12-A - Power of state chartered banking institutions to exercise the rights of counterpart federally chartered banking institutions. - New York Statutes

* § 12-a. Power of state chartered banking institutions to exercise the rights of counterpart federally chartered banking institutions. 1. Definitions. (a) As used in this section, "state chartered banking institution" shall mean any bank, trust company, private banker, savings bank, savings and loan association, foreign banking corporation, or credit union. (b) As used in this section and as is applicable, "federally chartered banking institution" shall mean (i) any national banking association organized pursuant to the National Bank Act of 1864, as amended, (12 USC 21 et seq.); (ii) any federal savings association as such term is defined by the Federal Deposit Insurance Act, as amended, (12 USC 1813(b)(2)); (iii) a federal branch and agency of a foreign bank, as such terms are defined by the International Banking Act of 1978, as amended, (122 USC 3101); or (iv) a federal credit union, as such term is defined by the Federal Credit Union Act, as amended, (12 USC 1752(1)). (c) As used in this section, "charter" shall mean the organization certificate or comparable document of a state banking institution, or the license for a state branch or agency of a foreign banking corporation, or a similar organizational document for a federal banking institution or a federal branch or agency, and "chartered" shall mean the formal act of the state or appropriate federal regulatory agency in approving and conveying such charter of a banking institution. (d) As used in this section, "federally permitted power" shall mean any right, power, privilege or benefit, any activity, or any loan, investment or transaction which a federally chartered banking institution directly or through a subsidiary or subsidiaries, may lawfully exercise or into which it may lawfully engage or enter. (e) As used in this section "foreign banking corporation" shall mean a banking corporation organized under the laws of a foreign country and acting through a branch or agency licensed pursuant to section twenty-six of this article. (f) As used in this section, unless the context requires otherwise, the term "subsidiary" shall have the same meaning as set forth in subdivision five of section one hundred forty-one of this chapter, except that (i) any reference therein to "bank holding company" shall be deemed to refer to a "state chartered banking institution" as defined in this section, and (ii) with respect to a credit union, the term "subsidiary" as used in this section shall mean a "credit union organization". 2. Pursuant to this section and notwithstanding any other provision of law, except as otherwise provided in its charter, a state-chartered banking institution may exercise any federally permitted power of its counterpart federally chartered banking institution as herein set forth: (a) a bank, private banker, or trust company may exercise any federally permitted power of a national banking association; (b) a savings bank or savings and loan association may exercise any federally permitted power of a federal savings association; (c) a foreign banking corporation acting through a branch may exercise any federally permitted power of a foreign bank acting through a federal branch; (d) a foreign banking corporation acting through an agency may exercise any federally permitted power of a foreign bank acting through a federal agency; (e) a credit union may exercise any federally permitted power of a federal credit union. Nothing contained in this section shall be deemed to permit a state chartered banking institution to exercise any federally permitted power except in a manner consistent with the following provisions of law, ineach case, as the terms contained in such provisions may be amended from time to time: (i) chapter one of the laws of nineteen hundred ninety-four; (ii) chapter nine of the laws of nineteen hundred ninety-six; and (iii) sections fourteen-c, twenty-eight-b, thirty-nine and forty-four of this article, and sections six hundred five through six hundred thirty-four of this chapter, and with respect to savings banks and savings and loan associations, respectively, section two hundred forty and section three hundred ninety-six of this chapter. 3. Except with respect to a federally permitted power approved pursuant to subdivision four of this section, prior to any state chartered banking institution initially exercising any federally permitted power pursuant to this section, such banking institution shall make an application individually or with one or more state chartered banking institutions to the superintendent indicating that such institution or institutions intend to exercise such federally permitted power and the basis on which such institution or institutions believe such power is a federally permitted power. The superintendent shall post such application upon the bulletin board of the department pursuant to section forty-two of this article. After promptly reviewing such application, the superintendent shall determine, consistent with the standards set forth in subdivision five of this section, whether to recommend to the banking board approval of such application subject to such terms and conditions as he or she may deem appropriate, in his or her sole discretion. Such determination, and any recommendation to the banking board to approve an application, shall be made by the superintendent within forty-five days after the posting of such application by the superintendent, provided however that the superintendent may notify the applicant or applicants that the review of the application shall be extended for an additional period of time not exceeding one hundred twenty days after the posting of such application, and provided further that such period of time may be extended for an additional period of time with the written consent of the applicant or applicants. The banking board shall not act upon the superintendent's recommendation prior to thirty days after such application has been posted. If the superintendent shall determine not to recommend approval of such application, the superintendent shall notify the applicant or