2023 New York Laws › BNK - Banking › Article 3 - Banks and Trust Companies › 103 - Restrictions on Loans, Purchases of Securities, Total Liabilities and Other Credit Exposures to a Bank or Trust Company of Any One Person.

§ 103.* Restrictions  on  loans,  purchases  of  securities  and total
liabilities to bank or trust company of any one person.
* NB Effective until notification of the superintendent  of  financial
services
* Restrictions  on  loans,  purchases of securities, total liabilities
and other credit exposures to a bank or trust company of any one person.
* NB Effective upon notification of the  superintendent  of  financial
services
No bank or trust company shall:
1. Lend to any person (which term shall mean, for the purposes of this
subdivision,  any  individual,  partnership, unincorporated association,
corporation or body politic) an amount which  will  exceed  fifteen  per
centum  of the capital stock, surplus fund and undivided profits of such
bank or trust company. Any extension of credit to a person by  means  of
the  issue  or  confirmation of irrevocable sight letters of credit upon
the responsibility of such person,  or  by  means  of  the  discount  or
purchase  of,  or  investment  in,  bills  of  exchange,  notes,  bonds,
debentures or other obligations made, drawn or accepted by such  person,
shall  be  considered  a  loan  to  such person for the purposes of this
subdivision except that (1) in the case of an accepted bill of exchange,
the loan shall be considered, subject to clause (2) below, to be made to
the acceptor and not to the drawer; and (2) if  any  bill  of  exchange,
note, bond, debenture or other obligation is endorsed without limitation
or  guaranteed  by any person and discounted with, or sold to, such bank
or trust company by such person, the loan shall be considered a loan  to
such  person  and  not  to the maker, drawer or acceptor of such bill of
exchange, note, bond,  debenture  or  other  obligation.  The  foregoing
limitation is subject to the following exceptions:
(a)  The  limitations  in  this subdivision shall not apply to (1) any
loan to the extent that the United  States,  this  state  or  any  city,
county,  town,  village  or  school  district  of  this  state,  or  any
department, agency or instrumentality of the United States or this state
designated by the superintendent by general or specific regulation,  has
agreed  to  pay  the  principal  and interest thereof, or has guaranteed
payment (by guaranty or commitment to purchase  or  otherwise)  of  such
principal  and  interest, or is committed to supply, by loan, subsidy or
otherwise, funds sufficient to pay such principal and interest,  or  has
otherwise pledged its faith and credit for the payment of such principal
and  interest;  or  (2)  any loan secured by not less than a like amount
(based on their principal amount or market value, whichever is lower, at
the time the loan is made) of direct obligations of the United States or
of this state or of any city, county, town, village or  school  district
of  this  state  or of any such department, agency or instrumentality of
the United States or  this  state  or  by  obligations  otherwise  fully
guaranteed as to principal and interest by the United States.
(b) The limitations in this subdivision shall not apply to any loan to
the  extent such loan is secured by cash collateral which is not subject
to withdrawal.
In addition, the limitations in this subdivision shall not  apply  (i)
to  loans  arising  from  the  discount  of commercial or business paper
evidencing an obligation to the person  negotiating  it  with  recourse;
(ii)  to loans to the student loan marketing association; (iii) to loans
to  any  financial  institution  or  to   any   receiver,   conservator,
superintendent  of  financial  services, or other agent in charge of the
business and property of such financial institutions when such loans are
approved by  the  superintendent;  (iv)  to  the  purchase  of  bankers'
acceptances  of  the  kind described in section 13 of an act of congress
entitled  the  "Federal  Reserve  Act"  and  issued  by  other   banking

corporations;  and  (v)  to loans made to facilitate prompt clearance or
settlement arising from the  purchase  or  sale  of  readily  marketable
securities  which loans (A) are secured by readily marketable securities
having  a market value or a principal face amount (whichever is less) at
the time the loan is made of not less than the principal amount of  said
loan,  and  (B)  shall  be required to be repaid upon settlement of such
purchase or sale.
(c) Loans (exclusive of any loan described in paragraph  (a)  of  this
subdivision)  to  any  state other than the state of New York, or to any
foreign nation, the New York State  thruway  authority,  the  Triborough
bridge  and tunnel authority, The Port of New York Authority, a railroad
corporation, a  municipal  corporation  of  this  state,  a  corporation
subject  to  the  jurisdiction  of  a  public service commission of this
state,  or  any  international  lending  facility  or   public   benefit
corporation  designated  by  the superintendent by regulation, may equal
but not exceed twenty-five per centum of the capital stock, surplus fund
and undivided profits of such bank or trust company.
