N.Y. Banking Law § 345: Application for acquisition of control of licensed lender by purchase of stock

§ 345. Application for acquisition of control of licensed lender by

purchase of stock. 1. Prior to the acquisition of control of a licensee

under this article by means of the acquisition of the capital stock or

equity interests in such licensee or in any person who directly or

indirectly controls such licensee, the person desirous of acquiring such

capital stock or other equity interests shall make written application

to the superintendent. Such application shall be in such form and shall

contain such information, including the information required under

section three hundred forty-one of this article, as the superintendent

may require and such applicant, at the time of making such application

if not licensed, shall pay to the superintendent an investigation fee as

prescribed pursuant to section eighteen-a of this chapter. If such

licensee is licensed, upon payment of an investigation fee as prescribed

pursuant to section eighteen-a of this chapter, the superintendent shall

approve the acquisition if it is found that such acquisition is in

accordance with the purposes of this article. If such person is not

licensed, the superintendent shall determine whether the financial

responsibility, experience, character, and general fitness of the

applicant, and of the members thereof if the applicant be a partnership

or association, and of the officers, directors and controlling

stockholders thereof if the applicant be a corporation, are such as to

command the confidence of the community and to warrant belief that the

business will be operated honestly, fairly, and efficiently within the

purpose of this article. Unless the superintendent shall have denied

such application in writing within ninety days of the filing thereof,

such application shall be deemed approved. If no such application has

been made, the license for each place of business maintained and

operated by the licensee shall, at the discretion of the superintendent,

become null and void and each such license shall be surrendered to the

superintendent. In addition, the superintendent may, in a proceeding

after notice and a hearing, require any person who has failed to make

application pursuant to this subdivision to pay the people of this state

a penalty in an amount as determined pursuant to section forty-four of

this chapter for each day of said violation.

As used in this subdivision, (a) the term "person" includes an

individual, partnership, corporation, association or any other

organization and (b) the term "control" means the possession, directly

or indirectly, of the power to direct or cause the direction of the

management and policies of a person, whether by means of the ownership

of the voting stock or equity interests of such person or of one or more

persons controlling such person, by means of a contractual arrangement,

or otherwise. Control shall be presumed to exist if any person directly

or indirectly owns, controls or holds with the power to vote ten per

centum or more of the voting stock or equity interests of the person

desirous of continuing to maintain and operate a licensee's place of

business or of any entity which directly or indirectly controls such

person. The superintendent may, upon the application of a licensee or

any such person or entity, determine whether or not the ownership,

control or holding of such voting stock or equity interests constitutes

or would constitute control for purposes of this subdivision.

2. For a period of six months from the date of qualification thereof

and for such additional period of time as the superintendent may

prescribe in writing, the provisions of subdivision one of this section

shall not apply to a transfer of control by operation of law to the

legal representative, as hereinafter defined, of one who has control of

a licensee. Thereafter, such legal representative shall comply with the

provisions of subdivision one of this section. The provisions of

subdivision one of this section shall be applicable to an application

made under such section by a legal representative.

The term "legal representative," for the purposes of this section,

shall mean one duly appointed by a court of competent jurisdiction to

act as executor, administrator, trustee, committee, conservator or

receiver, including one who succeeds a legal representative and one

acting in an ancillary capacity thereto in accordance with the

provisions of such court appointment.

If any provision of this section, or the application of such provision

to any individual, company, corporation or circumstance, shall be held

invalid, the remainder of this section, and the application thereof to

anyone other than one to which it is held invalid, shall not be affected

thereby.