NY Banking L § 131 (2021)
2021 New York Laws BNK - Banking Article 3 - Banks and Trust Companies 131 - Prohibitions Against Encroachments Upon Certain Powers of Banks and Trust Companies.

§ 131. Prohibitions against encroachments upon certain powers of banks and trust companies. 1. No person unauthorized by law shall subscribe to or  become  a member of, or be in any way interested in any association, institution or company formed or to be formed for the purpose of issuing notes or other evidences of debt to be loaned or put in  circulation  as money;  nor  shall  any  such  person  subscribe to or become in any way interested in any bank or trust company or fund created or to be created for the like purposes or either of them.  No  corporation,  domestic  or foreign,  other  than  a national bank or a federal reserve bank, unless expressly authorized by the laws of this state, shall employ any part of its property, or be in any way interested in any  fund  which  shall  be employed  for  the  purpose  of  receiving  deposits,  making discounts, receiving  for  transmission  or  transmitting  money  in   any   manner whatsoever,  or issuing notes or other evidences of debt to be loaned or put into circulation as money, except that a small  business  investment company as defined in and operating pursuant to the provisions of an act of congress entitled "Small Business Investment Act of 1958," may act as depository  or  fiscal  agent of the United States when so designated by the secretary of the treasury without violating the provisions  of  this section,  except  that a corporation duly licensed by the superintendent under article thirteen-B of this chapter or therein  expressly  excepted from  the  application  of  said  article  may engage in the business of selling or issuing  checks  or  the  business  of  receiving  money  for transmission  or  transmitting  the  same and except that services of an agent  or  representative  may  be  performed  in  connection  with  the obligations  of issuers where each such marketable obligation has a face value of not less than one hundred thousand dollars. The discounting  of bills,  notes or evidences of debt by a corporation organized solely for the purpose of enabling producers of farm, dairy, horticultural or other agricultural products or cooperative corporations of such  producers  to avail  themselves of the provisions of an act of congress approved March fourth, nineteen hundred and twenty-three,  known  as  the  agricultural credits  act of nineteen hundred and twenty-three, same being subchapter three of chapter seven of title twelve of the code of laws of the United States  as  adopted  by  congress  January   third,   nineteen   hundred thirty-five, and amendments thereto, where such discounting is solely in connection with the rediscount of such bills, notes or evidences of debt under  the  provisions  of  said  act of congress shall not be deemed or construed to be a  form  of  banking,  nor  shall  the  making  of  such discounts  be  deemed  to  violate  any  provisions of law pertaining to banking. Except as  otherwise  provided  in  article  twelve-D  of  this chapter,  engaging  in  the  business  of loaning money in this state on bonds, notes or other evidences of indebtedness,  secured  by  deeds  of trust  or mortgages upon real property or personal property situated in, upon or appurtenant thereto, and/or purchasing of or otherwise acquiring existing bonds, notes or other evidences of indebtedness, deeds of trust or mortgages of or upon such properties, or any  interest  therein,  and the   holding  of  the  same,  or  the  endorsing,  selling,  assigning, transferring or disposing of the  same  to  another  corporation,  by  a domestic  business  corporation,  or  by  a foreign corporation which is authorized to transact business in this state, shall not  be  deemed  or construed to violate any of the provisions of this chapter. The purchase or  other  acquisition on original issue or subsequent transfer for less than the principal amount thereof or otherwise  at  a  discount  of  any evidences  of indebtedness or other obligations for the payment of money shall not by reason of such discount be or be deemed to be  a  violation of the provisions of this section.    2.  No person, association of persons or corporation, unless expressly authorized by law, shall keep any office for the purpose of issuing  any evidences  of  debt,  to  be  loaned or put in circulation as money; nor shall they issue any bills or promissory notes  or  other  evidences  of debt  for  the purpose of loaning them or putting them in circulation as money, unless thereto specially authorized by law.   3. Except as otherwise provided in article five or article  five-C  of this  chapter  or subdivision four of this section, no corporation other than a trust company shall have or exercise in this state the  power  of receiving  deposits of money, securities or other personal property from any person or corporation in trust, or have or exercise  in  this  state any  of  the powers specified in section one hundred of this article, or have or maintain an office in this state  for  the  transaction  of,  or transact,  directly  or indirectly, any such or similar business, except that a federal  reserve  bank  may  exercise  the  powers  conferred  by subdivision  one  of  such section if authorized so to do by the laws of the United States and any domestic corporation legally exercising any of the powers conferred by such subdivision at  the  time  this  act  takes effect  may  continue  to  exercise  such  powers, and a foreign banking corporation or trust company incorporated  under  the  laws  of  another state,  which  by  the  law of the state of its incorporation may act as trustee, guardian, executor, administrator, or in  any  other  fiduciary capacity  under  any last will and testament or codicil thereto or other testamentary writing or under any deed of trust  inter  vivos  or  other written  instrument  establishing  a trust, or by the appointment of any court of said state, may  act  in  this  state  in  any  such  fiduciary capacity,  provided  similar  domestic corporations which have the power under the law of  this  state  to  act  herein  in  any  such  fiduciary capacity,  are  permitted to act in like fiduciary capacity in the state where such foreign corporation has its domicile, provided that  if  such foreign  corporation  proposes  to act in any fiduciary capacity in this state and to do  so  is  required  to  file  its  qualification  in  the surrogate's  court  of  this  state,  it shall file in the office of the clerk of the surrogate's court of the county in  which  