S T A T E O F N E W Y O R K
________________________________________________________________________
7353
2023-2024 Regular Sessions
I N A S S E M B L Y
May 18, 2023
___________
Introduced by M. of A. HUNTER, PEOPLES-STOKES -- read once and referred
to the Committee on Banks
AN ACT to amend the banking law, in relation to authorizing New York
chartered banking institutions to exercise powers authorized to bank-
ing institutions chartered in other states, subject to the approval of
the superintendent of financial services
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 12-a of the banking law, as added by chapter 322
of the laws of 2007, subdivision 3 as amended by chapter 448 of the laws
of 2011 and subdivisions 4, 5, 7, 8 and 9 as amended by section 88 of
part A of chapter 62 of the laws of 2011, is amended to read as follows:
§ 12-a. Power of state chartered banking institutions to exercise the
rights of counterpart federally OR OUT-OF-STATE chartered banking insti-
tutions.
1. Definitions. (a) As used in this section, "state chartered banking
institution" shall mean any bank, trust company, private banker, savings
bank, savings and loan association, foreign banking corporation, or
credit union THAT IS CHARTERED OR LICENSED UNDER THIS CHAPTER.
(b) As used in this section and as is applicable, "federally OR OUT-
OF-STATE chartered banking institution" shall mean COLLECTIVELY: (i) any
national banking association organized pursuant to the National Bank Act
of 1864, as amended, (12 USC 21 et seq.); (ii) any [federal] savings
association as such term is defined by the Federal Deposit Insurance
Act, as amended, (12 USC 1813(b)([2] 1)), WHETHER FEDERALLY CHARTERED OR
CHARTERED BY A STATE OTHER THAN NEW YORK ("FEDERAL OR OUT-OF-STATE
SAVINGS BANK OR SAVINGS AND LOAN ASSOCIATION"); (iii) a [federal] branch
[and] OR agency of a foreign [bank] BANKING CORPORATION, as such terms
are defined by the International Banking Act of 1978, as amended, ([122]
12 USC 3101), WHETHER FEDERALLY LICENSED OR LICENSED BY A STATE OTHER
THAN NEW YORK ("FEDERAL OR OUT-OF-STATE BRANCH OR AGENCY OF A FOREIGN
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
A LBD07925-02-3
A. 7353 2
BANKING ORGANIZATION"); [or] (iv) a [federal] credit union, as such term
is defined by the Federal Credit Union Act, as amended, (12 USC 1752(1)
AND (6)), WHETHER FEDERALLY CHARTERED OR CHARTERED BY A STATE OTHER THAN
NEW YORK ("FEDERAL OR OUT-OF-STATE CREDIT UNION"); OR (V) ANY STATE BANK
AS THAT TERM IS DEFINED BY THE FEDERAL DEPOSIT INSURANCE ACT, AS
AMENDED, (12 USC 1813(A)(2)) CHARTERED IN A STATE OTHER THAN NEW YORK
("OUT-OF-STATE BANK").
(c) As used in this section, "charter" shall mean the organization
certificate or comparable document of a [state] banking institution, or
the license for a state branch or agency of a foreign banking corpo-
ration, or a similar organizational document for [a federal] ANY FEDER-
ALLY OR OUT-OF-STATE CHARTERED banking institution [or a federal branch
or agency], and "chartered" shall mean the formal act of the state or
appropriate federal regulatory agency in approving and conveying such
charter of a banking institution.
(d) As used in this section, "federally OR OUT-OF-STATE CHARTERED
BANKING INSTITUTION permitted power" shall mean any right, power, privi-
lege or benefit, any activity, or any loan, investment or transaction
which a federally OR OUT-OF-STATE chartered banking institution directly
or through a subsidiary or subsidiaries, may lawfully exercise or into
which it may lawfully engage or enter.
(e) As used in this section "foreign banking corporation" shall mean a
banking corporation organized under the laws of a foreign country and
acting through a branch or agency licensed pursuant to section twenty-
six of this article.
(f) As used in this section, unless the context requires otherwise,
the term "subsidiary" shall have the same meaning as set forth in subdi-
vision five of section one hundred forty-one of this chapter, except
that (i) any reference therein to "bank holding company" shall be deemed
to refer to a "state chartered banking institution" as defined in this
section, and (ii) with respect to a credit union, the term "subsidiary"
as used in this section shall mean a "credit union organization".
2. Pursuant to this section and notwithstanding any other provision of
law, except as otherwise provided in its charter, a state-chartered
banking institution may exercise any federally permitted power of its
counterpart federally OR OUT-OF-STATE chartered banking institution as
herein set forth:
(a) a bank, private banker, or trust company may exercise any [feder-
ally] permitted power of a national banking association OR OUT-OF-STATE
BANK;
(b) a savings bank or savings and loan association may exercise any
[federally] permitted power of a federal OR OUT-OF-STATE SAVINGS BANK OR
savings AND LOAN association;
(c) a foreign banking corporation acting through a branch may exercise
any [federally] permitted power of a foreign bank acting through a
federal OR OUT-OF-STATE branch OF A FOREIGN BANKING CORPORATION;
(d) a foreign banking corporation acting through an agency may exer-
cise any [federally] permitted power of a foreign bank acting through a
federal OR OUT-OF-STATE agency OF A FOREIGN BANKING CORPORATION;
(e) a credit union may exercise any [federally] permitted power of a
federal OR OUT-OF-STATE credit union.
