New York Banking Law

Article 3
Banks and Trust companies

                       
      Section 
        94.    Change from bank to trust company; from trust company to
                 bank.
        96.    General powers.
        96-a.  Servicing of mortgages by banks.
        96-b.  Payroll payment by banks or trust companies.
        96-c.  Power to act as trustee under self-employed retirement
                 trust or individual retirement trust.
        96-d.  Banking development districts.
        97.    Power to purchase securities and stocks.
        98.    Power to take and hold real estate; restrictions.
        98-a.  Club accounts.
        100.   Fiduciary powers.
        100-a. Fiduciary capacities; appointment by court authorized;
                 bond; oath; accounting.
        100-b. Investments as fiduciary; when interest is to be paid;
                 preference.
        100-c. Common trust funds.
        100-d. Foreign common trust funds.
        101.   Additional powers of certain trust companies.
        102.   Powers of specially chartered trust companies.
        102-a. Limited liability trust companies.
        103.   Restrictions on loans, purchases of securities and total
                 liabilities to bank or trust company of any one person.
        104.   Entries in books; restrictions; amortization of
                 securities.
        105.   Branch offices; prohibition against doing business at
                 unauthorized places.
        105-a. Electronic facilities.
        106.   Deposits by banks and trust companies with other banking
                 corporations and private bankers; restrictions.
        107.   Reserves against deposits.
        107-a. Security for public deposits.
        108.   Rates of interest; installment obligations; personal loan
                 departments.
        108-a. Acceptance of United States currency.
        109.   Closing of books; profits; how to be computed.
        110.   Surplus fund; of what composed, and for what purposes
                 used.
        111.   Profits; credits to surplus fund and to undivided
                 profits.
        112.   Dividends; payable from net profits; restrictions.
        113.   Change of location; change of designation of principal
                 office.
        114.   Assessment of stockholders to make good impairment of
                 capital stock; sale of stock.
        121.   Reports to directors.
        122.   Examinations of banks and trust companies by directors;
                 employment of assistants.
        123.   Reports of directors` examinations.
        124.   Communications from banking department to be submitted to
                 directors and noted in minutes.
        125.   Reports to superintendent; penalty for failure to make.
        128.   Preservation of books and records.
        129.   Requirement of notice on withdrawal of certain time
                 deposits; notice to superintendent.
        130.   Restrictions on officers, directors and employees.
        131.   Prohibitions against encroachments upon certain powers of
                 banks and trust companies.
        132.   Use of sign, or words, indicating bank or trust company
                 by unauthorized persons prohibited.
        133.   Use of banking organization name.
        134.   Repayment of deposits standing in the names of minors,
                 trustees or joint depositors; repayment where adverse
                 claim is asserted; interpleader in certain actions;
                 effect of claims or advices originating in, and
                 statutes, rules or regulations purporting to be in
                 force in occupied territories.
        136.   Change of national banking association into state bank by
                 conversion or merger.
        136-a. Purchase of assets of national banking association by
                 bank or trust company.
        136-b. Approval of superintendent.
        136-c. Effect of merger or conversion of national banking
                 association into state bank.
        137.   Change of state bank into national banking association by
                 conversion, merger or consolidation.
        138.   Foreign branches; performance of contracts and repayment
                 of deposits.
        139.   Saving clause.
        140-a. Stock option plans.

  S 94. Change from bank to trust company; from trust company to bank.
  A bank complying with the minimum capital stock requirements specified
in subdivision nine of section four thousand one of this chapter may
become a trust company by filing a certificate pursuant to subdivision
two of section eight thousand one of this chapter to provide that it
shall have the powers specified in section one hundred of this article.
A trust company may become a bank by filing a certificate pursuant to
subdivision two of section eight thousand one of this chapter to provide
that it shall not have the powers specified in section one hundred of
this article.  Prior to or simultaneously with the filing of such
certificate, such trust company shall if its title contains the term
"trust company" file a certificate pursuant to subdivision two of
section eight thousand one of this chapter for the purpose of omitting
such term from its title.

  S 96. General powers. Every bank and every trust company shall,
subject to the restrictions and limitations contained in this chapter,
have the following powers:
  1. To discount, purchase and negotiate promissory notes, drafts, bills
of exchange, other evidences of debt, and obligations in writing to pay
in installments or otherwise all or part of the price of personal
property or that of the performance of services; purchase accounts
receivable, whether or not they are obligations in writing; lend money
on real or personal security; borrow money and secure such borrowings by
pledging assets; buy and sell exchange, coin and bullion; and receive
deposits of moneys, securities or other personal property upon such
terms as the bank or trust company shall prescribe; and exercise all
such incidental powers as shall be necessary to carry on the business of
banking. For purposes of this subdivision, the term "accounts
receivable" shall not include the right to receive payment for property
to be sold at a future date or services to be rendered at a future date.
  2. To accept for payment at a future date, drafts drawn upon it by its
customers and to issue letters of credit authorizing the holders thereof
to draw upon it or its correspondents at sight or on time.
  3. (a) To receive upon deposit for safe-keeping for hire upon terms
and conditions to be prescribed by the bank or trust company, money,
securities, papers of any kind and any other personal property;
  (b) To engage in the safe deposit business by renting vaults, safe
deposit boxes and other receptacles upon premises occupied by the bank
or trust company, upon such terms and conditions as may be prescribed by
the bank or trust company.
  4. To issue by its board of directors capital notes or debentures,
when so specifically authorized by the superintendent, and, when so
specifically authorized by the superintendent, to receive in payment
therefor, in whole or in part, mortgages, interests therein or other
property and to retain, unrecorded or unregistered, assignments or
conveyances of such mortgages, interests therein or other property,
provided that the superintendent shall not approve the retention of any
assignment of mortgage or interest therein or any conveyance of other
property, which may be recorded or registered, without record or
registration thereof, except where such mortgage, interest therein or
other property is assigned or conveyed by a corporation organized under
the banking law or by a corporation wholly owned by not less than twenty
savings banks of this state.
  5. To become a member of a federal reserve bank, and to have and
exercise all powers, not in conflict with the laws of this state, which
are conferred upon any such member by the federal reserve act. Such bank
or trust company and its directors, officers and stockholders shall
continue to be subject, however, to all liabilities and duties imposed
upon them by any law of this state and to all the provisions of this
chapter relating to banks and trust companies.
  6. To assume and discharge such obligations to Federal Deposit
Insurance Corporation as may be necessary or required for the purpose of
maintaining deposit insurance in such corporation.
  7. (a) To act as financial agent of the United States Government and
as depositary of public money of the United States (including, without
being limited to, revenues and funds of the United States, and any funds
the deposit of which is subject to the control or regulation of the
United States or any of its officers, agents, or employees, and Postal
Savings funds); and to perform all such reasonable duties as depositary
of such public money and as financial agent of the United States
Government as may be required of it; and to pledge assets or furnish
other security, satisfactory in form and amount to the Secretary of the
Treasury of the United States, for the safekeeping and prompt payment of
such public money deposited with it and for the faithful performance of
its duties as financial agent of the United States Government.
  (b) To pledge assets or furnish other security, satisfactory in form
and amount to judges of courts of bankruptcy, for the repayment of
deposits of the money of estates under the national bankruptcy act.
  (c) To pledge assets or furnish other security, satisfactory in form
and amount to the depositor, for the repayment of moneys held in the
name of any state (which term shall include every territory of the
United States, the District of Columbia, and the Commonwealth of Puerto
Rico), or of any foreign nation, or of any Indian nation or tribe, or of
any political subdivision or instrumentality or authority of any of
them, when required to be secured by applicable law, decree, regulation
or resolution, and to pledge assets or furnish other security for the
repayment of moneys held as fiduciary, or in the name of a fiduciary, of
any trust created by any such state, foreign nation, Indian nation or
tribe, political subdivision, instrumentality or authority as required
by the terms of such trust; provided, however, that before any pledge or
security is made or furnished to any depositor other than this state or
a political subdivision, instrumentality or authority of this state, the
bank or trust company shall obtain a certified or official copy of such
law, decree, regulation, or resolution or trust requiring such pledge or
other security, and an opinion of counsel that such pledge or security
is required by such law, decree, regulation, or resolution or by the
terms of such trust.
  9. To execute and deliver such guaranties as may be incidental to
carrying on the business of a bank or trust company.
  10. To exercise, subject to such regulations as may be issued from
time to time by the banking board, through any foreign branch office
(other than one opened or occupied in another state of the United
States, the District of Columbia, any territory of the United States,
Guam, American Samoa, the United States Virgin Islands, and the Northern
Mariana Islands) opened and occupied with the approval of the
superintendent and the banking board as provided in section one hundred
five of this chapter, such further powers as may be usual in connection
with the transaction of the business of banking in the place where such
foreign branch office shall transact business, provided that no such
foreign branch office shall engage in the general business of producing,
distributing, buying or selling goods, wares, or merchandise, nor,
except with respect to securities issued by any foreign nation or any
political subdivision, agency or instrumentality thereof, engage or
participate, directly or indirectly, in the business of underwriting,
selling or distributing securities.
  11. To designate one or more agents (except its employees) to issue or
sell its travelers checks or money orders at locations other than its
principal office or branch offices authorized pursuant to section one
hundred five of this chapter, subject to such rules and regulations as
the superintendent may make from time to time.
  12. To acquire and lease personal property, or to acquire personal
property subject to an existing lease together with the lessor`s
interest therein, subject to such limitations and conditions as the
banking board may from time to time prescribe by general regulation.
  13. To reserve or order transportation, travel accommodations or other
travel services.
  14. To arrange, purchase or sell loans secured by liens on interests
in real estate, subject to such terms, conditions and limitations as may
be prescribed by the superintendent by regulation.
  * 16. In addition to such authority as is contained in section
ninety-eight of this chapter and notwithstanding any limitations set
forth therein, to purchase, lease, exchange or otherwise acquire real
property, improved or unimproved, or any interest therein, to erect,
construct, rebuild, enlarge, alter, improve, maintain, manage and
operate buildings or other improvements of any description thereon, to
sell, lease, sublet, mortgage, exchange or otherwise dispose of same and
execute, perform and carry out contracts for construction, alteration,
improvement, maintenance, management or repair thereof, to make loans in
connection therewith, as owner, co-owner or otherwise, subject to such
specific or general approvals and limitations as shall be required by
regulations promulgated from time to time by the banking board pursuant
to this subdivision; provided, however, that no activity specified
herein shall be undertaken pursuant to the authority contained in this
subdivision until the banking board shall have issued regulations
specifying the limitations and requirements which shall be imposed in
connection with the investments and activities referred to herein,
including, without limitation, the consideration of such bank or trust
company`s record in meeting the credit needs of local communities within
the meaning of section twenty-eight-b of this chapter.
  * NB Expires June 30, 1988

  S 96-a. Servicing of mortgages by banks. 1. Every bank shall, subject
to the restrictions and limitations contained in this article, have the
power to service mortgages, and the superintendent shall have the power
to prescribe, by specific or general regulation, the extent to which,
and the conditions upon which, mortgages may be serviced.
  2. No bank shall, by virtue of the provisions contained in this
section, be deemed to have the powers defined and described in
subdivision two of section one hundred of this article.
  3. The grant of powers to banks by or pursuant to this section shall
not be deemed to limit or restrict any other banking organizations,
heretofore or hereafter organized, in the exercise of their lawful
powers.

  S 96-b. Payroll payment by banks or trust companies. l.  Every bank
and trust company shall have the power to enter into contracts with any
municipal corporation, school district, district corporation, town or
county improvement district, public authority, or public corporation to
receive in a single payment, for each pay period, the total payroll of
such corporations, districts or authorities and deposit the same in
accordance with the terms of such contract, which shall include
provision for deposits for withholding, retirement and insurance, if
any.
  2. The amount due each employee shall be disbursed or credited in
accordance with the directions of each employee to saving or checking
accounts, or loan or mortgage accounts within such bank or trust company
or to a single account in another bank or trust company or savings bank
or savings and loan association or may be payable in cash or by check to
such employee.

