N.Y. BNK Law § 103 — New York Code / Act BNK / Article 3 / Section 103
Restrictions on loans, purchases of securities and total liabilities to bank or trust company of any one person
Status: in_force

§ 103.* Restrictions on loans, purchases of securities and total\nliabilities to bank or trust company of any one person.\n  * NB Effective until notification of the superintendent of financial\nservices\n  * Restrictions on loans, purchases of securities, total liabilities\nand other credit exposures to a bank or trust company of any one person.\n  * NB Effective upon notification of the superintendent of financial\nservices\n  No bank or trust company shall:\n  1. Lend to any person (which term shall mean, for the purposes of this\nsubdivision, any individual, partnership, unincorporated association,\ncorporation or body politic) an amount which will exceed fifteen per\ncentum of the capital stock, surplus fund and undivided profits of such\nbank or trust company. Any extension of credit to a person by means of\nthe issue or confirmation of irrevocable sight letters of credit upon\nthe responsibility of such person, or by means of the discount or\npurchase of, or investment in, bills of exchange, notes, bonds,\ndebentures or other obligations made, drawn or accepted by such person,\nshall be considered a loan to such person for the purposes of this\nsubdivision except that (1) in the case of an accepted bill of exchange,\nthe loan shall be considered, subject to clause (2) below, to be made to\nthe acceptor and not to the drawer; and (2) if any bill of exchange,\nnote, bond, debenture or other obligation is endorsed without limitation\nor guaranteed by any person and discounted with, or sold to, such bank\nor trust company by such person, the loan shall be considered a loan to\nsuch person and not to the maker, drawer or acceptor of such bill of\nexchange, note, bond, debenture or other obligation. The foregoing\nlimitation is subject to the following exceptions:\n  (a) The limitations in this subdivision shall not apply to (1) any\nloan to the extent that the United States, this state or any city,\ncounty, town, village or school district of this state, or any\ndepartment, agency or instrumentality of the United States or this state\ndesignated by the superintendent by general or specific regulation, has\nagreed to pay the principal and interest thereof, or has guaranteed\npayment (by guaranty or commitment to purchase or otherwise) of such\nprincipal and interest, or is committed to supply, by loan, subsidy or\notherwise, funds sufficient to pay such principal and interest, or has\notherwise pledged its faith and credit for the payment of such principal\nand interest; or (2) any loan secured by not less than a like amount\n(based on their principal amount or market value, whichever is lower, at\nthe time the loan is made) of direct obligations of the United States or\nof this state or of any city, county, town, village or school district\nof this state or of any such department, agency or instrumentality of\nthe United States or this state or by obligations otherwise fully\nguaranteed as to principal and interest by the United States.\n  (b) The limitations in this subdivision shall not apply to any loan to\nthe extent such loan is secured by cash collateral which is not subject\nto withdrawal.\n  In addition, the limitations in this subdivision shall not apply (i)\nto loans arising from the discount of commercial or business paper\nevidencing an obligation to the person negotiating it with recourse;\n(ii) to loans to the student loan marketing association; (iii) to loans\nto any financial institution or to any receiver, conservator,\nsuperintendent of financial services, or other agent in charge of the\nbusiness and property of such financial institutions when such loans are\napproved by the superintendent; (iv) to the purchase of bankers'\nacceptances of the kind described in section 13 of an act of congress\nentitled the "Federal Reserve Act" and issued by other banking\ncorporations; and (v) to loans made to facilitate prompt clearance or\nsettlement arising from the purchase or sale of readily marketable\nsecurities which loans (A) are secured by readily marketable securities\nhaving a market value or a principal face amount (whichever is less) at\nthe time the loan is made of not less than the principal amount of said\nloan, and (B) shall be required to be repaid upon settlement of such\npurchase or sale.\n  (c) Loans (exclusive of any loan described in paragraph (a) of this\nsubdivision) to any state other than the state of New York, or to any\nforeign nation, the New York State thruway authority, the Triborough\nbridge and tunnel authority, The Port of New York Authority, a railroad\ncorporation, a municipal corporation of this state, a corporation\nsubject to the jurisdiction of a public service commission of this\nstate, or any international lending facility or public benefit\ncorporation designated by the superintendent by regulation, may equal\nbut not exceed twenty-five per centum of the capital stock, surplus fund\nand undivided profits of such bank or trust company.