(d) Loans to any person, other than loans described in paragraph  (a),
(b) or (c) of this subdivision, may equal but not exceed twenty-five per
centum  of the capital stock, surplus fund and undivided profits of such
bank or trust company, provided such loans either in whole or  in  part,
but  in  any  event that part thereof in excess of fifteen per centum of
such capital stock, surplus fund and undivided profits:
(1) are upon, or with respect to, drafts or bills of exchange drawn in
good  faith  against  actually  existing  values,   or   upon   bankers'
acceptances  or  bills  of  exchange  of  the  kinds and maturities made
eligible by law for purchase in  the  open  market  by  federal  reserve
banks; or
(2)  are  secured by collateral having an ascertained market value, or
otherwise having a value as collateral as found  in  good  faith  by  an
officer  of  such bank or trust company, at least equal to the excess of
such loans over fifteen per centum of such capital stock,  surplus  fund
and undivided profits.
(d-1) Loans secured by bills of lading, warehouse receipts, or similar
documents  transferring  or securing title to readily marketable staples
shall be subject to a  limitation  of  thirty-five  per  centum  of  the
capital  stock, surplus fund and undivided profits of such bank or trust
company in addition to the general limitations if the  market  value  of
the staples securing each additional loan at all times equals or exceeds
one  hundred  fifteen per centum of the outstanding amount of such loan.
The staples shall be fully covered by insurance whenever it is customary
to insure such staples.
(d-2) Loans secured by shipping documents or instruments  transferring
or  securing title covering livestock or giving a lien on livestock when
the market value of the livestock securing the obligation is not at  any
time  less than one hundred fifteen per centum of the face amount of the
note covered,  shall  be  subject  to  a  maximum  limitation  equal  to
twenty-five  per centum of the capital stock, surplus fund and undivided
profits of such bank or trust company.
In addition, loans which arise from the discount by dealers  in  dairy
cattle of paper given in payment for dairy cattle, which paper carries a
full  recourse endorsement or unconditional guarantee of the seller, and
which are secured by the cattle  being  sold,  shall  be  subject  to  a
limitation  of twenty-five per centum of the capital stock, surplus fund
and undivided profits of such bank or trust company.
(e) In computing the total loans by any bank or trust company  (i)  to
any  individual,  there shall be included all loans by the bank or trust
company to any partnership or unincorporated association of which he  is

a  member, and all loans made for his benefit or for the benefit of such
partnership or association; (ii) to any  partnership  or  unincorporated
association,  there  shall  be  included  all loans by the bank or trust
company  to  its  individual  members  and all loans made by the bank or
trust company for the benefit  of  such  partnership  or  unincorporated
association  or  any member thereof; and (iii) to any corporation, there
shall be included all loans made by the bank or trust  company  for  the
benefit  of  the  corporation. A loan shall be deemed to be made for the
benefit of a corporation only to the extent that the  proceeds  of  such
loan (1) are to be loaned to the corporation; (2) are to be used for the
acquisition  (otherwise  than in connection with a public offering) from
the corporation by a person in control of, or under common control with,
the corporation,  of  any  stock  or  other  securities  issued  by  the
corporation,  or  (3)  are  to be transferred to the corporation without
fair and adequate consideration, and  the  discharge  of  an  equivalent
amount  of debt previously incurred in good faith and for value shall be
considered fair and adequate consideration. A loan shall not  be  deemed
to  be  made  for the benefit of a corporation if such loan is made to a
person other  than  the  corporation  and  is  secured  as  provided  in
subdivision  four  of this section or is secured by collateral having an
ascertained market value, or otherwise having a value as  collateral  as
found  in  good  faith  by  an officer of such bank or trust company, at
least equal to the amount of the loan;  provided  that  stock  or  other
securities  issued  by, or a lien on property of, such corporation shall
not be considered collateral for the purposes of this provision.
