real property therein or to require a

levy thereon by municipalities within its area in either case for the

payment of such obligation without limitation of rate or amount. The

term "city" as used in this paragraph and in paragraph (d) of

subdivision five of this section shall include The Municipality of

Metropolitan Toronto and any other similar corporation in Canada, and

the power to require a levy by municipalities within its area shall be

deemed to be a power to levy taxes within the meaning of such last

mentioned paragraph.

(d) Not more than ten per centum of the assets of any savings banks

shall be invested in the obligations defined in this subdivision, and

not more than two per centum of such assets shall be invested in the

obligations of any province, nor more than two per centum of such assets

in the obligations of any city, as authorized by this subdivision.

26. Subject to such regulations and restrictions as the superintendent

of financial services finds to be necessary and proper:

(a) Preferred stock of any corporation, created or existing under the

laws of the United States or of any state, district or territory

thereof, provided (1) the net earnings of such corporation available for

its fixed charges for a period of five fiscal years next preceding the

date of investment by such savings bank shall have averaged per year not

less than one and one-half times the sum of the following, computed as

of the date of such investment: its annual fixed charges, if any, its

annual maximum contingent interest, if any, and its annual preferred

dividend requirements; and (2) during either of the last two years of

such period such net earnings shall have been not less than one and

one-half times the sum of its fixed charges, contingent interest and

preferred dividend requirements for such year. As used in this paragraph

(a), the term "dividend requirements" shall be construed to mean

cumulative or non-cumulative dividends whether or not paid.

(b) Guaranteed stock of any corporation created or existing under the

laws of the United States or of any state, district or territory

thereof, provided (1) the net earnings of the guaranteeing corporation

available for its fixed charges for a period of five fiscal years next

preceding the date of investment by such savings bank shall have

averaged per year not less than one and one-half times its annual fixed

charges computed as of the time of such investment; and (2) during

either of the last two years of such period net earnings shall have been

not less than one and one-half times its fixed charges for such year.

(c) Common stock of any corporation created or existing under the laws

of the United States or of any state, district or territory thereof,

provided such common stock is registered on a national securities

exchange, as provided in an act of congress of the United States,

entitled the "Securities Exchange Act of 1934", approved June sixth,

nineteen hundred thirty-four, as amended.

(e) Stock or shares of any investment company, as defined by, and

which is registered under, an act of congress of the United States,

entitled the "Investment Company Act of 1940", approved August

twenty-second, nineteen hundred forty, as amended, provided such company

may invest only in such investments as are eligible for savings banks,

including, without limitation, investments made eligible for savings

banks by paragraphs (a), (b) and (c) of this subdivision but excluding

investments made eligible for savings banks by subdivisions five-a, six,

eight, nine, sixteen, seventeen, eighteen, twenty-two and twenty-three

of this section, provided that (i) investment restrictions based upon

the assets, surplus fund, net worth or other features of the condition

or operation of the savings bank shall not be applicable to such

investment company, (ii) the amount of stock of any corporation which

may be held by such investment company shall not exceed five per centum

of the number of shares of stock of such corporation outstanding at the

time of investment by such investment company, and (iii) at the time the

investment is made, the percentage of assets that a savings bank may

invest in the stock or shares of the investment company shall not exceed

the limitation, if any, applicable to a savings bank's investment in any

individual security included in the investment company's portfolio.

Nothing contained in the provisions of this chapter shall prevent an

officer, director, clerk or other employee of any bank or trust company

from being an officer, director or employee of any such investment

company.

(ee) Stock of any "bank service corporation", as such term is defined

by an act of congress of the United States, entitled the "Bank Service

Corporation Act", approved October twenty-third, nineteen hundred

sixty-two, as such act may be amended from time to time, provided such

investment shall have been authorized by the superintendent.

