New York Banking Law
Article 8
Safe Deposit Companies
Section 317. General powers.
318. Branch offices.
319. Limitations upon the powers of safe deposit companies.
320. Books and records.
321. Change of location; change of designation of principal
office.
323. Assessment of stockholders to make good impairment of
capital; sale of stock.
324. Change of control.
327. Use of sign or words indicating safe deposit company by
unauthorized persons prohibited.
328. Communications from banking department must be submitted
to directors and noted in minutes.
329. Reports to superintendent; penalty for failure to make.
330. Liability of safe deposit company for assessments by
superintendent.
S 317. General powers. Every safe deposit company shall, subject to
the limitations and restrictions contained in this article, have the
power:
1. To receive upon deposit as bailee for storage, upon terms and
conditions to be prescribed by the safe deposit company, personal
property and papers of any kind.
2. To engage in the safe deposit business by renting vaults, safe
deposit boxes and other receptacles upon premises occupied by the safe
deposit company upon such terms and conditions as may be prescribed by
the safe deposit company.
S 318. Branch offices. Any safe deposit company having a capital of
one hundred thousand dollars or more may, in accordance with the
provisions of article two of this chapter, be permitted to open and
maintain a branch office or branch offices in the city or village where
its principal office is located.
Any safe deposit company having a capital of one hundred thousand
dollars or more, the majority of stock of which is owned by any other
banking organization or a national bank may, in accordance with the
provisions of article two of this chapter, be permitted to open and
maintain a branch office at a location at which such banking
organization or national bank is maintaining a duly authorized branch
office.
S 319. Limitations upon the powers of safe deposit companies.
No safe deposit company shall:
1. Lend money, or make any advance, on any property left in its
possession, or belonging to others.
2. Open or maintain any branch offices, except as provided in section
three hundred and eighteen of this article.
S 320. Books and records. Every safe deposit 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 the provisions of article two of this chapter. Any safe
deposit 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.
S 321. Change of location; change of designation of principal office.
Any safe deposit company may make a written application to the
superintendent for leave to change its place or one of its places of
business to any place at which it could be authorized, under the
provisions of this chapter, to open and maintain a branch office or for
leave to change the designation of its principal office to a branch
office and to change the designation of one of its branch offices to its
principal office. The application shall state the reasons for such
proposed change, and shall be accompanied by a copy of a resolution
authorizing the making of the application, certified by a principal
officer of the safe deposit company to have been adopted by vote of a
majority of its entire board of directors at a meeting of such board,
duly convened and held. If the proposed place of business is within the
limits of the village, borough or city if in a city not divided into
boroughs, in which the place of business sought to be changed is
located, such change may be made upon the written approval of the
superintendent. If the proposed place of business is beyond such limits,
notice of intention to make such application, signed by a principal
officer of the safe deposit company shall be published once a week for
two successive weeks in a newspaper to be designated by the
superintendent for the purpose, in accordance with the provisions of
article two of this chapter. If the superintendent shall grant his
certificate authorizing the change of location, as provided in article
two of this chapter, the safe deposit company may, upon or after the day
specified in the certificate, remove its property and effects to the
location designated therein.
S 323. Assessment of stockholders to make good impairment of capital;
sale of stock.
Whenever the superintendent shall have made requisition upon any safe
deposit company pursuant to the provisions of article two of this
chapter to make good the amount of an impairment of its capital, the
directors of the safe deposit company shall immediately give notice of
such requisition to each stockholder of the amount of the assessment
which he must pay for the purpose of making good such deficiency, by a
written or printed notice mailed to such stockholder at his place of
residence, or served personally upon him. If any stockholder shall
refuse or neglect to pay the assessment specified in such notice within
sixty days from the date thereof, the directors of such safe deposit
company shall have the right to sell to the highest bidder at public
auction the stock of such stockholder, after giving previous notice of
such sale once a week for two successive weeks in a newspaper of general
circulation in the county where the principal office of such safe
deposit company is located; or such stock may be sold at private sale,
and without such published notice, provided, however, that before making
a private sale thereof an offer in writing to purchase such stock shall
first be obtained, and a copy thereof served upon the owner of record of
the stock sought to be sold either personally or by mailing a copy of
such offer to such owner at his place of residence or the address
furnished by him to the safe deposit company; and if, after service of
such offer, such owner shall still refuse or neglect to pay such
assessment within two weeks from the time of service of such offer, the
said directors may accept such offer and sell such stock to the person
or persons making such offer, or to any other person or persons making a
larger offer than the amount named in the offer submitted to such
stockholder; but said stock shall in no event be sold for a smaller sum
than the amount of the assessment called for and the necessary costs of
sale. Out of the avails of the stock sold the directors shall pay the
necessary costs of sale and the amount of the assessment called for
thereon. The balance, if any, shall be paid to the person or persons
whose stock has been thus sold. A sale of stock as herein provided shall
effect an absolute cancellation of the outstanding certificate or
certificates evidencing the stock so sold, and shall render the same
null and void and a new certificate or certificates shall be issued to
the purchaser or purchasers of said stock.
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Article 5-B, Continued . . .
S 324. Change of control. 1. It shall be unlawful, except with the
prior approval of the superintendent, for any company, as defined in
subdivision two of section one hundred forty-one of this chapter, to
directly or indirectly acquire control of any safe deposit company
subject to the provisions of this article.