(f) The limitations  in  this  subdivision  shall  not  apply  to  the
acceptance  of bills of exchange or the issue or confirmation of letters
of credit calling for acceptances by a bank or  trust  company,  but  no
bank or trust company shall make acceptances, or issue letters of credit
calling  for  acceptances,  upon  the responsibility of any person to an
amount in excess of fifteen per centum of  the  capital  stock,  surplus
fund  and  undivided  profits of such bank or trust company, unless that
part thereof in excess of fifteen per  centum  of  such  capital  stock,
surplus  fund  and undivided profits is, and will remain, secured either
by accompanying documents or by some other actual security  growing  out
of  the same transaction as the acceptance or by substituted security of
similar character.
(g) Loans arising from the discount of  negotiable  or  non-negotiable
installment  consumer paper which carries a full recourse endorsement or
unconditional guarantee by the transferor of such paper shall be subject
to a limitation of twenty-five per centum of the capital stock,  surplus
fund  and  undivided  profits  of such bank or trust company. Within the
meaning of this subdivision, the liability to such bank or trust company
of  any   individual,   partnership,   unincorporated   association   or
corporation  as  endorser  or  guarantor of negotiable or non-negotiable
instalment consumer paper shall not be deemed a loan to such individual,
partnership, unincorporated association or corporation to the extent  of
the  value  of  the  obligation  thereon of the maker of such instalment
consumer paper, as found in good faith in writing by an officer of  such
bank   or   trust  company,  designated  to  make  such  evaluation  and
certification by the board of directors of the bank  or  trust  company,
and  upon the further certification by the said officer that the bank or
trust company is relying  primarily  on  the  maker  of  the  instalment
consumer  paper  for  the payment of an amount owing upon the instalment
consumer paper upon the security of which the bank or trust  company  is
making   the  loan  or  in  which  it  is  making  the  investment.  The
certifications are to be  made  at  the  time  of  making  the  loan  or
investment, and are to be based on information contained in the files of

the  bank  or  trust  company,  or  on  the  personal  knowledge  of the
designated officer. Instalment consumer paper, for the purposes of  this
section,  shall  mean  retail instalment contracts and retail instalment
obligations  as  defined  in  subdivisions six and six-a of section four
hundred ninety-one of this chapter, and similar agreements entered  into
outside of this state.
(h) The limitations in this subdivision shall not apply to any advance
of  federal  funds  by  such bank or trust company to a commercial bank,
provided such advance is made on the condition that it be repaid on  the
next  business  day  following the day on which the advance is made. For
purposes of this paragraph, the term "federal funds" shall mean funds on
deposit at a federal reserve bank or funds on deposit  at  a  commercial
bank  which  are  exchangeable for funds on deposit at a federal reserve
bank; the term "commercial bank" shall mean  any  bank,  trust  company,
private  banker,  national  banking association, any banking corporation
organized under the laws of the United States or any state of the United
States and engaged in a commercial  banking  business,  or  any  banking
corporation  organized under the laws of any foreign country and engaged
in the commercial banking business that maintains  a  branch  or  agency
licensed  by  any  state  of the United States or the comptroller of the
currency; and the term "business day" shall mean any day  on  which  the
bank  or trust company making the advance, the commercial bank obtaining
the advance and any federal reserve bank or  banks  through  which  such
advance was effected are all open for general business.
* (i)  The  limitations  in  this  subdivision  shall not apply to the
investment of such bank or trust company in the bonds, debentures, notes
or  other  obligations  of  any  person,  provided:  (i)   such   bonds,
debentures,  notes  or  other  obligations mature not less than one year
after their respective dates of issuance,  and,  at  the  time  of  such
investment,  are  rated  in one of the three highest rating grades by an
independent rating service designated by the superintendent of financial
services; (ii) such investment does not exceed fifteen per centum of the
capital stock, surplus fund and undivided profits of such bank or  trust
company;  and  (iii)  such  investment  complies  with  such  additional
limitations and conditions as the superintendent of  financial  services
from time to time may prescribe by general regulation.
* NB  Effective  until notification of the superintendent of financial
services
* (i) The limitations in this  subdivision  shall  not  apply  to  the
investment of such bank or trust company in the bonds, debentures, notes
or   other   obligations  of  any  person,  provided:  (i)  such  bonds,
debentures, notes or other obligations mature not  less  than  one  year
after  their  respective  dates  of  issuance,  and, at the time of such
investment,  meet  the  standards  of  creditworthiness  established  by
regulation  by  the superintendent; (ii) such investment does not exceed
fifteen per centum of the capital  stock,  surplus  fund  and  undivided
profits  of  such  bank  or  trust  company;  and  (iii) such investment
complies  with  such  additional  limitations  and  conditions  as   the
superintendent from time to time may prescribe by regulation.
