Bill Text: NY A07353 | 2023-2024 | General Assembly | Introduced

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Bill Title: Authorizes New York-chartered banking institutions to exercise any permitted powers of its counterpart federally or out-of-state chartered banking institutions.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed) 2024-03-21 - REFERRED TO BANKS [A07353 Detail]

Download: New_York-2023-A07353-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          7353

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                      May 18, 2023
                                       ___________

        Introduced  by  M. of A. 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:

     1    Section  1.   Section 12-a of the banking law, as added by chapter 322
     2  of the laws of 2007, subdivision 3 as amended by chapter 448 of the laws
     3  of 2011 and subdivisions 4, 5, 7, 8 and 9 as amended by  section  88  of
     4  part A of chapter 62 of the laws of 2011, is amended to read as follows:
     5    §  12-a. Power of state chartered banking institutions to exercise the
     6  rights of counterpart federally or out-of-state chartered banking insti-
     7  tutions.
     8    1.  Definitions. (a) As used in this section, "state chartered banking
     9  institution" shall mean any bank, trust company, private banker, savings
    10  bank, savings and loan  association,  foreign  banking  corporation,  or
    11  credit union that is chartered or licensed under this chapter.
    12    (b)  As  used in this section and as is applicable, "federally or out-
    13  of-state chartered banking institution" shall mean collectively: (i) any
    14  national banking association organized pursuant to the National Bank Act
    15  of 1864, as amended, (12 USC 21 et seq.);  (ii)  any  [federal]  savings
    16  association  as  such  term  is defined by the Federal Deposit Insurance
    17  Act, as amended, (12 USC 1813(b)([2] 1)), whether federally chartered or
    18  chartered by a state other  than  New  York  ("federal  or  out-of-state
    19  savings bank or savings and loan association"); (iii) a [federal] branch
    20  [and]  or  agency of a foreign [bank] banking corporation, as such terms
    21  are defined by the International Banking Act of 1978, as amended, ([122]
    22  12 USC 3101), whether federally licensed or licensed by  a  state  other
    23  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.
                                                                   LBD07925-02-3
        A. 7353                             2

     1  banking organization"); [or] (iv) a [federal] credit union, as such term
     2  is defined by the Federal Credit Union Act, as amended, (12 USC  1752(1)
     3  and (6)), whether federally chartered or chartered by a state other than
     4  New York ("federal or out-of-state credit union"); or (v) any state bank
     5  as  that  term  is  defined  by  the  Federal  Deposit Insurance Act, as
     6  amended, (12 USC 1813(a)(2)) chartered in a state other  than  New  York
     7  ("out-of-state bank").
     8    (c)  As  used  in  this section, "charter" shall mean the organization
     9  certificate or comparable document of a [state] banking institution,  or
    10  the  license  for  a  state branch or agency of a foreign banking corpo-
    11  ration, or a similar organizational document for [a federal] any  feder-
    12  ally  or out-of-state chartered banking institution [or a federal branch
    13  or agency], and "chartered" shall mean the formal act of  the  state  or
    14  appropriate  federal  regulatory  agency in approving and conveying such
    15  charter of a banking institution.
    16    (d) As used in this  section,  "federally  or  out-of-state  chartered
    17  banking institution permitted power" shall mean any right, power, privi-
    18  lege  or  benefit,  any activity, or any loan, investment or transaction
    19  which a federally or out-of-state chartered banking institution directly
    20  or through a subsidiary or subsidiaries, may lawfully exercise  or  into
    21  which it may lawfully engage or enter.
    22    (e) As used in this section "foreign banking corporation" shall mean a
    23  banking  corporation  organized  under the laws of a foreign country and
    24  acting through a branch or agency licensed pursuant to  section  twenty-
    25  six of this article.
    26    (f)  As  used  in this section, unless the context requires otherwise,
    27  the term "subsidiary" shall have the same meaning as set forth in subdi-
    28  vision five of section one hundred forty-one  of  this  chapter,  except
    29  that (i) any reference therein to "bank holding company" shall be deemed
    30  to  refer  to a "state chartered banking institution" as defined in this
    31  section, and (ii) with respect to a credit union, the term  "subsidiary"
    32  as used in this section shall mean a "credit union organization".
    33    2. Pursuant to this section and notwithstanding any other provision of
    34  law,  except  as  otherwise  provided  in its charter, a state-chartered
    35  banking institution may exercise any federally permitted  power  of  its
    36  counterpart  federally  or out-of-state chartered banking institution as
    37  herein set forth:
    38    (a) a bank, private banker, or trust company may exercise any  [feder-
    39  ally]  permitted power of a national banking association or out-of-state
    40  bank;
    41    (b) a savings bank or savings and loan association  may  exercise  any
    42  [federally] permitted power of a federal or out-of-state savings bank or
    43  savings and loan association;
    44    (c) a foreign banking corporation acting through a branch may exercise
    45  any  [federally]  permitted  power  of  a  foreign bank acting through a
    46  federal or out-of-state branch of a foreign banking corporation;
    47    (d) a foreign banking corporation acting through an agency  may  exer-
    48  cise  any [federally] permitted power of a foreign bank acting through a
    49  federal or out-of-state agency of a foreign banking corporation;
    50    (e) a credit union may exercise any [federally] permitted power  of  a
    51  federal or out-of-state credit union.
    52    Nothing  contained  in  this section shall be deemed to permit a state
    53  chartered banking institution to exercise any [federally] power  permit-
    54  ted  [power] to federally or out-of-state chartered banking institutions
    55  except in a manner consistent with the following provisions of  law,  in
        A. 7353                             3

