2023 New York Laws › BNK - Banking › Article 3 - Banks and Trust Companies › 130 - Restrictions on Officers, Directors and Employees.

§ 130.  Restrictions  on  officers,  directors  and  employees.  1. No
officer, director, clerk or other employee of any bank or trust company,
and no person in any way interested or concerned in  the  management  of
its  affairs,  shall, acting on his own behalf or for any partnership or
unincorporated  association  of  which  he  is  a  member  or  for   any
corporation,  of  which  he  owns  or controls a majority of the capital
stock, discount, or directly or indirectly make any loan upon, any  note
or  other  evidence of debt which he shall know to have been offered for
discount to such bank or trust company, and to have been refused.  Every
person  violating  the  provisions  of  this subdivision shall, for each
offense, forfeit to the people of the state twice the amount of the loan
which he shall have made.
2. No officer, director, clerk or other employee of any bank or  trust
company  shall, directly or indirectly, purchase or be interested in the
purchase of any promissory note or other evidence of debt issued  by  it
on  terms  more  favorable  than  those available to the general public,
provided, however, that every director,  and  every  officer,  clerk  or
other  employee  who is a stockholder of such bank or trust company, may
purchase promissory notes or other evidences of debt issued by it in the
same ratio as to amount and on the same terms as any other stockholder.
3. (a) No executive officer of a bank  or  trust  company  may  be  an
executive officer, director or trustee of another bank or trust company,
savings  bank,  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 of financial
services  pursuant  to  the  provisions  of  paragraph   (b)   of   this
subdivision, except that an executive officer of a bank or trust company
which  is a subsidiary of a bank holding company may be (i) an executive
officer and (ii) a director of the bank holding company and  of  one  or
more  banking  institutions  which are subsidiaries of such bank holding
company.
(b) The superintendent of financial services 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 a general or
specific regulation to grant permission to an  executive  officer  of  a
bank or trust company to be an executive officer, director or trustee or
both  an  executive officer and director or a trustee of another bank or
trust company, savings bank, or savings and loan  association,  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
of financial services 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  of  financial  services
shall have the power to revoke such permission whenever he or she 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  terms  "subsidiary",
"banking institution" and "bank holding company" shall each be given the
same  meaning  as is contained in their respective definition in section
one hundred forty-one of this chapter, except that 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 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  banks  and  trust  companies  shall
continue in effect.
5.  Every  director of a bank or trust company who is obligated on any
loan or other extension of credit made by such bank or trust company  to
such  director  or  to any other individual, partnership, unincorporated
association or corporation, shall file  a  statement  of  his  financial
condition with such bank or trust company at least once in each year and
at  such other times as the superintendent may require. This subdivision
shall not apply to directors whose obligations are secured by collateral
having an ascertained market value of at least fifteen per  centum  more
than  the  amount of such obligations. The superintendent shall have the
power to determine by regulation what shall  be  considered,  under  the
provisions of this subdivision, to be a loan or an extension of credit.
6.  If  any officer of a bank or trust company becomes indebted to any
domestic or foreign banking organization, other than the bank  or  trust
company  of  which  he is an officer, or becomes indebted to any banking
institution organized under the laws of  the  United  States,  he  shall
within  ten  calendar  days  after he becomes so indebted make a written
report to the board of directors of the bank or trust company  of  which
he  is  an  officer,  stating  the  date  and amount of any such loan or
indebtedness, and the security therefor. In addition  to  the  foregoing
reports  he  shall  render written reports of such other indebtedness as
the board of directors of the bank or trust company  may  by  resolution
require  of  its  officers.  The  superintendent shall have the power to
determine by regulation who shall be  considered  an  officer  and  what
shall  be considered a loan or indebtedness under the provisions of this
subdivision.
The provision of this subdivision  shall  not  be  applicable  if  the
amount  of  the  indebtedness  does  not exceed an amount which shall be
determined by the superintendent.
7. (a) Every person who is directly or indirectly the beneficial owner
of more than ten per centum of any class of any  equity  security  of  a
bank  or  trust  company  or who is a director or officer thereof, shall
file, within ten days following (i) the effective date of this  section,
or  (ii) the date on which he becomes such beneficial owner, director or
officer, whichever is later, a statement with the superintendent of  the
amount  of  all equity securities of such bank or trust company of which
he is the beneficial owner, and within ten days after the close of  each
calendar  month  thereafter,  if  there  has  been  any  change  in such
ownership during such  month,  shall  file  with  the  superintendent  a
statement  indicating  his  ownership at the close of the calendar month
and such changes in such ownership as have occurred during such calendar
month.
(b) Any such beneficial owner, director or officer of a bank or  trust
company shall not be subject to the requirements of this section if
(1)  he  is required by section sixteen (a) of the securities exchange
act of nineteen hundred thirty-four, as amended, to file with the  board
of governors of the federal reserve system in accordance with regulation
f  of  such  board  or with the federal deposit insurance corporation in
accordance with part three hundred thirty-five of title  twelve  of  the
regulations  of  such corporation, a statement as to his stock ownership
and he files with the superintendent at his New York  city  office  four
copies of each such statement filed with such board or corporation, or
(2)  he  is  such  beneficial  owner, director or officer of a bank or
trust company, all of the voting securities  of  which,  excepting  only
directors'  qualifying  shares, are owned, controlled or held with power

to vote by a bank holding company as  defined  in  section  one  hundred
forty-one of this chapter or by a single corporation, or
(3)  he  is  such  beneficial  owner, director or officer of a bank or
trust company, all of the voting securities  of  which,  excepting  only
directors'  qualifying  shares, are owned, controlled or held with power
to vote by one or more banks organized  under  the  laws  of  a  foreign
country, or
(4)  he  is  such  beneficial  owner,  director  or officer of a trust
company, all of the capital stock of which is owned by  twenty  or  more
savings banks chartered by the state of New York.
(c)  The  superintendent shall have power to adopt such regulations as
the superintendent shall deem  necessary  or  proper  to  implement  the
provisions of this section.