Superintendent Lawsky reminds banks of the procedures for emergency closing of offices
Because of possible storm damage from Hurricane Sandy, including flooding and power outages, senior management of New York-chartered banking organizations may wish to familiarize themselves with the statutory procedures for emergency closing of bank offices. The Industry Letter, which summarizes the authority and procedures for emergency office closings where the Governor has not declared a bank holiday, may be found here.
http://www.dfs.ny.gov/legal/industry_circular/banking/il030918.htm
In brief:
Definition of Emergency
An emergency is any condition which may interfere with the conduct of normal banking operations, at one or more or all offices of a banking organization, or which poses an imminent or existing threat to the safety and security of persons or property, or both, including floods, wind, rain, hail, snow storms, power failures, transportation failures, and any similar or different condition which may interfere physically with the conduct of normal banking operations.
Determinations by Bank Management
Where the Governor has not declared a bank holiday, the General Construction Law relies on the officers of the banking organization to make a determination whether the bank can conduct normal operations and functions at its offices. The following summary covers different situations that may apply and whether prior approval or after-the-fact notice of a closing is permitted. Please note that the Superintendent has delegated the authority to receive notices and grant authorizations to Deputy Superintendents. Notice may be sent by email to regina.stone@dfs.ny.gov or martin.cofsky@dfs.ny.gov.
Closing of Non-Principal Office or Offices
- Bank’s officers declare emergency, i.e. normal business cannot be conducted at the office or offices.
- Office or offices may be closed provided business functions are relocated to principal office or another office.
- No Superintendent prior approval required.
- Notify Superintendent of office closing immediately.
Closing of Principal Office
- Emergency affects principal office operations.
- Without prior approval, principal office may be closed if principal office operations relocated to another office. Notify Superintendent immediately.
- Only with prior approval of Superintendent, principal office may be closed if operations cannot be relocated to another office.
Closing of Certain Businesses or Functions at the Principal Office but not entire office
- Emergency affects the conduct of certain businesses or functions at principal office.
- Bank must try to relocate functions to a non-principal office.
- If not feasible to relocate:
- With prior approval, bank may discontinue the businesses or functions.
- Without prior approval, bank may discontinue the businesses or functions but only if a good faith effort has been made to contact Superintendent to obtain approval to discontinue businesses or functions. Notify Superintendent immediately.