* NB  Effective  upon  notification of the superintendent of financial
services
* (j) In the case of a  trust  company  which  (1)  does  not  receive
deposits  from  the  general  public  and  (2)  has been exempted by the
superintendent of financial services from the  requirements  of  section
thirty-two  of  this  chapter, the limitations of this subdivision shall
not apply to  the  investment  of  such  trust  company  in  the  bonds,
debentures,  notes  or  other obligations of, any foreign nation, or any
political subdivision, agency or instrumentality thereof, provided:  (i)

at  the  time of such investment, such bonds, debentures, notes or other
obligations are rated in one of the three highest rating  grades  by  an
independent rating service designated by the superintendent of financial
services;   (ii)   for  any  such  bonds,  debentures,  notes  or  other
obligations, the foreign nation, or any political subdivision, agency or
instrumentality  thereof,  has  guaranteed  payment  (by   guaranty   or
commitment  to purchase or otherwise) of such principal and interest, or
is committed to supply, by loan, subsidy or otherwise, funds  sufficient
to  pay  such principal and interest, or has otherwise pledged its faith
and credit for the payment of such principal and  interest;  (iii)  such
investments  do  not exceed the per centum applicable to such obligor of
the capital stock, surplus fund and undivided profits of  such  bank  or
trust  company  as  the  superintendent  shall  approve,  and  (iv) such
investments  comply  with  such  limitations  and  conditions   as   the
superintendent may from time to time prescribe.
* NB  Effective  until notification of the superintendent of financial
services
* (j) In the case of a  trust  company  which  (1)  does  not  receive
deposits  from  the  general  public  and  (2)  has been exempted by the
superintendent from the  requirements  of  section  thirty-two  of  this
chapter,  the  limitations  of  this  subdivision shall not apply to the
investment of such trust company in  the  bonds,  debentures,  notes  or
other  obligations of, any foreign nation, or any political subdivision,
agency or instrumentality thereof, provided: (i) at  the  time  of  such
investment,  such bonds, debentures, notes or other obligations meet the
standards  of  creditworthiness  established  by   regulation   by   the
superintendent;  (ii)  for  any  such  bonds, debentures, notes or other
obligations, the foreign nation, or any political subdivision, agency or
instrumentality  thereof,  has  guaranteed  payment  (by   guaranty   or
commitment  to purchase or otherwise) of such principal and interest, or
is committed to supply, by loan, subsidy or otherwise, funds  sufficient
to  pay  such principal and interest, or has otherwise pledged its faith
and credit for the payment of such principal and  interest;  (iii)  such
investments  do  not exceed the per centum applicable to such obligor of
the capital stock, surplus fund and undivided profits of  such  bank  or
trust  company  as  the  superintendent  shall  approve;  and  (iv) such
investments  comply  with  such  limitations  and  conditions   as   the
superintendent may from time to time prescribe.
* NB  Effective  upon  notification of the superintendent of financial
services
* (k) In the case of a  trust  company  which  (1)  does  not  receive
deposits  from  the  general  public  and  (2)  has been exempted by the
superintendent of financial services from the  requirements  of  section
thirty-two  of  this  chapter, the limitations of this subdivision shall
not apply to the  purchase  of  securities  under  repurchase  agreement
provided  that  the repurchase agreement relates to not less than a like
amount of direct obligations (based on their principal amount or  market
value,  whichever  is  lower,  at  the  time the purchase occurs) of any
foreign nation, or any political subdivision, agency or  instrumentality
thereof,  provided:  (i)  at  the  time  of  such  purchase, such direct
obligations are rated in one of the three highest rating  grades  by  an
independent rating service designated by the superintendent of financial
services;  (ii)  for any such direct obligations, the foreign nation, or
any  political  subdivision,  agency  or  instrumentality  thereof,  has
guaranteed  payment (by guaranty or commitment to purchase or otherwise)
of the principal and interest thereof, or is  committed  to  supply,  by
loan,  subsidy  or otherwise, funds sufficient to pay such principal and
interest, or has otherwise pledged its faith and credit for the  payment

of  such  principal  and  interest;  (iii)  the  purchase  price of such
securities does not exceed the per centum applicable to the  obligor  of
such securities of the capital stock, surplus fund and undivided profits
of  such  bank or trust company as the superintendent shall approve; and
(iv) such purchase complies with such limitations and conditions as  the
superintendent may from time to time prescribe.
