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Adopted Regulations

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Explanatory All Institutions Letter

December 28, 2011

TO THE INDIVIDUAL OR INSTITUTION ADDRESSED:

Re:    Adoption of Part 600 of the Regulations of the Superintendent of Financial Services (State Charter Advisory Board: Selection of Candidates Representing Financial Institutions)


The Superintendent of Financial Services has adopted the attached new Part 600 of his Regulations.  The regulation becomes effective upon publication in the State Register, which is expected to occur on December 28, 2011. 

This regulation was previously adopted on an emergency basis effective October 3, 2011. 

The regulation implements Section 205-b of Part A of Chapter 62 of the Laws of 2011.  That section creates the State Charter Advisory Board (the “Board”) and provides that it will have nine members, who will be appointed by the Superintendent of Financial Services (the “Superintendent”).    The Board is to work with the Superintendent in retaining state chartered banking institutions, encouraging federally chartered institutions to convert to state charter and promoting the state banking system.

In addition to a consumer representative selected by the Superintendent, Section 205-b provides that the Board shall include one representative of credit unions, one representative of foreign banks, and six representatives of banks, which, to the extent practicable, reflect a range of size and geographic location.  Of those six, at least one Board member is to represent institutions with assets of at least $3 billion, and at least two are to represent institutions with assets of less than $500 million.

Section 205-b also requires that the Superintendent make rules governing the method by which state-chartered institutions nominate persons to the Board and the process for selecting such persons for membership. The section specifies that the consumer representative is to be selected by the Superintendent.

Part 600 implements the statutory requirement that the Superintendent make rules to govern the nomination and selection process. 

It divides the qualifying banking institutions into eight groups, each of which may nominate a person for a seat on the Board. 

Six of the groups represent “banks,” which term is defined as including state-chartered banks, trust companies, private bankers, savings banks, and savings and loan associations.

One group comprises all banks with assets of more than $3 billion. 

Banks with less than $500 million in assets are divided into two groups.  One group consists of such institutions located in New York City and its surrounding counties, and another consists of such institutions located in the rest of the state. These groups cover areas that are geographically contiguous and contain a similar number of qualifying institutions. 

Similarly, banks with assets between $500 million and $3 billion are divided into three groups.   One group consists of banks located in New York City, another consists of banks located in a specified group of counties, including the suburbs of New York City and the northeastern part of the state, and the last consists of banks located elsewhere in the state. Again, these groups cover areas that are geographically contiguous and contain similar numbers of qualifying institutions. 

The remaining two groups consist respectively of all state-chartered credit unions and of all foreign banks having a state-licensed branch or agency.

The regulation also requires the Department of Financial Services to notify to banking institutions entitled to make nominations within 90 days after the effective date of Section 205-b (which was October 3, 2011), at least 30 days prior to the expiration of a member’s three year term and within 60 days after a vacancy occurs for any other reason.  Notice may be given by such means as the Superintendent deems appropriate.

The regulation provides that while the Superintendent will give due consideration to persons nominated in accordance with Part 600, Board members are selected by the Superintendent in his or her sole discretion. 

The proposal to adopt Part 600 as a permanent regulation was issued for public comment on October 19, 2011.  The comment period ended December 3, 2011. 

Very truly yours,

Sam L. Abram
Assistant Counsel
Department of Financial Services