Nothing contained in this section shall be deemed to permit a state
chartered banking institution to exercise any [federally] POWER permit-
ted [power] TO FEDERALLY OR OUT-OF-STATE CHARTERED BANKING INSTITUTIONS
except in a manner consistent with the following provisions of law, in
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each case, as the terms contained in such provisions may be amended from
time to time:
(i) chapter one of the laws of nineteen hundred ninety-four;
(ii) chapter nine of the laws of nineteen hundred ninety-six; and
(iii) sections fourteen-c, twenty-eight-b, thirty-nine and forty-four
of this article, and sections six hundred five through six hundred thir-
ty-four of this chapter, and with respect to savings banks and savings
and loan associations, respectively, section two hundred forty and
section three hundred ninety-six of this chapter.
3. Except with respect to a federally OR OUT-OF-STATE CHARTERED BANK-
ING INSTITUTION permitted power approved pursuant to subdivision four of
this section, prior to any state chartered banking institution initially
exercising any federally OR OUT-OF-STATE CHARTERED BANKING INSTITUTION
permitted power pursuant to this section, such banking institution shall
make an application individually or with one or more state chartered
banking institutions to the superintendent indicating that such institu-
tion or institutions intend to exercise such federally OR OUT-OF-STATE
CHARTERED BANKING INSTITUTION permitted power and the basis on which
such institution or institutions believe such power is [a federally]
permitted [power]. The superintendent shall have one hundred twenty days
from receipt of the application to determine whether it meets the
requirements of this section, provided that such period may be extended
for an additional period of time [with the written consent of the appli-
cant or applicants]. If such application meets the requirements of this
section, the superintendent shall post such application upon the bulle-
tin board of the department pursuant to section forty-two of this arti-
cle. If such application does not meet the requirements of this section,
the superintendent shall, within ten days of such determination, notify
the applicant or applicants of the reasons why the application fails to
meet the requirements. The superintendent shall determine, consistent
with the standards set forth in subdivision five of this section, wheth-
er to approve such application subject to such terms and conditions as
the superintendent may deem appropriate, in the superintendent's sole
discretion. Such determination[,] shall be made by the superintendent
within forty-five days after the posting of such application, provided,
however, that the superintendent may notify the applicant or applicants
that the review of the application shall be extended for an additional
period of time not exceeding sixty days after the posting of such appli-
cation, and provided further that such period of time may be extended
for an additional period of time [with the written consent of the appli-
cant or applicants]. The superintendent shall not act upon the applica-
tion prior to thirty days after such application has been posted. If the
superintendent approves such application, the superintendent shall,
within ten days of approving the application, notify the applicant or
applicants in writing thereof, and the applicant or applicants may exer-
cise such federally OR OUT-OF-STATE CHARTERED BANKING INSTITUTION
permitted power subject to such terms and conditions as the superinten-
dent may have approved. If the superintendent declines such application,
the superintendent shall, within ten days of making such determination,
notify the applicant or applicants in writing thereof. An applicant or
applicants may, upon the superintendent's failure to comply with this
section, petition the superintendent to act upon the application. The
failure of the superintendent to act upon the application or notify the
applicant or applicants, in writing, as to the reasons why action cannot
be taken within thirty days of receipt of such petition shall be deemed
a denial of the application, which shall be subject to judicial review.
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Notwithstanding any other law, the superintendent may make the approval
of an application under this section applicable to one or more addi-
tional state chartered banking institutions that are qualified to exer-
cise the same federally OR OUT-OF-STATE CHARTERED BANKING INSTITUTION
permitted powers as the applicant or applicants pursuant to subdivision
two of this section, subject to such terms and conditions as the super-
intendent shall find necessary and appropriate.
4. Notwithstanding any other law, the superintendent, in the super-
intendent's discretion, may, when the superintendent deems it necessary
and appropriate after considering the standards set forth in subdivision
five of this section, by order, authorize one or more state chartered
banking institutions to exercise a federally OR OUT-OF-STATE CHARTERED
BANKING INSTITUTION permitted power, subject to such terms and condi-
tions as the superintendent shall find necessary and appropriate. Prior
to issuing such order, the superintendent shall post notice of the
superintendent's intention to issue such order upon the bulletin board
of the department pursuant to section forty-two of this article, and
shall not act upon such intention prior to thirty days after such notice
has been posted.