application  for such  appointment  is pending (a) a duly executed instrument in writing, by its terms of indefinite duration  and  irrevocable,  appointing  such clerk  and his or her successors its true and lawful attorney, upon whom all  process  in  any  action  or  proceeding  against  such  fiduciary, affecting or relating to the state, trust or fund represented or held by such  fiduciary or the acts of defaults of such corporation in reference to such estate, trust or fund may be served  with  the  same  force  and effect as if it were a domestic corporation and had been lawfully served with  process  within the state, and (b) a copy of its charter certified by its secretary under its corporate seal, together with the post office address of its principal office; provided further that if  such  foreign corporation  proposes  to  act  in  any  other fiduciary capacity in the state, it shall file in the office of  the  superintendent  (a)  a  duly executed  instrument in writing, by its terms of indefinite duration and irrevocable, appointing the superintendent and his or her successors its true and lawful attorney,  upon  whom  all  process  in  any  action  or proceeding  against  such fiduciary affecting or relating to the estate, trust or fund held or represented by  such  fiduciary  or  the  acts  or defaults  of such corporation in reference to such estate, trust or fund may be served with the same force and effect as if it  were  a  domestic corporation  and had been lawfully served with process within the state, (b) a written certificate of designation, which may be changed from time to time thereafter by the filing of a new  certificate  of  designation, specifying  the  name and address of the officer, agent, or other person  to whom such process shall be forwarded by the superintendent, and (c) a copy of its charter certified by its secretary under its corporate seal, together with the post office address of its principal office.   4.  (a) Except as otherwise provided in article five or article five-C of this chapter, no foreign corporation, having authority to act in this state as trustee, guardian, executor, administrator,  or  in  any  other fiduciary  capacity shall establish or maintain, directly or indirectly, any branch office or agency in this state.  (b) Notwithstanding any other provisions of this chapter,  a  bank  or trust  company  incorporated  under  the laws of another state, which is authorized by  its  charter  and  by  the  laws  of  the  state  of  its incorporation  to  exercise  in  such  state any or all of the fiduciary powers that trust companies are authorized to  exercise  in  this  state pursuant  to  sections  one  hundred,  one hundred-a, one hundred-b, one hundred-c and one hundred-d of this article, may establish and  maintain a  trust  office  in this state for purposes of exercising any or all of the fiduciary powers  authorized  by  the  laws  of  the  state  of  its incorporation;  provided, however, that (i) such trust office is not its principal  office;  (ii)  such  exercise  does  not  exceed  the  powers authorized under sections one hundred, one hundred-a, one hundred-b, one hundred-c  and  one hundred-d of this article; and (iii) a bank or trust company organized under  the  laws  of  this  state  and  authorized  to exercise  any  or  all  fiduciary powers under sections one hundred, one hundred-a, one hundred-b,  one  hundred-c  and  one  hundred-d  of  this article   is   permitted  to  establish  a  trust  office  and  exercise substantially similar fiduciary powers on substantially the  same  basis as  permitted  an  out-of-state  state bank or trust company pursuant to this subdivision, in the state where such  out-of-state  state  bank  or trust  company  is  so  incorporated.  A  trust  office  established  or maintained by such an out-of-state state bank or trust company  pursuant to  this  subdivision  shall  not  be  considered  to be a branch office pursuant to any other provisions of this chapter.  (c) An out-of-state state bank or trust company seeking  to  establish and maintain a trust office or open any additional trust offices in this state shall file a notice with the superintendent in the form prescribed by  the  superintendent describing the proposed activities of the office and such other information as  the  superintendent  shall  request.  The trust office may commence operation thirty days after the superintendent receives   such   notice,   unless   the   superintendent  notifies  the out-of-state state bank or trust company in  writing  within  such  time period  that  such  office may not commence operation or that additional information or time is required for the superintendent to consider  such notice.  (d)  Such  out-of-state  state bank or trust company may establish and maintain  additional  trust  offices  in  this  state  pursuant  to  and consistent  with  the  provisions of this subdivision, provided that the superintendent finds that the establishment and maintenance of  any  and all  trust  offices  by such out-of-state state bank or trust company is and continues  to  be  consistent  with  the  goals  set  forth  in  the declaration  of  policy  contained  in  section ten of this chapter. The superintendent shall have the power at any time in his or her discretion to examine any trust office established pursuant to this section to  the same  extent  as  is  provided  for in the case of banking organizations pursuant to  the  provisions  of  this  chapter.  If  any  such  foreign corporation  or  out-of-state  state bank or trust company violates this provision, such foreign corporation or out-of-state state bank or  trust company  shall  not thereafter be appointed or act in any such fiduciary capacity in this state. The validity of any mortgage heretofore given by  a foreign corporation to a trust company doing business within a foreign domicile of such mortgagor to secure the payment of an  issue  of  bonds shall  not be affected by any of the provisions of this section and such mortgage  shall be enforceable in accordance with the laws of this state against property covered thereby within the state of New York.   5. Any out-of-state  state  bank  or  trust  company  subject  to  the provision  of subdivision three or four of this section may be either in corporate form or organized as a limited liability company.   6. Every person, and every corporation, director,  agent,  officer  or member  thereof,  who  shall  violate  any  provision  of  this section, directly or indirectly or assent to such  violation,  shall  forfeit  an amount  as  determined pursuant to section forty-four of this chapter to the people of the state.