\n  (d) Loans to any person, other than loans described in paragraph (a),\n(b) or (c) of this subdivision, may equal but not exceed twenty-five per\ncentum of the capital stock, surplus fund and undivided profits of such\nbank or trust company, provided such loans either in whole or in part,\nbut in any event that part thereof in excess of fifteen per centum of\nsuch capital stock, surplus fund and undivided profits:\n  (1) are upon, or with respect to, drafts or bills of exchange drawn in\ngood faith against actually existing values, or upon bankers'\nacceptances or bills of exchange of the kinds and maturities made\neligible by law for purchase in the open market by federal reserve\nbanks; or\n  (2) are secured by collateral having an ascertained market value, or\notherwise having a value as collateral as found in good faith by an\nofficer of such bank or trust company, at least equal to the excess of\nsuch loans over fifteen per centum of such capital stock, surplus fund\nand undivided profits.\n  (d-1) Loans secured by bills of lading, warehouse receipts, or similar\ndocuments transferring or securing title to readily marketable staples\nshall be subject to a limitation of thirty-five per centum of the\ncapital stock, surplus fund and undivided profits of such bank or trust\ncompany in addition to the general limitations if the market value of\nthe staples securing each additional loan at all times equals or exceeds\none hundred fifteen per centum of the outstanding amount of such loan.\nThe staples shall be fully covered by insurance whenever it is customary\nto insure such staples.\n  (d-2) Loans secured by shipping documents or instruments transferring\nor securing title covering livestock or giving a lien on livestock when\nthe market value of the livestock securing the obligation is not at any\ntime less than one hundred fifteen per centum of the face amount of the\nnote covered, shall be subject to a maximum limitation equal to\ntwenty-five per centum of the capital stock, surplus fund and undivided\nprofits of such bank or trust company.\n  In addition, loans which arise from the discount by dealers in dairy\ncattle of paper given in payment for dairy cattle, which paper carries a\nfull recourse endorsement or unconditional guarantee of the seller, and\nwhich are secured by the cattle being sold, shall be subject to a\nlimitation of twenty-five per centum of the capital stock, surplus fund\nand undivided profits of such bank or trust company.\n  (e) In computing the total loans by any bank or trust company (i) to\nany individual, there shall be included all loans by the bank or trust\ncompany to any partnership or unincorporated association of which he is\na member, and all loans made for his benefit or for the benefit of such\npartnership or association; (ii) to any partnership or unincorporated\nassociation, there shall be included all loans by the bank or trust\ncompany to its individual members and all loans made by the bank or\ntrust company for the benefit of such partnership or unincorporated\nassociation or any member thereof; and (iii) to any corporation, there\nshall be included all loans made by the bank or trust company for the\nbenefit of the corporation. A loan shall be deemed to be made for the\nbenefit of a corporation only to the extent that the proceeds of such\nloan (1) are to be loaned to the corporation; (2) are to be used for the\nacquisition (otherwise than in connection with a public offering) from\nthe corporation by a person in control of, or under common control with,\nthe corporation, of any stock or other securities issued by the\ncorporation, or (3) are to be transferred to the corporation without\nfair and adequate consideration, and the discharge of an equivalent\namount of debt previously incurred in good faith and for value shall be\nconsidered fair and adequate consideration. A loan shall not be deemed\nto be made for the benefit of a corporation if such loan is made to a\nperson other than the corporation and is secured as provided in\nsubdivision four of this section or is secured by collateral having an\nascertained market value, or otherwise having a value as collateral as\nfound in good faith by an officer of such bank or trust company, at\nleast equal to the amount of the loan; provided that stock or other\nsecurities issued by, or a lien on property of, such corporation shall\nnot be considered collateral for the purposes of this provision.\n  (f) The limitations in this subdivision shall not apply to the\nacceptance of bills of exchange or the issue or confirmation of letters\nof credit calling for acceptances by a bank or trust company, but no\nbank or trust company shall make acceptances, or issue letters of credit\ncalling for acceptances, upon the responsibility of any person to an\namount in excess of fifteen per centum of the capital stock, surplus\nfund and undivided profits of such bank or trust company, unless that\npart thereof in excess of fifteen per centum of such capital stock,\nsurplus fund and undivided profits is, and will remain, secured either\nby accompanying documents or by some other actual security growing out\nof the same transaction as the acceptance or by substituted security of\nsimilar character.