  S 96-c. Power to act as trustee under self-employed retirement trust
or individual retirement trust. Every bank without fiduciary powers may,
subject to any regulations and restrictions prescribed by the
superintendent of banks, act as trustee under a retirement plan
established pursuant to the provisions of the act of congress entitled
"Self-employed Individuals Tax Retirement Act of 1962" as such
provisions may be amended from time to time, and under an individual
retirement account plan established pursuant to the amendments to the
provisions of the Internal Revenue Code contained in the act of congress
entitled "Employee Retirement Income Security Act of 1974" as such
provisions may be amended from time to time, provided that the
provisions of such retirement or individual retirement account plan
require the funds of such trust to be invested exclusively in deposits
in banks, trust companies, savings banks, savings and loan associations
or federal savings and loan associations whose principal offices are
located in this state. In the event that any such retirement or
individual retirement account plan, which in the judgment of the bank,
constituted a qualified plan under the provisions of the applicable act
of congress hereinabove mentioned and the regulations promulgated
thereunder at the time the trust was established and accepted by the
bank is subsequently determined not to be such a qualified plan or
subsequently ceases to be such a qualified plan, in whole or in part,
the bank may, nevertheless, continue to act as trustee of any deposits
theretofore made under such plan and to dispose of the same in
accordance with the directions of the depositor and the beneficiaries
thereof. No bank, in respect to deposits made under this section, shall
be required to segregate such deposits from other deposits of such bank,
provided, however, that the bank shall keep appropriate records showing
in proper detail all transactions engaged in under the authority of this
section.

  S 96-d. Banking development districts. 1. * There is hereby created a
banking development district program, the purpose of which is to
encourage the establishment of bank branches in geographic locations
where there is a demonstrated need for banking services. The banking
board shall, in consultation with the department of economic
development, promulgate rules and regulations, after public hearing and
comment, which set forth the criteria for the establishment of banking
development districts. Such criteria shall include, but not be limited
to, the following:
  * NB Repealed January 1, 2005
  * There is hereby created a banking development district program, the
purpose of which is to encourage the establishment of commercial bank
branches in geographic locations where there is a demonstrated need for
banking services. The banking board shall, in consultation with the
department of economic development, promulgate rules and regulations,
after public hearing and comment, which set forth the criteria for the
establishment of banking development districts. Such criteria shall
include, but not be limited to, the following:
  * NB Effective January 1, 2005
  (a) the location, number, and proximity of sites where banking
services are available within the district;
  (b) the identification of consumer needs for banking services within
the district;
  (c) the economic viability and local credit needs of the community
within the district;
  (d) the existing commercial development within the district;
  (e) the impact additional banking services would have on potential
economic development in the district; and
  (f) such other criteria which the superintendent in his or her
discretion shall identify as appropriate.
  2. A local government, in conjunction with a bank, trust company or
national bank, may submit an application to the superintendent for the
designation of a banking development district. The superintendent shall
issue a determination on such an application within sixty days of
receiving such application. If an application is approved, the
superintendent shall transmit notification of such approval to the local
government, the bank, trust company or national bank, the state
comptroller, the commissioner of taxation and finance, the commissioner
of the department of economic development, the temporary president of
the senate and the speaker of the assembly.
  2-a. Notwithstanding any other provision of law, an application may be
submitted by a local government in conjunction with a bank, trust
company or national bank which has already opened a bank branch within
such area, provided such branch was opened after December thirty-first,
nineteen hundred ninety-six. In considering the criteria authorized
pursuant to subdivision one of this section, the superintendent shall
also take into account the importance and benefits of preserving the
banking services offered by the existing branch.
  * 3. The establishment of a branch in a banking development district
by a bank, trust company or national bank shall be subject to all
applicable state and federal laws regarding the establishment of branch
offices, including the provisions of section one hundred five of this
article, provided however that the branch application fee required
pursuant to section twenty-nine of this chapter shall be waived for any
such branch. A bank or trust company may submit an application to open a
branch office simultaneously with the submission of the application for
the designation of a banking development district.
  * NB Repealed January 1, 2005
  * 3. The establishment of a branch in a banking development district
by a bank, trust company or national bank shall be subject to all
applicable state and federal laws regarding the establishment of branch
offices, including the provisions of section one hundred five of this
article. A bank or trust company may submit an application to open a
branch office simultaneously with the submission of the application for
the designation of a banking development district.
  * NB Effective January 1, 2005
  4. For the purposes of this section, the term "local government" shall
mean a county, town, city or village.
  * 5. (a) Notwithstanding the provisions of subdivision two of section
two hundred thirty-seven of this chapter; for the purposes of this
section, paragraph c of subdivision two of section ten of the general
municipal law, subdivision six of section one hundred five of the state
finance law and section four hundred eighty-five-f of the real property
tax law, any reference to a bank, trust company or national bank shall
be deemed to include a savings bank, savings and loan association,
federal savings and loan association or federal savings bank; provided,
however, that such provisions of law do not grant a savings bank,
savings and loan association, federal savings and loan association or
federal savings bank eligibility to accept municipal or public funds or
municipal or public moneys other than for the limited purposes of the
establishment of a branch in a banking development district pursuant to
this section.  Any such municipal or public funds or moneys shall be
deposited only at the branch established pursuant to this section, and
any municipal funds or moneys may be deposited only by the sponsoring
municipality in which the branch and banking development district are
located; provided further that any such municipal or public funds or
moneys shall be subject to the same requirements which apply to
municipal or public funds or moneys deposited in a bank, trust company
or national bank and shall also be subject to the provisions of section
one hundred five of the state finance law or section ten of the general
municipal law relating to such deposits.
  (b) Notwithstanding any other provision of law, the banking board
shall promulgate rules and regulations to authorize the participation of
savings banks, savings and loan associations, federal savings banks and
federal savings and loan associations in the program established
pursuant to this section.
  * NB Repealed January 1, 2005

  S 97. Power to purchase securities and stocks. Subject to the
restrictions and limitations contained in this chapter, a bank or trust
company may invest in and have and exercise all rights of ownership with
respect to:
  1. Bonds, notes, debentures and other obligations for payment of
money, which are not in default as to either principal or interest when
acquired.
  2. Stocks of any city, county, town or village of this state which are
not in default as to either principal or interest when acquired.
  3. Stock of a federal reserve bank in the amount necessary to qualify
for membership in such reserve bank.
  4. Stock of each of the following to an amount not in excess of ten
per centum of the capital stock, surplus fund and undivided profits of
such bank or trust company:
  (a) Any safe deposit company which does business on premises owned or
leased by the bank or trust company or the vaults of which are connected
with or adjacent to an office of such bank or trust company; provided
that the purchase and holding of such stock is first duly authorized by
resolution of the board of directors of the bank or trust company and by
written approval of the superintendent, stating the number and amount of
the shares which may be so purchased and held, excepting that the bank
or trust company may, without the written approval of the
superintendent, acquire the stock owned by a former director of the safe
deposit company at the time that he ceased to be a director. The bank or
trust company may not pay, without the prior written approval of the
superintendent, more for such stock than the cost thereof to the
director.
  (b) Any investment company qualified to exercise the powers specified
in subdivision two of section five hundred eight of this chapter;
  (c) The Bank for International Settlements.
  4-a. When the banking board shall have adopted such regulations as
shall permit such ownership or investment, and subject to such
restrictions as the banking board may prescribe, stock or other equity
investments in subsidiary corporations engaged in, or to be organized to
engage in the following activities:
  (a) To acquire and lease personal property under the same terms and
conditions as provided in subdivision twelve of section ninety-six of
this article;
  (b) To purchase accounts receivable as provided in subdivision one of
section ninety-six of this article;
  (c) To be a corporation organized pursuant to the provisions of
section twenty-five (a) of an act of congress entitled the "Federal
Reserve Act";
  (d) To own or operate real or personal property acquired through
foreclosure or in settlement or reduction of debts due it;
  (e) To own or operate real or personal property for use as bank
premises; or
  (f) To transact any other business in which the bank or trust company
may engage directly.
  4-b. Common or preferred stock of any corporation created or existing
under the laws of the United States or of any state, district or
territory thereof, or of the commonwealth of Puerto Rico, provided that:
(a) such common or preferred stock is registered on a national
securities exchange, as provided in an act of congress of the United
States entitled the "Securities Exchange Act of 1934", approved June
sixth, nineteen hundred thirty-four, as amended, or such other exchange
or market system as the superintendent shall approve by regulation; (b)
the aggregate amount of all investments in common and preferred stock as
permitted by this subdivision shall at no time exceed two percent of the
assets or twenty percent of the capital, surplus and undivided profits
of the bank or trust company, whichever is less; (c) the aggregate
amount of all investments in the common and preferred stock of any one
issuer pursuant to this subdivision, together with the aggregate amount
of all investments in the bonds, debentures, notes or other obligations
of such issuer made pursuant to paragraph (i) of subdivision one of
section one hundred three of this chapter, shall at no time exceed one
percent of the assets or fifteen percent of the capital, surplus and
undivided profits of the bank or trust company, whichever is less; and
(d) no bank or trust company shall at any time hold pursuant to this
subdivision more than two percent of the total issued and outstanding
shares of stock of any one issuer.
  5. So much of the capital stock of any other corporation as may be
specifically authorized by the laws of this state or by resolution of
the banking board upon a three-fifths vote of all its members.
  The superintendent is authorized to adopt such rules and regulations
as shall permit banks and trust companies to make a loan which provides
for receipt of shares of stock of, or a share of the profits, income or
earnings of, a borrower in consideration for making the loan.
  A bank or trust company may acquire stock in settlement or reduction
of a loan, or advance of credit or in exchange for an investment
previously made in good faith and in the ordinary course of business,
where such acquisition of stock is necessary in order to minimize or
avoid loss in connection with any such loan, advance of credit or
investment previously made in good faith. A trust company may acquire
stock from any estate, trust or fund with respect to which such trust
company is acting in a fiduciary capacity, if a claim is asserted or may
be asserted against it with respect to the purchase or retention of such
stock for such estate, trust or fund, (a) where such acquisition by the
trust company has been authorized or directed by a court, or (b) where
such trust company has been advised by its counsel in writing that it
has incurred a contingent or potential liability with respect to the
purchase or retention of such stock and such trust company desires to
relieve itself from such liability. Stocks acquired pursuant to the
provisions of this paragraph may be held for such period as the board of
directors deems advisable.
  A bank or trust company may continue to hold any bonds or other
securities or stock which it holds in accordance with the provisions of
law at the time this act takes effect.
  No bank or trust company shall purchase, acquire, or hold any stock of
any corporation except as provided in this section.

  S 98. Power to take and hold real estate; restrictions. 1. A bank or
trust company may purchase, hold, lease and convey real property as
follows:
  (a) A plot whereon there is or may be erected a building suitable for
the convenient transaction of its business, from portions of which not
required for its own use a revenue may be derived, and a plot whereon
parking accommodations are, or are to be, provided, with or without
charge, primarily for its customers or employees or both, and a building
or a portion or portions thereof for use by the bank or trust company in
its business, provided that the aggregate of all investments of any bank
or trust company in such plots and buildings and in a leased building or
a portion or portions thereof or in the stock, debentures or other
obligations of any corporation holding such plots or buildings and of
all loans to or upon the security of the stock of any such corporation
shall not exceed forty per centum of the aggregate of the capital stock,
surplus fund and undivided profits of such bank or trust company, except
with the approval of the superintendent.  Any bank or trust company
having, prior to April twenty-third, nineteen hundred thirty-four, made
loans and investments in excess of the limitations prescribed by this
paragraph may retain any such loans and investments notwithstanding such
limitations.
  (b) Such as shall be conveyed to it in satisfaction of debts
previously contracted in the course of its business.
  (c) Such as it shall purchase at sales under judgments, decrees or
mortgages held by it.
  (d) Such as may be specifically authorized by resolution of the
banking board upon a three-fifths vote of all its members, provided,
however, that the banking board upon a three-fifths vote of all its
members may delegate to the superintendent the authority to approve the
purchase, lease, conveyance or other acquisition or sale of real
property which is located outside the United States, its territories and
possessions, and which is used principally as the residence of one or
more directors, officers, or employees of the bank or trust company.
  (e) A whole or part interest in a "project", as defined in the New
York state urban development corporation act, pursuant to sections six
or eight of such act. An investment by a bank or trust company in a
single project shall not exceed one per centum of the assets or fifteen
per centum of the combined capital stock, surplus fund and undivided
profits of such bank or trust company, whichever is less, and the
aggregate of all investments of a bank or trust company in such projects
and investments in securities of any "subsidiary" of the New York state
urban development corporation, as defined in the New York state urban
development corporation act, shall not exceed five per centum of the
assets or seventy-five per centum of the combined capital stock, surplus
fund and undivided profits of such bank or trust company, whichever is
less.
  2. All real estate purchased by any bank or trust company or taken by
it in settlement of debts due it, shall be conveyed to it in its name
or, subject to such regulations and restrictions as the banking board
finds to be necessary and proper, may be taken in the name of a duly
authorized nominee. All such conveyances shall be immediately recorded
or registered in the office of the proper recording officer of the
county in which such real estate is located.

