N.Y. BNK Law § 130 — New York Code / Act BNK / Article 3 / Section 130
Restrictions on officers, directors and employees
Status: in_force

§ 130. Restrictions on officers, directors and employees. 1. No\nofficer, director, clerk or other employee of any bank or trust company,\nand no person in any way interested or concerned in the management of\nits affairs, shall, acting on his own behalf or for any partnership or\nunincorporated association of which he is a member or for any\ncorporation, of which he owns or controls a majority of the capital\nstock, discount, or directly or indirectly make any loan upon, any note\nor other evidence of debt which he shall know to have been offered for\ndiscount to such bank or trust company, and to have been refused. Every\nperson violating the provisions of this subdivision shall, for each\noffense, forfeit to the people of the state twice the amount of the loan\nwhich he shall have made.\n  2. No officer, director, clerk or other employee of any bank or trust\ncompany shall, directly or indirectly, purchase or be interested in the\npurchase of any promissory note or other evidence of debt issued by it\non terms more favorable than those available to the general public,\nprovided, however, that every director, and every officer, clerk or\nother employee who is a stockholder of such bank or trust company, may\npurchase promissory notes or other evidences of debt issued by it in the\nsame ratio as to amount and on the same terms as any other stockholder.\n  3. (a) No executive officer of a bank or trust company may be an\nexecutive officer, director or trustee of another bank or trust company,\nsavings bank, 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 of financial\nservices pursuant to the provisions of paragraph (b) of this\nsubdivision, except that an executive officer of a bank or trust company\nwhich is a subsidiary of a bank holding company may be (i) an executive\nofficer and (ii) a director of the bank holding company and of one or\nmore banking institutions which are subsidiaries of such bank holding\ncompany.\n  (b) The superintendent of financial services shall have the power to\ndetermine by regulation who shall be considered, under the provisions of\nthis subdivision, to be an executive officer, and by a general or\nspecific regulation to grant permission to an executive officer of a\nbank or trust company to be an executive officer, director or trustee or\nboth an executive officer and director or a trustee of another bank or\ntrust company, savings bank, or savings and loan association, national\nbank, federal savings bank or federal savings association, the principal\noffice of which is located in this state, bank holding company, or\nforeign banking corporation maintaining a branch in this state. Such\npermission may be granted only if in the judgment of the superintendent\nof financial services such service by the executive officer will be\nconsistent with the policy of the state of New York as declared in\nsection ten of this chapter. The superintendent of financial services\nshall have the power to revoke such permission whenever he or she 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 terms "subsidiary",\n"banking institution" and "bank holding company" shall each be given the\nsame meaning as is contained in their respective definition in section\none hundred forty-one of this chapter, except that the definition of the\nterm "banking institution" is modified to include a national bank,\nfederal savings bank or federal savings association, the principal\noffice of which institution is 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\nexecutive officers and directors of banks and trust companies shall\ncontinue in effect.\n  5. Every director of a bank or trust company who is obligated on any\nloan or other extension of credit made by such bank or trust company to\nsuch director or to any other individual, partnership, unincorporated\nassociation or corporation, shall file a statement of his financial\ncondition with such bank or trust company at least once in each year and\nat such other times as the superintendent may require. This subdivision\nshall not apply to directors whose obligations are secured by collateral\nhaving an ascertained market value of at least fifteen per centum more\nthan the amount of such obligations. The superintendent shall have the\npower to determine by regulation what shall be considered, under the\nprovisions of this subdivision, to be a loan or an extension of credit.\n  6. If any officer of a bank or trust company becomes indebted to any\ndomestic or foreign banking organization, other than the bank or trust\ncompany of which he is an officer, or becomes indebted to any banking\ninstitution organized under the laws of the United States, he shall\nwithin ten calendar days after he becomes so indebted make a written\nreport to the board of directors of the bank or trust company of which\nhe is an officer, stating the date and amount of any such loan or\nindebtedness, and the security therefor. In addition to the foregoing\nreports he shall render written reports of such other indebtedness as\nthe board of directors of the bank or trust company may by resolution\nrequire of its officers. The superintendent shall have the power to\ndetermine by regulation who shall be considered an officer and what\nshall be considered a loan or indebtedness under the provisions of this\nsubdivision.\n  The provision of this subdivision shall not be applicable if the\namount of the indebtedness does not exceed an amount which shall be\ndetermined by the superintendent.\n  7. (a) Every person who is directly or indirectly the beneficial owner\nof more than ten per centum of any class of any equity security of a\nbank or trust company or who is a director or officer thereof, shall\nfile, within ten days following (i) the effective date of this section,\nor (ii) the date on which he becomes such beneficial owner, director or\nofficer, whichever is later, a statement with the superintendent of the\namount of all equity securities of such bank or trust company of which\nhe is the beneficial owner, and within ten days after the close of each\ncalendar month thereafter, if there has been any change in such\nownership during such month, shall file with the superintendent a\nstatement indicating his ownership at the close of the calendar month\nand such changes in such ownership as have occurred during such calendar\nmonth.\n  (b) Any such beneficial owner, director or officer of a bank or trust\ncompany shall not be subject to the requirements of this section if\n  (1) he is required by section sixteen (a) of the securities exchange\nact of nineteen hundred thirty-four, as amended, to file with the board\nof governors of the federal reserve system in accordance with regulation\nf of such board or with the federal deposit insurance corporation in\naccordance with part three hundred thirty-five of title twelve of the\nregulations of such corporation, a statement as to his stock ownership\nand he files with the superintendent at his New York city office four\ncopies of each such statement filed with such board or corporation, or\n  (2) he is such beneficial owner, director or officer of a bank or\ntrust company, all of the voting securities of which, excepting only\ndirectors' qualifying shares, are owned, controlled or held with power\nto vote by a bank holding company as defined in section one hundred\nforty-one of this chapter or by a single corporation, or\n  (3) he is such beneficial owner, director or officer of a bank or\ntrust company, all of the voting securities of which, excepting only\ndirectors' qualifying shares, are owned, controlled or held with power\nto vote by one or more banks organized under the laws of a foreign\ncountry, or\n  (4) he is such beneficial owner, director or officer of a trust\ncompany, all of the capital stock of which is owned by twenty or more\nsavings banks chartered by the state of New York.\n  (c) The superintendent shall have power to adopt such regulations as\nthe superintendent shall deem necessary or proper to implement the\nprovisions of this section.\n