\n  (g) Loans arising from the discount of negotiable or non-negotiable\ninstallment consumer paper which carries a full recourse endorsement or\nunconditional guarantee by the transferor of such paper shall be subject\nto a limitation of twenty-five per centum of the capital stock, surplus\nfund and undivided profits of such bank or trust company. Within the\nmeaning of this subdivision, the liability to such bank or trust company\nof any individual, partnership, unincorporated association or\ncorporation as endorser or guarantor of negotiable or non-negotiable\ninstalment consumer paper shall not be deemed a loan to such individual,\npartnership, unincorporated association or corporation to the extent of\nthe value of the obligation thereon of the maker of such instalment\nconsumer paper, as found in good faith in writing by an officer of such\nbank or trust company, designated to make such evaluation and\ncertification by the board of directors of the bank or trust company,\nand upon the further certification by the said officer that the bank or\ntrust company is relying primarily on the maker of the instalment\nconsumer paper for the payment of an amount owing upon the instalment\nconsumer paper upon the security of which the bank or trust company is\nmaking the loan or in which it is making the investment. The\ncertifications are to be made at the time of making the loan or\ninvestment, and are to be based on information contained in the files of\nthe bank or trust company, or on the personal knowledge of the\ndesignated officer. Instalment consumer paper, for the purposes of this\nsection, shall mean retail instalment contracts and retail instalment\nobligations as defined in subdivisions six and six-a of section four\nhundred ninety-one of this chapter, and similar agreements entered into\noutside of this state.\n  (h) The limitations in this subdivision shall not apply to any advance\nof federal funds by such bank or trust company to a commercial bank,\nprovided such advance is made on the condition that it be repaid on the\nnext business day following the day on which the advance is made. For\npurposes of this paragraph, the term "federal funds" shall mean funds on\ndeposit at a federal reserve bank or funds on deposit at a commercial\nbank which are exchangeable for funds on deposit at a federal reserve\nbank; the term "commercial bank" shall mean any bank, trust company,\nprivate banker, national banking association, any banking corporation\norganized under the laws of the United States or any state of the United\nStates and engaged in a commercial banking business, or any banking\ncorporation organized under the laws of any foreign country and engaged\nin the commercial banking business that maintains a branch or agency\nlicensed by any state of the United States or the comptroller of the\ncurrency; and the term "business day" shall mean any day on which the\nbank or trust company making the advance, the commercial bank obtaining\nthe advance and any federal reserve bank or banks through which such\nadvance was effected are all open for general business.\n  * (i) The limitations in this subdivision shall not apply to the\ninvestment of such bank or trust company in the bonds, debentures, notes\nor other obligations of any person, provided: (i) such bonds,\ndebentures, notes or other obligations mature not less than one year\nafter their respective dates of issuance, and, at the time of such\ninvestment, are rated in one of the three highest rating grades by an\nindependent rating service designated by the superintendent of financial\nservices; (ii) such investment does not exceed fifteen per centum of the\ncapital stock, surplus fund and undivided profits of such bank or trust\ncompany; and (iii) such investment complies with such additional\nlimitations and conditions as the superintendent of financial services\nfrom time to time may prescribe by general regulation.\n  * NB Effective until notification of the superintendent of financial\nservices\n  * (i) The limitations in this subdivision shall not apply to the\ninvestment of such bank or trust company in the bonds, debentures, notes\nor other obligations of any person, provided: (i) such bonds,\ndebentures, notes or other obligations mature not less than one year\nafter their respective dates of issuance, and, at the time of such\ninvestment, meet the standards of creditworthiness established by\nregulation by the superintendent; (ii) such investment does not exceed\nfifteen per centum of the capital stock, surplus fund and undivided\nprofits of such bank or trust company; and (iii) such investment\ncomplies with such additional limitations and conditions as the\nsuperintendent from time to time may prescribe by regulation.