applicants in writing that the applicant or applicants may not exercise such federally permitted power. If the superintendent determines to recommend approval of such application, and the banking board approves such application by adoption of a resolution, the applicant or applicants may exercise such federally permitted power subject to such terms and conditions as the banking board may have approved. If the banking board declines to approve such application, the superintendent shall notify the applicant or applicants in writing thereof. Notwithstanding any other law, the banking board, upon the recommendation of the superintendent, may, by resolution, make the approval of an application under this section applicable to one or more additional state chartered banking institutions that are qualified to exercise the same federally permitted powers as the applicant or applicants pursuant to subdivision two of this section, subject to such terms and conditions as the superintendent shall find necessary and appropriate and as approved by the banking board. 4. Notwithstanding any other law, the superintendent, in his or her sole discretion, may, when he or she deems it necessary and appropriate after considering the standards set forth in subdivision five of this section, recommend to the banking board that it adopt a resolution authorizing one or more state chartered banking institutions to exercisea federally permitted power, subject to such terms and conditions as the superintendent shall find necessary and appropriate and as approved by the banking board. Prior to making any such recommendation to the banking board, the superintendent shall post such recommendation upon the bulletin board of the department pursuant to section forty-two of this article, and the banking board shall not act upon such recommendation prior to thirty days after such recommendation has been posted. 5. Prior to approving any recommendation by the superintendent pursuant to subdivision three or four of this section, the banking board shall make a finding that the approval of such recommendation is: (i) consistent with the policy of the state of New York as declared in section ten of this article and thereby protects the public interest, including the interests of depositors, creditors, shareholders, stockholders and consumers; and (ii) necessary to achieve or maintain parity between state chartered banking institutions and their counterpart federally chartered banking institutions with respect to rights, powers, privileges, benefits, activities, loans, investments or transactions. 6. A federally permitted power authorized pursuant to this section shall not exceed and shall be limited by any conditions, qualifications or restrictions on the same when exercised by a counterpart federally chartered banking institution of a state chartered banking institution unless the state chartered banking institution is so authorized by other New York state law, or a rule, regulation or policy adopted pursuant to such other New York state law, or by a judicial decision. Notwithstanding any other law, the superintendent may, at any time, impose by order any other terms and conditions as he or she finds necessary and proper including, but not limited to, a requirement that any federally permitted power authorized by this section be exercised, conducted or held in a subsidiary of a state chartered banking institution. In the event that federally chartered banking institutions located in the state of New York lose the authority to exercise a federally permitted power, based upon which comparable authority was granted to the counterpart state chartered banking institutions pursuant to this section, then unless such authority is authorized by other New York state law, or a rule, regulation or policy adopted pursuant to such other New York state law, or by a judicial decision, the authorization for such state chartered banking institutions pursuant to this section shall be deemed revoked, provided, however, that any such revocation shall be subject to such terms and conditions as may be imposed upon the counterpart federally chartered banking institutions or by the superintendent. 7. (a) In those instances where state chartered banking institutions are permitted to engage in the business of insurance pursuant to this section, they shall do so subject to regulation by the department of insurance and pursuant to all insurance laws, rules, and regulations; provided, however, that the superintendent, in consultation with the superintendent of insurance, may exempt state chartered banking institutions from any insurance law, rule or regulation which has been preempted under federal law, rule or regulation for federally chartered banking institutions if such law, rule or regulation has been preempted because it applies to insurance activities of federally chartered banking institutions and not to those of other entities. (b) In those instances where a federally permitted power authorized pursuant to this section is subject to regulation by an agency, as defined in subdivision one of section one hundred two of the state administrative procedure act, other than the superintendent, bankingboard or superintendent of insurance, then when a state chartered banking institution exercises such federally permitted power, unless it is so authorized by other New York state law, or a rule, regulation or policy adopted pursuant to such other New York state law, or by a judicial decision, it shall do so subject to such regulation to the same extent and in the same manner as such agency regulates entities other than state chartered banking institutions, except to the extent that federally chartered banking institutions are not subject to such regulation. (c) Except with respect to a credit unemployment insurance policy, group credit life insurance policy, a group credit health, group credit accident or group credit health and accident policy, or similar group credit insurance covering the person of the insured, state chartered banking institutions, federally chartered banking institutions, and any person soliciting the purchase of or selling insurance on the premises thereof, must disclose or cause to be disclosed in