2023 New York Laws › BNK - Banking › Article 10 - Savings and Loan Associations › 399 - Restrictions on Directors and Officers.

§ 399.  Restrictions  on  directors  and  officers.  1. No director or
officer of any savings and loan association shall  receive  any  salary,
fees,  expenses  or other compensation for soliciting the sale of shares
of the association to any person.
2. No officer, director, attorney, agent or employee  of  any  savings
and loan association shall discount or, directly or indirectly, purchase
from  a  member of such association a share in such association, whether
or not withdrawal application has been filed with respect to such share,
except by payment therefor of the book value  of  such  share.  For  the
purposes of this subdivision, the book value of a share shall consist of
the  dues  and  dividends  credited  thereon  and dividends declared but
withheld subject to payment at maturity.
3. No director or officer of any savings and loan  association  shall,
after  June  thirtieth,  nineteen  hundred thirty-nine for himself or as
agent or partner of another borrow any of the funds of such  association
or become the owner of real property upon which such association holds a
mortgage;  except  that  such  officer  or director may borrow from such
association on the security of shares held by him or on the security  of
real  estate  owned  by  him  if  used and occupied by him as a home for
himself or family, or may become the owner of real estate  so  used  and
occupied  upon  which  the association holds a mortgage. As used in this
subdivision, the terms "real property", "real  estate",  and  "mortgage"
shall  be  deemed  to refer to ownership interests in, and security with
respect to, a cooperative apartment unit.
4. No director or officer of any savings and  loan  association  shall
direct  or  require  a borrower on a mortgage to negotiate any policy of
insurance on the mortgaged property  through  any  particular  insurance
company or companies or through any particular insurance agent or agents
and  broker  or brokers or attempt to divert to any particular insurance
company or companies or any particular insurance  agent  or  agents  and
broker  or  brokers, the business of borrowers from the savings and loan
association, or refuse to accept any insurance policy because it was not
negotiated through  a  particular  insurance  company  or  companies  or
through a particular insurance agent or agents and broker or brokers.
5.  (a)  No executive officer of a savings and loan association may be
an executive officer, director or trustee of another  savings  and  loan
association, bank or trust company, savings bank, 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 of  financial
services pursuant to 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 and loan association to be  an  executive
officer, director or trustee or both an executive officer and a director
or  a  trustee  of  another  savings and loan association, bank or trust
company, savings bank, national bank, federal savings  bank  or  federal
savings  association,  the  principal office of which 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
executive officers and directors of savings and loan associations  shall
continue in effect.