\n  * NB Effective upon notification of the superintendent of financial\nservices\n  * (j) In the case of a trust company which (1) does not receive\ndeposits from the general public and (2) has been exempted by the\nsuperintendent of financial services from the requirements of section\nthirty-two of this chapter, the limitations of this subdivision shall\nnot apply to the investment of such trust company in the bonds,\ndebentures, notes or other obligations of, any foreign nation, or any\npolitical subdivision, agency or instrumentality thereof, provided: (i)\nat the time of such investment, such bonds, debentures, notes or other\nobligations are rated in one of the three highest rating grades by an\nindependent rating service designated by the superintendent of financial\nservices; (ii) for any such bonds, debentures, notes or other\nobligations, the foreign nation, or any political subdivision, agency or\ninstrumentality thereof, has guaranteed payment (by guaranty or\ncommitment to purchase or otherwise) of such principal and interest, or\nis committed to supply, by loan, subsidy or otherwise, funds sufficient\nto pay such principal and interest, or has otherwise pledged its faith\nand credit for the payment of such principal and interest; (iii) such\ninvestments do not exceed the per centum applicable to such obligor of\nthe capital stock, surplus fund and undivided profits of such bank or\ntrust company as the superintendent shall approve, and (iv) such\ninvestments comply with such limitations and conditions as the\nsuperintendent may from time to time prescribe.\n  * NB Effective until notification of the superintendent of financial\nservices\n  * (j) In the case of a trust company which (1) does not receive\ndeposits from the general public and (2) has been exempted by the\nsuperintendent from the requirements of section thirty-two of this\nchapter, the limitations of this subdivision shall not apply to the\ninvestment of such trust company in the bonds, debentures, notes or\nother obligations of, any foreign nation, or any political subdivision,\nagency or instrumentality thereof, provided: (i) at the time of such\ninvestment, such bonds, debentures, notes or other obligations meet the\nstandards of creditworthiness established by regulation by the\nsuperintendent; (ii) for any such bonds, debentures, notes or other\nobligations, the foreign nation, or any political subdivision, agency or\ninstrumentality thereof, has guaranteed payment (by guaranty or\ncommitment to purchase or otherwise) of such principal and interest, or\nis committed to supply, by loan, subsidy or otherwise, funds sufficient\nto pay such principal and interest, or has otherwise pledged its faith\nand credit for the payment of such principal and interest; (iii) such\ninvestments do not exceed the per centum applicable to such obligor of\nthe capital stock, surplus fund and undivided profits of such bank or\ntrust company as the superintendent shall approve; and (iv) such\ninvestments comply with such limitations and conditions as the\nsuperintendent may from time to time prescribe.\n  * NB Effective upon notification of the superintendent of financial\nservices\n  * (k) In the case of a trust company which (1) does not receive\ndeposits from the general public and (2) has been exempted by the\nsuperintendent of financial services from the requirements of section\nthirty-two of this chapter, the limitations of this subdivision shall\nnot apply to the purchase of securities under repurchase agreement\nprovided that the repurchase agreement relates to not less than a like\namount of direct obligations (based on their principal amount or market\nvalue, whichever is lower, at the time the purchase occurs) of any\nforeign nation, or any political subdivision, agency or instrumentality\nthereof, provided: (i) at the time of such purchase, such direct\nobligations are rated in one of the three highest rating grades by an\nindependent rating service designated by the superintendent of financial\nservices; (ii) for any such direct obligations, the foreign nation, or\nany political subdivision, agency or instrumentality thereof, has\nguaranteed payment (by guaranty or commitment to purchase or otherwise)\nof the principal and interest thereof, or is committed to supply, by\nloan, subsidy or otherwise, funds sufficient to pay such principal and\ninterest, or has otherwise pledged its faith and credit for the payment\nof such principal and interest; (iii) the purchase price of such\nsecurities does not exceed the per centum applicable to the obligor of\nsuch securities of the capital stock, surplus fund and undivided profits\nof such bank or trust company as the superintendent shall approve; and\n(iv) such purchase complies with such limitations and conditions as the\nsuperintendent may from time to time prescribe.