May 4, 2006
Re: Article XII-B of the New York Banking Law
Dear [ ]:
Your letter of December 13, 2005 to Sara Kelsey, Esq., New York State Banking Department (the "Department"), has been referred to me for response. In your letter you asked the following questions: (i) Whether a national bank, through a subsidiary, can provide premium financing without first obtaining a license under Article XII-B of the Banking Law? (ii) Whether a national bank, through a subsidiary, can continue to operate a premium finance agency without a license, after purchasing such agency, or must the subsidiary maintain the Article XII-B license?
In connection with both your questions, the Department is of the opinion that unless it is notified, via a written letter from the Office of the Comptroller of the Currency, that the subsidiaries in these cases are preempted from state licensing, such entities are required to be licensed under Article XII-B of the Banking Law.
Also, note that with relation to your second question, the national bank would be required, under Section 555-a of the Banking Law, to receive the superintendent's approval prior to acquiring the premium finance agency.
I trust the foregoing is responsive to your inquiry.
Very truly yours,
Harry C. Goberdhan