N.Y. Banking Law § 258: Prohibition of unauthorized savings banks and use of the word "savings"; exception as to school savings

§ 258. Prohibition of unauthorized savings banks and use of the word

"savings"; exception as to school savings. 1. No individual,

partnership, unincorporated association or corporation other than a

savings bank, state or federal chartered savings and loan association,

bank, trust company, industrial bank, private banker, national bank,

foreign banking corporation licensed pursuant to this chapter to

transact in this state the business of receiving deposits or state and

federal chartered credit unions shall make use of the word "saving" or

"savings" or their equivalent in its banking or financial business, or

use any advertisement containing the word "saving" or "savings", or

their equivalent in relation to its banking or financial business, nor

shall any individual or corporation other than a savings bank in any way

solicit or receive deposits as a savings bank; but nothing herein shall

be construed to prohibit the use of the word "savings" in the name of

the Savings and Loan Bank of the State of New York or in the name of a

trust company all of the stock of which is owned by not less than twenty

savings banks. Any bank, trust company, industrial bank, private banker,

national bank, foreign banking corporation, state or federal chartered

credit unions, individual, partnership, unincorporated association or

corporation violating this provision shall forfeit to the people of the

state for every offense the sum of one hundred dollars for every day

such offense shall be continued.

2. Any school in the state of New York may collect from time to time

amounts of money from the pupils of such school and any philanthropic

agency incorporated for philanthropic purposes, if such agency be so

authorized by certificate of the superintendent of financial services,

may collect from time to time amounts of money from the children or

persons under the direction or guidance of, or the promotion of whose

welfare is an object of, such philanthropic agency. As to each such

school, such money shall be collected by or under the supervision of,

the principal or superintendent of such school or by, or under the

supervision of, any person designated for that purpose by the board of

education or other authority having jurisdiction over such school. As to

each such philanthropic agency, such money shall be collected by, or

under the supervision of, the superintendent or other designated head of

such agency. All money so collected shall, not later than the day

following the day of collection, be deposited in some savings bank in

the state, be used for the purchase of shares in any savings and loan

association organized under this law, or under the laws of the United

States, whose principal office is located in the state of New York, or

be deposited in any trust company or state or national bank located in

the state and having an interest department. All money so collected from

any person shall be deposited, or used to purchase shares, in his name;

provided, however, that if the principal, superintendent, designated

person or agency head by whom, or under whose supervision, such money

was collected shall deem the amount of money so collected at any one

time to be insufficient for the opening of individual accounts, such

money shall be deposited, or used to purchase shares, in the name of

such principal, superintendent, designated person or agency head, in

trust, to be by him eventually transferred to the credit of the

respective persons to whom the same belongs, and pending such transfer,

said principal, superintendent, designated person or agency head shall

furnish to the depositary institution or savings and loan association

receiving such money the name, signature, address, age and place of

birth of each person from whom such money was collected, and such other

data concerning such person as the institution may require. Any

depositary institution or savings and loan association authorized to

receive any amounts collected by a school or philanthropic agency in

accordance with this subdivision, may, on the request of any person

authorized by this subdivision to collect such amounts for such school

or philanthropic agency, send a collector to such school or

philanthropic agency to receive and receipt for same. Any certificate of

authorization issued to a philanthropic agency by the superintendent of

financial services in accordance with this subdivision shall specify the

period for which such authorization is to be effective and the area in

which collections may be made, and may specify any other terms or

conditions upon which such authorization is granted. Any such

authorization may be terminated by the superintendent of financial

services by written notice served upon the philanthropic agency or

mailed to it at its last known address. As used in this subdivision with

reference to the placing of amounts with a depositary institution or

savings and loan association, the words "the day following the day of

collection" shall mean the next day, after the day of collection, on

which such institution or association is open for business. As used in

this subdivision, the words "philanthropic agency" shall be deemed to

include, without limitation a corporation, not organized for profit,

engaged in promoting the welfare of seamen.

3. Money, deposited pursuant to the provisions of subdivision two of

this section and held by such banking organizations in the name of such

principal, superintendent, designated person or agency head in a school

district in a city having a population of more than one million, and

under whose custodial authority said money has remained for a period of

thirty years may be used by such a school district to establish a trust

fund after due and diligent effort by such principal, superintendent,

designated person, or agency head to locate and notify any such persons

entitled to receive such property. The income of said trust fund shall

be used to provide college scholarships to disadvantaged youth on a

competitive basis pursuant to rules promulgated by the board of

education of said district provided however that such scholarships shall

not exceed the cost of attendance. Any person or persons entitled to

receive such property shall be reimbursed from funds held in trust

pursuant to this subdivision. A bank shall not be liable as a result of

action taken under the provisions of this subdivision. Furthermore, no

banking organization acting on the instructions of or otherwise dealing

with any such principal, superintendent, designated person or agency

head shall be responsible for determining whether any such person is

acting in accordance with this section or is obliged to inquire into the

validity or propriety of the actions or instructions executed by any

such person or is bound to see to the application of any funds.