  S 98-a. Club accounts. 1. No contract under which a bank or trust
company agrees to repay deposits of fixed sums made at regular intervals
at a given time with all interest or dividends credited thereon, or to
repay said deposits when, together with interest or dividends credited
thereon, they shall equal a specified sum, may provide for any
forfeiture of the sums deposited in the event of the discontinuance of
the regular payments. Interest or dividends on club accounts, if
offered, must be credited at least quarterly and may not be forfeited
once credited, in the event of the discontinuance of regular payments.
  2. Any bank which provides for deposits in club accounts shall, in all
advertising, announcements or brochures pertaining to such accounts,
state whether or not interest or dividends are paid thereon and, if
interest or dividends are paid, shall state the rate or form of interest
or dividends so paid in accordance with any rules and regulations that
may be prescribed by the superintendent.

  S 100. Fiduciary powers. Every trust company shall have, subject to
the restrictions and limitations contained in this chapter, the
following powers:
  1. To act as the fiscal or transfer agent of the United States, any
state, municipality, body politic or corporation; and in such capacity
to receive and disburse money, to transfer, register and countersign
certificates of stock, bonds or other evidences of indebtedness or other
securities, and to act as attorney in fact or agent of any person or
corporation, foreign or domestic, for any lawful purpose.
  2. To act as trustee under any mortgage or bonds issued by any
municipality, body politic or corporation, foreign or domestic, and
accept and execute any other municipal or corporate trust not prohibited
by the laws of this state.
  3. To be appointed and to act under the order or appointment of any
court of competent jurisdiction:
  (a) As guardian, receiver, trustee, committee or conservator of the
estate of any minor, mentally ill person, mentally retarded person,
person of unsound mind, alcohol abuser or conservatee or in any other
fiduciary capacity;
  (b) As receiver, trustee, or committee of the property or estate of
any person in insolvency or bankruptcy proceedings.
  4. To be appointed and to accept the appointment of executor or of
trustee under the last will and testament or administrator with or
without the will annexed of the estate of any deceased person.
  5. To take, accept and execute any and all such trusts, duties and
powers of whatever nature or description as may be conferred upon or
entrusted or committed to it by any person or persons, or any body
politic, corporation, domestic or foreign, or other authority by grant,
assignment, transfer, devise, bequest or otherwise, or which may be
entrusted or committed or transferred to it or vested in it by order of
any court of competent jurisdiction, or any surrogate, and to receive,
take, manage, hold and dispose of according to the terms of such trust,
duty or power, any property or estate, real or personal, which may be
the subject of any such trust, duty or power.
  Provided that no trust company shall have any right or power to make
any contract, or to accept or execute any trust whatever, which it would
not be lawful for any individual to make, accept or execute.

  S 100-a. Fiduciary capacities; appointment by court authorized; bond;
oath; accounting. 1. Executor. When any trust company is appointed
executor in any last will and testament, the court or officer authorized
to grant letters testamentary in this state, shall, upon the proper
application, grant letters testamentary thereon to such trust company or
to its successors by merger.
  2. Guardian, trustee or administrator.
  (a) Any trust company may be appointed guardian, trustee or
administrator, on the application or consent of any person acting as
such or as an executor or entitled to such appointment irrespective of
whether such person would himself be disqualified from acting by reason
of his being an alien or non-resident of this state, and in the place
and stead of such person, or such trust company may be joined with any
person so acting or entitled to such appointment; but such appointments
shall be made upon such notice, as is required by law, to the persons
interested in the estate or fund and on the consent of such of the
principal legatees or other persons interested in the estate or fund as
the court, surrogate or judge making the appointment shall deem proper.
No appointment so made shall be deemed to increase the number of persons
entitled to full compensation beyond the number so entitled under the
terms of the will or deed creating the trust or appointing a guardian or
authorized by law. Whenever a person is joined with such trust company
in any appointment as guardian, trustee or administrator, his
appointment may be under such limitation of powers and upon such terms
and conditions as to deposit of assets by such person, with such trust
company, or otherwise, and upon such reduced bond or security to be
given by such person, as the court, surrogate or judge, making the
appointment shall prescribe.  (b) When application is made to any court
or officer having authority to grant letters of administration with the
will annexed upon the estate of any deceased person, and there is no
person entitled to such letters who is qualified, competent, willing and
able to accept such administration, such court or officer may at the
request of any party interested in the estate, grant such letters of
administration with the will annexed, to any trust company.
  (c) Any court or officer having authority to grant letters of
guardianship of any infant may upon the same application as is required
by law for the appointment of a guardian for such infant, appoint any
trust company as the guardian of the estate of such infant.
  3. Committee of incompetent or conservator of a conservatee. Any court
having jurisdiction to appoint a trustee, guardian, receiver, committee
of the estate of a mentally ill person, mentally retarded person or
alcohol abuser or conservator of the estate of a conservatee, or to make
any fiduciary appointment, may appoint any trust company to be such
trustee, guardian, receiver, committee or conservator, or to act in any
other fiduciary capacity.
  4. Receiver, trustee or committee. Any court, having jurisdiction to
appoint a committee or trustee or a receiver in insolvency or bankruptcy
proceedings or in any other proceeding, or action, under state or
federal law, may appoint any trust company to be such receiver, trustee
or committee.
  5. Bonds. No bond or other security, except as hereinafter provided,
shall be required from any trust company for or in respect to any trust,
nor when appointed executor, administrator, guardian, trustee, receiver,
committee or depositary or in any other fiduciary capacity nor when
receiving commissions under the provisions of SCPA 2310 or 2311. The
court, or officer making such appointment may, upon proper application,
require any trust company, which shall have been so appointed to give
such security as to the court or officer shall seem proper, or upon
failure of such trust company to give security as required, may remove
such trust company from and revoke such appointment.
  6. Court orders, accounts. Such court or officer may make orders
respecting such trusts and require any such trust company to render all
accounts, which such court or officer might lawfully require if such
executor, administrator, guardian, trustee, receiver, committee,
depositary or such trust company acting in any other fiduciary capacity,
were a natural person.
  7. No official oath required. Upon the appointment of such trust
company as such executor, administrator, guardian, trustee, receiver or
committee, no official oath shall be required.