(eee) Stock or shares of any investment company, as defined by, and

which is registered under, an act of Congress of the United States,

entitled the "Investment Company Act of 1940", approved August

twenty-second, nineteen hundred forty, as amended, provided: (1) such

company is managed, advised and has its assets held at a bank or trust

company which is supervised and examined by the superintendent; (2) all

of the stock and shares, other than stock or shares required by law to

qualify directors, of such investment company are or are to be owned by

savings banks, savings and loan associations and pension trusts, funds,

plans or agreements participated in by one or more savings banks or

savings and loan associations to provide retirement benefits, for any or

all of its or their active officers and employees; and (3) such

investment company may invest only in investments as are made eligible

for savings banks by subdivisions one, two, three, four and fifteen of

this section. For the purpose of investments authorized by this

paragraph, no investment shall be made by a savings bank if the total

amount invested by it exceeds, or by the making of the investment will

exceed, an amount equal to thirty-five percent of its assets.

(f) For the purposes of this subdivision, (1) the term "net earnings

available for fixed charges" shall mean net income after deducting

operating and maintenance expenses, taxes other than federal and state

income taxes, depreciation and depletion, but excluding extraordinary

non-recurring items of income or expense appearing in the regular

financial statements of the issuing, assuming or guaranteeing

corporation; provided, however, that in the case of preferred stocks,

federal and state income taxes shall also be deducted in determining net

earnings available for fixed charges; (2) the term "fixed charges" shall

include interest on funded and unfunded debt, amortization of debt

discount and rentals for leased properties; (3) if net earnings are

determined in reliance upon consolidated earnings statements of parent

and subsidiary corporations, such net earnings shall be determined after

provision for income taxes of subsidiaries and after proper allowance

for minority stock interest, if any, and the required coverage of fixed

charges shall be computed on a basis including fixed charges and

preferred dividends of subsidiaries other than those payable by such

subsidiaries to the parent corporation or to any other of such

subsidiaries; and (4) in applying the earnings tests under this

subdivision to any issuing, assuming, or guaranteeing corporation, where

such corporation shall have acquired its property or any substantial

part thereof within the five years immediately preceding the date of

investment by consolidation or merger, or by the purchase of all or a

substantial portion of any other corporation or corporations, or shall

have acquired the assets of any unincorporated business enterprise by

purchase or otherwise, the gross operating income, net earnings and

interest charges of the several predecessor or constitutent corporations

or enterprises shall be consolidated and adjusted so as to ascertain

whether or not the applicable requirements of this subdivision have been

complied with.

(g) No investment shall be made by a savings bank pursuant to

paragraphs (a), (b) or (c) of this subdivision in the stock of any

corporation if the total investment by the savings bank in the stock of

such corporation exceeds, or by the making of such investment will

exceed (1) in amount, one per centum of the assets of the savings bank,

or (2) in number of shares, two per centum of the total issued and

outstanding shares of stock of such corporation.

(h) No investment shall be made by a savings bank pursuant to

paragraph (a), (b) or (c) of this subdivision if the total aggregate

amount so invested by it exceeds, or by the making of such investment

will exceed, an amount equal to seven and one half per centum of its

assets.

(i) No investment in an investment company shall be made by a savings

bank pursuant to paragraph (e) of this subdivision if the total amount

invested by it in all such investment companies pursuant to such

paragraph exceeds, or by the making of such investment will exceed, an

amount equal to seven and one-half per centum of its assets.

(k) For the purposes of sections two hundred seventy-four, two hundred

eighty-five and four hundred thirty-five of this chapter, investments

authorized by this subdivision shall not be deemed investments in which

savings banks may legally invest.

(l) For the purposes of any other statutes which restrict investments

to securities authorized for investment by savings banks, including but

not limited to section ninety-two of the membership corporation law,

section 9.27 of the mental hygiene law and sections fifteen and

twenty-five-a of the workmen's compensation law, investments authorized

by this subdivision, shall not be deemed investments in which savings

banks may legally invest.

