NYSBL Sec 258
April 15, 2005
Re: [ ] Savings Bank Financial Literacy Outreach Program
Dear [ ]:
Your letter of December 29, 2004 addressed to Anthony Calabrese, Deputy Superintendent and Counsel, has been forwarded to me for a response. You have asked for the Department's opinion with regard to an aspect of the bank's Financial Literacy Outreach Program. The bank has concluded that the proposed activity does not require the bank to submit formal branching applications.
According to your letter, as part of its financial literacy outreach program, [ ] Savings Bank plans to partner with elementary and secondary schools in Ulster and Dutchess Counties. The bank will send a representative to each partner school and the representative will work with a selected student to represent the bank. The bank's representative will help educate students with respect to financial awareness and will work with the schools to open savings accounts (statement and passbook) for the students and receive deposits to those accounts. The paperwork required to open an account would be completed by the student at the school, with the help of the bank's representative and the student representative, and then transported to a bank branch for the actual opening of the account. Students will be given a receipt for their deposits at the time the deposit is tendered to the bank representative and/or student representative. Deposits received by the bank representative and/or student representative will be posted as deposits only after they are transported to the appropriate bank branch.
Section 258 of the Banking Law provides authority for the establishment of school savings plans. Specifically, Section 258(2) provides that any school in the state of New York may collect from time to time amounts of money from the pupils of such school. Such money shall be collected by or under the supervision of, the principal or superintendent of such school or by, or under the supervision of, any person designated for that purpose by the board of education or other authority having jurisdiction over such school. The money collected must be deposited by the day following the day of collection. Any depositary institution authorized to receive any amounts collected by a school, may, on the request of any person authorized by this subdivision to collect such amounts for such school, send a collector to such school to receive and receipt for such deposits.
As noted above the language of Section 258(2) provides the school with the authority to collect the money from the students. It does not provide the bank's representative with the authority to collect deposits from students individually. The bank may send a representative to receive and receipt for the money collected by the authorized representative of the school. Therefore, to the extent that your program involves the bank representative collecting deposits from students individually, the Department is of the opinion that would not be permissible under Section 258(2).
cc: Ed Dooley