5. Prior to approving any application or proposal pursuant to subdivi-
sion three or four of this section, the superintendent shall make a
finding that the approval of such application or proposal is:
[(i)] (A) consistent with the policy of the state of New York as
declared in section ten of this article and thereby protects the public
interest, including the interests of depositors, creditors, sharehold-
ers, stockholders and consumers; and
[(ii)] (B) necessary to achieve or maintain parity between state char-
tered banking institutions and their counterpart federally OR OUT-OF-
STATE chartered banking institutions with respect to rights, powers,
privileges, benefits, activities, loans, investments or transactions.
6. A federally OR OUT-OF-STATE CHARTERED BANKING INSTITUTION permitted
power authorized FOR A STATE CHARTERED BANKING INSTITUTION pursuant to
this section shall not exceed and shall be limited by any conditions,
qualifications or restrictions on the same when exercised by [a] THE
counterpart federally OR OUT-OF-STATE chartered banking institution [of
a state chartered banking institution] unless the state chartered bank-
ing institution is so authorized by other New York state law, or a rule,
regulation or policy adopted pursuant to such other New York state law,
or by a judicial decision. Notwithstanding any other law, the super-
intendent may, at any time, impose by order any other terms and condi-
tions as he or she finds necessary and proper including, but not limited
to, a requirement that any federally OR OUT-OF-STATE CHARTERED BANKING
INSTITUTION permitted power authorized by this section be exercised,
conducted or held in a subsidiary of a state chartered banking institu-
tion. In the event that federally OR OUT-OF-STATE chartered banking
institutions [located in the state of New York] lose the authority to
exercise a federally OR OUT-OF-STATE CHARTERED BANKING INSTITUTION
permitted power, based upon which comparable authority was granted to
the counterpart state chartered banking institutions pursuant to this
section, then unless such authority is authorized by other New York
state law, or a rule, regulation or policy adopted pursuant to such
other New York state law, or by a judicial decision, the authorization
for such state chartered banking institutions pursuant to this section
shall be deemed revoked, provided, however, that any such revocation
shall be subject to such terms and conditions as may be imposed upon the
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counterpart federally OR OUT-OF-STATE chartered banking institutions or
by the superintendent.
7. (a) In those instances where state chartered banking institutions
are permitted to engage in the business of insurance pursuant to this
section, they shall do so subject to all insurance laws, rules, and
regulations; provided, however, that the superintendent may exempt state
chartered banking institutions from any insurance law, rule or regu-
lation which has been preempted under federal law, rule or regulation
for federally chartered banking institutions if such law, rule or regu-
lation has been preempted because it applies to insurance activities of
federally chartered banking institutions and not to those of other enti-
ties.
(b) In those instances where a federally permitted power authorized
pursuant to this section is subject to regulation by an agency, as
defined in subdivision one of section one hundred two of the state
administrative procedure act, other than the superintendent, then when a
state chartered banking institution exercises such federally permitted
power, unless it is so authorized by other New York state law, or a
rule, regulation or policy adopted pursuant to such other New York state
law, or by a judicial decision, it shall do so subject to such regu-
lation to the same extent and in the same manner as such agency regu-
lates entities other than state chartered banking institutions, except
to the extent that federally chartered banking institutions are not
subject to such regulation.
(c) Any state chartered banking institution or federally chartered
banking institution and any subsidiary or affiliate thereof which is
licensed to sell insurance in this state shall maintain separate and
distinct books and records relating to its insurance transactions,
including all files relating to and reflecting consumer complaints, and
such insurance books and records shall be made available to the super-
intendent for inspection upon reasonable notice.
8. On or before June first of each year, the superintendent shall
submit a report to the governor, the speaker of the assembly, the tempo-
rary president of the senate, the minority leaders of the senate and
assembly, and the chairs and ranking minority members of the senate and
assembly banks committees, which shall include, with respect to the
authority provided for in this section, with respect to the preceding
calendar year, (1) a listing of state chartered banking institutions
that were established, (2) a listing of institutions that have converted
to a federal charter or have been acquired by, or merged with, another
banking institution, (3) the number of New York banking institutions
exercising the insurance activities authorized by this section, (4) the
total number of New York chartered banking institutions located in this
state, and (5) the total amount of assets of such chartered banking
institutions by type.
9. Any rules or regulations promulgated by the banking board pursuant
to former sections fourteen-g and fourteen-h of this chapter prior to
September first, two thousand seven, and any resolutions adopted by the
banking board pursuant to this section after September first, two thou-
sand seven and before the effective date of the chapter of the laws of
two thousand eleven which amended this subdivision, including any such
rules, regulations and resolutions which in whole or in part impose
conditions, qualifications or restrictions on any federally permitted
powers authorized thereby which exceed the conditions, qualifications or
restrictions imposed on the same when exercised by a federally chartered
banking institution, shall remain in full force and effect on or after
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such date, unless any such rule, regulation or resolution is thereafter
superseded, modified, or revoked by the superintendent pursuant to the
provisions of subdivisions three and four of this section.
§ 2. This act shall take effect immediately; provided, however, that
the amendments to section 12-a of the banking law made by section one of
this act shall not affect the repeal of such section and shall be deemed
repealed therewith.