  S 100-b. Investments as fiduciary; when interest is to be paid;
preference. 1. Investments. All investments of money received by any
trust company as executor, administrator, guardian, trustee of a trust
of any kind, receiver, committee, conservator or depositary, shall be at
its sole risk, and for all losses of such money the capital stock,
property and effects of the trust company shall be absolutely liable,
unless the investments are such as are proper when made by an individual
acting as trustee, executor, administrator, guardian, receiver,
committee, conservator or depositary, or such as are permitted in and by
the instrument or words creating or defining the trust. But no corporate
fiduciary shall purchase securities from itself. Any moneys of any such
estate or fund awaiting investment or distribution may be held on
deposit by such trust company in its own name, subject to the provisions
of subdivision four of this section; provided that appropriate entries
showing the share or interest of each such estate or fund in the moneys
so held on deposit shall, at all times, appear upon the records of such
trust company.
  2. On and after September first, nineteen hundred thirty-six, no trust
company shall invest in any part interest in a bond and mortgage or note
and mortgage on behalf of any estate or fund held by such trust company
as executor, administrator, guardian, personal or testamentary trustee,
receiver, committee, conservator or depositary except that if the
instrument creating such estate or fund has authorized such trust
company as executor, administrator, guardian, personal or testamentary
trustee, receiver, committee, conservator or depositary to invest in any
part interest in a bond and mortgage or note and mortgage insured by the
federal housing commissioner such trust company may so invest and if the
instrument creating an employee benefit trust has authorized such trust
company to invest in any part interest in a bond and mortgage or note
and mortgage, such trust company may so invest. Any part interest in a
bond and mortgage or note and mortgage heretofore apportioned to any
estate or fund and held by such trust company as executor,
administrator, guardian, personal or testamentary trustee, receiver,
committee, conservator or depositary, and outstanding at any time in the
hands of any estate, fund or person may be repurchased at its face value
by such corporation individually. Such trust company, in any case where
it shall have apportioned or transferred a part interest in any bond and
mortgage or note and mortgage whether to any estate or fund held by it
alone or in conjunction with another person or otherwise, shall be
authorized and empowered, in behalf of all persons interested therein,
to collect the principal and interest and to satisfy and discharge the
mortgage on receiving payment thereof in the amount and in the manner
specified in the bond and mortgage or note and mortgage, to pay the said
principal and interest to the persons entitled thereto and generally to
exercise all of the options reserved to the mortgagee, to enforce in its
own name by appropriate action or proceeding, including foreclosure, any
and all of the covenants in the said bond and mortgage or note and
mortgage, to take such other measures for the protection of the mortgage
loan and the preservation of the security and the management of,
utilization and sale of any real estate which may be acquired on
foreclosure as may be necessary and appropriate and to exercise all
other rights of ownership in respect of the entire bond and mortgage or
note and mortgage. In case any bond, note or mortgage shall be held by,
or in the name of, such trust company and it shall hold any part
interest therein, acting as a fiduciary, whether alone, or in
conjunction with another person or otherwise, it may, prior to April
first, nineteen hundred sixty-nine, waive or modify or agree to waive or
modify, either with or without consideration and prior or subsequent to
maturity, any terms and conditions thereof, including the rate of
interest, and extend or re-extend or agree to extend or re-extend such
bond and mortgage or note and mortgage, for a period of not more than
five years from the time of such extension, by agreement with the owner
of the real property subject to the lien thereof, upon the consent of
the holders of such part interests to the extent of sixty-six and
two-thirds per centum of the whole amount of such bond and mortgage or
note and mortgage, notwithstanding that, at the time of such waiver,
modification, extension or agreement, the value of such real property
may be less than that required by law for an original investment of such
an amount therein by such holder and, in case any such investment is
guaranteed, such trust company may also extend or re-extend or agree to
extend or re-extend the time of payment under the guaranty for a like
period from its due date, and may release or agree to release such
guaranty or from time to time waive or modify or agree to waive or
modify any terms and conditions thereof, including the rate of interest;
provided however, that no such waiver, modification, extension or
agreement shall be made or agreed to unless, at least fifteen days prior
thereto, such trust company shall have notified each holder of such a
part interest in such bond and mortgage or note and mortgage of the
terms and conditions of such contemplated waiver, modification,
extension or agreement. Such notice shall be given by mailing the same
by registered mail to the address or place of residence of each holder
according to the records of such trust company. The notice hereinbefore
provided for shall not be required to be given to any holder of such a
part interest in such bond and mortgage or note and mortgage (1) who, at
the time of the mailing of such notice to holders of part interests in
such bond and mortgage or note and mortgage, was not shown on the
records of such trust company to be such holder, or (2) who, at any time
whether before or after any such waiver, modification, extension or
agreement shall have been made or agreed to, shall have consented to
such waiver, modification, extension or agreement. Any such consent
shall also be binding upon and shall be deemed to be the consent also of
each and every holder of the part interest in such bond and mortgage or
note and mortgage or of any part of such part interest with respect to
which such consent was given who, at the time such consent was given,
was not shown on the records of such trust company to be such holder
whether or not such holder shall have become such holder before or after
such consent was given. Any holder to whom the notice hereinbefore
provided for is required to be given as hereinbefore provided and who
objects to such waiver, modification, extension or agreement shall have
the right to apply, within fifteen days after such notice shall have
been mailed to such holder as hereinbefore provided, to the supreme
court of the county in which the real property securing such mortgage is
located and, subject to the discretion of the supreme court in the
premises, to obtain an order enjoining such waiver, modification,
extension or agreement. In the event of the granting of such an order,
any holder shall have the right to apply to such supreme court and,
subject to the discretion of the supreme court in the premises, to
obtain an order directing a partition of such bond and mortgage or note
and mortgage by a judicial sale thereof. Such sale shall be upon such
notice and advertisement and at such time and place and in such manner
as the court or a justice thereof may direct, but at least fifteen days`
notice thereof shall be given to each holder. The proceeds of the sale
of such bond and mortgage or note and mortgage after deducting the
expenses of such sale, shall be paid into the supreme court and shall be
distributed among such holders according to their respective interests
therein. Such trust companies shall have all the powers heretofore had
under this section or any other provision of law with respect to
investments in part interests in bonds and mortgages or notes and
mortgages for the protection, preservation and liquidation of the trust
property. It is the intent of this subdivision to prohibit after August
thirty-first, nineteen hundred thirty-six, any future apportionments or
investments of any part interests in bonds and mortgages and notes and
mortgages to or investments in part interests of bonds and mortgages and
notes and mortgages for any estate or fund of which such trust company
is executor, administrator, guardian, personal or testamentary trustee,
receiver, committee, conservator or depositary, except as permitted by
this subdivision. Such trust company, however, shall not transfer to any
estate or fund any part interests in bonds and mortgages or notes and
mortgages heretofore purchased, or invested in, from itself or from any
other estate or fund.
  Nothing contained in this act shall be construed to affect any
investments in part interest in bonds and mortgages apportioned or
transferred, prior to September first, nineteen hundred thirty-six, to
any estate or fund of which such trust company is executor,
administrator, guardian, personal or testamentary trustee, receiver,
committee, conservator or depositary, nor to affect any action
heretofore taken in accordance with law with respect to such bonds and
mortgages or part interests in said bonds and mortgages; nor to affect
the right of any such trust company to transfer or apportion any such
investment from an estate or fund to a succeeding interest created by
the same instrument under which the investment was made; nor shall it be
construed to impair or otherwise affect the power of such trust company
to apportion to any estate, fund or person interested in such mortgage
its or his proportionate share of the consideration, consisting in whole
or in part of evidences of indebtedness secured by mortgages on real
property received by such trust company on the sale of real property
acquired by foreclosure of such mortgage, or otherwise, and to exercise
with respect to such mortgages on behalf of such estates, funds, or
persons the same powers reserved with respect to the original mortgage.
  3. Preference. If dissolved by the legislature or the court, or
otherwise, or liquidated by the superintendent or otherwise, the debts
from any trust company as guardian, trustee, executor, administrator,
committee, conservator or depositary, shall be entitled to priority of
payment from the assets of such trust company on an equality with any
other priority given by this chapter.
  4. Interest. On all sums of money not less than one thousand dollars,
which shall be collected, received and held as principal by a trust
company acting as executor, administrator, guardian, trustee, receiver,
committee or conservator under the appointment of any court or officer,
or in any fiduciary capacity under such appointment, or as a depositary
of moneys paid into court, interest shall be paid by such trust company
from sixty days after the receipt thereof until the moneys so received
shall be duly expended or distributed, at a rate equal to the maximum
rate per annum then being paid by such trust company on savings
deposits, except that in the case of a trust company acting as executor
or administrator interest shall not be paid, and the grace period of
sixty days herein provided for shall not be deemed to begin, until five
months after the date of issuance of letters testamentary or of
administration to it; provided however that such trust company shall not
be required to allow any interest upon any such moneys payment of which
is prohibited under any order, regulation or ruling issued under or
pursuant to the "Trading with the Enemy Act" and any amendments thereto,
or under or pursuant to any other law, so long as such prohibition shall
remain in force and effect. If income be accumulated for a minor or
surplus income in excess of expenditures be held for investment by the
committee of an incompetent or the conservator of a conservatee, but not
otherwise, any uninvested balance of such income shall be treated as
principal upon which interest shall be paid as provided in this
subdivision. If interest moneys payable hereunder or any part thereof
shall not annually be expended or distributed pursuant to the terms or
provisions of the trust under which such moneys are held, the amount
thereof not so expended or distributed shall be accumulated by such
trust company for the benefit of the parties interested in such trust
fund, and shall be added to the principal to constitute a new principal
upon which interest shall thereafter be computed. The word "trustee" as
used in this subdivision shall mean a trustee appointed by will or by
any court, and the words "savings deposits" as used in this subdivision
shall mean time deposits with respect to which the depositor is not
required by the deposit contract, but may at any time be required by
such trust company, to give notice in writing of an intended withdrawal
not less than fourteen days before such withdrawal is made, and which is
not payable on a specified date or at the expiration of a specified time
after the date of deposit. For the purposes of this subdivision only,
moneys on which interest is payable as provided herein shall not be
deemed to be demand deposits.

  S 100-c. Common trust funds. 1. For the purpose of investment and
reinvestment of moneys received and held by any trust company as
executor, administrator, guardian, trustee, donee of power during
minority to manage property vested in an infant, custodian under any
Uniform Gifts to Minors Act, any Uniform Transfers to Minors Act or The
New York Uniform Transfers to Minors Act, conservator or committee, such
trust company may establish and maintain common trust funds and short
term investment common trust funds. In any case where the instrument or
the order, decree or judgment under which such moneys are held does not
forbid, such trust company, either alone or in conjunction with one or
more other persons acting with it in any fiduciary capacity, may invest
and reinvest such moneys or any part thereof by adding the same to any
such common trust funds and short term investment common trust funds.
Such trust company shall have the same power to invest common trust
funds in securities of any management type investment company or
investment trust, registered pursuant to the federal investment company
act of nineteen hundred forty, as is set forth in, and subject to the
provisions of, sections 11-2.2 and 11-2.3 of the estates, powers and
trusts law.
  2. Notwithstanding any other provision of law, a trust company may
deposit securities investments of a common trust fund, or arrange for
the deposit of such investments through a subcustodian, (a) with a
clearing corporation pursuant to EPTL 11-1.9, (b) with a federal reserve
bank pursuant to EPTL 11-1.8, or (c) with a securities depository,
clearing agency, or bank, whether or not subject to the laws of a
jurisdiction other than the United States of America, or any state or
subdivision thereof, for the account of the trust company and such
investments shall be deemed for the purposes of this section to be in
the custody of such trust company.
  3. A common trust fund shall not be deemed a separate trust fund on
which commissions or other compensation is allowable and no trust
company maintaining such a fund shall make any charge against such fund
for the management thereof. Provided, however, that in those instances
where a trust company invests common trust funds in securities of any
management type investment company or investment trust pursuant to the
provisions of subdivision one of this section, such trust company may
charge the common trust fund for the fees and expenses of such
securities pursuant to and consistent with the provisions of sections
11-2.2 and 11-2.3 of the estates, powers and trusts law.
  4. If money of an estate, trust or fund or any part thereof held by a
trust company in conjunction with one or more other persons in any
fiduciary capacity is invested in a common trust fund, the participating
interest therein so acquired shall be withdrawn therefrom upon the
written request of any such other person acting in such fiduciary
capacity with such trust company.
  5. If any investment held in a common trust fund shall cease to be
eligible as a new investment of such common trust fund, the trust
company maintaining the common trust fund, prior to any further
additions to or withdrawals from such fund, either shall sell such
investment or shall set the same apart in a liquidating account for the
benefit ratably of each participant then interested in such common trust
fund.
  6. At least once every ten years, each trust company maintaining a
common trust fund shall file an account of its proceedings in respect
thereof either in the office of the clerk of the supreme court or in the
office of the surrogate in any county in which such trust company
maintains an office.
  Upon the filing of the petition for the settlement of such account,
the court shall assign a time and place for a hearing on the settlement
of such account and order notice thereof by: (a) one publication not
less than twenty days prior to the date of such hearing, of a notice in
a newspaper to be designated by the court, and (b) mailing on or before
the day of publication a copy of the notice to all persons whose names
and addresses appear, at the close of the period accounted for, upon the
records maintained by the trust company pertaining to the common trust
fund as well as to any estate, trust or fund, any part of which shall
have been invested in the common trust fund and who at the close of the
period accounted for were known by such trust company to be or to claim
to be included in any of the following classes of persons: (i) those who
at any time during the period accounted for were entitled to share in
the income of any estate, trust or fund invested in the common trust
fund at any time during the period accounted for; (ii) those who became
entitled to share in the principal of any estate, trust or fund invested
in the common trust fund which became distributable in whole or in part
during the period accounted for; (iii) those who at the close of the
period accounted for would have been entitled to share in the principal
of any estate, trust or fund invested in the common trust fund if the
event upon which such estate, trust or fund would become distributable
in whole or in part had occurred at the close of the period accounted
for, provided, however, that in the case of a trust which at the close
of the period accounted for can be revoked in its entirety in favor of
and by the grantor, donor, trustor or creator, it shall not be necessary
for such trust company to include the names and addresses of any persons
interested in the principal of such trust other than the grantor, donor,
trustor, or creator; (iv) those living at the close of the period
accounted for who had any interest in the income or principal, or both,
of any estate, trust or fund invested in the common trust fund, and who
prior to the close of the period accounted for shall have notified the
trust company in writing to send a copy of the notice or citation of any
proceeding for the settlement of any account or the trustee of such
common trust fund to such person at an address furnished to the trust
company by such person; (v) those who at any time during the period
accounted for were acting with the trust company in a fiduciary capacity
with respect to any such estate, trust or fund; (vi) the guardian of any
infant, the committee of any incompetent and the conservator of any
conservatee included among the persons hereinbefore described; (vii) the
personal representative of any deceased person included among the
persons hereinbefore described in class (i), (ii), (iii), or (v).
  Upon the filing of such petition, the court shall appoint a person to
appear as guardian ad litem for each person who has or who may
thereafter have any interest in the income of such common trust fund and
a person to appear as guardian ad litem for each person who has or who
may thereafter have any interest in the principal of such common trust
fund. Each such interested person may appear in such accounting
proceeding and on his failure to appear shall be deemed to be
represented in such proceeding by the person designated respectively as
such guardian ad litem.
  Except as otherwise herein provided, such proceeding shall be
conducted in the same manner as any other proceeding for the voluntary
judicial settlement of the account of a testamentary trustee. The decree
in such proceeding shall be thereafter binding and conclusive in respect
of any matter embraced in the account or in such decree upon all persons
having or who may thereafter have any interest in such common trust fund
or in any participating estate, trust or fund.
  7. As used in this section, subject to subdivision eight of this
section the term "trust company" shall mean any trust company, any bank
duly authorized to exercise fiduciary powers and any national bank
having a principal, branch or trust office in this state and duly
authorized to exercise fiduciary powers; the term "estate" shall mean
the assets held by an executor or an administrator, with or without the
will annexed, of the goods, chattels and credits of a decedent, but not
a temporary administrator; the term "trust" shall mean the assets of any
trust however created held by the trustee thereof, including, but
without limitation, any assets held by a fiduciary as donee of a power
during minority to manage property vested in an infant; the term "fund"
shall include the assets of an infant held by the guardian thereof, the
assets of an incompetent person held by the committee thereof, and the
assets of a conservatee held by the conservator thereof. The term "donee
of a power during minority to manage property vested in an infant" shall
for the purposes of this section include only a fiduciary who has power
during a period measured by a minority to hold and invest moneys under
the terms of an instrument under which the fiduciary had theretofore
held such moneys as executor or as personal or testamentary trustee.
  8. (a) A trust company, at least ninety per centum of the capital
stock of which is directly or indirectly, or through a subsidiary or
subsidiaries, owned, controlled or held with power to vote by a bank
holding company may establish and maintain one or more common trust
funds and short term investment common trust funds, or may utilize one
or more common trust funds and short term investment common trust funds
previously established by it, for funds held in any of the fiduciary
capacities mentioned in subdivision one of this section, by itself and
by other trust companies at least ninety per centum of the capital stock
of each of which is directly or indirectly, or through a subsidiary or
subsidiaries, owned, controlled or held with power to vote by such bank
holding company. Each trust company, the capital stock of which is so
owned, controlled or held, may invest and reinvest in one or more of
such common trust funds and short term investment common trust funds
moneys held in any of the fiduciary capacities mentioned in subdivision
one of this section. The trust company establishing, maintaining, or so
utilizing any such common trust funds and short term investment common
trust funds shall comply with, and be subject to, all of the provisions
of this section as though such trust company and the other trust
companies participating in such fund were one and the same corporate
entity.
  (b) For the purpose of this subdivision, (i) the term "bank holding
company" shall be given the same meaning as is contained in the
definition of such term in section one hundred forty-one of this
chapter, except that such definition is modified by substituting the
words "a banking institution" for the phrase "each of two or more
banking institutions" wherever such phrase appears, and (ii) the term
"trust company" shall be given the same meaning as is contained in the
definition of such term in subdivision seven of this section, except
that such term shall be deemed to include, in addition to the entities
listed in such subdivision, any banking, trust or financial company,
corporation or association, organized under the laws of the United
States, whether or not having its principal office outside this state,
or of any state of the United States, which is duly authorized to
exercise fiduciary powers.
  9. (a) As used in this subdivision, unless the context otherwise
required:
  (i) "Short term investment common trust fund" means a common trust
fund maintained and administered by a trust company exclusively for the
collective investment and reinvestment of moneys contributed thereto
which are invested and reinvested in any short term investment by a
trust company, in its capacity as a fiduciary or co-fiduciary.
  (ii) "Short term investment" means bonds, notes or other evidences of
indebtedness which are payable upon demand (including variable amount
notes) or which have a maturity date of one year or less from the date
of purchase, or which may be prescribed, from time to time, by rules or
regulations promulgated by the banking board, and which are acquired or
held by a trust company in a short term investment common trust fund.
  (iii) "Participant" means any estate, trust, donee of a power during
minority, guardianship, committeeship, conservatorship, or custodian
under any Uniform Transfers to Minors Act administered by a trust
company, as fiduciary or co-fiduciary, having a participation.
  (iv) "Participation" means the interest of a participant in a short
term investment common trust fund.
  (b) Any trust company may administer one or more short term investment
common trust funds.
  (c) Any trust company shall, at least once each year, cause an audit
of each short term investment common trust fund administered by the
trust company to be made by auditors who are independent certified
public accountants. A copy of such audit shall be available at the
office of the trust company maintained for the transaction of trust
business, during all regular business hours, for inspection by any
person having an interest in any participant, and upon request a copy of
any such audit shall be furnished without any cost to such person. The
reasonable expenses of any such audit made by independent certified
public accounts or of any examination by the superintendent may be
charged to the income of the short term investment common trust fund.
  (d) A trust company administering a short term investment common trust
fund shall not be required to render a court accounting with regard to
such fund.
  10. The banking board shall promulgate such regulations and rules as
it considers appropriate to govern the administration of common trust
funds and short term investment common trust funds.