26-a. (1) Subject to such regulations and restrictions as the

superintendent of financial services finds to be necessary and proper,

the stock or obligations of one or more corporations engaged, or to be

engaged, primarily in originating and servicing mortgages on real

property, provided, however, that if the savings bank shall own less

than all of the stock and obligations of any such corporation, the

remainder of the stock, excluding directors' qualifying shares, if any,

and obligations of such corporation shall be owned by one or more

savings banks or savings and loan associations located in this state.

(2) No investment shall be made pursuant to this subdivision unless

the corporation in which such investment is to be made shall have

furnished satisfactory assurance to the superintendent that it will be

subject to examination by him to the same extent as if the business of

such corporation were being conducted by the savings bank on its own

premises. No investment shall be made by a savings bank pursuant to this

subdivision if the total amount so invested by it exceeds, or by the

making of such investment will exceed, an amount equal to one per centum

of its assets.

(4) For the purposes of any other provisions of law which restrict

investments to those in which savings banks may legally invest, other

than subdivision five of section three hundred seventy-nine of this

chapter, investments authorized by this subdivision shall not be deemed

investments in which savings banks may legally invest.

27. For the purposes of this section the term "state", when used

generally to include every state of the United States, includes also the

commonwealth of Puerto Rico, and the term "city", when used generally to

include cities in every state of the United States, includes also any

municipality of the commonwealth of Puerto Rico.

28. Bonds, notes or evidences of indebtedness issued by a corporation

organized for the purpose of undertaking, constructing, owning,

maintaining, operating, selling or conveying a slum clearance and

redevelopment project, located within this state, pursuant to title one

of an act of congress of the United States approved July fifteenth,

nineteen hundred forty-nine, entitled the "Housing Act of 1949," or

organized pursuant to articles five and six of the private housing

finance law, and secured by a first mortgage upon all of the real

property owned by the corporation. A mortgage loan made under this

subdivision may equal but shall in no event exceed ninety per centum of

the cost as estimated prior to the completion of the project, or ninety

per centum of the total actual final cost, if that shall be greater than

the estimated cost, but in no event, shall such mortgage loan exceed

ninety per centum of the appraised value of the completed project

determined pursuant to subdivision six of this section. The estimated

cost and the total actual final cost shall be certified as to

reasonableness and correctness by an independent engineering

organization and shall include the cost to the corporation of the lands

owned by the corporation, the cost of demolition, the cost of

constructing the improvements, including planning, designing,

engineering and landscaping, the cost of relocation of tenants, interest

and other carrying charges during the period of acquisition and of

construction, all other costs necessarily incurred and properly

attributable to undertaking, constructing and completing the project,

and an allowance for working capital which shall not exceed an amount

equal to three per centum of the estimated cost or of the total actual

final cost of the project if that shall be greater than the estimated

cost. A mortgage loan made under this subdivision may be participated in

by one or more savings banks. An agreement setting forth the manner in

which the participating banks shall administer the mortgage and acquire

real estate, if any, shall be executed on behalf of each bank by two

persons appointed by the board of trustees of such bank. Investments

made by any savings bank in mortgage loans pursuant to this subdivision

and pursuant to paragraph (h) of subdivision six of this section shall

not, in the aggregate, exceed ten per centum of the assets or an amount

equal to the surplus fund and undivided profits and surplus reserve of

such savings bank, whichever is less, and shall be included in the

computation of permissive investment in mortgage loans pursuant to

paragraph (d) of subdivision six of this section. Investments in such

mortgage loans shall be subject to such regulations and restrictions as

the superintendent of financial services finds to be necessary and

proper.

28-a. Such bonds or other evidences of indebtedness issued or

guaranteed by the State of Israel as are approved by the comptroller of

the currency for investment by national banks; provided, however, that

the principal and interest payable thereon shall be payable in United

States dollars; and provided that such investments may not exceed in the

aggregate five percent of the bank's capital deposits, undivided

profits, surplus and reserves.

28-b. Such acquisitions and leases of personal property as are

authorized to be made by commercial banks by subdivision twelve of

section ninety-six of this chapter, subject to those limitations

applicable to such investments in the case of banks or trust companies.

