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Banking Interpretations

NYSBL 674-a

December 5, 2008

[---]

Re:  Request for Written Opinion on Section 674-a

Dear Mr. [---]:

We apologize for any confusion in our response dated December 2, 2008. Please consider this the official letter of the New York State Banking Department.

Your letter dated October 16, 2008 to the New York State Banking Department was referred to me for a response. In your letter you request an opinion as to (a) whether Section 674-a of the Banking Law prohibits the "Current Bank Tenant" from enforcing a use restriction set forth in the Condominium Declaration of the real property in question and (b) whether Section 674-a renders this use restriction null and void and thus prohibits its enforcement by any owner or occupant of a condominium unit.

The Condominium Declaration referred to in your letter violates Section 674-a(1) of the Banking Law in that it prohibits the owner of the condominium unit from leasing the premises to any other banking organization, bank holding company, national banking association, federal savings and loan association or foreign banking corporation. Under Section 674-a(2) of the Banking Law "any banking organization, bank holding company, national banking association, federal savings and loan association, foreign banking corporation or any other entity or person injured in his business or property" as a result of a violation of Section 674-a(1) may sue and is "entitled to recover three times the amount of the damages sustained, and the cost of the suit, including reasonable attorneys' fees." If damages have been sustained, the bank seeking space in the condominium may bring suit under Section 674-a and therefore it would appear that the Current Bank Tenant could not enforce the use restriction set forth in the Condominium Declaration.

If you have any further questions, please do not hesitate to contact me at (212) 709-1653.

Very truly yours,

Monique E. Holmes
Assistant Counsel