     1  each case, as the terms contained in such provisions may be amended from
     2  time to time:
     3    (i) chapter one of the laws of nineteen hundred ninety-four;
     4    (ii) chapter nine of the laws of nineteen hundred ninety-six; and
     5    (iii)  sections fourteen-c, twenty-eight-b, thirty-nine and forty-four
     6  of this article, and sections six hundred five through six hundred thir-
     7  ty-four of this chapter, and with respect to savings banks  and  savings
     8  and  loan  associations,  respectively,  section  two  hundred forty and
     9  section three hundred ninety-six of this chapter.
    10    3. Except with respect to a federally or out-of-state chartered  bank-
    11  ing institution permitted power approved pursuant to subdivision four of
    12  this section, prior to any state chartered banking institution initially
    13  exercising  any  federally or out-of-state chartered banking institution
    14  permitted power pursuant to this section, such banking institution shall
    15  make an application individually or with one  or  more  state  chartered
    16  banking institutions to the superintendent indicating that such institu-
    17  tion  or  institutions intend to exercise such federally or out-of-state
    18  chartered banking institution permitted power and  the  basis  on  which
    19  such  institution  or  institutions  believe such power is [a federally]
    20  permitted [power]. The superintendent shall have one hundred twenty days
    21  from receipt of the  application  to  determine  whether  it  meets  the
    22  requirements  of this section, provided that such period may be extended
    23  for an additional period of time [with the written consent of the appli-
    24  cant or applicants]. If such application meets the requirements of  this
    25  section,  the superintendent shall post such application upon the bulle-
    26  tin board of the department pursuant to section forty-two of this  arti-
    27  cle. If such application does not meet the requirements of this section,
    28  the  superintendent shall, within ten days of such determination, notify
    29  the applicant or applicants of the reasons why the application fails  to
    30  meet  the  requirements.  The superintendent shall determine, consistent
    31  with the standards set forth in subdivision five of this section, wheth-
    32  er to approve such application subject to such terms and  conditions  as
    33  the  superintendent  may  deem appropriate, in the superintendent's sole
    34  discretion. Such determination[,] shall be made  by  the  superintendent
    35  within  forty-five days after the posting of such application, provided,
    36  however, that the superintendent may notify the applicant or  applicants
    37  that  the  review of the application shall be extended for an additional
    38  period of time not exceeding sixty days after the posting of such appli-
    39  cation, and provided further that such period of time  may  be  extended
    40  for an additional period of time [with the written consent of the appli-
    41  cant  or applicants]. The superintendent shall not act upon the applica-
    42  tion prior to thirty days after such application has been posted. If the
    43  superintendent approves  such  application,  the  superintendent  shall,
    44  within  ten  days  of approving the application, notify the applicant or
    45  applicants in writing thereof, and the applicant or applicants may exer-
    46  cise  such  federally  or  out-of-state  chartered  banking  institution
    47  permitted  power subject to such terms and conditions as the superinten-
    48  dent may have approved. If the superintendent declines such application,
    49  the superintendent shall, within ten days of making such  determination,
    50  notify  the  applicant or applicants in writing thereof. An applicant or
    51  applicants may, upon the superintendent's failure to  comply  with  this
    52  section,  petition  the  superintendent to act upon the application. The
    53  failure of the superintendent to act upon the application or notify  the
    54  applicant or applicants, in writing, as to the reasons why action cannot
    55  be  taken within thirty days of receipt of such petition shall be deemed
    56  a denial of the application, which shall be subject to judicial  review.
        A. 7353                             4

