NY Banking L § 36 (2021)
2021 New York Laws BNK - Banking Article 2 - Department of Financial Services; Superintendent of Financial Services; Supervisory and Regulatory Powers 36 - Examinations; Right of Inspection; Penalties for Refusing to Permit Examination.

§ 36.  Examinations;  right  of  inspection; penalties for refusing to permit examination. 1.  The  superintendent  shall  have  the  power  to examine  every  banking organization, every bank holding company and any non-banking subsidiary thereof (as such terms "bank holding company" and "non-banking subsidiary" are defined in article three-A of this chapter) and every licensed lender at any time prior to its dissolution  whenever in his judgment such examination is necessary or advisable.   2.  At least once in each calendar year upon such date or dates within each such period as in his or her discretion he or she deems proper, the superintendent shall cause every banking organization  to  be  examined; provided, however, that:  (a)  the  provisions of this subdivision shall not be applicable to an investment  company  unless  (i)  such  investment  company   has   been authorized  by  the  superintendent  of  financial  services  to receive deposits, in accordance with the terms of subdivision three  of  section five hundred eight of this chapter, (ii) a bank or trust company, or any two or more of such organizations, shall own an aggregate of twenty-five per  centum  or more of the capital stock of such investment company, or (iii) such investment company is a corporation which, under the terms of subdivision six of this section, is deemed  for  the  purposes  of  this section  to  be  a  corporation  affiliated  with  a  corporate  banking organization, and  (b) the superintendent may extend the  examination  interval  from  at least once in each calendar year to at least once in each eighteen month period if the banking organization to be examined:  (1) has total assets of less than one billion dollars;  (2)  is  well-capitalized,  which  for  purposes  of this paragraph is defined as having  capital  which  significantly  exceeds  the  required minimum  level  for  each  relevant  capital  measure  or as having such capital as the superintendent shall otherwise define by regulation;  (3) at its most recent examination, was found to be  well-managed  and its composite condition was found to be outstanding or good;  (4)  is  not  currently  subject to a formal enforcement proceeding or order by the superintendent, the federal deposit  insurance  corporation or any other federal banking agency; and  (5) has not been acquired by any person during the twelve month period in which an examination would be required but for this paragraph, and  (c)  the  superintendent  may  modify  the  examination  intervals  as prescribed by this subdivision to the extent  the  superintendent  deems appropriate,  in  his  or  her  sole  discretion, in order to obtain the efficient  use  of  the  personal  and  nonpersonal  resources  of   the department   by  maximizing  coordination  with  identical  or  parallel examinations having differing or varying intervals performed by  federal banking   regulators,   whether   such  examinations  are  performed  in conjunction with the department or on an alternating schedule with  such federal  banking  regulators;  provided,  that nothing in this paragraph shall be deemed in any  manner  to  lessen  or  modify  the  requirement imposed pursuant to section ten of this article.   3. On every such examination of any banking organization inquiry shall be  made as to (a) its financial condition, (b) the security afforded to those by whom  its  engagements  are  held,  (c)  the  policies  of  its management,  (d) whether the requirements of law have been complied with in the administration of its affairs, and (e) such other matters as  the superintendent  may prescribe. Examination of a licensed lender shall be made  only  for  the  purposes  set  forth  in  section  three   hundred forty-eight of this chapter.   4.  The  superintendent  shall  also have power at any time to examine every agency, branch or office located in  this  state  of  any  foreign  banking  corporation,  including,  but not limited to, all of the books, accounts or records of every agency, branch or office  located  in  this state  of  such foreign banking corporation as well as all of the books, accounts  or  records  maintained in this state of any agency, branch or office not located in this state of such foreign banking corporation for the purpose of ascertaining whether it has violated any law and for  any other purpose.   5.  The  superintendent  shall  have  the  power  to make such special investigations as he shall  deem  necessary  to  determine  whether  any individual,  partnership,  unincorporated association or corporation has violated any of the provisions  of  this  chapter;  and  to  the  extent necessary  for  this  purpose the superintendent shall have the power to examine all relevant books, records, accounts and documents.   