writing, where practicable, in clear and concise language, to their customers and prospective customers who are solicited therefor that any insurance offered or sold: (i) is not a deposit; (ii) is not insured by the federal deposit insurance corporation or the national credit union share insurance fund, as applicable; and (iii) is not guaranteed by the state chartered banking institution or the federally chartered banking institution. (d) Except with respect to a flood insurance policy, or a credit unemployment insurance policy, group credit life insurance policy, a group credit health, group credit accident or group credit health and accident policy, or similar group credit insurance covering the person of the insured, when a customer obtains insurance and credit from a state chartered banking institution or a federally chartered banking institution, then the credit and insurance transactions shall be completed through separate documents. The expense of insurance premiums may not be included in the primary credit transaction without the express written consent of the customer. (e) State chartered banking institutions and federally chartered banking institutions shall not extend credit, lease or sell property of any kind, or furnish any services, or fix or vary the consideration for any of the foregoing, on the condition or requirement that the customer obtain insurance from the state chartered banking institution or federally chartered banking institution, its affiliate or subsidiary, or a particular insurer, agent or broker; provided, however, that this prohibition shall not prevent any state chartered banking institution or federally chartered banking institution from engaging in any activity described in this subdivision that would not violate section 106 of the Bank Holding Company Act Amendments of 1970 (12 USCA §1971 et seq.), as interpreted by the Board of Governors of the Federal Reserve System. This prohibition shall not prevent a state chartered banking institution or federally chartered banking institution from informing a customer that insurance is required in order to obtain a loan or credit, that loan or credit approval is contingent upon the customer's procurement of acceptable insurance, or that insurance is available from the state chartered banking institution or federally chartered banking institution; provided, however, that the state chartered banking institution or federally chartered banking institution shall also inform the customer in writing that his or her choice of insurance provider shall not affect the state chartered banking institution's or federally chartered banking institution's credit decision or credit terms in any way. Such disclosure shall be given prior to or at the time that a statechartered banking institution or federally chartered banking institution or person selling insurance on the premises thereof solicits the purchase of any insurance from a customer who has applied for a loan or extension of credit. (f) No state chartered banking institution or federally chartered banking institution shall require a debtor, insurer, or insurance agent or broker to pay a separate charge in connection with the handling of insurance that is required in connection with a loan or other extension of credit or the provision of another traditional banking product solely because the insurance is being provided by an insurance agent or broker which is not the state chartered banking institution or federally chartered banking institution or any subsidiary or affiliate thereof. (g) Any state chartered banking institution or federally chartered banking institution and any subsidiary or affiliate thereof which is licensed to sell insurance in this state shall maintain separate and distinct books and records relating to its insurance transactions, including all files relating to and reflecting consumer complaints, and such insurance books and records shall be made available to the superintendent of insurance for inspection upon reasonable notice. 8. (a) On or before June first, two thousand eight and annually thereafter, the superintendent shall submit a report to the governor, the speaker of the assembly, the temporary president of the senate, the minority leaders of the senate and assembly, and the chairs and ranking minority members of the senate and assembly banks committees, which shall include, with respect to the authority provided for in this section, a listing of state chartered banking institutions that have been retained, established or that have converted to federally chartered banking institutions or have been acquired by, or merged with and into another state or out-of-state state chartered banking institution or federally chartered banking institution and the total employment of the banking sector in this state, the total number of chartered banking institutions located in this state, including branches, and the total amount of assets of such chartered or licensed banking institutions by type of federal, state or out-of-state state charter. (b) On or before June first, two thousand eight and annually thereafter, the superintendent shall, in conjunction with the superintendent of insurance, submit a report to the governor, the speaker of the assembly, the temporary president of the senate and the minority leaders of the senate and the assembly, which assesses the impact of the provisions of this section which apply to the insurance activities of state chartered banking institutions. 9. Any rules or regulations promulgated by the banking board pursuant to former sections fourteen-g and fourteen-h of this chapter prior to September first, two thousand seven, including any such rules and regulations which in whole or in part impose conditions, qualifications or restrictions on any federally permitted powers authorized thereby which exceed the conditions, qualifications or restrictions imposed on the same when exercised by a federally chartered banking institution, shall remain in full force and effect on or after such date, unless any such rule or regulation is thereafter superseded, modified, or revoked by the banking board pursuant to the provisions of subdivisions three and four of this section. * NB Repealed September 10, 2011