  S 100-d. Foreign common trust funds. Any banking corporation or trust
company incorporated under the laws of another state which is qualified
to act as executor or testamentary trustee in this state pursuant to
subdivision three of section one hundred thirty-one of the banking law
may, when acting in either such capacity, invest any moneys received and
held by it in such capacity, either alone or in conjunction with one or
more other persons acting with it in such capacity, in any common trust
fund or funds maintained by it in accordance with the laws of the state
of its incorporation; provided that the will under which it is acting
does not specifically prohibit such investment and that the will under
which it is acting shall authorize the investment of such moneys in any
of the following; (a) in such a common trust fund; (b) in such
investments as such fiduciary or fiduciaries under such will may select
in the discretion of such fiduciary or fiduciaries; (c) generally in
investments other than those in which trustees are by law authorized to
invest trust funds; and provided that any banking corporation or trust
company incorporated under the laws of this state is permitted by the
laws of the state of incorporation of such foreign banking corporation
or trust company, when acting in similar fiduciary capacity in that
state, to invest any moneys received and held by it in such capacity in
any common trust fund or funds maintained by it in accordance with the
laws of this state.

  S 101. Additional powers of certain trust companies. Every trust
company which at the time this act takes effect lawfully possesses and
exercises the power, for hire, to examine titles to real estate, to
procure and furnish information in relation thereto, and to guarantee or
insure the title to real estate to persons interested, in such real
estate or in mortgages thereon, against loss, by reason of defective
title or other encumbrances of or upon, such real estate, shall continue
to possess such power, but no other trust company shall hereafter have
or exercise such power.

  S 102. Powers of specially chartered trust companies. Every trust
company incorporated by a special law shall possess the powers of trust
companies incorporated under this chapter and shall be subject to such
provisions of this chapter as are not inconsistent with the special laws
relating to such specially chartered company.

  S 102-a. Limited liability trust companies. 1. Trust companies which
(a) do not receive deposits from the general public and (b) have been
exempted by the banking board from the requirements of section
thirty-two of this chapter, may be formed and operated as limited
liability trust companies. Such limited liability trust companies shall
be formed in accordance with, shall operate in compliance with, and
shall meet all of the requirements of the limited liability company law
and this chapter, except that to the extent any provision of the limited
liability company law shall be inconsistent with the provisions of this
chapter, the provisions of this chapter shall govern; provided, however,
that limited liability trust companies shall not have perpetual
existence.
  2. Notwithstanding any other provision of this chapter, a limited
liability trust company shall dissolve and its affairs shall be wound up
upon the occurrence of any event specified in section seven hundred one
of the limited liability company law. Upon such a dissolution, the
provisions of this chapter shall govern the winding up of the affairs of
the limited liability trust company and the distribution of its assets.
Further, upon such a dissolution, if the members of a limited liability
trust company wish to continue the existence of the company and meet the
requirements of section seven hundred one of the limited liability
company law, they shall apply for and may receive the approval of the
superintendent for new articles of organization and a new authorization
certificate.
  3. Trust companies which have been formed and are operating pursuant
to this article and article fifteen of this chapter on the effective
date of this section, and which meet the requirements of subdivision one
of this section, may, with the approval of the banking board, convert
into limited liability trust companies, provided that they meet all of
the other requirements of this chapter as if they were newly formed
companies.
  4. The superintendent is hereby authorized and empowered to make such
general rules and regulations as may be necessary and proper to
effectuate the provisions of this chapter relating to the formation and
operation of limited liability trust companies.

