N.Y. Banking Law § 36: Examinations; right of inspection; penalties for refusing to permit examination

§ 36. Examinations; right of inspection; penalties for refusing to

permit examination. * 1. The superintendent shall have the power to

examine every banking organization, every bank holding company and any

non-banking subsidiary thereof (as such terms "bank holding company" and

"non-banking subsidiary" are defined in article three-A of this chapter)

and every licensed lender at any time prior to its dissolution whenever

in his judgment such examination is necessary or advisable.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* 1. The superintendent shall have the power to examine every banking

organization, every bank holding company and any non-banking subsidiary

thereof (as such terms "bank holding company" and "non-banking

subsidiary" are defined in article three-A of this chapter) and every

licensed lender and licensed buy-now-pay-later lender at any time prior

to its dissolution whenever in the superintendent's judgment such

examination is necessary or advisable.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)

2. At least once in each calendar year upon such date or dates within

each such period as in his or her discretion he or she deems proper, the

superintendent shall cause every banking organization to be examined;

provided, however, that:

(a) the provisions of this subdivision shall not be applicable to an

investment company unless (i) such investment company has been

authorized by the superintendent of financial services to receive

deposits, in accordance with the terms of subdivision three of section

five hundred eight of this chapter, (ii) a bank or trust company, or any

two or more of such organizations, shall own an aggregate of twenty-five

per centum or more of the capital stock of such investment company, or

(iii) such investment company is a corporation which, under the terms of

subdivision six of this section, is deemed for the purposes of this

section to be a corporation affiliated with a corporate banking

organization, and

(b) the superintendent may extend the examination interval from at

least once in each calendar year to at least once in each eighteen month

period if the banking organization to be examined:

(1) has total assets of less than one billion dollars;

(2) is well-capitalized, which for purposes of this paragraph is

defined as having capital which significantly exceeds the required

minimum level for each relevant capital measure or as having such

capital as the superintendent shall otherwise define by regulation;

(3) at its most recent examination, was found to be well-managed and

its composite condition was found to be outstanding or good;

(4) is not currently subject to a formal enforcement proceeding or

order by the superintendent, the federal deposit insurance corporation

or any other federal banking agency; and

(5) has not been acquired by any person during the twelve month period

in which an examination would be required but for this paragraph, and

(c) the superintendent may modify the examination intervals as

prescribed by this subdivision to the extent the superintendent deems

appropriate, in his or her sole discretion, in order to obtain the

efficient use of the personal and nonpersonal resources of the

department by maximizing coordination with identical or parallel

examinations having differing or varying intervals performed by federal

banking regulators, whether such examinations are performed in

conjunction with the department or on an alternating schedule with such

federal banking regulators; provided, that nothing in this paragraph

shall be deemed in any manner to lessen or modify the requirement

imposed pursuant to section ten of this article.

3. On every such examination of any banking organization inquiry shall

be made as to (a) its financial condition, (b) the security afforded to

those by whom its engagements are held, (c) the policies of its

management, (d) whether the requirements of law have been complied with

in the administration of its affairs, and (e) such other matters as the

superintendent may prescribe. Examination of a licensed lender shall be

made only for the purposes set forth in section three hundred

forty-eight of this chapter.

4. The superintendent shall also have power at any time to examine

every agency, branch or office located in this state of any foreign

banking corporation, including, but not limited to, all of the books,

accounts or records of every agency, branch or office located in this

state of such foreign banking corporation as well as all of the books,

accounts or records maintained in this state of any agency, branch or

office not located in this state of such foreign banking corporation for

the purpose of ascertaining whether it has violated any law and for any

other purpose.

5. The superintendent shall have the power to make such special

investigations as he shall deem necessary to determine whether any

individual, partnership, unincorporated association or corporation has

violated any of the provisions of this chapter; and to the extent

necessary for this purpose the superintendent shall have the power to

examine all relevant books, records, accounts and documents.