* NB  Effective  until notification of the superintendent of financial
services
* (k) In the case of a  trust  company  which  (1)  does  not  receive
deposits  from  the  general  public  and  (2)  has been exempted by the
superintendent from the  requirements  of  section  thirty-two  of  this
chapter,  the  limitations  of  this  subdivision shall not apply to the
purchase of securities under  repurchase  agreement  provided  that  the
repurchase  agreement  relates  to not less than a like amount of direct
obligations (based on their principal amount or market value,  whichever
is lower, at the time the purchase occurs) of any foreign nation, or any
political  subdivision, agency or instrumentality thereof, provided: (i)
at the time of such purchase, such direct obligations meet the standards
of creditworthiness established by  regulation  by  the  superintendent;
(ii)  for  any  such  direct  obligations,  the  foreign  nation, or any
political subdivision, agency or instrumentality thereof, has guaranteed
payment (by guaranty or commitment to  purchase  or  otherwise)  of  the
principal  and  interest  thereof,  or  is committed to supply, by loan,
subsidy or  otherwise,  funds  sufficient  to  pay  such  principal  and
interest,  or has otherwise pledged its faith and credit for the payment
of such principal  and  interest;  (iii)  the  purchase  price  of  such
securities  does  not exceed the per centum applicable to the obligor of
such securities of the capital stock, surplus fund and undivided profits
of such bank or trust company as the superintendent shall  approve;  and
(iv)  such purchase complies with such limitations and conditions as the
superintendent may from time to time prescribe.
* NB Effective upon notification of the  superintendent  of  financial
services
* The  superintendent  of  financial  services  shall  be empowered to
promulgate rules and regulations as shall be appropriate  to  carry  out
the purposes of this subdivision.
* NB  Effective  until notification of the superintendent of financial
services
* The superintendent  shall  be  empowered  to  promulgate  rules  and
regulations  as  shall  be appropriate to carry out the purposes of this
subdivision.
* NB Effective upon notification of the  superintendent  of  financial
services
* The  superintendent also shall be authorized to determine the manner
and  extent  to  which  credit  exposure   resulting   from   derivative
transactions,  repurchase  agreements,  reverse  repurchase  agreements,
securities lending transactions and  securities  borrowing  transactions
shall  be  taken  into  account for purposes of this section. As used in
this section, the term "derivative transaction" includes any transaction
that is a contract, agreement, swap, warrant, note  or  option  that  is
based,  in  whole  or  in  part,  on  the value of, any interest in, any
quantitative measure of, or the occurrence of any event relating to, one
or more commodities, securities, currencies, interest  or  other  rates,
indices   or   other   assets.   In   making  such  determinations,  the
superintendent may, but is not required to, act by order or regulation.
* NB Effective upon notification of the  superintendent  of  financial
services
4. Make a loan upon the security of real estate within or without this
state  which  does  not comply with any such rules or regulations as the
superintendent of financial services may prescribe.
No  loan shall be made under the provisions of this subdivision except
upon the written  and  signed  certificate  of  an  appraiser  appointed
pursuant  to  policies established by the board of directors, certifying
to the value of the premises according to his judgment.
The provisions of this subdivision shall not constitute the  authority
to make a loan to a natural person upon the security of a mortgage which
is not a first lien.