\n  * NB Effective until notification of the superintendent of financial\nservices\n  * (k) In the case of a trust company which (1) does not receive\ndeposits from the general public and (2) has been exempted by the\nsuperintendent from the requirements of section thirty-two of this\nchapter, the limitations of this subdivision shall not apply to the\npurchase of securities under repurchase agreement provided that the\nrepurchase agreement relates to not less than a like amount of direct\nobligations (based on their principal amount or market value, whichever\nis lower, at the time the purchase occurs) of any foreign nation, or any\npolitical subdivision, agency or instrumentality thereof, provided: (i)\nat the time of such purchase, such direct obligations meet the standards\nof creditworthiness established by regulation by the superintendent;\n(ii) for any such direct obligations, the foreign nation, or any\npolitical subdivision, agency or instrumentality thereof, has guaranteed\npayment (by guaranty or commitment to purchase or otherwise) of the\nprincipal and interest thereof, or is committed to supply, by loan,\nsubsidy or otherwise, funds sufficient to pay such principal and\ninterest, or has otherwise pledged its faith and credit for the payment\nof such principal and interest; (iii) the purchase price of such\nsecurities does not exceed the per centum applicable to the obligor of\nsuch securities of the capital stock, surplus fund and undivided profits\nof such bank or trust company as the superintendent shall approve; and\n(iv) such purchase complies with such limitations and conditions as the\nsuperintendent may from time to time prescribe.\n  * NB Effective upon notification of the superintendent of financial\nservices\n  * The superintendent of financial services shall be empowered to\npromulgate rules and regulations as shall be appropriate to carry out\nthe purposes of this subdivision.\n  * NB Effective until notification of the superintendent of financial\nservices\n  * The superintendent shall be empowered to promulgate rules and\nregulations as shall be appropriate to carry out the purposes of this\nsubdivision.\n  * NB Effective upon notification of the superintendent of financial\nservices\n  * The superintendent also shall be authorized to determine the manner\nand extent to which credit exposure resulting from derivative\ntransactions, repurchase agreements, reverse repurchase agreements,\nsecurities lending transactions and securities borrowing transactions\nshall be taken into account for purposes of this section. As used in\nthis section, the term "derivative transaction" includes any transaction\nthat is a contract, agreement, swap, warrant, note or option that is\nbased, in whole or in part, on the value of, any interest in, any\nquantitative measure of, or the occurrence of any event relating to, one\nor more commodities, securities, currencies, interest or other rates,\nindices or other assets. In making such determinations, the\nsuperintendent may, but is not required to, act by order or regulation.\n  * NB Effective upon notification of the superintendent of financial\nservices\n  4. Make a loan upon the security of real estate within or without this\nstate which does not comply with any such rules or regulations as the\nsuperintendent of financial services may prescribe.\n  No loan shall be made under the provisions of this subdivision except\nupon the written and signed certificate of an appraiser appointed\npursuant to policies established by the board of directors, certifying\nto the value of the premises according to his judgment.\n  The provisions of this subdivision shall not constitute the authority\nto make a loan to a natural person upon the security of a mortgage which\nis not a first lien.\n  Where the collateral for any loan consists partly of real estate\nsecurity and partly of other security, including a guarantee or\nendorsement by or an obligation or commitment of a person other than the\nborrower, only the amount by which the loan exceeds the value as\ncollateral of such other security, as found in good faith by a duly\nauthorized officer of such bank or trust company, at the time of the\nmaking of the loan or commitment therefor, shall be considered a loan\nupon the security of real estate, provided, that in no event shall a\nloan be considered a loan upon the security of real estate (i) where the\nprincipal amount of any real estate security taken therefor is less than\nfifteen per centum of the amount of such loan or (ii) where the loan is\npayable in monthly or quarterly installments over a period not to exceed\none hundred twenty-one months and does not exceed twenty thousand\ndollars and is for the purpose of paying the cost of any repairs,\nalterations or improvements upon, or in connection with, or, as the\nsuperintendent may authorize, the equipping of existing structures or\nthe building of new structures by the owners thereof or by the lessees\nunder a lease expiring not less than six months after the maturity of\nthe loan or (iii) where the loan is