6. For the purpose of determining the financial condition of a banking

organization, the superintendent shall have the power, when in his or

her judgment it is necessary or advisable, to examine corporations or

any other entity affiliated with any such banking organization. The

following are deemed for the purposes of this section to be corporations

or other entities affiliated with a banking organization:

(a) (i) Any corporation or other entity, the capital stock of which

such banking organization directly or indirectly, or through a

subsidiary or subsidiaries, owns or controls ten per centum or more of

the voting shares of such corporation or other entity; or (ii) any

corporation or other entity the election of a majority of the board of

directors of which is in any manner directly or indirectly controlled by

such banking organization; or (iii) any corporation or other entity the

management or policies over which the banking organization has the

power, directly or indirectly, to exercise a controlling influence, as

determined by the superintendent; provided, however, the foregoing

definition of affiliate corporations and other entities shall not apply

to small business investment companies as defined in and operating

pursuant to the provisions of an act of congress entitled "Small

Business Investment Act of 1958," and such companies shall be deemed to

be corporations affiliated with the banking organization for the

purposes of this subdivision, if such banking organization directly or

indirectly owns or controls twenty-five per centum or more of the voting

shares or more than twenty-five per centum of the shares voted for the

election of directors at the preceding annual meeting of such small

business investment company; or any such small business investment

company the election of at least twenty-five per centum of the board of

directors of which is in any other manner directly or indirectly

controlled by such banking organization; or

(b) Any corporation or other entity which directly or indirectly, or

through a subsidiary or subsidiaries, owns or controls ten per centum or

more of the voting shares of capital stock of such banking organization;

or any corporation or other entity which in any manner directly or

indirectly controls the election of a majority of the board of directors

of such banking organization; or with respect to the management or

policies of such banking organization has the power, directly or

indirectly, to exercise a controlling influence, as determined by the

superintendent.

6-a. (a) For the purposes of determining the financial condition of a

banking organization, the superintendent shall have the power, when in

his or her judgment it is necessary or advisable, to examine a

non-banking subsidiary of a corporation or other entity which

corporation or other entity, pursuant to paragraph (b) of subdivision

six of this section, is deemed to be an affiliate of a banking

organization.

(b) For the purposes of this subdivision, a "subsidiary" of such

affiliated corporation or other entity shall mean:

(1) Any corporation or other entity ten per centum or more of whose

voting stock is directly or indirectly, or through a subsidiary or

subsidiaries, owned, controlled, or held with power to vote, by an

affiliated corporation or other entity; or (2) any corporation or other

entity, the election of a majority of whose directors is controlled in

any manner by an affiliated corporation or other entity; or (3) any

corporation or other entity, ten per centum or more of whose voting

stock is directly or indirectly owned, controlled, or held with power to

vote, by a trustee or trustees for the benefit of the stockholders or

members of an affiliated corporation or other entity; or (4) any

corporation or other entity, at least ten per centum of the voting stock

of which is directly or indirectly, or through a subsidiary or

subsidiaries, owned, controlled or held with power to vote by a

combination of an affiliated corporation or other entity and by a

trustee or trustees for the benefit of the stockholders or members of

such affiliated corporation or other entity; or (5) any entity,

corporate or unincorporated, with respect to the management or policies

of which such affiliated corporation or other entity has the power,

directly or indirectly, to exercise a controlling influence, as

determined by the superintendent, after notice and opportunity for a

hearing. For the purposes of this subdivision, voting stock shall not be

deemed to include voting stock owned by the United States or by any

corporation wholly owned by the United States.

(c) A "non-banking subsidiary" for the purposes of this subdivision

means one which is not a banking organization or which is not engaged in

the banking business as defined in subdivision one of section one

hundred thirty-one of this chapter.

(d) The superintendent may use the reports of regulatory agencies of

this state, of other states, of any foreign government, and of federal

regulatory agencies in making such examinations or in conjunction with

such examination. All regulatory agencies of this state, shall upon

request of the superintendent, furnish or make available to him or her

reports of examination made by them of any such non-banking subsidiary.

6-b. For purposes of subdivisions six and six-a of this section, any

references contained therein to "voting stock" or "voting shares" shall

be deemed to include any ownership interest with respect to any entity

other than a corporation, any references to "stockholders" or

"shareholders" shall include persons or entities who have an equity

interest in any entity other than a corporation, and any references to

"board of directors" shall be deemed to mean the governing body with

respect to any entity other than a corporation.

