N.Y. BNK Law § 247 — New York Code / Act BNK / Article 6 / Section 247
Restrictions upon trustees and officers
Status: in_force

§ 247. Restrictions upon trustees and officers. 1. A trustee of a\nsavings bank shall not\n  (a) Have any interest, direct or indirect, in the profits of the\nsavings bank, but may receive interest upon the amounts contributed by\nhim or her to the surplus fund, may make deposits in the savings bank\nand receive interest thereon and may acquire from the life insurance\ndepartment of the savings bank, or through the savings bank as agent for\nthe life insurance department of another savings bank, life insurance\nissued on his or her life, or that of another, in accordance with the\nprovisions of article six-A of this chapter and may receive dividends\nthereon. Notwithstanding the provisions of this paragraph, an officer of\na savings bank who also serves as a trustee of such institution may\nreceive compensation as an officer of such institution, as approved by\nthe board of trustees, which in whole or in part is based upon the\nfinancial performance of the institution.\n  (b) Become a member of the board of directors of a bank, trust company\nor national bank of which board enough other trustees of the savings\nbank are members to constitute with him a majority of the board of\ntrustees.\n  (c) Become a director or trustee of a bank, trust company or national\nbank located in this state, operating a special interest department, or\nof a mortgage or title company organized under the banking law or\ninsurance law, if, after election as such director or trustee a majority\nof the trustees of the savings bank will be directors or trustees of\nsuch other institutions.\n  2. Neither a trustee nor an executive officer of a savings bank shall\n  (a) Receive directly or indirectly and retain for his or her own use\nany commission on or benefit from any loan made by the savings bank, or\nany pay or emolument for services rendered to any borrower from the\nsavings bank in connection with such loan, except as provided in section\ntwo hundred forty-nine of this article.\n  (b) Direct or require a borrower on a mortgage to negotiate any policy\nof insurance on the mortgaged property through any particular insurance\nbroker or brokers, or attempt to divert to any particular insurance\nbroker or brokers the business of borrowers from the savings bank, or\nrefuse to accept any such insurance policy because it was not negotiated\nthrough a particular insurance broker or brokers.\n  (c) Become an indorser, surety, or guarantor, or in any manner an\nobligor, for any loan made by the savings bank.\n  (d) For himself or as agent or partner of another, directly or\nindirectly borrow or use any of the funds of the savings bank or become\nthe owner of real property on which the savings bank holds a mortgage.\n  2-a. Notwithstanding paragraph (c) or (d) of subdivision two of this\nsection an executive officer of a savings bank may borrow from such\nsavings bank or become the owner of real property on which the savings\nbank holds a mortgage if the loan is secured by (a) a first mortgage or\nis a cooperative apartment unit loan, which property or apartment is to\nbe occupied as the executive officer's primary residence and is\nspecifically approved in writing by the board of trustees or (b) a\ndeposit maintained by the executive officer with the savings bank.\n  2-b. As used in subdivisions two and two-a of this section, the term\n"executive officer" shall be defined as set forth in section 22(h)(9)(C)\nof the Federal Reserve Act 12 U.S.C. 375b(9)(C), and regulations\npromulgated thereunder, as amended.\n  3. A loan to or a purchase by a corporation in which he is a\nstockholder to the amount of fifteen per centum of the total outstanding\nstock, or in which he and other trustees of the savings bank hold stock\nto the amount of twenty-five per centum of the total outstanding stock,\nshall be deemed a loan to or a purchase by such trustee within the\nmeaning of this section; except when the loan to or purchase by such\ncorporation shall have occurred without his knowledge or against his\nprotest. A deposit with a banking corporation shall not be deemed a loan\nwithin the meaning of this section.\n  4. This section shall not be construed to prohibit a savings bank from\nmaking a loan to a religious corporation, club, or other membership\ncorporation of which one or more trustees of such savings bank may be\nmembers or officers but in which they have no financial interest, nor\nshall it be construed to prohibit a savings bank from making loans to or\npurchasing guaranteed mortgages from any stock corporation, provided no\ntrustee owns more than fifteen per centum of the capital stock of such\ncorporation, and the total amount of such stock owned by all the\ntrustees of such savings bank is less than twenty-five per centum of\nsuch capital stock.\n  5. (a) No executive officer of a savings bank may be an executive\nofficer, director or trustee of another savings bank, or of a bank or\ntrust company, savings and loan association, national bank, federal\nsavings bank or federal savings association, the principal office of\nwhich institution is located in this state, bank holding company or\nforeign banking corporation maintaining a branch in this state, unless\npermission therefor has been granted by the superintendent pursuant to\nthe provisions of paragraph (b) of this subdivision.\n  (b) The superintendent shall have the power to determine by regulation\nwho shall be considered, under the provisions of this subdivision, to be\nan executive officer, and by regulation, to grant permission to an\nexecutive officer of a savings bank to be an executive officer, director\nor trustee or both an executive officer and director or trustee of\nanother savings bank or a bank or trust company, savings and loan\nassociation, national bank, federal savings bank or federal savings\nassociation, the principal office of which institution is located in\nthis state, bank holding company or foreign banking corporation\nmaintaining a branch in this state. Such permission may be granted only\nif in the judgment of the superintendent such service by the executive\nofficer will be consistent with the policy of the state of New York as\ndeclared in section ten of this chapter. The superintendent shall have\nthe power to revoke such permission whenever the superintendent finds,\nafter reasonable notice and an opportunity to be heard, that the public\ninterest requires such revocation.\n  (c) For the purposes of this subdivision, the term "bank holding\ncompany" shall be given the same meaning as is contained in section one\nhundred forty-one of this chapter, and the definition of the term,\n"banking institution" is modified to include a national bank, federal\nsavings bank or federal savings association, the principal office of\nwhich institution is located in this state, and a foreign banking\ncorporation maintaining a branch in this state.\n  (d) All other restrictions and limitations imposed by this chapter on\nofficers and trustees of savings banks shall continue in effect.\n