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Banking Interpretations

General Construction Law 24 and 24-a

To: Examiner Lindquist

From: First Assistant Counsel Notaro

Date: December 2, 2004

Subject: Banks Remaining Open on Public Holidays Issue


Issue

Whether there are any laws or regulations that would prevent a bank from being open any day of the year, including public holidays.

Recommendation

There are no laws or regulations of which I am aware that would prevent a bank from remaining open every day of the year. The General Construction Law specifically provides that a bank may elect to remain open on Saturdays, Sundays and public holidays.

Reasoning

General Construction Law (Gen Cons. Law) Sections 24 and 24-a designate public holidays and set forth when and under what conditions banks are permitted to close. Gen. Cons. Law Sections 25 and 25-a relate to legal and contractual obligations of banks that are closed on Saturdays, Sundays and public holidays.

Gen Cons. Law Section 24 specifies certain days which shall constitute "public holidays". Gen Cons. Law Section 24-a(1) states in part:

"Any banking organization lawfully doing business within the state of New York may be closed on any one or more Saturdays upon the adoption of a resolution Any one or more of such Saturdays shall, with respect to any such banking organization which shall be closed in accordance with the provisions of this subdivision, constitute a public holiday within the meaning of such term as used in and for all purposes of section twenty- five and twenty-five-a of this chapter (but, not in the case of negotiable instruments, for the purposes of subdivision two of section twenty-five thereof), and shall neither be a "full business day" nor a banking day within the meaning of such terms as used in and for all purposes of the uniform commercial code...."

Further, Gen. Cons. Law Section 24-a(2) provides:

"Nothing in the law of this state shall in any manner whatsoever affect the validity of, or render void or voidable, the payment certification or acceptance of a check or other negotiable instrument under the uniform commercial code or any other transaction by a banking organization in this state, because done or performed on a Sunday or public holiday, or on any Saturday between twelve o'clock noon and midnight, provided such payment, certification, acceptance, or other transaction would be valid if done or performed on any business day or before twelve o'clock noon on such Saturday; provided further that nothing in this subdivision shall be construed to compel any banking organization in this state, which by law or custom is entitled to close at twelve o'clock noon on any Saturday, to keep open for the transaction of business or to perform any of the acts or transactions aforesaid, on any Saturday after such hour except at its own option or to compel any banking organization in this state to keep open on a public holiday except at its own option and then only to the extent it elects to do so." (underlining added )


"Bank Holidays"

The question you posed used the term "bank holidays", and whether there were any laws or regulations that would prevent a bank from being open every day of the year, including "bank holidays".

In providing my response above, I assumed by your question that you meant "public holidays", because a "bank holiday" is a special holiday declared by the Governor of the State of New York under emergency conditions (see Gen. Cons. Law Section 24-a(3.a).

Depending on the terms of the Governor's proclamation, a bank could be compelled to close on a "bank holiday". Such instances are very rare, but legally possible.

R.N.

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