New York Banking Law

Article 10-C, Mutual Holding Companies

Section 447.   Authorization of the formation of mutual holding
                 companies.
        447-a. Required approvals.
        447-b. Formation of a mutual holding company.
        447-c. Mutual holding company powers.
        447-d. Conversion of mutual holding company into stock holding
                 company.

  S 447. Authorization of the formation of mutual holding companies. 1.
Notwithstanding any other provision of law and in accordance with
general regulations which the banking board shall promulgate to
facilitate such reorganizations, a mutual savings and loan association
may reorganize so as to cause its deposit-taking and one or more other
activities to be conducted by a stock savings and loan association
subsidiary of a mutual holding company formed for such purpose.
  2. Except to the extent that such provisions are inconsistent with
this article, the stock savings and loan association subsidiary of the
mutual holding company shall be subject to the same provisions of this
chapter as apply to savings and loan associations which have converted
to stock form pursuant to sections fourteen-e and nine thousand nineteen
of this chapter.

  S 447-a. Required approvals. 1. Approval by the board of directors. A
reorganization of a mutual savings and loan association pursuant to this
article shall be approved by a majority of the board of directors of the
mutual savings and loan association.
  2. (a) Approval by the superintendent. A mutual savings and loan
association proposing a reorganization pursuant to this article shall
provide the superintendent with written notice of such proposed
reorganization. Such notice shall include a copy of the plan of
reorganization approved by the board of directors pursuant to
subdivision one of this section, the proposed organization certificate
for the mutual holding company and the stock savings and loan
association subsidiary and shall contain such other information as the
superintendent shall require. The superintendent shall approve or
disapprove the plan of reorganization within sixty days of the
submission of such plan together with such other information as the
superintendent shall require.
  (b) Factors considered. In determining whether to approve the plan of
reorganization, the superintendent shall consider:
  (i) whether the formation of the mutual holding company would not be
detrimental to the interests of the shareholders of the mutual savings
and loan association proposing to reorganize as provided in section four
hundred forty-seven of this article;
  (ii) whether disapproval is necessary to prevent unsafe or unsound
banking practices;
  (iii) whether the interest of the public will be served by the
proposed reorganization;
  (iv) whether the financial or management resources of the mutual
savings and loan association proposing to reorganize as provided in
section four hundred forty-seven of this article warrant disapproval of
the proposed plan of reorganization; (v) whether the mutual savings and
loan association proposing to reorganize as provided in section four
hundred forty-seven of this article fails to furnish any information
required under paragraph (a) of this subdivision or furnished
information containing any statement which, at the time and in the
circumstances under which it was made, was false or misleading with
respect to any material fact or omits to state any material fact
necessary to make the statements therein not false or misleading.
  (c) When the superintendent shall have determined to approve or
disapprove the plan of reorganization, the superintendent shall so
advise the mutual savings and loan association in writing and shall
endorse approval on an organization certificate and cause it to be filed
in the office of the superintendent and with the clerk of the county in
which the principal office of the mutual savings and loan association is
located. Upon the filing of the organization certificate the existence
of the mutual holding company shall commence. As used in this article,
the term "organization certificate" shall include an amended
organization certificate.
  3. Approval by shareholders. If approved by the superintendent the
mutual savings and loan association shall submit the plan of
reorganization to its shareholders for approval at a meeting convened in
accordance with general regulations promulgated by the banking board for
the sole purpose of approving or disapproving such plan. At such
meeting:
  (a) all shareholders whose aggregate share balance equals at least one
hundred dollars as of a record date shall be entitled to approve the
plan of reorganization, either in person or by valid proxy;
  (b) each shareholder entitled to vote shall be entitled to cast one
vote for each full one hundred dollars of shares of such shareholder
shown on the books and records of the mutual savings and loan
association as of the record date;
  (c) no shareholder shall be entitled to cast any vote for any share
balance in amounts of less than one hundred dollars;
  (d) no plan of reorganization shall be effective unless approved by
the affirmative vote of at least seventy-five per centum of the
aggregate dollar amount of the book value of shares represented at such
meeting either in person or by valid proxy and entitled to vote thereat.

  S 447-b. Formation of a mutual holding company. 1. The plan of
reorganization may authorize the formation of a mutual holding company
by:
  (a) (i) the organization by the mutual holding company of a stock
savings and loan association subsidiary and the transferal to such stock
savings and loan association of the substantial part of its assets and
liabilities, including all of its deposit liabilities, in accordance
with general regulations promulgated by the banking board;
  (ii) the organization by the mutual savings and loan association of a
mutual holding company and the organization by such mutual holding
company of a stock savings and loan association subsidiary which merges
with the mutual savings and loan association; or
  (iii) the reorganization of the mutual savings and loan association
under any other method approved pursuant to general or specific
regulations promulgated by the banking board.
  (b) For the purposes of paragraph (a) of this subdivision, such
regulations shall permit the stock savings and loan association to issue
to persons other than the mutual holding company of which it is a
subsidiary an amount of common stock and securities convertible into
common stock which in the aggregate does not exceed forty-nine per
centum of the issued and outstanding common stock of such stock savings
and loan association. Issued and outstanding securities that are
convertible into common stock shall be considered issued and outstanding
common stock for the purposes of computing the forty-nine per centum
limitation. This paragraph shall not limit the authority of such stock
savings and loan association to issue equity or debt securities other
than common stock and securities convertible into common stock.
 

