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Press Release
New York Expands Interstate Branching Law
Rules Enable New York Banks to Branch More Easily into Many Other States

July 23, 2008

New York, N.Y.: The New York State Banking Department announced the enactment of a bill amending the New York State Banking Law to permit de novo interstate de novo branching by banks into the State of New York.   As a result of the new statute which was signed by Governor David A. Paterson, New York banks will now be permitted to branch into many other states with similar laws without the requirement to merge with or acquire the assets of a local bank.  

“This amendment to our law will expand the competitiveness of New York banks and enhance the availability of financial services to consumers” said Richard H. Neiman, Superintendent of Banks for New York. “De novo interstate branching will allow out-of-state banks without a presence in New York to branch more easily into our State, while offering the same opportunity to New York banks to expand into many other states.”

“This legislation completes the work begun over a decade ago to remove the barriers to unfettered interstate branching,” said Michael P. Smith, President and CEO of the New York Bankers Association.  “The New York banking industry commends Governor Paterson, Superintendent Neiman and the Legislature for their leadership.”

The passing of this bill complements a compact signed in April 2008, by Superintendent Neiman and banking officials from Pennsylvania and New Jersey. The multi-state compact allows banks in these three states that have branches across state lines to continue to be regulated and examined only by their home state regulator. There continue to be ongoing discussions with other nearby states to expand this compact.  States sharing a border with New York that already allow reciprocal de novo interstate branching include Connecticut, Massachusetts, Pennsylvania and Vermont.  New Jersey expects to pass such a law later this year.

Previously New York State Banking Law allowed out-of-state national banks and state-chartered banks and thrifts to initially establish branches in New York only by merger or the acquisition of an existing banking franchise, including a single branch, so long as it had been in existence for at least five years.   The historical lack of reciprocal de novo branching in New York has been a disadvantage for New York-chartered banks, since they could only branch across state lines through more expensive mergers or branch acquisitions.

Under the Riegle-Neal Interstate Banking and Branching Act national banks are required to comply with state law branching provisions; however, federally-chartered thrift institutions are permitted by the Home Owners Loan Act (HOLA) to branch outside their home office state irrespective of the branching laws of the states where the branches will be located.

TheNew York State Banking Department is the regulator for all state-chartered banking institutions, virtually all of the United States offices of international banking institutions, all of the State’s mortgage brokers, mortgage bankers, check cashers, money transmitters and budget planners. The aggregate assets of the depository institutions supervised by the Banking Department are more than $1.8 trillion.

In addition to regulating banking institutions, the Banking Department is active in informing and educating all New Yorkers on banking matters. To contact the Banking Department, please call 1-877-BANK-NYS or visit our Web site at

Department of Financial Services


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