     1  Notwithstanding  any other law, the superintendent may make the approval
     2  of an application under this section applicable to  one  or  more  addi-
     3  tional  state chartered banking institutions that are qualified to exer-
     4  cise  the  same  federally or out-of-state chartered banking institution
     5  permitted powers as the applicant or applicants pursuant to  subdivision
     6  two  of this section, subject to such terms and conditions as the super-
     7  intendent shall find necessary and appropriate.
     8    4. Notwithstanding any other law, the superintendent,  in  the  super-
     9  intendent's  discretion, may, when the superintendent deems it necessary
    10  and appropriate after considering the standards set forth in subdivision
    11  five of this section, by order, authorize one or  more  state  chartered
    12  banking  institutions  to exercise a federally or out-of-state chartered
    13  banking institution permitted power, subject to such  terms  and  condi-
    14  tions  as the superintendent shall find necessary and appropriate. Prior
    15  to issuing such order, the  superintendent  shall  post  notice  of  the
    16  superintendent's  intention  to issue such order upon the bulletin board
    17  of the department pursuant to section forty-two  of  this  article,  and
    18  shall not act upon such intention prior to thirty days after such notice
    19  has been posted.
    20    5. Prior to approving any application or proposal pursuant to subdivi-
    21  sion  three  or  four  of  this section, the superintendent shall make a
    22  finding that the approval of such application or proposal is:
    23    [(i)] (a) consistent with the policy of  the  state  of  New  York  as
    24  declared  in section ten of this article and thereby protects the public
    25  interest, including the interests of depositors,  creditors,  sharehold-
    26  ers, stockholders and consumers; and
    27    [(ii)] (b) necessary to achieve or maintain parity between state char-
    28  tered  banking  institutions  and their counterpart federally or out-of-
    29  state chartered banking institutions with  respect  to  rights,  powers,
    30  privileges, benefits, activities, loans, investments or transactions.
    31    6. A federally or out-of-state chartered banking institution permitted
    32  power  authorized  for a state chartered banking institution pursuant to
    33  this section shall not exceed and shall be limited  by  any  conditions,
    34  qualifications  or  restrictions  on  the same when exercised by [a] the
    35  counterpart federally or out-of-state chartered banking institution  [of
    36  a  state chartered banking institution] unless the state chartered bank-
    37  ing institution is so authorized by other New York state law, or a rule,
    38  regulation or policy adopted pursuant to such other New York state  law,
    39  or  by  a judicial decision.   Notwithstanding any other law, the super-
    40  intendent may, at any time, impose by order any other terms  and  condi-
    41  tions as he or she finds necessary and proper including, but not limited
    42  to,  a  requirement that any federally or out-of-state chartered banking
    43  institution permitted power authorized by  this  section  be  exercised,
    44  conducted  or held in a subsidiary of a state chartered banking institu-
    45  tion. In the event that  federally  or  out-of-state  chartered  banking
    46  institutions  [located  in  the state of New York] lose the authority to
    47  exercise a  federally  or  out-of-state  chartered  banking  institution
    48  permitted  power,  based  upon which comparable authority was granted to
    49  the counterpart state chartered banking institutions  pursuant  to  this
    50  section,  then  unless  such  authority  is authorized by other New York
    51  state law, or a rule, regulation or  policy  adopted  pursuant  to  such
    52  other  New  York state law, or by a judicial decision, the authorization
    53  for such state chartered banking institutions pursuant to  this  section
    54  shall  be  deemed  revoked,  provided, however, that any such revocation
    55  shall be subject to such terms and conditions as may be imposed upon the
        A. 7353                             5

