N.Y. Banking Law § 238: Regulations and restrictions as to repayment of deposits

§ 238. Regulations and restrictions as to repayment of deposits. 1.

The repayment of deposits made with any savings bank and any interest

credited thereto, shall be subject to the provisions of this chapter and

to rules and regulations made in accordance therewith. Any such

regulations adopted by the board of trustees shall be posted in a

conspicuous place in the office or offices of such savings bank, and

shall be available to depositors upon request. All such rules and

regulations, from time to time in effect, and all amendments thereto,

from time to time in effect, shall be binding upon all depositors.

2. A savings bank may at any time by a resolution of its board of

trustees require a notice of sixty days before repaying deposits which

are not demand deposits, in which event no non-demand deposit shall be

due or payable until sixty days after notice of intention to withdraw

the same shall have been personally given by the depositor. Any such

non-demand deposit shall cease to be due or payable under such notice or

by reason thereof upon the fifteenth day after the expiration of such

sixty days' notice if not withdrawn by the fifteenth day thereafter.

Nothing herein contained, however, shall be construed as prohibiting any

savings bank from making payments of such deposits before the expiration

of said sixty days' notice. Except as provided in subdivision four of

this section and in subdivision one-a of section two hundred thirty-four

of this chapter, no savings bank shall agree with its depositors in

advance to waive said sixty days' notice nor shall it require a longer

notice than sixty days. In the event that any savings bank shall require

that notice be given before such deposits may be withdrawn it shall,

upon the day such requirement is made effective, notify the

superintendent by telephone or telegraph that such requirement has been

made.

3. Except as provided in subdivisions four, five and six of this

section, a savings bank shall not pay, nor shall a depositor, his

assignee or anyone claiming through a depositor, be entitled to receive

any interest or deposit or portion of a deposit, unless the passbook of

the depositor be produced and the proper entry be made therein at the

time of the payment. The board of trustees, however, may provide in the

by-laws for making payments in cases of loss of passbook, or other

exceptional cases where the passbooks cannot be produced without serious

inconvenience to depositors. The board of trustees may further provide

in the by-laws for the payment of interest to a depositor without

requiring the production of the passbook, provided that such payment is

made (a) pursuant to the written request of the depositor, and (b) by

check payable to the order of the depositor. The right to make such

payments without production of the passbook shall cease when the

superintendent shall so direct, upon his being satisfied that such right

is being improperly exercised. Payments, however, may be made upon the

judgment or order of a court. Where payment is made without production

of the passbook in accordance with its by-laws, a savings bank shall not

be liable to an assignee of that passbook for such payment if such

assignee has not, prior to such payment, served upon the savings bank

written notice of the assignment. When authorized by the depositor, or,

in the case of a joint account, by both depositors, a savings bank may

charge the account of such depositor or depositors for any sums due the

insurance department of such savings bank, or due the insurance

department of any other savings bank for which it is agent, without

requiring the production of the passbook for the recording of the charge

therein. For the purpose of this subdivision, the term "passbook" shall

include any evidence of ownership of a deposit held pursuant to

subdivision one-a of section two hundred thirty-four of this chapter,

subject, however, to such regulations and restrictions as the

superintendent of financial services may prescribe pursuant to such

subdivision.

4. A savings bank may contract with its depositors to repay deposits

of fixed sums made at regular intervals, other than demand deposits and

deposits held pursuant to subdivision one-a of section two hundred

thirty-four of this chapter, at a given time with all interest credited

thereon or to repay said deposits when, together with interest credited

thereon, they shall equal a specific sum and may issue a certificate

setting forth the given sum to which such deposits shall be accumulated

or the given time during which the deposits and the interest thereon

shall be accumulated. Such contract shall not provide for any forfeiture

of the sums deposited in the event of the discontinuance of the regular

payments. Interest on club accounts, if offered, must be credited at

least quarterly and may not be forfeited once credited, in the event of

the discontinuance of regular payments. Any savings bank which provides

for deposits in club accounts shall, in all advertising, announcements

or brochures pertaining to such accounts, state whether or not interest

is paid thereon and, if interest is paid, shall state the rate or form

of interest so paid in accordance with any rules and regulations that

may be prescribed by the superintendent.

4-a. If a deposit held pursuant to subdivision one-a of section two

hundred thirty-four of this chapter is repaid prior to maturity at the

request of a depositor, such repayment shall be subject to such

penalties as the superintendent of financial services may find to be

necessary and proper, except that no such penalty shall be imposed where

the depositor has died or been declared legally incompetent.

5. A savings bank may accept deposits from an employer or an employee

group, to be credited to the individual accounts of the members of a

group of employees having a common employer, without the issuance of a

passbook in connection therewith, and may pay to any one of the members

of such group, or to his authorized agent, in person, the whole or any

part of such deposits credited to his account together with the interest

credited thereon, without requiring the production of a passbook.

6. Subject to any regulations and restrictions prescribed by the

superintendent of financial services, a savings bank may accept

deposits, including demand deposits, without the issuance of a passbook

in connection therewith, and may issue such other evidences of its

obligation to repay such deposits as may be appropriate to safeguard the

interests of the depositors and of the savings bank.