6. For the purpose of determining the financial condition of a banking organization, the superintendent shall have the power, when  in  his  or her  judgment  it  is necessary or advisable, to examine corporations or any other entity affiliated with  any  such  banking  organization.  The following are deemed for the purposes of this section to be corporations or other entities affiliated with a banking organization:  (a)  (i)  Any  corporation or other entity, the capital stock of which such  banking  organization  directly  or  indirectly,  or   through   a subsidiary  or  subsidiaries, owns or controls ten per centum or more of the voting shares of such corporation  or  other  entity;  or  (ii)  any corporation  or  other entity the election of a majority of the board of directors of which is in any manner directly or indirectly controlled by such banking organization; or (iii) any corporation or other entity  the management  or  policies  over  which  the  banking organization has the power, directly or indirectly, to exercise a controlling  influence,  as determined  by  the  superintendent;  provided,  however,  the foregoing definition of affiliate corporations and other entities shall not  apply to  small  business  investment  companies  as  defined in and operating pursuant to the  provisions  of  an  act  of  congress  entitled  "Small Business  Investment Act of 1958," and such companies shall be deemed to be  corporations  affiliated  with  the  banking  organization  for  the purposes  of  this subdivision, if such banking organization directly or indirectly owns or controls twenty-five per centum or more of the voting shares or more than twenty-five per centum of the shares voted  for  the election  of  directors  at  the  preceding annual meeting of such small business investment company;  or  any  such  small  business  investment company  the election of at least twenty-five per centum of the board of directors of which  is  in  any  other  manner  directly  or  indirectly controlled by such banking organization; or  (b)  Any  corporation or other entity which directly or indirectly, or through a subsidiary or subsidiaries, owns or controls ten per centum or more of the voting shares of capital stock of such banking organization; or any corporation or other entity  which  in  any  manner  directly  or indirectly controls the election of a majority of the board of directors of  such  banking  organization;  or  with  respect to the management or policies of  such  banking  organization  has  the  power,  directly  or indirectly,  to  exercise  a controlling influence, as determined by the superintendent.   6-a. (a) For the purposes of determining the financial condition of  a banking  organization,  the superintendent shall have the power, when in his or  her  judgment  it  is  necessary  or  advisable,  to  examine  a non-banking   subsidiary   of   a  corporation  or  other  entity  which corporation or other entity, pursuant to paragraph  (b)  of  subdivision six  of  this  section,  is  deemed  to  be  an  affiliate  of a banking organization.  (b) For the purposes of  this  subdivision,  a  "subsidiary"  of  such affiliated corporation or other entity shall mean:  (1)  Any  corporation  or other entity ten per centum or more of whose voting stock is directly or  indirectly,  or  through  a  subsidiary  or subsidiaries,  owned,  controlled,  or  held  with  power to vote, by an affiliated corporation or other entity; or (2) any corporation or  other entity,  the  election of a majority of whose directors is controlled in any manner by an affiliated corporation or  other  entity;  or  (3)  any corporation  or  other  entity,  ten  per centum or more of whose voting stock is directly or indirectly owned, controlled, or held with power to vote, by a trustee or trustees for the benefit of  the  stockholders  or members  of  an  affiliated  corporation  or  other  entity;  or (4) any corporation or other entity, at least ten per centum of the voting stock of  which  is  directly  or  indirectly,  or  through  a  subsidiary  or subsidiaries,  owned,  controlled  or  held  with  power  to  vote  by a combination of an affiliated  corporation  or  other  entity  and  by  a trustee  or  trustees  for the benefit of the stockholders or members of such  affiliated  corporation  or  other  entity;  or  (5)  any  entity, corporate  or unincorporated, with respect to the management or policies of which such affiliated corporation or  other  entity  has  the  power, directly   or  indirectly,  to  exercise  a  controlling  influence,  as determined by the superintendent, after notice  and  opportunity  for  a hearing. For the purposes of this subdivision, voting stock shall not be deemed  to  include  voting  stock  owned by the United States or by any corporation wholly owned by the United States.  (c) A "non-banking subsidiary" for the purposes  of  this  subdivision means one which is not a banking organization or which is not engaged in the  banking  business  as  defined  in  subdivision  one of section one hundred thirty-one of this chapter.  (d) The superintendent may use the reports of regulatory  agencies  of this  state,  of other states, of any foreign government, and of federal regulatory agencies in making such examinations or in  conjunction  with such  examination.  All  regulatory  agencies  of this state, shall upon request of the superintendent, furnish or make available to him  or  her reports of examination made by them of any such non-banking subsidiary.   6-b.  For  purposes of subdivisions six and six-a of this section, any references contained therein to "voting stock" or "voting shares"  shall be  deemed  to include any ownership interest with respect to any entity other  than  a  corporation,  any  references   to   "stockholders"   or "shareholders"  shall  include  persons  or  entities who have an equity interest in any entity other than a corporation, and any  references  to "board  of  directors"  shall  be deemed to mean the governing body with respect to any entity other than a corporation.   7. The  superintendent  may  cause  any  corporation,  association  or partnership having business transactions or relations with any corporate banking  organization  to  be examined if such examination is found by a justice of the supreme court, on application of the  superintendent  and on  notice  to  such  company,  to be necessary or expedient in order to ascertain  whether  the  capital  stock  of   such   corporate   banking organization  is  impaired  or  whether safety of depositors with it has been imperilled.   8. Examinations may be made and inquiries instituted or  continued  in the  discretion  of  the superintendent after he has taken possession of the property and business of any banking organization or  after  it  has entered upon voluntary dissolution until it shall resume business or its affairs shall be finally liquidated.   9.   Any   individual,   partnership,  unincorporated  association  or corporation, or any other entity, which refuses to permit examination or  investigation in accordance with the terms of this section shall forfeit to the people of the state an amount as determined pursuant  to  section forty-four of this chapter for every day such refusal continues.   10. All reports of examinations and investigations, correspondence and memoranda   concerning   or   arising   out   of  such  examination  and investigations, including any duly authenticated copy or copies  thereof in  the  possession of any banking organization, bank holding company or any subsidiary  thereof  (as  such  terms  "bank  holding  company"  and "subsidiary"  are  defined  in  article  three-A  of  this chapter), any corporation or any other entity affiliated with a  banking  organization within   the  meaning  of  subdivision  six  of  this  section  and  any non-banking subsidiary of a corporation or any other entity which is  an affiliate  of  a  banking organization within the meaning of subdivision six-a of this section, foreign  banking  corporation,  licensed  lender, licensed casher of checks, licensed mortgage banker, registered mortgage broker,  licensed  mortgage  loan  originator,  licensed  sales  finance company,  registered  mortgage  loan  servicer,  licensed  student  loan servicer,   licensed   insurance   premium   finance   agency,  licensed transmitter of money, licensed  budget  planner,  any  other  person  or entity  subject  to  supervision  under this chapter, or the department, shall be confidential communications, shall not be subject  to  subpoena and   shall   not  be  made  public  unless,  in  the  judgment  of  the superintendent, the ends of justice and the  public  advantage  will  be subserved  by the publication thereof, in which event the superintendent may publish or authorize the publication of a copy of any such report or any part thereof in such manner as may be deemed proper or  unless  such laws  specifically  authorize  such disclosure. For the purposes of this subdivision,  "reports  of  examinations  and  investigations,  and  any correspondence   and   memoranda  concerning  or  arising  out  of  such examinations and investigations", includes any such materials of a bank, insurance or securities regulatory agency or any  unit  of  the  federal government  or that of this state any other state or that of any foreign government which are considered confidential by such agency or unit  and which  are  in  the  possession of the department or which are otherwise confidential materials that have been shared by the department with  any such agency or unit and are in the possession of such agency or unit.