2023 New York Laws › BNK - Banking › Article 5 - Foreign Banking Corporations and National Banks › 204-A - Payment of Claims by Foreign Banking Corporations Where Adverse Claim Is Asserted; Effect of Claims or Advices Originating In, and Statutes, Rules Or

§ 204-a.  Payment  of  claims  by  foreign  banking corporations where
adverse claim is asserted; effect of claims or advices  originating  in,
and statutes, rules or regulations purporting to be in force in occupied
territory;   performance   of   contracts   and  repayment  of  deposits
performable  or  repayable  at  foreign  offices  of   foreign   banking
corporations.  1.  Notice  to  any  foreign  banking  corporation  doing
business in this state under a license issued by the  superintendent  in
accordance with the provisions of this chapter, of an adverse claim to a
credit  standing  on  its  books to the account of any person, or to the
balance in any deposit account, or of an adverse claim to securities  or
other  property  held  for  the  account  of  any  person,  shall not be
effectual in this state to cause said  foreign  banking  corporation  to
recognize  said adverse claimant unless said adverse claimant shall also
either procure a restraining  order,  injunction  or  other  appropriate
process  against  said  foreign  banking  corporation  from  a  court of
competent  jurisdiction  in  the  United  States  in  a  cause   therein
instituted  by  him  wherein  the  person to whose account the credit or
deposit stands, or for whose account the securities  or  other  property
are  held,  or  his executor or administrator is made a party and served
with summons, or shall execute to said foreign banking  corporation,  in
form  and  with  sureties  acceptable  to  it  a bond, indemnifying said
foreign banking corporation from any and all  liability,  loss,  damage,
costs  and  expenses,  for  and on account of the payment of or delivery
pursuant to such adverse claim or the  dishonor  of  the  order  of  the
person  to  whose  account  the credit or deposit stands on the books of
said foreign banking corporation or for whose account the securities  or
other property are held by said foreign banking corporation.
2.  (a)  A  foreign  banking  corporation doing business in this state
under a license issued by the  superintendent  in  accordance  with  the
provisions of this chapter, need not in this state recognize or give any
effect to (1) any claim to a credit standing on its books to the account
of,  or  the  balance  in  any  deposit  account  of,  or  any  claim to
securities, or other property  held  by  it  for  the  account  of,  any
corporation,  firm  or  association  in  occupied  territory  or (2) any
advice, statute, rule or regulation purporting  to  cancel  or  to  give
notice  of  the  cancellation of the authority of any person at the time
appearing on the books of such foreign banking corporation as authorized
to withdraw or otherwise dispose of cash, securities, or other  property
of  such  corporation,  firm or association, unless such foreign banking
corporation is required so to do by appropriate process procured against
it in a court of competent jurisdiction in the United States in a  cause
therein  instituted  by  or  in  the  name  of such corporation, firm or
association, or unless the person  making  such  claim  or  giving  such
advice or invoking such statute, rule or regulation, as the case may be,
shall  execute  to  such  foreign  banking corporation, in form and with
sureties acceptable to it, a bond  indemnifying  it  from  any  and  all
liability,  loss,  damage,  costs  and  expenses  for  and on account of
recognizing or giving any effect to such claim, advice, statute, rule or
regulation.
(b) For the purposes  of  this  subdivision  (1)  the  term  "occupied
territory"  shall  mean  territory  occupied  by  a  dominant  authority
asserting governmental, military or police powers of any  kind  in  such
territory,  but  not  recognized  by  the  United  States as the de jure
government of such territory, and (2) the  term  "corporation,  firm  or
association  in  occupied  territory"  shall mean a corporation, firm or
association which has, or at any time has had, a place  of  business  in
territory which has at any time been occupied territory.
(c)  The  foregoing  provisions of this subdivision shall be effective
only in cases where (1) such claim or advice purports or appears to have
been sent from or is reasonably believed to have been sent  pursuant  to
orders  originating  in,  such  occupied  territory during the period of
occupation,  or  (2)  such  statute,  rule or regulation appears to have
emanated from such dominant authority and purports to be or to have been
in force in such occupied territory during the period of occupation.
(d) The foregoing  provisions  of  this  subdivision  shall  apply  to
claims,  advices,  statutes, rules or regulations made, given or invoked
either prior to, or on or subsequent to the effective date of this act.