7. The superintendent may cause any corporation, association or

partnership having business transactions or relations with any corporate

banking organization to be examined if such examination is found by a

justice of the supreme court, on application of the superintendent and

on notice to such company, to be necessary or expedient in order to

ascertain whether the capital stock of such corporate banking

organization is impaired or whether safety of depositors with it has

been imperilled.

8. Examinations may be made and inquiries instituted or continued in

the discretion of the superintendent after he has taken possession of

the property and business of any banking organization or after it has

entered upon voluntary dissolution until it shall resume business or its

affairs shall be finally liquidated.

9. Any individual, partnership, unincorporated association or

corporation, or any other entity, which refuses to permit examination or

investigation in accordance with the terms of this section shall forfeit

to the people of the state an amount as determined pursuant to section

forty-four of this chapter for every day such refusal continues.

* 10. All reports of examinations and investigations, correspondence

and memoranda concerning or arising out of such examination and

investigations, including any duly authenticated copy or copies thereof

in the possession of any banking organization, bank holding company or

any subsidiary thereof (as such terms "bank holding company" and

"subsidiary" are defined in article three-A of this chapter), any

corporation or any other entity affiliated with a banking organization

within the meaning of subdivision six of this section and any

non-banking subsidiary of a corporation or any other entity which is an

affiliate of a banking organization within the meaning of subdivision

six-a of this section, foreign banking corporation, licensed lender,

licensed casher of checks, licensed mortgage banker, registered mortgage

broker, licensed mortgage loan originator, licensed sales finance

company, registered mortgage loan servicer, licensed student loan

servicer, licensed insurance premium finance agency, licensed

transmitter of money, licensed budget planner, any other person or

entity subject to supervision under this chapter, or the department,

shall be confidential communications, shall not be subject to subpoena

and shall not be made public unless, in the judgment of the

superintendent, the ends of justice and the public advantage will be

subserved by the publication thereof, in which event the superintendent

may publish or authorize the publication of a copy of any such report or

any part thereof in such manner as may be deemed proper or unless such

laws specifically authorize such disclosure. For the purposes of this

subdivision, "reports of examinations and investigations, and any

correspondence and memoranda concerning or arising out of such

examinations and investigations", includes any such materials of a bank,

insurance or securities regulatory agency or any unit of the federal

government or that of this state any other state or that of any foreign

government which are considered confidential by such agency or unit and

which are in the possession of the department or which are otherwise

confidential materials that have been shared by the department with any

such agency or unit and are in the possession of such agency or unit.

* NB Effective until certain provisions are met (see Ch. 58 of 2025,

Part Y, § 13)

* 10. All reports of examinations and investigations, correspondence

and memoranda concerning or arising out of such examination and

investigations, including any duly authenticated copy or copies thereof

in the possession of any banking organization, bank holding company or

any subsidiary thereof (as such terms "bank holding company" and

"subsidiary" are defined in article three-A of this chapter), any

corporation or any other entity affiliated with a banking organization

within the meaning of subdivision six of this section and any

non-banking subsidiary of a corporation or any other entity which is an

affiliate of a banking organization within the meaning of subdivision

six-a of this section, foreign banking corporation, licensed lender,

licensed buy-now-pay-later lender, licensed casher of checks, licensed

mortgage banker, registered mortgage broker, licensed mortgage loan

originator, licensed sales finance company, registered mortgage loan

servicer, licensed student loan servicer, licensed insurance premium

finance agency, licensed transmitter of money, licensed budget planner,

any other person or entity subject to supervision under this chapter, or

the department, shall be confidential communications, shall not be

subject to subpoena and shall not be made public unless, in the judgment

of the superintendent, the ends of justice and the public advantage will

be subserved by the publication thereof, in which event the

superintendent may publish or authorize the publication of a copy of any

such report or any part thereof in such manner as may be deemed proper

or unless such laws specifically authorize such disclosure. For the

purposes of this subdivision, "reports of examinations and

investigations, and any correspondence and memoranda concerning or

arising out of such examinations and investigations", includes any such

materials of a bank, insurance or securities regulatory agency or any

unit of the federal government or that of this state any other state or

that of any foreign government which are considered confidential by such

agency or unit and which are in the possession of the department or

which are otherwise confidential materials that have been shared by the

department with any such agency or unit and are in the possession of

such agency or unit.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)