NY Banking L § 247 (2021)
2021 New York Laws BNK - Banking Article 6 - Savings Banks 247 - Restrictions Upon Trustees and Officers.

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