  S 103. Restrictions on loans, purchases of securities and total
liabilities to bank or trust company of any one person. No bank or trust
company shall:
  1. Lend to any person (which term shall mean, for the purposes of this
subdivision, any individual, partnership, unincorporated association,
corporation or body politic) an amount which will exceed fifteen per
centum of the capital stock, surplus fund and undivided profits of such
bank or trust company. Any extension of credit to a person by means of
the issue or confirmation of irrevocable sight letters of credit upon
the responsibility of such person, or by means of the discount or
purchase of, or investment in, bills of exchange, notes, bonds,
debentures or other obligations made, drawn or accepted by such person,
shall be considered a loan to such person for the purposes of this
subdivision except that (1) in the case of an accepted bill of exchange,
the loan shall be considered, subject to clause (2) below, to be made to
the acceptor and not to the drawer; and (2) if any bill of exchange,
note, bond, debenture or other obligation is endorsed without limitation
or guaranteed by any person and discounted with, or sold to, such bank
or trust company by such person, the loan shall be considered a loan to
such person and not to the maker, drawer or acceptor of such bill of
exchange, note, bond, debenture or other obligation. The foregoing
limitation is subject to the following exceptions:
  (a) The limitations in this subdivision shall not apply to (1) any
loan to the extent that the United States, this state or any city,
county, town, village or school district of this state, any federal
intermediate credit bank, Federal National Mortgage Association, any
federal land bank, any bank for cooperatives organized under the laws of
the United States, any national mortgage association, any federal home
loan bank, the Small Business Administration or any other department,
agency or instrumentality of the United States or this state designated
by the banking board by general or specific regulation upon a
three-fifths vote of all its members, has agreed to pay the principal
and interest thereof, or has guaranteed payment (by guaranty or
commitment to purchase or otherwise) of such principal and interest, or
is committed to supply, by loan, subsidy or otherwise, funds sufficient
to pay such principal and interest, or has otherwise pledged its faith
and credit for the payment of such principal and interest; or (2) any
loan secured by not less than a like amount of direct obligations (based
on their principal amount or market value, whichever is lower, at the
time the loan is made) of the United States or of this state or of any
city, county, town, village or school district of this state or of any
such department, agency or instrumentality of the United States or this
state; or (3) when authorized by the superintendent, any loan to a
savings bank of this state or a corporation all of the capital stock of
which is owned by not less than twenty savings banks of this state.
  (b) The limitations in this subdivision shall not apply to any loan to
the extent such loan is secured by cash collateral which is not subject
to withdrawal.
  In addition, the limitations in this subdivision shall not apply (i)
to loans arising from the discount of commercial or business paper
evidencing an obligation to the person negotiating it with recourse;
(ii) to loans to the student loan marketing association; (iii) to loans
to any financial institution or to any receiver, conservator,
superintendent of banks, or other agent in charge of the business and
property of such financial institutions when such loans are approved by
the superintendent; (iv) to the purchase of bankers` acceptances of the
kind described in section 13 of an act of congress entitled the "Federal
Reserve Act" and issued by other banking corporations; and (v) to loans
made to facilitate prompt clearance or settlement arising from the
purchase or sale of readily marketable securities which loans (A) are
secured by readily marketable securities having a market value or a
principal face amount (whichever is less) at the time the loan is made
of not less than the principal amount of said loan, and (B) shall be
required to be repaid upon settlement of such purchase or sale.
  (c) Loans (exclusive of any loan described in paragraph (a) of this
subdivision) to any state other than the state of New York, or to any
foreign nation, the New York State thruway authority, the Triborough
bridge and tunnel authority, The Port of New York Authority, a railroad
corporation, a municipal corporation of this state, a corporation
subject to the jurisdiction of a public service commission of this
state, or any international lending facility or public benefit
corporation designated by the banking board by general or specific
regulation upon a three-fifths vote of all its members, may equal but
not exceed twenty-five per centum of the capital stock, surplus fund and
undivided profits of such bank or trust company.
  (d) Loans to any person, other than loans described in paragraph (a),
(b) or (c) of this subdivision, may equal but not exceed twenty-five per
centum of the capital stock, surplus fund and undivided profits of such
bank or trust company, provided such loans either in whole or in part,
but in any event that part thereof in excess of fifteen per centum of
such capital stock, surplus fund and undivided profits:
  (1) are upon, or with respect to, drafts or bills of exchange drawn in
good faith against actually existing values, or upon bankers`
acceptances or bills of exchange of the kinds and maturities made
eligible by law for purchase in the open market by federal reserve
banks; or
  (2) are secured by collateral having an ascertained market value, or
otherwise having a value as collateral as found in good faith by an
officer of such bank or trust company, at least equal to the excess of
such loans over fifteen per centum of such capital stock, surplus fund
and undivided profits.
  (d-1) Loans secured by bills of lading, warehouse receipts, or similar
documents transferring or securing title to readily marketable staples
shall be subject to a limitation of thirty-five per centum of the
capital stock, surplus fund and undivided profits of such bank or trust
company in addition to the general limitations if the market value of
the staples securing each additional loan at all times equals or exceeds
one hundred fifteen per centum of the outstanding amount of such loan.
The staples shall be fully covered by insurance whenever it is customary
to insure such staples.
  (d-2) Loans secured by shipping documents or instruments transferring
or securing title covering livestock or giving a lien on livestock when
the market value of the livestock securing the obligation is not at any
time less than one hundred fifteen per centum of the face amount of the
note covered, shall be subject to a maximum limitation equal to
twenty-five per centum of the capital stock, surplus fund and undivided
profits of such bank or trust company.
  In addition, loans which arise from the discount by dealers in dairy
cattle of paper given in payment for dairy cattle, which paper carries a
full recourse endorsement or unconditional guarantee of the seller, and
which are secured by the cattle being sold, shall be subject to a
limitation of twenty-five per centum of the capital stock, surplus fund
and undivided profits of such bank or trust company.
  (e) In computing the total loans by any bank or trust company (i) to
any individual, there shall be included all loans by the bank or trust
company to any partnership or unincorporated association of which he is
a member, and all loans made for his benefit or for the benefit of such
partnership or association; (ii) to any partnership or unincorporated
association, there shall be included all loans by the bank or trust
company to its individual members and all loans made by the bank or
trust company for the benefit of such partnership or unincorporated
association or any member thereof; and (iii) to any corporation, there
shall be included all loans made by the bank or trust company for the
benefit of the corporation. A loan shall be deemed to be made for the
benefit of a corporation only to the extent that the proceeds of such
loan (1) are to be loaned to the corporation; (2) are to be used for the
acquisition (otherwise than in connection with a public offering) from
the corporation by a person in control of, or under common control with,
the corporation, of any stock or other securities issued by the
corporation, or (3) are to be transferred to the corporation without
fair and adequate consideration, and the discharge of an equivalent
amount of debt previously incurred in good faith and for value shall be
considered fair and adequate consideration. A loan shall not be deemed
to be made for the benefit of a corporation if such loan is made to a
person other than the corporation and is secured as provided in
subdivision four of this section or is secured by collateral having an
ascertained market value, or otherwise having a value as collateral as
found in good faith by an officer of such bank or trust company, at
least equal to the amount of the loan; provided that stock or other
securities issued by, or a lien on property of, such corporation shall
not be considered collateral for the purposes of this provision.
  (f) The limitations in this subdivision shall not apply to the
acceptance of bills of exchange or the issue or confirmation of letters
of credit calling for acceptances by a bank or trust company, but no
bank or trust company shall make acceptances, or issue letters of credit
calling for acceptances, upon the responsibility of any person to an
amount in excess of fifteen per centum of the capital stock, surplus
fund and undivided profits of such bank or trust company, unless that
part thereof in excess of fifteen per centum of such capital stock,
surplus fund and undivided profits is, and will remain, secured either
by accompanying documents or by some other actual security growing out
of the same transaction as the acceptance or by substituted security of
similar character.
  (g) Loans arising from the discount of negotiable or non-negotiable
installment consumer paper which carries a full recourse endorsement or
unconditional guarantee by the transferor of such paper shall be subject
to a limitation of twenty-five per centum of the capital stock, surplus
fund and undivided profits of such bank or trust company. Within the
meaning of this subdivision, the liability to such bank or trust company
of any individual, partnership, unincorporated association or
corporation as endorser or guarantor of negotiable or non-negotiable
instalment consumer paper shall not be deemed a loan to such individual,
partnership, unincorporated association or corporation to the extent of
the value of the obligation thereon of the maker of such instalment
consumer paper, as found in good faith in writing by an officer of such
bank or trust company, designated to make such evaluation and
certification by the board of directors of the bank or trust company,
and upon the further certification by the said officer that the bank or
trust company is relying primarily on the maker of the instalment
consumer paper for the payment of an amount owing upon the instalment
consumer paper upon the security of which the bank or trust company is
making the loan or in which it is making the investment. The
certifications are to be made at the time of making the loan or
investment, and are to be based on information contained in the files of
the bank or trust company, or on the personal knowledge of the
designated officer. Instalment consumer paper, for the purposes of this
section, shall mean retail instalment contracts and retail instalment
obligations as defined in subdivisions six and six-a of section four
hundred ninety-one of this chapter, and similar agreements entered into
outside of this state.
  (h) The limitations in this subdivision shall not apply to any advance
of federal funds by such bank or trust company to a commercial bank,
provided such advance is made on the condition that it be repaid on the
next business day following the day on which the advance is made. For
purposes of this paragraph, the term "federal funds" shall mean funds on
deposit at a federal reserve bank or funds on deposit at a commercial
bank which are exchangeable for funds on deposit at a federal reserve
bank; the term "commercial bank" shall mean any bank, trust company,
private banker, national banking association, any banking corporation
organized under the laws of the United States or any state of the United
States and engaged in a commercial banking business, or any banking
corporation organized under the laws of any foreign country and engaged
in the commercial banking business that maintains a branch or agency
licensed by any state of the United States or the comptroller of the
currency; and the term "business day" shall mean any day on which the
bank or trust company making the advance, the commercial bank obtaining
the advance and any federal reserve bank or banks through which such
advance was effected are all open for general business.
  (i) The limitations in this subdivision shall not apply to the
investment of such bank or trust company in the bonds, debentures, notes
or other obligations of any person, provided: (i) such bonds,
debentures, notes or other obligations mature not less than one year
after their respective dates of issuance, and, at the time of such
investment, are rated in one of the three highest rating grades by an
independent rating service designated by the banking board; (ii) such
investment does not exceed fifteen per centum of the capital stock,
surplus fund and undivided profits of such bank or trust company; and
(iii) such investment complies with such additional limitations and
conditions as the banking board from time to time may prescribe by
general regulation.
  (j) In the case of a trust company which (1) does not receive deposits
from the general public and (2) has been exempted by the banking board
from the requirements of section thirty-two of this chapter, the
limitations of this subdivision shall not apply to the investment of
such trust company in the bonds, debentures, notes or other obligations
of, any foreign nation, or any political subdivision, agency or
instrumentality thereof, provided: (i) at the time of such investment,
such bonds, debentures, notes or other obligations are rated in one of
the three highest rating grades by an independent rating service
designated by the banking board; (ii) for any such bonds, debentures,
notes or other obligations, the foreign nation, or any political
subdivision, agency or instrumentality thereof, has guaranteed payment
(by guaranty or commitment to purchase or otherwise) of such principal
and interest, or is committed to supply, by loan, subsidy or otherwise,
funds sufficient to pay such principal and interest, or has otherwise
pledged its faith and credit for the payment of such principal and
interest; (iii) such investments do not exceed the per centum applicable
to such obligor of the capital stock, surplus fund and undivided profits
of such bank or trust company as the superintendent shall approve, and
(iv) such investments comply with such limitations and conditions as the
superintendent may from time to time prescribe.
  (k) In the case of a trust company which (1) does not receive deposits
from the general public and (2) has been exempted by the banking board
from the requirements of section thirty-two of this chapter, the
limitations of this subdivision shall not apply to the purchase of
securities under repurchase agreement provided that the repurchase
agreement relates to not less than a like amount of direct obligations
(based on their principal amount or market value, whichever is lower, at
the time the purchase occurs) of any foreign nation, or any political
subdivision, agency or instrumentality thereof, provided: (i) at the
time of such purchase, such direct obligations are rated in one of the
three highest rating grades by an independent rating service designated
by the banking board; (ii) for any such direct obligations, the foreign
nation, or any political subdivision, agency or instrumentality thereof,
has guaranteed payment (by guaranty or commitment to purchase or
otherwise) of the principal and interest thereof, or is committed to
supply, by loan, subsidy or otherwise, funds sufficient to pay such
principal and interest, or has otherwise pledged its faith and credit
for the payment of such principal and interest; (iii) the purchase price
of such securities does not exceed the per centum applicable to the
obligor of such securities of the capital stock, surplus fund and
undivided profits of such bank or trust company as the superintendent
shall approve; and (iv) such purchase complies with such limitations and
conditions as the superintendent may from time to time prescribe.
  The banking board shall be empowered to promulgate rules and
regulations as shall be appropriate to carry out the purposes of this
subdivision.
  4. Make a loan upon the security of real estate within or without this
state which does not comply with any such rules or regulations as the
banking board may prescribe.
  No loan shall be made under the provisions of this subdivision except
upon the written and signed certificate of an appraiser appointed
pursuant to policies established by the board of directors, certifying
to the value of the premises according to his judgment.
  The provisions of this subdivision shall not constitute the authority
to make a loan to a natural person upon the security of a mortgage which
is not a first lien.
  Where the collateral for any loan consists partly of real estate
security and partly of other security, including a guarantee or
endorsement by or an obligation or commitment of a person other than the
borrower, only the amount by which the loan exceeds the value as
collateral of such other security, as found in good faith by a duly
authorized officer of such bank or trust company, at the time of the
making of the loan or commitment therefor, shall be considered a loan
upon the security of real estate, provided, that in no event shall a
loan be considered a loan upon the security of real estate (i) where the
principal amount of any real estate security taken therefor is less than
fifteen per centum of the amount of such loan or (ii) where the loan is
payable in monthly or quarterly installments over a period not to exceed
one hundred twenty-one months and does not exceed twenty thousand
dollars and is for the purpose of paying the cost of any repairs,
alterations or improvements upon, or in connection with, or, as the
superintendent may authorize, the equipping of existing structures or
the building of new structures by the owners thereof or by the lessees
under a lease expiring not less than six months after the maturity of
the loan or (iii) where the loan is fully guaranteed or insured by the
United States or a state, or any department, agency or instrumentality
thereof, and for the payment of which loan the full faith and credit of
the United States or of such state is pledged and if under the terms of
the guaranty or insurance agreement the bank or trust company will be
assured of repayment in accordance with the terms of the loan or (iv)
where there is a binding and valid commitment or agreement by a
financially responsible lender, purchaser or other financially
responsible party either directly with the lending bank or trust company
or which is for the benefit of, or has been assigned to, the lending
bank or trust company and pursuant to which commitment, agreement or
assignment, the lender, purchaser or other party is required to advance
to the lending bank or trust company within thirty months from the date
of such commitment or agreement the full amount of the loan to be made
by the lending bank or trust company upon the security of real estate
improved by a building or buildings, or to be improved by a building or
buildings in the process of construction, the major portion of which
building is used, or in the case of a building under construction is to
be used, for residential, business, manufacturing or agricultural
purposes, and where pursuant to the terms and provisions of such
commitment or agreement such advance shall be made prior to or upon the
maturity of the loan by the lending bank or trust company.
  Real estate security for purposes of this section shall not include
(a) an assignment of rents under a lease, (b) a mortgage or other lien
upon a leasehold, (c) a mortgage or other lien upon leasehold, royalty
or other rights in oil, gas, minerals, standing timber, or other
products of land, (d) a mortgage or other lien made or given upon real
estate and taken as collateral security for loans to a borrower,
provided, that at the time of the making of the loan or commitment
therefor, repayment thereof is reasonably expected to be made out of the
operations of such borrower or of the mortgagor, or (e) such mortgages
or other liens on property as may be specifically exempted from the
limitations and restrictions of this subdivision by the banking board by
general or specific regulations adopted by a three-fifths vote of all
its members.  Nothing in this paragraph shall be construed to imply that
security of a kind not mentioned herein is to be deemed real estate
security.
  The limitations and restrictions contained in this subdivision shall
not prevent the acceptance of any real estate security to secure the
payment of a debt previously contracted in good faith. Every mortgage
and every assignment of a mortgage taken or held by such bank or trust
company shall immediately be recorded or registered in its name in the
office of the clerk or the proper recording officer of the county in
which the real estate described in the mortgage is located, except that
where the underlying real estate is located outside the state of New
York such mortgage or assignment may be recorded or registered in the
name of a duly authorized nominee, and except that if such mortgage or
assignment of mortgage or of an interest therein shall be taken from a
corporation organized under the banking law or all of the capital stock
of which is owned by not less than twenty savings banks of this state,
the bank or trust company may hold such mortgage or assignment
unrecorded unless the superintendent shall direct the bank or trust
company to record the same. The recording or registering of assignments
of mortgages shall not be required when not less than ten mortgages are
assigned as security for a loan, the term of which does not exceed
twelve months.
  Any bank or trust company may renew from time to time any loan upon
the security of real estate lawfully made by it prior to June thirtieth,
nineteen hundred thirty-seven.
  None of the prohibitions and restrictions contained in this
subdivision shall apply to any corporation all of the capital stock of
which is owned by not less than twenty savings banks of this state.
  4-a. A bank or trust company may, in addition to the authority granted
under any other provisions of this article, make a loan to a natural
person upon the security of a mortgage which is not a first lien at the
rate or rates agreed to by the bank or trust company and the borrower,
subject to such regulations as the banking board may prescribe. Such
regulations by the banking board may include such restrictions as the
banking board finds necessary or proper, including without limitation, a
restriction as to the percentage of total assets which may be invested
in such loans or a restriction on the loan to appraisal value of
property securing such loan.
  For purposes of this subdivision, the term mortgage shall include a
lien on an existing ownership interest in certificates of stock or other
evidence of an ownership interest in, and a proprietary lease from, a
corporation or partnership formed for the purpose of the cooperative
ownership of real estate.
  5. Make any loan for the purpose of financing the purchase of or
refinancing an existing ownership interest in certificates of stock or
other evidence of an ownership interest in, and a proprietary lease
from, a corporation or partnership formed for the purpose of the
cooperative ownership of real estate, unsecured except to the extent of
an assignment or transfer of the stock certificates or other evidence of
ownership interest of the borrower and the proprietary lease within
ninety days from the making of the loan, which shall exceed the maximum
per cent of the loan permitted to be made on real estate improved by a
single family residence occupied by the owner, provided that for
purposes of this section the amount of the purchase price shall be
deemed to equal the appraised value of such certificate of stock or
other evidence of an ownership interest, or, in the case of a
refinancing, the appraised value of such certificates of stock or other
evidence of an ownership interest and which shall fail to provide for
full repayment of principal and interest within the same number of years
as a conventional mortgage loan previously described in this
subdivision, provided that all real estate owned by such corporation or
partnership shall be located within the state; and provided, further,
that such loan shall be subject to such regulations as the banking board
may from time to time promulgate. The maximum rate of interest which may
be charged, taken or received upon any loan or forbearance made pursuant
to this subdivision may exceed the rate of interest prescribed by the
banking board in accordance with section fourteen-a by no more than one
and one-half per centum per annum.
  6. Make any loan or discount on the security of the shares of its own
capital stock, or, except as provided in section five thousand twelve of
this chapter, be the purchaser of any such shares, unless such security
or purchase shall be necessary to minimize or avoid loss upon a debt
previously contracted in good faith, and stock so purchased shall be
sold at public or private sale, or otherwise disposed of, within six
months from the time of its purchase unless the superintendent shall
authorize such bank or trust company in writing to hold such shares for
a longer period. Any bank or trust company violating any of the
provisions of this subdivision shall forfeit to the people of the state
twice the amount of the loan or purchase.
  7. Knowingly lend, directly or indirectly, any money or property for
the purpose of enabling any person to pay for or hold shares of its
stock, unless the loan is made upon security having an ascertained
market value of at least fifteen per centum more than the amount of the
loan. Any bank or trust company violating the provisions of this
subdivision shall forfeit to the people of the state twice the amount of
the loan.
  8. Except in conformity with such rules and regulations as may be
promulgated by the superintendent, lend any sum of money to any
executive officer or director of such bank or trust company. The
superintendent shall have power to determine by regulation who shall be
considered, under the provisions of this subdivision, to be an executive
officer and what shall be considered, under the provisions of this
subdivision, to be a loan to an executive officer or director. In making
such determination, the superintendent shall have power to include or
exclude, subject to such conditions and limitations, if any, as he shall
prescribe, any or all of the following: (1) any transaction as a result
of which an executive officer or director of a bank or trust company
becomes obligated to such bank or trust company upon any note, draft,
bill of exchange or other indebtedness, as maker, drawer, endorser,
guarantor, surety or otherwise; and (2) any transaction as a result of
which a corporation, in which an executive officer or director or any
combination of such persons, owns or controls a majority of the stock,
or as a result of which a partnership in which an executive officer or
director is a partner, becomes obligated or renews its obligation to
such bank or trust company upon any note, draft, bill of exchange or
other indebtedness, as maker, drawer, endorser, guarantor, surety or
otherwise. Every bank or trust company violating this provision or any
regulation issued pursuant thereto and every officer or director of such
bank or trust company knowingly participating in such violation shall,
for each offense, forfeit to the people of the state twice the amount of
the loan.
  No executive officer or director of a bank or trust company shall
borrow from the bank or trust company of which he is an executive
officer or director except as permitted by this section.