fully guaranteed or insured by the\nUnited States or a state, or any department, agency or instrumentality\nthereof, and for the payment of which loan the full faith and credit of\nthe United States or of such state is pledged and if under the terms of\nthe guaranty or insurance agreement the bank or trust company will be\nassured of repayment in accordance with the terms of the loan or (iv)\nwhere there is a binding and valid commitment or agreement by a\nfinancially responsible lender, purchaser or other financially\nresponsible party either directly with the lending bank or trust company\nor which is for the benefit of, or has been assigned to, the lending\nbank or trust company and pursuant to which commitment, agreement or\nassignment, the lender, purchaser or other party is required to advance\nto the lending bank or trust company within thirty months from the date\nof such commitment or agreement the full amount of the loan to be made\nby the lending bank or trust company upon the security of real estate\nimproved by a building or buildings, or to be improved by a building or\nbuildings in the process of construction, the major portion of which\nbuilding is used, or in the case of a building under construction is to\nbe used, for residential, business, manufacturing or agricultural\npurposes, and where pursuant to the terms and provisions of such\ncommitment or agreement such advance shall be made prior to or upon the\nmaturity of the loan by the lending bank or trust company.\n  Real estate security for purposes of this section shall not include\n(a) an assignment of rents under a lease, (b) a mortgage or other lien\nupon a leasehold, (c) a mortgage or other lien upon leasehold, royalty\nor other rights in oil, gas, minerals, standing timber, or other\nproducts of land, (d) a mortgage or other lien made or given upon real\nestate and taken as collateral security for loans to a borrower,\nprovided, that at the time of the making of the loan or commitment\ntherefor, repayment thereof is reasonably expected to be made out of the\noperations of such borrower or of the mortgagor, or (e) such mortgages\nor other liens on property as may be specifically exempted from the\nlimitations and restrictions of this subdivision by the superintendent\nof financial services by general or specific regulations. Nothing in\nthis paragraph shall be construed to imply that security of a kind not\nmentioned herein is to be deemed real estate security.\n  The limitations and restrictions contained in this subdivision shall\nnot prevent the acceptance of any real estate security to secure the\npayment of a debt previously contracted in good faith. Every mortgage\nand every assignment of a mortgage taken or held by such bank or trust\ncompany shall immediately be recorded or registered in its name in the\noffice of the clerk or the proper recording officer of the county in\nwhich the real estate described in the mortgage is located, except that\nwhere the underlying real estate is located outside the state of New\nYork such mortgage or assignment may be recorded or registered in the\nname of a duly authorized nominee, and except that if such mortgage or\nassignment of mortgage or of an interest therein shall be taken from a\ncorporation organized under the banking law or all of the capital stock\nof which is owned by not less than twenty savings banks of this state,\nthe bank or trust company may hold such mortgage or assignment\nunrecorded unless the superintendent shall direct the bank or trust\ncompany to record the same. The recording or registering of assignments\nof mortgages shall not be required when not less than ten mortgages are\nassigned as security for a loan, the term of which does not exceed\ntwelve months.\n  Any bank or trust company may renew from time to time any loan upon\nthe security of real estate lawfully made by it prior to June thirtieth,\nnineteen hundred thirty-seven.\n  None of the prohibitions and restrictions contained in this\nsubdivision shall apply to any corporation all of the capital stock of\nwhich is owned by not less than twenty savings banks of this state.\n  4-a. A bank or trust company may, in addition to the authority granted\nunder any other provisions of this article, make a loan to a natural\nperson upon the security of a mortgage which is not a first lien at the\nrate or rates agreed to by the bank or trust company and the borrower,\nsubject to such regulations as the superintendent of financial services\nmay prescribe. Such regulations by the superintendent of financial\nservices may include such restrictions as the superintendent of\nfinancial services finds necessary or proper, including without\nlimitation, a restriction as to the percentage of total assets which may\nbe invested in such loans or a restriction on the loan to appraisal\nvalue of property securing such loan.