	NY Banking Law Index Civil Practice Law & Rules Consolidated Laws Statute of Limitations Article 10-C, Continued . . . 2. In connection with the reorganization of a mutual savings and loan association as provided in section four hundred forty-seven of this article, the mutual holding company may retain or acquire assets of the mutual savings and loan association to the extent that such assets are not then required to be transferred to or retained by the stock savings and loan association in order to satisfy capital or reserve requirements of any applicable state or federal law or regulation. 3. A stock savings and loan association, at least fifty-one per centum but less than one hundred per centum of the outstanding common stock of which is owned by a mutual holding company shall have at least one director, but no more than two-fifths of its directors, who are "unaffiliated directors" who shall represent the interests of the minority shareholders. An "unaffiliated director" is a director who is not (a) an officer or employee of the stock savings and loan association (or any affiliate thereof) or (b) an officer, trustee, director or employee of the mutual holding company. If the organization certificate or bylaws of the stock savings and loan association provide that the board of directors shall be divided into two or more classes, then to the extent possible, each class shall contain the same number of unaffiliated directors as each other class. S 447-c. Mutual holding company powers. 1. Upon the formation of a mutual holding company by a mutual savings and loan association: (a) the mutual holding company shall possess all the rights, powers and privileges, except deposit-taking powers, and shall be subject to all the limitations not inconsistent with this article of a mutual savings and loan association under articles ten and sixteen of this chapter; (b) the mutual holding company shall be subject to the limitations imposed by the savings and loan holding company provisions of the Home Owners Loan Act (title twelve United States Code Section 1467a); (c) notwithstanding the provisions of paragraph (b) of this subdivision no mutual holding company shall exercise any rights, powers or privileges pursuant to any provision of federal law applicable to savings and loan holding companies which are not also authorized under article ten of this chapter. 2. Notwithstanding any inconsistent provision of section fourteen-e, six hundred, six hundred one, six hundred one-a or six hundred one-b of this chapter, subject to general regulations promulgated by the banking board, a mutual holding company may: (a) merge with, acquire or purchase the assets of a mutual holding company established pursuant to this article or the savings and loan holding company provisions of the Home Owners Loan Act (title twelve United States Code Section 1467a); (b) acquire or purchase the assets or stock of a stock savings bank, a stock savings and loan association, a stock federal savings bank or a stock federal savings and loan association; (c) acquire a mutual savings bank, a mutual savings and loan association, a federal mutual savings bank or a federal mutual savings and loan association through the merger of such institution with a stock subsidiary of such mutual holding company; (d) engage in any other acquisition or combination specifically permitted by general or special regulations promulgated by the banking board; provided, however, that the banking board shall have no power to permit any insurance activities prohibited by subdivision three of this section or to expand by interpretation any provision of federal law set forth in the savings and loan holding company provisions of the Home Owners Loan Act (title twelve United States Code Section 1467a). 3. Except to the extent permitted by the savings and loan holding company provisions of the Home Owners Loan Act (title twelve United States Code Section 1467a) and authorized by article ten of this chapter, the powers of the mutual holding company shall not include the power to directly or indirectly engage in: the sale or underwriting of insurance; the formation or acquisition of an insurance agency or an insurance company, or; the issue, sale, distribution and underwriting of, or to deal in, any security arising out of a contract issued by an insurance company and subject to the supervision of the superintendent of insurance. S 447-d. Conversion of mutual holding company into stock holding company. 1. If approved by the superintendent, a mutual holding company may convert to a stock holding company in accordance with general regulations promulgated by the banking board. 2. If approved by the superintendent, the mutual holding company shall submit the plan of conversion to its shareholders for approval at a meeting convened for that purpose in accordance with such regulations. The provisions of paragraphs (a), (b), (c) and (d) of subdivision three of section four hundred forty-seven-a of this article shall apply to such meeting. For the purpose of this subdivision, the term "shareholders" shall mean those shareholders as of a record date, of a stock savings and loan association subsidiary of the mutual holding company which: (a) was organized as a result of the reorganization of a mutual savings and loan association as provided in section four hundred forty-seven of this article; and (b) has not at any time subsequent to its organization issued more than forty-nine per centum of its issued and outstanding common stock to any persons other than a mutual holding company organized pursuant to this article or the savings and loan holding company provisions of the Home Owners Loan Act (title twelve United States Code Section 1467a).