Where  the  collateral  for  any  loan  consists partly of real estate
security  and  partly  of  other  security,  including  a  guarantee  or
endorsement by or an obligation or commitment of a person other than the
borrower,  only  the  amount  by  which  the  loan  exceeds the value as
collateral of such other security, as found in  good  faith  by  a  duly
authorized  officer  of  such  bank or trust company, at the time of the
making of the loan or commitment therefor, shall be  considered  a  loan
upon  the  security  of  real estate, provided, that in no event shall a
loan be considered a loan upon the security of real estate (i) where the
principal amount of any real estate security taken therefor is less than
fifteen per centum of the amount of such loan or (ii) where the loan  is
payable in monthly or quarterly installments over a period not to exceed
one  hundred  twenty-one  months  and  does  not  exceed twenty thousand
dollars and is for the purpose  of  paying  the  cost  of  any  repairs,
alterations  or  improvements  upon,  or  in connection with, or, as the
superintendent may authorize, the equipping of  existing  structures  or
the  building  of new structures by the owners thereof or by the lessees
under a lease expiring not less than six months after  the  maturity  of
the  loan  or (iii) where the loan is fully guaranteed or insured by the
United States or a state, or any department, agency  or  instrumentality
thereof,  and for the payment of which loan the full faith and credit of
the United States or of such state is pledged and if under the terms  of
the  guaranty  or  insurance agreement the bank or trust company will be
assured of repayment in accordance with the terms of the  loan  or  (iv)
where  there  is  a  binding  and  valid  commitment  or  agreement by a
financially  responsible  lender,   purchaser   or   other   financially
responsible party either directly with the lending bank or trust company
or  which  is  for  the benefit of, or has been assigned to, the lending
bank or trust company and pursuant to  which  commitment,  agreement  or
assignment,  the lender, purchaser or other party is required to advance
to the lending bank or trust company within thirty months from the  date
of  such  commitment or agreement the full amount of the loan to be made
by the lending bank or trust company upon the security  of  real  estate
improved  by a building or buildings, or to be improved by a building or
buildings in the process of construction, the  major  portion  of  which
building  is used, or in the case of a building under construction is to
be  used,  for  residential,  business,  manufacturing  or  agricultural
purposes,  and  where  pursuant  to  the  terms  and  provisions of such
commitment or agreement such advance shall be made prior to or upon  the
maturity of the loan by the lending bank or trust company.
Real  estate  security  for purposes of this section shall not include
(a) an assignment of rents under a lease, (b) a mortgage or  other  lien
upon  a  leasehold, (c) a mortgage or other lien upon leasehold, royalty
or other rights  in  oil,  gas,  minerals,  standing  timber,  or  other
products  of  land, (d) a mortgage or other lien made or given upon real
estate and taken  as  collateral  security  for  loans  to  a  borrower,
provided,  that  at  the  time  of  the making of the loan or commitment
therefor, repayment thereof is reasonably expected to be made out of the

operations of such borrower or of the mortgagor, or (e)  such  mortgages
or  other  liens  on  property  as may be specifically exempted from the
limitations and restrictions of this subdivision by  the  superintendent
of  financial  services  by  general or specific regulations. Nothing in
this paragraph shall be construed to imply that security of a  kind  not
mentioned herein is to be deemed real estate security.
The  limitations  and restrictions contained in this subdivision shall
not prevent the acceptance of any real estate  security  to  secure  the
payment  of  a  debt previously contracted in good faith. Every mortgage
and every assignment of a mortgage taken or held by such bank  or  trust
company  shall  immediately be recorded or registered in its name in the
office of the clerk or the proper recording officer  of  the  county  in
which  the real estate described in the mortgage is located, except that
where the underlying real estate is located outside  the  state  of  New
York  such  mortgage  or assignment may be recorded or registered in the
name of a duly authorized nominee, and except that if such  mortgage  or
assignment  of  mortgage or of an interest therein shall be taken from a
corporation organized under the banking law or all of the capital  stock
of  which  is owned by not less than twenty savings banks of this state,
the  bank  or  trust  company  may  hold  such  mortgage  or  assignment
unrecorded  unless  the  superintendent  shall  direct the bank or trust
company to record the same. The recording or registering of  assignments
of  mortgages shall not be required when not less than ten mortgages are
assigned as security for a loan, the  term  of  which  does  not  exceed
twelve months.
Any  bank  or  trust company may renew from time to time any loan upon
the security of real estate lawfully made by it prior to June thirtieth,
nineteen hundred thirty-seven.
None  of  the  prohibitions  and  restrictions   contained   in   this
subdivision  shall  apply to any corporation all of the capital stock of
which is owned by not less than twenty savings banks of this state.
4-a. A bank or trust company may, in addition to the authority granted
under any other provisions of this article, make a  loan  to  a  natural
person  upon the security of a mortgage which is not a first lien at the
rate or rates agreed to by the bank or trust company and  the  borrower,
subject  to such regulations as the superintendent of financial services
may prescribe. Such  regulations  by  the  superintendent  of  financial
services   may  include  such  restrictions  as  the  superintendent  of
financial  services  finds  necessary  or  proper,   including   without
limitation, a restriction as to the percentage of total assets which may
be  invested  in  such  loans  or a restriction on the loan to appraisal
value of property securing such loan.
For purposes of this subdivision, the term mortgage  shall  include  a
lien on an existing ownership interest in certificates of stock or other
evidence  of  an  ownership interest in, and a proprietary lease from, a
corporation or partnership formed for the  purpose  of  the  cooperative
ownership of real estate.
