Banking Interpretations

NYSBL Section 335

To Examiner Edward Valdes

From: Gene C. Brooks

Date: March 10, 2006

Subject: Safe Deposit Box Late Fees

By email dated November 30, 2006, you have advised that [ ]
bank wishes to impose a late fee on past due safe deposit box rentals. You ask if such
charges are permissible. [ ].

In my opinion, the imposition of such charges should be left to the agreement between
the customer and the banking institution.

You note in your inquiry that you have reviewed Sections 332 to 335 of the Banking Law
and find that nothing therein expressly addresses this question. I have also reviewed
these sections of law, which represent Article 8-A of the Banking Law, as well as Article
8 of the Banking Law regarding the chartering of Safe Deposit Companies, and agree
with your conclusion that nothing in these sections expressly addresses your question.
Nevertheless, I am of the opinion that this silence does not address the question
presented because these sections do not speak to the question of fees.

I read the banking law silence on the question of what fees may be charged as meaning
that an entity renting a safe deposit box may impose rental fees in any amount it deems
appropriate. And to which its customer agrees. It may also impose a late fee as it
deems appropriate if agreed to by its customer. Again, there is simply no limitation in
the Banking Law on what may be imposed for the basic rental of the box. Nor have I
found any legal opinions that address this question.

This conclusion also makes sense from a policy point of view. If a box renter and lessee
are free to agree to any level of box rentals, it makes no sense to conclude that they
may not also agree to late fees. Indeed, it would be illogical to conclude otherwise.
Accordingly, I am of the opinion that the imposition of late fees on box renters is a
matter of contract between the parties to the contract.

It should be pointed out Section 335 of the Banking Law, which provides a detailed
process for a safe deposit provider to collect "the amount due for the rental of any safe
deposit box" - the rent for which has not been paid for one year - does not address the
question of whether late fees may be imposed. Since there is a clear, detailed process
for collecting these past due amounts, the question must again be raised whether this
statutory silence should be interpreted to mean that safe deposit renters may not
impose late fees. For the reasons stated above, however, I again conclude that this
silence does not resolve this question.


Noted: ______