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Amendment to New York’s Banking Law Article 2, Section 12-a
New Wild Card Authority Under New York State Banking Law

October 22, 2007


§  12-a. Power of state chartered banking institutions to exercise the rights of  counterpart  federally  chartered  banking  institutions.   1.  Definitions. 

  1. 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.

  2. As used in this section and as is applicable, "federally chartered banking institution" shall mean (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)); (iii) a federal branch and agency of a  foreign  bank, as such  terms  are  defined  by  the International banking Act of 1978, as amended, (122 USC 3101); or (iv) a federal credit union, as such term is defined by the Federal Credit Union Act, as amended, (12 USC 1752(1)).

  3. 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 corporation, or a similar organizational document for a federal 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.

  4. As used in this section, "federally permitted power" shall mean any right, power, privilege or benefit, any activity, or any loan, investment or transaction which a federally chartered banking institution directly or through a subsidiary or subsidiaries, may lawfully exercise or into which it may lawfully engage or enter.

  5. 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.

  6. As used in this section, unless the  context  requires  otherwise, the term "subsidiary" shall have the same meaning as set forth in subdivision  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 chartered banking institution as herein set forth:

  1. a bank, private banker, or trust company may exercise any federally permitted power of a national banking association;

  2. a savings bank or savings and loan association  may  exercise any federally permitted power of a federal savings association;

  3. a foreign banking corporation acting through a branch may exercise any federally permitted power of a foreign bank acting through a federal branch;

  4. a foreign banking corporation acting through an agency may exercise any federally permitted power of a foreign bank  acting  through a federal agency;

  5. a credit  union  may exercise any federally permitted power of a federal credit union.

Nothing contained in this section shall be deemed to permit a state chartered banking institution to exercise any federally permitted power except in a manner consistent with the following provisions of law, in each case, as the terms contained in such provisions may be amended from time to time:

  1. chapter one of the laws of nineteen hundred ninety-four;

  2. chapter nine of the laws of nineteen hundred ninety-six; and

  3. sections fourteen-c, twenty-eight-b, thirty-nine and forty-four of this article, and sections six hundred five through six hundred thirty-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 permitted power approved  pursuant  to  subdivision  four of this section, prior to any state chartered banking institution initially exercising any federally  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 institution or institutions  intend to exercise such federally permitted power and the basis on which such institution or institutions believe such power is a federally permitted power. The superintendent shall post such application upon the bulletin board of the department pursuant to section forty-two of this article.  After promptly reviewing such application, the superintendent shall determine, consistent with the standards set forth in subdivision five of this section, whether to recommend to the banking board approval of such application subject to such terms and conditions as he or she may deem appropriate, in his or her sole discretion.  Such determination, and any recommendation to the banking board to approve an application,  shall be made by the superintendent within forty-five days after the posting of such application by the superintendent, 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 one hundred twenty days after the posting of such application, and provided further that such period of time may be extended for an additional period of time with the written consent of the applicant or applicants.  The banking board shall not act upon the superintendent's recommendation prior to thirty days after such application has been posted.  If the superintendent shall determine not to recommend approval of such application, the superintendent shall notify the applicant or applicants in writing that the applicant or applicants may not exercise such federally permitted power. If the superintendent determines to recommend approval of such application, and the banking board approves such application by adoption of a resolution, the applicant or applicants may exercise such federally permitted power subject to such terms and conditions as the banking board may have approved.  If the banking board declines to approve such application, the superintendent shall notify the applicant or applicants in writing thereof.  Notwithstanding  any other law, the banking board, upon the recommendation of the superintendent, may, by resolution, make the approval of an application under this section  applicable to one or more additional state chartered banking institutions that are qualified to exercise the same federally permitted powers as the applicant or applicants pursuant to subdivision two of this section, subject to such terms and conditions as the superintendent shall find necessary and appropriate and as approved by the banking board. 4.  Notwithstanding  any  other law, the superintendent, in his or her sole discretion, may, when he or she deems it necessary and  appropriate after  considering  the  standards set forth in subdivision five of this section, recommend to the banking board that it adopt a resolution authorizing one or more state chartered banking institutions to exercise a federally permitted power, subject to such terms and conditions as the superintendent shall find necessary and appropriate and as approved by the banking board. Prior to making any such recommendation to the banking board, the superintendent shall post such recommendation upon the bulletin board of the department pursuant to section forty-two of this article, and the banking board shall not act upon such recommendation prior to thirty days after such recommendation has been posted.

Explanatory All Institutions Letter

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