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Wild Card Approvals

Procedures For Repurchase Of Stock By Commercial Banks And Trust Companies

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On February 7, 2008, pursuant to Banking Law section 12-a (wild card statute),the Banking Board adopted a resolution authorizing New York state commercial banks and trust companies (‘banks”) to repurchase their own stock subject to the same terms and conditions then in effect for national banks.

Letter Application:  

A bank must submit a letter application to the Superintendent detailing its proposal for the bank’s repurchase of stock. The application must contain a legitimate corporate purpose for the proposed stock repurchase.


New York state banks must comply with the conditions applicable to national banks. 

The Office of the Comptroller of the Currency (“OCC”) permits national banks to reduce their capital by repurchasing and retiring their outstanding shares (See 12 U.S.C. 59).

National banks also may repurchase their outstanding shares and hold them as treasury stock, if the acquisition and retention of the shares is, and continues to be, for a legitimate corporate purpose. (See 12 C.F.R. 7.2020).  Examples of a legitimate corporate purpose in 12 C.F.R. 7.2020 include:

It is not a legitimate corporate purpose to acquire or hold treasury stock on speculation about changes in its value.

In all cases in which a national bank repurchases its shares, the following conditions apply:

(See Comptroller’s Licensing Manual, “Capital and Dividends”, pp. 10-11).

Superintendent’s Approval:

In acting on an application for a bank to repurchase its shares, the Superintendent will consider the above conditions, among others, such as the adequacy of the information provided by the bank, and the overall safety and soundness of the proposal.  The Superintendent may place conditions he or she deems appropriate on any stock repurchase.

Please note that, to effect an amendment to a bank’s organization certificate, separate approval of the Superintendent must be obtained pursuant to Supervisory Procedure CB 102.

Department of Financial Services


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