  S 104. Entries in books; restrictions; amortization of securities. 1.
No bank or trust company shall by any system of accounting or any device
of bookkeeping, directly or indirectly enter any of its assets upon its
books in the name of any individual, partnership, unincorporated
association or of any other corporation, or under any title or
designation that is not truly descriptive thereof, except as authorized
by the provisions of this article.
  2. The stocks, bonds and other interest-bearing securities purchased
by a bank or trust company shall be entered on its books at the actual
cost thereof, and shall not thereafter be carried upon the books at a
valuation exceeding their cost as adjusted by amortization for the
purpose of bringing them to par at maturity except that the same may be
carried at cost if appropriate amortization reserve is set up for the
purpose of bringing them to par at maturity. Where securities purchased
at a premium are callable prior to maturity, the rate of amortization
thereof shall be increased where necessary to such extent as shall
reduce the amount at which such securities are carried upon the books to
the call price at the date or dates upon which a call may be made;
provided, however, that no adjustment for amortization or amortization
reserve shall be required to be made on the books except when net
profits are computed. The banking board may by general regulation
adopted by a three-fifths vote of all its members vary the requirements
of this subdivision to permit the amortization of premiums at the same
rate as that required by federal tax statutes or regulations.
  3. No bank or trust company shall, except with the written approval of
the superintendent, enter on its books its real estate and the building
or buildings thereon, or its fixtures, vaults, furniture and equipment,
at a valuation exceeding the actual cost to such bank or trust company,
or carry such real estate, building or buildings, fixtures, vaults,
furniture or equipment at a valuation exceeding the actual cost less
appropriate allowances for depreciation except that the same may be
carried at cost if appropriate depreciation reserve is set up; provided,
however, no adjustment for depreciation or depreciation reserve shall be
required to be made on the books except when net profits are computed.
  4. Real estate acquired by a bank or trust company, other than that
acquired for use as a place of business, shall be entered on the books
of the bank or trust company in conformity with the method of accounting
for troubled debt restructurings approved by the financial accounting
standards boards or such other method of accounting as may be authorized
or required by rules and regulations of the banking board.
  The provisions of this subdivision shall not, except as the
superintendent may otherwise require, apply to any parcel of real estate
as to which the bank or trust company has exercised its option to
transfer or convey such real estate to the veterans administration or
the federal housing commissioner pursuant to insurance or guaranty.
  5. Every bank and every trust company shall conform its methods of
keeping its books and records to such orders in respect thereto as shall
have been made and promulgated by the superintendent pursuant to article
two of this chapter. Any bank or trust company that refuses or neglects
to obey such order shall be subject to a penalty of one hundred dollars
for each day it so refuses or neglects.
  6. Every bank and every trust company holding any funds or money paid
into court shall keep records in which it shall make an exact account
thereof, including appropriate references to the order or orders
pursuant to which such funds are held.

  S 105. Branch offices; prohibition against doing business at
unauthorized places. 1. (a) No bank or trust company or officer,
director, agent or employee thereof, shall transact any part of its
usual business of banking at any place other than its principal office,
except that a bank or trust company may open and occupy one or more
branch offices at any location in the state, provided: (i) that the
requirements of section twenty-nine of this chapter are met and (ii)
that, except for the city or village in which its principal office is
located, in no event shall a branch be opened and occupied pursuant to
this subdivision in a city or village with a population of fifty
thousand or less in which is already located the principal office of
another bank, trust company or national banking association, other than
a bank holding company, if such bank holding company is a banking
institution, or a banking subsidiary of a bank holding company (as such
terms "bank holding company", "banking institution" and "banking
subsidiary" are defined in article three-A of this chapter), except, in
the case of a conversion pursuant to the provisions of this article,
branch offices occupied immediately prior thereto or except for the
purpose of acquiring by merger, sale or otherwise the business and
property of a bank, trust company or national banking association,
whether in liquidation or doing business in the usual course.
  (b) An office of an affiliated bank at which the customers of a bank
or trust company may make deposits, renew time deposits, make
withdrawals, close loans, service loans, and receive payments on loans
and other obligations shall not be deemed a branch office of such bank
or trust company. For the purposes of this section, the term "affiliated
bank" means any bank, as such term is defined in section 3(a)(1) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(a)(1)), that is a
subsidiary of the same bank holding company, as that term is defined in
section 2 of the Bank Holding Company Act (12 U.S.C. 1841).
  2. Hereafter before any branch or branches shall be opened and
occupied pursuant to subdivision one of this section the superintendent
shall have given his written approval as provided in article two of this
chapter.
  3. (a) Any bank or trust company may with the written approval of the
superintendent, open and occupy a branch office or branch offices in one
or more places located without the state of New York, either in the
United States of America or in foreign countries.
  (b) If any bank or trust company has opened and occupied a branch
office in a foreign country pursuant to the provisions of paragraph (a)
of this subdivision, it may, unless otherwise advised by the
superintendent, open and occupy an additional branch office or branch
offices in such country without having to apply for the approval of the
superintendent, provided that it gives the superintendent notice of at
least thirty days (or such shorter period as the superintendent in
individual cases may approve) before opening and occupying any such
additional branch office.
  4. The term "village" as used in this section shall mean either an
incorporated or an unincorporated village.
  5. (a) A bank or trust company may, if the merger or acquisition
agreement so provides, maintain as a branch office or branch offices the
place or places of business of any bank, trust company, safe deposit
company, national banking association, out-of-state state bank (as such
term is defined in section two hundred twenty-two of this chapter),
savings bank, or savings and loan association which it has received into
itself by merger or by acquisition of assets thereof pursuant to the
provisions of this chapter and, if the merger or acquisition agreement
so provides, may maintain, as its principal office rather than as a
branch office, the principal office of such merging or acquired banking
institution (so long as such principal office is located in this state),
in which event the former principal office of the receiving or acquiring
bank or trust company may be maintained as a branch office. A state bank
or trust company resulting from the conversion of a national banking
association may, if the conversion agreement so provides, maintain as a
branch office or branch offices the place or places of business of the
national banking association. As used in this subdivision, the term
"place or places of business" shall include any branch office of the
merging, acquired or converting banking institution which has been
approved pursuant to this chapter or federal law or the law of another
state, as the case may be, even if such branch office is not in
operation at the time said merger, acquisition or conversion becomes
effective.
  (b) Notwithstanding anything to the contrary in paragraph (a) of this
subdivision, any public accommodation office of a merging or acquired
banking organization or association, including any such office which has
been approved pursuant to section one hundred ninety-one of this chapter
but which is not in operation at the time said merger or acquisition
becomes effective, may be maintained by the receiving or acquiring bank
or trust company as a public accommodation office only.

  S 105-a. Electronic facilities. A bank or trust company may conduct a
banking business, at automated teller machines, point-of-sale terminals,
and similar facilities subject to regulations which may be promulgated
by the banking board. Such facilities shall not be deemed to be branches
and shall not be subject to any of the provisions of this chapter
applicable to branches; provided however that notwithstanding the
foregoing, for purposes of clause (ii) of subdivision one of section one
hundred five of this chapter, such facilities shall be deemed to be
branches, and such facilities shall be subject to the terms and
conditions of section one hundred five, and for purposes of section
twenty-eight-b of this chapter, such facilities shall be deemed to be
branches.

  S 106. Deposits by banks and trust companies with other banking
corporations and private bankers; restrictions.  1. No bank or trust
company shall deposit any of its funds with any other foreign or
domestic banking corporation or private banker in an amount exceeding
one hundred per centum of the capital stock, surplus fund and undivided
profits of such bank or trust company unless such other banking
corporation or private banker has been approved by the superintendent as
a depositary for the purpose of this section, in which case the amount
so deposited may equal but shall not exceed such per centum of the
capital stock, surplus fund and undivided profits of such bank or trust
company as the superintendent shall approve.
  2. The restrictions contained in this section shall not apply to
deposits by any bank or trust company with a federal reserve bank.