\n  For purposes of this subdivision, the term mortgage shall include a\nlien on an existing ownership interest in certificates of stock or other\nevidence of an ownership interest in, and a proprietary lease from, a\ncorporation or partnership formed for the purpose of the cooperative\nownership of real estate.\n  5. Make any loan for the purpose of financing the purchase of or\nrefinancing an existing ownership interest in certificates of stock or\nother evidence of an ownership interest in, and a proprietary lease\nfrom, a corporation or partnership formed for the purpose of the\ncooperative ownership of real estate, unsecured except to the extent of\nan assignment or transfer of the stock certificates or other evidence of\nownership interest of the borrower and the proprietary lease within\nninety days from the making of the loan, which shall exceed the maximum\nper cent of the loan permitted to be made on real estate improved by a\nsingle family residence occupied by the owner, provided that for\npurposes of this section the amount of the purchase price shall be\ndeemed to equal the appraised value of such certificate of stock or\nother evidence of an ownership interest, or, in the case of a\nrefinancing, the appraised value of such certificates of stock or other\nevidence of an ownership interest and which shall fail to provide for\nfull repayment of principal and interest within the same number of years\nas a conventional mortgage loan previously described in this\nsubdivision, provided that all real estate owned by such corporation or\npartnership shall be located within the state; and provided, further,\nthat such loan shall be subject to such regulations as the\nsuperintendent of financial services may from time to time promulgate.\nThe maximum rate of interest which may be charged, taken or received\nupon any loan or forbearance made pursuant to this subdivision may\nexceed the rate of interest prescribed by the superintendent of\nfinancial services in accordance with section fourteen-a by no more than\none and one-half per centum per annum.\n  6. Make any loan or discount on the security of the shares of its own\ncapital stock, or, except as provided in section five thousand twelve of\nthis chapter, be the purchaser of any such shares, unless such security\nor purchase shall be necessary to minimize or avoid loss upon a debt\npreviously contracted in good faith, and stock so purchased shall be\nsold at public or private sale, or otherwise disposed of, within six\nmonths from the time of its purchase unless the superintendent shall\nauthorize such bank or trust company in writing to hold such shares for\na longer period. Any bank or trust company violating any of the\nprovisions of this subdivision shall forfeit to the people of the state\ntwice the amount of the loan or purchase.\n  7. Knowingly lend, directly or indirectly, any money or property for\nthe purpose of enabling any person to pay for or hold shares of its\nstock, unless the loan is made upon security having an ascertained\nmarket value of at least fifteen per centum more than the amount of the\nloan. Any bank or trust company violating the provisions of this\nsubdivision shall forfeit to the people of the state twice the amount of\nthe loan.\n  8. Except in conformity with such rules and regulations as may be\npromulgated by the superintendent, lend any sum of money to any\nexecutive officer or director of such bank or trust company. The\nsuperintendent shall have power to determine by regulation who shall be\nconsidered, under the provisions of this subdivision, to be an executive\nofficer and what shall be considered, under the provisions of this\nsubdivision, to be a loan to an executive officer or director. In making\nsuch determination, the superintendent shall have power to include or\nexclude, subject to such conditions and limitations, if any, as he shall\nprescribe, any or all of the following: (1) any transaction as a result\nof which an executive officer or director of a bank or trust company\nbecomes obligated to such bank or trust company upon any note, draft,\nbill of exchange or other indebtedness, as maker, drawer, endorser,\nguarantor, surety or otherwise; and (2) any transaction as a result of\nwhich a corporation, in which an executive officer or director or any\ncombination of such persons, owns or controls a majority of the stock,\nor as a result of which a partnership in which an executive officer or\ndirector is a partner, becomes obligated or renews its obligation to\nsuch bank or trust company upon any note, draft, bill of exchange or\nother indebtedness, as maker, drawer, endorser, guarantor, surety or\notherwise. Every bank or trust company violating this provision or any\nregulation issued pursuant thereto and every officer or director of such\nbank or trust company knowingly participating in such violation shall,\nfor each offense, forfeit to the people of the state twice the amount of\nthe loan.\n  No executive officer or director of a bank or trust company shall\nborrow from the bank or trust company of which he is an executive\nofficer or director except as permitted by this section.\n