As used in this section, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of a safe deposit company, whether by means
of the ownership of the voting stock or equity interests of such safe
deposit company or of one or more companies controlling such safe
deposit company by means of a contractual arrangement, or otherwise.
Control shall be presumed to exist if any company, directly or
indirectly, owns, controls or holds with the power to vote ten per
centum or more of the voting stock of any safe deposit company or of any
company which owns, controls or holds with power to vote ten per centum
or more of the voting stock of such safe deposit company, but no person
shall be deemed to control a safe deposit company solely by reason of
his being an officer or director of such safe deposit company. The
superintendent may, in his discretion, upon the application of a safe
deposit company or any company which, directly or indirectly, owns,
controls or holds with power to vote or seeks to own, control or holds
with power to vote any voting stock of such safe deposit company,
determine whether or not the ownership, control or holding of such
voting stock constitutes or would constitute control of such safe
deposit company for purposes of this section.
2. (a) A company which seeks to acquire control of a safe deposit
company subject to the provisions of this article shall file a written
application therefor with the superintendent and pay an investigation
fee of one thousand dollars to the superintendent. The application shall
be in such form and shall contain such information as the superintendent
may require.
(b) The superintendent shall disapprove the proposed exercise of
control of any safe deposit company if, after notice to and an
opportunity to be heard by the applicant and such safe deposit company,
he finds the acquisition of control therein contrary to law or
determines that disapproval is reasonably necessary to protect the
interests of the people of this state. In making such determination, the
superintendent shall only consider (i) whether the character,
responsibility and general fitness of the company which seeks to control
such safe deposit company are such as to command confidence and warrant
belief that the business of such safe deposit company will be honestly
and efficiently conducted in a manner consistent with the public
interest, the interests of bailors and creditors of such safe deposit
company and (ii) whether the exercise of control may impair the safe and
sound conduct of the business of such safe deposit company, the
conservation of its assets, or public confidence in its business. Unless
the superintendent shall have denied such application in writing within
ninety days of the receipt thereof, or shall have advised the applicant
in writing before the expiration of ninety days of his determination to
extend such period an additional sixty days, such application shall be
deemed approved.
(c) For a period of six months from the date of qualification thereof
and for such additional period of time as the superintendent may
prescribe in writing, the provisions of this subdivision shall not apply
to a transfer of control by operation of law to a legal representative,
as hereinafter defined, who has control of a safe deposit company. The
term "legal representative", for the purposes of this section, shall
mean one duly appointed by a court of competent jurisdiction to act as
executor, administrator, trustee, committee, conservator or receiver,
including one who succeeds a legal representative and one acting in a
ancillary capacity thereto in accordance with the provisions of such
court appointment.
S 327. Use of sign or words indicating safe deposit company by
unauthorized persons prohibited. 1. No entity, other than a duly
chartered safe deposit company, shall make use of any office sign at the
place where such business is transacted having thereon any artificial or
corporate name, or other words indicating that such place or office is
the place of business or office of a safe deposit company; nor shall any
such entity make use of or circulate any letterheads, billheads, blank
forms, notes, receipts, certificates, circulars, or any written or
printed or partly written and partly printed paper whatever, having
thereon any artificial or corporate name, or other word or words,
indicating that such business is the business of a safe deposit company.
2. Nothing in this section shall be deemed to prevent any banking
organization, foreign banking corporation duly licensed to maintain a
branch in the state, national bank, federal savings and loan association
or federal savings bank from engaging in the safe deposit business in
this state.
S 328. Communications from banking department must be submitted to
directors and noted in minutes. Every official communication as defined
in article two of this chapter directed to a safe deposit company or to
any officer thereof shall be submitted, by the officer receiving it, to
the board of directors at the next meeting of such board, and duly noted
in the minutes of the meetings of such board.
S 329. Reports to superintendent; penalty for failure to make. On or
before the first day of February in each year, every safe deposit
company shall make a written report to the superintendent of banks which
shall contain a statement of its condition on the morning of the first
day of January in said year. Every such report shall be subscribed and
affirmed as true under the penalties of perjury, according to the best
of their knowledge and belief, by the two principal officers in charge
of the affairs of the safe deposit company at the time of such
subscription and shall state that the usual business of the safe deposit
company has been transacted at the location required by this article and
not elsewhere.
Every safe deposit company shall also make such other special reports
to the superintendent as he may from time to time require, which shall
be in such form and filed at such date as may be prescribed by the
superintendent and shall, if required by him, be subscribed and affirmed
as true under the penalties of perjury.
If any safe deposit company shall fail to make any report required by
this section on or before the day designated for the making thereof, or
shall fail to include therein any matter required by the superintendent,
it shall forfeit to the people of the state the sum of ten dollars for
every day that such report shall be delayed or withheld, and for every
day that it shall fail to report any such omitted matter, unless the
time therefor shall have been extended by the superintendent as provided
in article two of this chapter.
S 330. Liability of safe deposit company for assessments by
superintendent. When the superintendent, pursuant to the powers
conferred on him by article two of this chapter, shall have levied any
assessment upon any safe deposit company and shall have duly notified
such safe deposit company of the amount thereof, the amount so assessed
shall become a liability of and shall be paid by such safe deposit
company to the superintendent.