(e) A foreign banking corporation doing business in this state under a
license issued by the superintendent in accordance with  the  provisions
of this chapter need not in this state recognize or give any effect to a
claim  of  authority  to  order  the payment or delivery of any funds or
other property standing on its books to the credit of, or held by it for
the account of, any person, corporation, unincorporated  association  or
partnership,  which  claim  conflicts with a claim of authority of which
the foreign banking corporation had prior notice, unless the  person  or
persons  asserting  such  subsequent  claim  shall procure a restraining
order, injunction or other  appropriate  process  against  said  foreign
banking corporation from a court of competent jurisdiction in the United
States,  or,  in  lieu  thereof,  at  the option of said foreign banking
corporation, shall execute to said foreign banking corporation, in  form
and  with sureties acceptable to it, a bond, indemnifying it for any and
all liability, loss, damage, costs and expenses for or on account of any
payment or delivery of such property by it pursuant to  such  subsequent
claim  of authority or for or on account of the dishonor of any check or
other order of any person or persons asserting the claim of authority of
which such foreign banking corporation already had notice  at  the  time
the  subsequent conflicting claim of authority is asserted by the person
or persons furnishing such bond.
3. (a) Notwithstanding section 1--301 of the uniform commercial  code,
any  foreign  banking  corporation  doing business in this state under a
license issued by the superintendent in accordance with  the  provisions
of  this  chapter  shall  be  liable  in  this state for contracts to be
performed at its office or offices  in  any  foreign  country,  and  for
deposits  to  be  repaid at such office or offices, to no greater extent
than a bank, banking corporation or other  organization  or  association
for  banking  purposes  organized  and  existing  under the laws of such
foreign country would be liable under its laws. The laws of such foreign
country for the purpose of this subdivision shall be deemed  to  include
all  acts,  decrees, regulations and orders promulgated or enforced by a
dominant authority asserting governmental, military or police  power  of
any  kind  at the place where any such office is located, whether or not
such dominant  authority  be  recognized  as  a  de  facto  or  de  jure
government.
(b)  Notwithstanding section 1--301 of the uniform commercial code, if
by action of any such dominant authority which is not recognized by  the
United  States  as  the  de  jure  government  of  the foreign territory
concerned, any property situated in or any amount to be received in such
foreign territory and carried as an asset of any office of such  foreign
banking  corporation  in  such foreign territory is seized, destroyed or
cancelled, then the liability, if any, in this  state  of  such  foreign
banking  corporation for any deposit theretofore received and thereafter
to be repaid by it, and for any contract theretofore made and thereafter
to be performed by it, at any office in such foreign territory shall  be
reduced  pro  tanto  by  the  proportion that the value (as shown by the
books or other records of such foreign banking corporation, at the  time

of  such  seizure,  destruction or cancellation) of such assets bears to
the aggregate of all the deposit and contract liabilities of the  office
or   offices  of  such  foreign  banking  corporation  in  such  foreign
territory,  as  shown at such time by the books or other records of such
foreign banking corporations. Nothing contained in this paragraph  shall
diminish  or  otherwise affect the liability of any such foreign banking
corporation to any corporation, firm or individual which at the time  of
such  seizure,  destruction or cancellation was incorporated or resident
in any state of the United States.
(c) Notwithstanding the provisions of  any  law  to  the  contrary,  a
foreign  banking corporation operating a branch or branches or an agency
or agencies in this state shall not be required to repay,  at  any  such
branch,  branches, agency or agencies in this state, any deposit made at
a foreign office of any such foreign banking corporation if such  office
cannot  repay  the  deposit  due  to (i) an act of war, insurrection, or
civil  strife;  or  (ii)  an  action  by   a   foreign   government   or
instrumentality,  whether  de  jure or de facto, in the country in which
the office is located preventing  such  repayment,  unless  the  foreign
banking  corporation  operating  in  this  state has expressly agreed in
writing  to  repay   the   deposit   under   such   circumstances.   The
superintendent   of   financial   services  may  promulgate  regulations
necessary to effectuate the  provisions  of  this  paragraph,  including
regulations  providing  for  adequate disclosure to retail depositors in
the United States of the restrictions on  repayment  contained  in  this
subdivision.  The  provisions  of  this  paragraph  shall  not  alter or
diminish the liability of a custodian of assets of a fund under  section
one hundred seventy-eight-a of the retirement and social security law.