Banking Interpretations

NYSBL 605(11)(c) and 606(4)

December 23, 2005
[ ]

Re: Liquidation of NY Branch of [ ]

Dear [ ]:

This is in response to your letter dated November 29, 2005 in which
you asked the Superintendent of Banks to intervene in the ongoing,
voluntary liquidation of the New York branch ("NY Branch") of [
]. We understand that your client is presently involved in
litigation against [ ].

New York Banking Law ("NYBL") Section 605(c), pursuant to which
the NY Branch is liquidating, provides for the recognition only of those claims
of foreign banking corporation creditors which "arise out of transactions had
by them with its New York agency or agencies, or New York branch or
branches...". Similarly, although NYBL Section 606(4) is not directly
involved in this case, as it relates to the involuntary liquidation of a New
York branch or agency by the Superintendent, the same principles of
liquidation apply and therefore it is also instructive. That section provides
that the following claims shall not be accepted for payment out of the
business and property of a branch or agency in this state: "claims which
would not represent an enforceable legal obligation against such branch or
agency if such branch or agency were a separate legal entity.." ( NYBL
606(4)(a)). Finally, it is also worth noting that the "designation certificate",
which a foreign banking corporation is required to supply as part of the
application for a branch or agency license, which "designates" the
Superintendent as true and lawful attorney for service of process, by its
terms only applies to "any action or proceeding against the foreign banking
corporation arising out of a transaction with its New York branch or agency".

As our legal counsel discussed with you on the telephone, because the
alleged conduct that underlies your claims against [ ] did not involve any
conduct by New York Branch employees, or have any connection to the
activities of the New York Branch, the Superintendent must deny your
request.

If you have any further questions concerning the foregoing, please feel
free to call either Rosanne Notaro or Bryan Farrell of our Legal Division at
(212) 709-1663.

Sincerely,
David S. Fredsall
Deputy Superintendent of Banks
Foreign & Wholesale Banks Division