     1  counterpart federally or out-of-state chartered banking institutions  or
     2  by the superintendent.
     3    7.  (a)  In those instances where state chartered banking institutions
     4  are permitted to engage in the business of insurance  pursuant  to  this
     5  section,  they  shall  do  so  subject to all insurance laws, rules, and
     6  regulations; provided, however, that the superintendent may exempt state
     7  chartered banking institutions from any insurance  law,  rule  or  regu-
     8  lation  which  has  been preempted under federal law, rule or regulation
     9  for federally chartered banking institutions if such law, rule or  regu-
    10  lation  has been preempted because it applies to insurance activities of
    11  federally chartered banking institutions and not to those of other enti-
    12  ties.
    13    (b) In those instances where a federally  permitted  power  authorized
    14  pursuant  to  this  section  is  subject  to regulation by an agency, as
    15  defined in subdivision one of section  one  hundred  two  of  the  state
    16  administrative procedure act, other than the superintendent, then when a
    17  state  chartered  banking institution exercises such federally permitted
    18  power, unless it is so authorized by other New  York  state  law,  or  a
    19  rule, regulation or policy adopted pursuant to such other New York state
    20  law,  or  by  a  judicial decision, it shall do so subject to such regu-
    21  lation to the same extent and in the same manner as  such  agency  regu-
    22  lates  entities  other than state chartered banking institutions, except
    23  to the extent that federally  chartered  banking  institutions  are  not
    24  subject to such regulation.
    25    (c)  Any  state  chartered  banking institution or federally chartered
    26  banking institution and any subsidiary or  affiliate  thereof  which  is
    27  licensed  to  sell  insurance  in this state shall maintain separate and
    28  distinct books and  records  relating  to  its  insurance  transactions,
    29  including  all files relating to and reflecting consumer complaints, and
    30  such insurance books and records shall be made available to  the  super-
    31  intendent for inspection upon reasonable notice.
    32    8.  On  or  before  June  first of each year, the superintendent shall
    33  submit a report to the governor, the speaker of the assembly, the tempo-
    34  rary president of the senate, the minority leaders  of  the  senate  and
    35  assembly,  and the chairs and ranking minority members of the senate and
    36  assembly banks committees, which shall  include,  with  respect  to  the
    37  authority  provided  for  in this section, with respect to the preceding
    38  calendar year, (1) a listing of  state  chartered  banking  institutions
    39  that were established, (2) a listing of institutions that have converted
    40  to  a  federal charter or have been acquired by, or merged with, another
    41  banking institution, (3) the number of  New  York  banking  institutions
    42  exercising  the insurance activities authorized by this section, (4) the
    43  total number of New York chartered banking institutions located in  this
    44  state,  and  (5)  the  total  amount of assets of such chartered banking
    45  institutions by type.
    46    9. Any rules or regulations promulgated by the banking board  pursuant
    47  to  former  sections  fourteen-g and fourteen-h of this chapter prior to
    48  September first, two thousand seven, and any resolutions adopted by  the
    49  banking  board pursuant to this section after September first, two thou-
    50  sand seven and before the effective date of the chapter of the  laws  of
    51  two  thousand  eleven which amended this subdivision, including any such
    52  rules, regulations and resolutions which in  whole  or  in  part  impose
    53  conditions,  qualifications  or  restrictions on any federally permitted
    54  powers authorized thereby which exceed the conditions, qualifications or
    55  restrictions imposed on the same when exercised by a federally chartered
    56  banking institution, shall remain in full force and effect on  or  after
        A. 7353                             6

     1  such  date, unless any such rule, regulation or resolution is thereafter
     2  superseded, modified, or revoked by the superintendent pursuant  to  the
     3  provisions of subdivisions three and four of this section.
     4    §  2.  This act shall take effect immediately; provided, however, that
     5  the amendments to section 12-a of the banking law made by section one of
     6  this act shall not affect the repeal of such section and shall be deemed
     7  repealed therewith.