29. Subject to such restrictions as the superintendent of financial

services may prescribe, stock or other equity interest in one or more

small business investment companies, as authorized pursuant to the

provisions of an act of congress entitled "Small Business Investment Act

of 1958," as amended, or in any entity established to invest solely in

such small business investment companies, except that in no event shall

the total amount of such investments exceed: (a) for a stock form

savings bank five percent of its capital stock, surplus fund and

undivided profits; or (b) for a non-stock savings bank five percent of

its net worth.

30. Alternative investment authority of savings banks to invest in

certain securities. Notwithstanding the limitations contained in

subdivision one, two, three, four, five, seven, seven-a, ten, eleven,

thirteen, fourteen, fifteen, nineteen, twenty-one-a, twenty-four,

twenty-four-a, twenty-four-b, twenty-four-c, twenty-five, twenty-six,

twenty-seven, twenty-eight-a, or subparagraph two of paragraph (a) or

paragraph (b) of subdivision twenty-one of this section, and subject to

such limitations as the superintendent of financial services shall

adopt, a savings bank shall be authorized to invest in such debt

securities as are not in default as to either principal or interest when

acquired, and in such equity securities, in both cases as would be

acquired by prudent persons of discretion and intelligence in such

matters who are seeking a reasonable income and preservation of their

capital.

Without limiting its authority hereunder, the superintendent of

financial services shall adopt regulations to require that any savings

bank which shall elect to make investments pursuant to this subdivision

shall have first established an investment committee of its board of

trustees to supervise and monitor the investment activities exercisable

pursuant to the authority granted by this subdivision, the majority of

the members of which shall be trustees who are not also officers or

employees of such savings bank.

The superintendent of financial services shall, in addition, adopt

regulations to require that no savings bank, in making investments

pursuant to this subdivision shall (either before or after the making of

such investments) control, as the superintendent of financial services

shall define the term "control", the issuer of any such securities

acquired by such savings bank.

For purposes of any other law establishing or limiting the investments

of any person or entity to those investments which are permitted for

savings banks, the investments authorized by this subdivision shall not,

by virtue of this subdivision alone, be deemed investments in which a

savings bank may legally invest.

31. Subject to such regulations as the superintendent of financial

services may promulgate, investments which do not qualify under any of

the preceding subdivisions of this section, provided that:

(a) No investment shall be made by a savings bank pursuant to this

subdivision if the amount of such investment exceeds one per centum of

the assets of the savings bank, or if the aggregate amount of all such

investments by a savings bank exceeds, or by the making of such

investment will exceed, five per centum of its assets;

(b) No investment shall be made by a savings bank in the equity

securities of any one issuer pursuant to this subdivision if the

aggregate amount invested by it pursuant to this subdivision together

with the amount invested in the equity securities of such issuer

pursuant to any other provision of law exceeds, or by the making of such

investment will exceed, one per centum of the assets of the savings

bank, and no investment shall be made by a savings bank in a loan to, or

in the debt securities of, any one issuer pursuant to this subdivision,

if the aggregate amount invested by it pursuant to this subdivision

together with the amount invested in a loan to, or in the debt

securities of, such issuer pursuant to any other provision of law

exceeds, or by the making of such investment will exceed, one per centum

of the assets of the savings bank;

(c) This subdivision shall not be deemed to alter any provision of

this chapter limiting the aggregate amount which may be invested in any

class of loan or investment;

(e) For the purposes of this subdivision, "net worth" of a savings

bank shall mean the excess of its assets at book value, less allocated

reserves, over known liabilities; and

(f) For the purposes of sections two hundred seventy-four, two hundred

eighty-five and four hundred thirty-five of this chapter, section three

hundred fifty-nine-f of the general business law, and any other

provisions of law which restrict investments to those in which savings

banks may legally invest, other than subdivision six of section three

hundred seventy-nine of this chapter, investments authorized by this

subdivision shall not be deemed investments in which savings banks may

legally invest.