  S 107. Reserves against deposits. 1. Every bank and trust company
shall maintain total reserves against its demand and time deposits in
such ratios as the banking board shall by regulation impose. If the
principal office or any branch of such bank or trust company is located
in a special requirement area, as designated in or pursuant to
subdivision two of this section said bank or trust company shall
maintain such additional reserves as may be prescribed by the banking
board.
  2. The cities of Albany and Buffalo and the boroughs of Brooklyn,
Manhattan and The Bronx are hereby designated as special requirement
areas.  The banking board may at any time add to the number of cities or
boroughs designated as special requirement areas, or may terminate the
designation of any city or borough as such.
  3. Any part of total reserves may be deposited, subject to call, with
a federal reserve bank in the district in which such bank or trust
company is located, or with reserve depositaries, and the reserves on
hand not so deposited shall consist of any form of currency authorized
by the laws of the United States. Any bank or trust company which is or
shall become a member of the federal reserve system shall maintain such
reserves with a federal reserve bank as are required by or pursuant to
the federal reserve act and so long as it complies with the requirements
of such federal reserve act with reference to reserves shall be exempt
from the preceding provisions of this section.
  4. If any bank or trust company shall fail to maintain its total
reserves in the manner prescribed and authorized by this section, it
shall be liable to, and shall pay any assessment or assessments levied
by the superintendent pursuant to the provisions of article two of this
chapter.

  S 107-a. Security for public deposits. 1. As used in this section, the
following terms shall have the following meanings:
  (a) "Public depositary". A bank, trust company or other depositary,
whether state or federally chartered, authorized to accept and hold
deposits of public funds under the laws of this state.
  (b) "Public funds". Funds of a political subdivision.
  (c) "Political subdivision". Any municipal corporation, school
district, board of cooperative educational services, district
corporation, special improvement district governed by a separate board
of commissioners or a public library.
  (d) "Public deposits". Deposits of public funds in a public depositary
which are available for all uses generally permitted by the public
depositary to the depositing political subdivision for actually and
finally collected funds under the public depositary`s account agreement
or policies.
  2. Whenever a political subdivision is required by any general or
special law to obtain a pledge of assets or other security from a public
depositary for its public deposits and such political subdivision has
entered into a written agreement with such public depositary relating to
such public deposits and has provided written notice in a form specified
by such written agreement to the public depositary of such public
deposits, the public depositary shall comply with the provisions of such
law at the time it accepts any public deposits from the political
subdivision; provided, however, that where the public depositary and
political subdivision have agreed in writing as to the maximum amount of
security which such depositary shall provide, and the terms, conditions
and timing of the provisions of security pursuant thereto, and the
depositary has at all times complied with such agreement, it shall be
deemed to have complied with the provisions of such law for so long as
it shall comply with such agreement.

  S 108. Rates of interest; installment obligations; personal loan
departments. 1. Except as otherwise provided in this section, no bank or
trust company shall take, receive, reserve or charge on any loan or
discount made, or upon any note, bill of exchange or other evidence of
debt, negotiable or otherwise, interest, as computed pursuant to this
subdivision, at a rate greater than the rate prescribed by the banking
board pursuant to section fourteen-a of this chapter, or, if no rate has
been so prescribed, six per centum per annum, or two dollars if the
interest so computed is less than that amount. Such interest may be
taken in advance, reckoning the days for which the note, bill or
evidence of debt has to run. If interest is so taken in advance and the
maturity of the debt is accelerated and judgment is obtained, or the
debt is otherwise paid prior to its normal date of maturity, the bank or
trust company shall refund to the obligor or his legal representative,
as the case may be, the unearned interest previously deducted and the
unused portion of any premiums charged for insuring the obligor under a
group credit insurance policy, such refund to be calculated in
accordance with the method described in paragraph (e) of subdivision
four of this section. A reasonable charge by a bank or trust company for
the collection of a bona fide bill of exchange, note or other evidence
of debt payable at a place other than the place where purchased,
discounted or sold, in addition to the interest, shall not be considered
interest for the purpose of any law regulating the maximum rate of
interest which may be charged, taken or received.
  Anything contained in this subdivision to the contrary
notwithstanding, the charging of interest or discount on a loan or
discount made outside this state at a rate allowed by the laws of the
jurisdiction where such loan is made, or the acquisition by a bank or
trust company of a part interest or the entire interest in any loan or
discount heretofore or hereafter made by a bank or trust company or any
other banking institution, shall not be a violation of this section.
  2. Any bank or trust company may purchase or otherwise acquire from
the payee, owner or holder thereof any obligation in writing to pay in
installments all or part of the price of personal property or that of
the performance of services, whether that obligation be a negotiable
promissory note or other evidence of debt, or any accounts receivable,
whether or not they are obligations in writing, or any lease of personal
property, and may lease personal property acquired by it, doing so for
such price or rentals or other consideration and upon such additional
terms and conditions as may be mutually agreeable.

  3. Upon advances of money, repayable on demand, to an amount not less
than five thousand dollars, made upon documents of title within article
seven of the uniform commercial code or negotiable instruments within
article three or article eight of the uniform commercial code pledged as
collateral security for such repayment, any bank or trust company may
receive or contract to receive and collect as compensation for making
such advances any sum which may be agreed upon by the parties to such
transaction. 

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Article 3, Continued . . .

  4. (a) A bank or trust company may operate a personal loan department
at all or at any one or more of its authorized places of business in
accordance with the requirements of this subdivision. The records of
such department shall be kept in such form as the superintendent may
from time to time prescribe. The superintendent may, after giving notice
of the contemplated action and reasonable opportunity to be heard, order
that the operation of such department be discontinued if he shall find
that the bank or trust company has failed to conform to any requirement
of this subdivision. The superintendent may forthwith, and for a period
not to exceed thirty days pending further investigation, order that the
operation of any such department be temporarily discontinued if he shall
have reasonable cause to believe that the requirements of this
subdivision are not having compliance. Such order of discontinuance or
temporary discontinuance may apply to one or more of the authorized
places of business of a bank or trust company. The superintendent may
terminate or modify such orders if he shall be satisfied that such
department will be operated in accordance with the requirements of this
subdivision. No order of discontinuance or temporary order of
discontinuance shall impair or affect the obligation of any preexisting
lawful loan or advance from a bank or trust company to any borrower.
  (b) A bank or trust company which operates a personal loan department
may make loans and charge interest thereon, which may be calculated on
the actual unpaid principal balances of the loan or in the case of a
loan commitment from the date of each advance thereunder for the actual
time outstanding, according to a generally accepted actuarial method at
a fixed or variable rate in accordance with the provisions of the
evidence of the indebtedness, or taken in advance, computed from the
date of the loan, or in the case of a loan commitment from the date of
each advance thereunder, to the date of the last installment payable
thereunder, at the rate or rates agreed to by the bank or trust company
and the borrower, with respect to any loan which is repayable at regular
periodic intervals of not more than one month over a period from the
date of the loan not exceeding (i) thirty-seven months, if the face
amount of the loan is for not more than twelve hundred dollars, or (ii)
any number of months agreed to by the bank or trust company and the
borrower, (A) if the face amount of the loan is for more than twelve
hundred dollars, (B) if the loan is for more than twelve hundred
dollars, and is made for a commercial or business use or purpose or for
investment in or purchase of an unincorporated business or commercial
enterprise, (C) if the loan or loan commitment is made for educational
purposes as specified in subdivision five-b of this section, or (D) if
the loan or advance of credit is made for the purpose of financing
alterations, repairs and improvements upon or in connection with, or as
the superintendent may authorize the equipping of existing structures,
and the building of new structures, upon urban, suburban, or rural real
property (including the restoration, rehabilitation, rebuilding and
replacement of such improvements which have been damaged or destroyed by
earthquake, conflagration, tornado, hurricane, cyclone, flood or other
catastrophe), by the owners thereof or by lessees of such real property
under a lease expiring not less than six months after the maturity of
the loan or advance of credit or by lessees under proprietary leases
from corporations or partnerships formed for the purpose of the
cooperative ownership of real estate. The total unpaid principal
balances of any one or more loans made by such bank or trust company to
the borrower pursuant to this subdivision shall be determined by
agreement between such bank or trust company and the borrower. If the
loan is made for a period of one year or more, provision may be made in
the note, instrument or other evidence of debt, for the omission of
payments during not more than any three specified months in any
twelve-month period, but the maximum period of thirty-seven months,
shall not be exceeded. On any loan with a variable rate of interest made
pursuant to this paragraph, the rate shall be determined at regular
intervals as set forth in the evidence of indebtedness and in accordance
with such regulations as the banking board shall prescribe but said rate
shall not vary more often than once in any three month period and shall
be based on a published index that is (a) readily available, (b)
independently verifiable, (c) beyond the control of the bank or trust
company and (d) approved by the superintendent.
  
  
  The banking board shall adopt regulations, including but not limited
to:  (a) providing for disclosure to the borrower by the bank or trust
company of the circumstances under which the rate may increase, any
limitations on the increase, the effect of an increase and an example of
the payment terms that would result from an increase; (b) providing for
disclosure to the borrower by the bank or trust company of a history of
the fluctuations of the index over a reasonable period of time; and (c)
providing for notice to the borrower from the bank or trust company
prior to any rate increase or change in the terms of payment.
  (c) The rate of interest authorized by this subdivision shall be
inclusive of all charges incident to investigating and making any loan.
No fee, commission, expense, or other charge whatsoever in addition
thereto shall be taken, received, reserved, or contracted for, except
(i) the fees payable to the appropriate public officer to perfect any
lien or other security interest taken to secure the loan or the premium,
not in excess of such filing fee, payable for any insurance in lieu of
such filing; (ii) in case of default, and in accordance with the
provisions of the instrument evidencing the obligation, either a fine in
an amount not to exceed five cents per dollar on any installment which
has become due and remained unpaid for a period in excess of ten days,
but no such fine shall exceed five dollars and only one fine shall be
collected on any such installment regardless of the period during which
it remains in default, and provided further that should the aggregate of
such fines collected in connection with any loan exceed two per centum
of such loan, or in any event twenty-five dollars, the bank or trust
company shall refund such excess to the borrower within sixty days after
the loan is paid in full, or, subject to an allowance of unearned
interest attributable to the amount in default, interest on each amount
past due at a rate not in excess of the rate provided for in the
instrument evidencing the obligation; (iii) the actual expenditures,
including reasonable attorney`s fees for necessary court process; and
(iv) in case the bank or trust company insures a borrower under a credit
unemployment insurance policy, group life insurance policy, group health
insurance policy, group accident insurance policy, or group health and
accident insurance policy, or requires insurance on personal property
securing any such loan, an amount not in excess of the premiums
chargeable in accordance with rate schedules then in effect and on file
with the superintendent of insurance for such insurance by the insurer.
No bank or trust company shall require a borrower to place any sum on
deposit, or to make deposits in lieu of regular periodic installment
payments, or to do or refrain from doing any other act which would
entail additional expense or sacrifice, as a condition precedent to
granting a loan under the authority of this subdivision except as
provided in subdivision five-b of this section. Notwithstanding the
provisions of this paragraph no refund of excess fines shall be required
if it amounts to less than one dollar.
  (d) In each note, instrument or other evidence of debt given by a
borrower to evidence a loan under this subdivision, where such loan is
not subject to the provisions of the act of congress entitled "Truth in
Lending Act" and the regulations thereunder, as such act and regulations
may from time to time be amended, the rate of charge (stating any
minimum as permitted by this subdivision four), shall be expressed
either in accordance with the method prescribed by such act of congress
or: (i) as a rate in dollars per annum discount per one hundred dollars
face amount of loan, or (ii) as the rate or rates agreed to by the bank
or trust company and the borrower.
  (e) A borrower may prepay the loan in full or, with the consent of the
bank or trust company, may refinance the loan. If the interest is
calculated on the actuarial basis, or if the evidence of the
indebtedness provides that the rate of interest may vary from time to
time, a borrower may prepay the loan in full without penalty. If the
interest was taken in advance, in the event of such prepayment or
refinancing, the bank or trust company shall refund: (1) the unearned
portion of the interest to the borrower the amount of which portion
shall be determine