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Banking Interpretations

NYSBL 105 and 141

March 14, 2006

[ ]

Re: Home Office Protection

Dear [ ]:

I have received your letter, dated January 27, 2006, requesting an interpretation on home office protection. You state in your letter that you are a shareholder of [ ], the holding company for [ ] ("the Bank"), which had one office in the Town of [ ] in [ ], New York for many years. You also explain that three years ago the Bank opened a branch in [ ], New York. In your letter, you ask for the Department's opinion as to whether the Bank has lost its home office protection by opening up a new branch outside the Town of [ ].

In general, Banking Law Section 105 prevents a bank from opening a branch in a city or village (incorporated or unincorporated) with a population of fifty thousand or less in which there is already located the principal office of another bank, trust company, or national banking association (collectively "banking institution"). (Note: home office protection is not available if such banking institution is owned or controlled by a bank holding company as such term is defined in Section 141 of the Banking Law).

As noted above, the pertinent area discussed in Banking Law Section 105 is a city or village (incorporated or unincorporated) with a population of fifty thousand or less. Therefore, the potentially protected area in this case is not the Town of [ ] but the incorporated village of [ ]. If the principal office of the Bank is located within the boundaries of the incorporated village of [ ] and the village has a population of fifty thousand or less, then the Bank is one that is potentially protected under Banking Law Section 105. Additionally, [ ] must not be a bank holding company as such term is defined in Section 141 of the Banking Law.

If the Bank does enjoy home office protection in the village of [ ] pursuant to Banking Law Section 105, the act of opening a branch in an area outside of the village does not affect the protection that is afforded to the principal office.

I trust that this has been responsive to your inquiry.

Very truly yours,

Megan Prendergast
Associate Attorney

Department of Financial Services

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