NYSBL 130(3), 143(3) and 209(1)
March 16, 1983
To Examiner Lesser
Domestic Commercial Banks Division
From M. Schussler
Re: Irving Bank Corporation/Irving Trust Company/Banca della Svizzera Italiana - management interlocks
You requested a legal opinion on management interlocks among the captioned corporations. Any combination of interlocks is permitted by the Banking Law without recourse to Banking Board approval.
B.L. S143(3) prohibits any executive officer of a bank holding company from serving at the same time as an executive officer or a director of a commercial bannk or a foreign banking corporation with a New York branch; except that such interlocks are permitted with subsidiary banking institutions. Thus, executive officers of Irving Bank Corporation may also serve as executive officers or directors of its subsidiaries, Irving Trust Company and Banca della Svizzera Italiana ("BSI"). Likewise, executive officers of Irving Trust Company, a bank holding company for the purposes of this statute by virtue of its investment in BSI, may serve also as executive officers or directors of that company.
B.L. S130(3) prohibits executive officers of a commerical bank from serving as executive officers or directors of bank holding companies or foreign banking corporations with New York branches; except that interlocks are permitted with parent bank holding companies and foreign banks that are subsidiaries of the same bank holding company. These exceptions permit executive officers of
Irving Trust Company to serve as executive officers or directors of Irving Bank Corporation and/or BSI.
B.L. S209(1) prohibits executive officers of foreign banking corporations with New York branches from serving as executive officers or directors of bank holding companies or commercial banks; except that such interlocks are permitted with parent bank holding companies and commercial banks that are subsidiaries of the same bank holding company. Thus, executive officers of BSI may serve as executive officers or directors of Irving Bank Corporation (a parent bank holding company) and Irving Trust Company (both a parent bank holding company and a sister subsidiary of Irving Bank Corporation).
This situation differs from the interlocks involving European-American Bancorp, European-American Bank & Trust Company, and their European parents. In those cases. the corporate structure (bank-bank holding company-bank) creates conflicts between the provisions of the Banking Law referred to above, conflicts not present in the corporate structure present here (bank holding company-bank-bank).
Of course, an intermediate bank holding company is present here - Irving Trust Company acting in that capacity because of its investment in BSI. That acquisition may thus appear to pro-hibit interlocks between Irving Trust Company and Irving Bank Corporation (B.L. Section 143(3) makes no exception for interlocks between bank holding companies); but such an interpretation may be readily dismissed either by reliance on rules of statutory construction or by simply acknowledging that it is downright silly.