5.  Make  any  loan  for  the  purpose of financing the purchase of or
refinancing an existing ownership interest in certificates of  stock  or
other  evidence  of  an  ownership  interest in, and a proprietary lease
from, a corporation  or  partnership  formed  for  the  purpose  of  the
cooperative  ownership of real estate, unsecured except to the extent of
an assignment or transfer of the stock certificates or other evidence of
ownership interest of the borrower  and  the  proprietary  lease  within
ninety  days from the making of the loan, which shall exceed the maximum
per cent of the loan permitted to be made on real estate improved  by  a
single  family  residence  occupied  by  the  owner,  provided  that for
purposes of this section the amount  of  the  purchase  price  shall  be

deemed  to  equal  the  appraised  value of such certificate of stock or
other  evidence  of  an  ownership  interest,  or,  in  the  case  of  a
refinancing,  the appraised value of such certificates of stock or other
evidence  of  an  ownership interest and which shall fail to provide for
full repayment of principal and interest within the same number of years
as  a  conventional  mortgage  loan   previously   described   in   this
subdivision,  provided that all real estate owned by such corporation or
partnership shall be located within the state;  and  provided,  further,
that   such   loan   shall   be  subject  to  such  regulations  as  the
superintendent of financial services may from time to  time  promulgate.
The  maximum  rate  of  interest which may be charged, taken or received
upon any loan or forbearance  made  pursuant  to  this  subdivision  may
exceed  the  rate  of  interest  prescribed  by  the  superintendent  of
financial services in accordance with section fourteen-a by no more than
one and one-half per centum per annum.
6. Make any loan or discount on the security of the shares of its  own
capital stock, or, except as provided in section five thousand twelve of
this  chapter, be the purchaser of any such shares, unless such security
or purchase shall be necessary to minimize or avoid  loss  upon  a  debt
previously  contracted  in  good  faith, and stock so purchased shall be
sold at public or private sale, or otherwise  disposed  of,  within  six
months  from  the  time  of its purchase unless the superintendent shall
authorize such bank or trust company in writing to hold such shares  for
a  longer  period.  Any  bank  or  trust  company  violating  any of the
provisions of this subdivision shall forfeit to the people of the  state
twice the amount of the loan or purchase.
7.  Knowingly  lend, directly or indirectly, any money or property for
the purpose of enabling any person to pay for  or  hold  shares  of  its
stock,  unless  the  loan  is  made  upon security having an ascertained
market value of at least fifteen per centum more than the amount of  the
loan.  Any  bank  or  trust  company  violating  the  provisions of this
subdivision shall forfeit to the people of the state twice the amount of
the loan.
8. Except in conformity with such rules  and  regulations  as  may  be
promulgated  by  the  superintendent,  lend  any  sum  of  money  to any
executive officer or  director  of  such  bank  or  trust  company.  The
superintendent  shall have power to determine by regulation who shall be
considered, under the provisions of this subdivision, to be an executive
officer and what shall be  considered,  under  the  provisions  of  this
subdivision, to be a loan to an executive officer or director. In making
such  determination,  the  superintendent shall have power to include or
exclude, subject to such conditions and limitations, if any, as he shall
prescribe, any or all of the following: (1) any transaction as a  result
of  which  an  executive  officer or director of a bank or trust company
becomes obligated to such bank or trust company upon  any  note,  draft,
bill  of  exchange  or  other  indebtedness, as maker, drawer, endorser,
guarantor, surety or otherwise; and (2) any transaction as a  result  of
which  a  corporation,  in which an executive officer or director or any
combination of such persons, owns or controls a majority of  the  stock,
or  as  a result of which a partnership in which an executive officer or
director is a partner, becomes obligated or  renews  its  obligation  to
such  bank  or  trust  company upon any note, draft, bill of exchange or
other indebtedness, as maker, drawer,  endorser,  guarantor,  surety  or
otherwise.  Every  bank or trust company violating this provision or any
regulation issued pursuant thereto and every officer or director of such
bank or trust company knowingly participating in such  violation  shall,
for each offense, forfeit to the people of the state twice the amount of
the loan.
No  executive  officer  or  director  of a bank or trust company shall
borrow from the bank or trust  company  of  which  he  is  an  executive
officer or director except as permitted by this section.