Banking Law 200
August 12, 2004
Dear Mr. [ ]:
Your letter of July 21, 2004 regarding [ ] Bank was forwarded to me for reply.
[ ] Bank is a foreign banking corporation with a New York state licensed branch office located at [ ]. In New York, except for deposit-taking activities, the branch office of a foreign banking corporation has authority under Article V of the New York Banking Law to engage in a range of banking activities similar to that of New York commercial banks.
With respect to the specific inquiry you posed, [ ] Bank would be permitted to issue checks and engage in foreign U.S. dollar transactions such as wire transfers. With respect to the taking of deposits, while the New York Banking Law authorizes deposit-taking by branches of foreign banks, federal law places restrictions on this activity. Specifically, uninsured branches of foreign banks such as [ ] Bank may accept wholesale deposits but may only accept retail deposits (defined as initial deposits of less than $ 100,000) from certain categories of persons or entities. These include individuals who are not U.S. residents or citizens; non-U.S. citizens who are U.S. residents and are employed by foreign businesses foreign governmental organization; certain persons or entities to whom the bank or an affiliate has extended credit; foreign businesses and large U.S. businesses, foreign and U.S. governmental units, and certain other limited categories of persons. The federal regulation imposing these deposit-taking restrictions may be found at 12 C.F.R. section 28.16. These restrictions also are imposed on state-licensed foreign branches through the International Banking Act (see 12 U.S.C. section 3104(d)).
I trust that this is responsive to your inquiry.
Christine M. Tomczak