2023 New York Laws › BNK - Banking › Article 6 - Savings Banks › 235 - Investment of Funds.

§ 235. Investment of funds. A savings bank may invest in the following
property and securities and no others:
1.  Obligations  of the United States, or those for which the faith of
the United States is pledged to provide for the payment of the  interest
and  principal,  or  those  for  which  annual  contributions to be paid
pursuant to contract by the United  States  government  or  any  of  its
instrumentalities  in  accordance  with  an act of congress entitled the
"Housing Act of 1949", are pledged as security for the  payment  of  the
interest and principal.
2.  Obligations of this state, issued pursuant to the authority of any
law of the state, or those for which the faith of this state is  pledged
to provide for the payment of the interest and principal.
3.  Obligations  of any state of the United States, or those for which
the faith of any state of the United States is pledged  to  provide  for
the  payment  of  the  interest  and  principal,  upon which there is no
default and upon which there has been no default for  more  than  ninety
days;   provided,  that  within  ten  years  immediately  preceding  the
investment such state has not been in default for more than ninety  days
in  the  payment  of  any part of principal or interest of any debt duly
authorized by the legislature of such state to  be  contracted  by  such
state  after  the  first day of January, eighteen hundred seventy-eight,
except debts representing a refunding or adjustment of any  indebtedness
originally contracted or in existence at that date or prior thereto.
4.  Obligations  of  or those for which the faith of any city, county,
town, village, school district, poor  district,  water  district,  sewer
district  or  fire  district in this state is pledged to provide for the
payment of principal  and  interest,  provided  that  they  were  issued
pursuant  to  law  and  the  faith  and  credit of the issuing municipal
corporation  or  district  is  pledged  for  their  payment,  bonds  and
debentures or other obligations of any public authority or commission or
similar  body created or approved by the state of New York having assets
of not less than fifty million dollars; and bonds and debentures of  any
other  public  authority,  commission  or  similar body which is legally
obligated to establish rates which while any debt  is  outstanding  will
provide  sufficient  revenues for the cost of operation, maintenance and
debt service, such debt service to include interest on  all  outstanding
obligations and serial maturities and sinking funds, provided such other
authority,  commission  or similar body shall issue financial statements
at least annually which shall be available to the public, shall have had
receipts  from  operations  during  each  of  the  five   fiscal   years
immediately  preceding  date  of  investment  sufficient  after  meeting
operation and maintenance expenses to cover debt service,  and  provided
further that the revenues available for debt service received during the
fiscal  year  immediately  preceding  investment  or  the average amount
available  for  debt  service  for  the  three  fiscal  years  preceding
investment  shall  have  been  adequate  to meet the maximum annual debt
service of the bonds outstanding, and said obligations have not been  in
default  as  to  principal  or  interest; and bonds, debentures or other
obligations of any  public  authority  or  commission  or  similar  body
created  by  the  state  of  New  York, the average of receipts from the
operations of which, during the three years  immediately  preceding  the
date  of  investment,  after meeting operation and maintenance expenses,
were not less than one hundred  twenty-five  per  cent  of  the  maximum
annual  debt service on the bonds outstanding and which obligations have
not been in default as to principal or interest.
5. (a) Obligations, excluding however, non-negotiable warrants, of any
city or of any school district coterminous with or which  includes  such
city,  or  of  any  county  situated  in one of the states of the United

States which adjoins the state of New York, provided said city or county
has a population, as shown by the last  federal  census  next  preceding
such investment, of not less than ten thousand inhabitants, and has not,
within  twenty-five  years preceding said investment, defaulted for more
than one hundred and twenty days in the payment of any  part  either  of
principal   or  interest  of  any  bond,  note,  or  other  evidence  of
indebtedness. The term "city" in this paragraph shall include any  city,
town,  borough, village, township or other incorporated municipality. An
investment made before  August  first,  nineteen  hundred  twenty-eight,
shall  not  under  the population provision of this paragraph, as to the
then owner thereof, cease to be an authorized investment for the  moneys
of savings banks.
(b)  Obligations,  excluding  however, non-negotiable warrants, of any
city or of any school district  or  county  coterminous  with  or  which
includes  such  city,  situated in any other of the states of the United
States the obligations of which state are an authorized  investment  for
the  moneys  of  savings  banks, provided said city has a population, as
shown by the last federal census next preceding said investment, of  not
less than thirty thousand inhabitants, and was incorporated as a city at
least  twenty-five years prior to the making of said investment, and has
not, within twenty-five years preceding said investment,  defaulted  for
more  than one hundred and twenty days in the payment of any part either
of principal or interest  of  any  bond,  note,  or  other  evidence  of
indebtedness. Provided further, that obligations issued by a city having
a  population  of  less than forty-five thousand inhabitants as shown by
said census or by a school district or county shall not be an authorized
investment for the moneys of  savings  banks  unless  the  city,  school
district  or county has power to levy taxes on the taxable real property
therein for the payment of such obligations without limitation  of  rate
or amount.
(c)  If  at  any  time  the  indebtedness  of  any  city  described in
paragraphs (a) or (b)  of  this  subdivision  or  in  paragraph  (c)  of
subdivision  twenty-five of this section, together with the indebtedness
of any district, municipal corporation or subdivision, except a  county,
which  is wholly within the boundaries of such city, and together with a
proportionate part  of  the  indebtedness  of  any  district,  municipal
corporation  or subdivision, except a county, which is partly within the
boundaries of such city, and together with so much of  the  indebtedness
of  any  county  wholly  within  the  boundaries  of  such  city  and  a
proportionate part of so much of the indebtedness of any  county  partly
within  the  boundaries  of such city, as shall be in excess of five per
centum of the valuation  for  the  purposes  of  taxation  of  the  real
property  in  any  such  county,  shall  exceed twelve per centum of the
valuation of real property in said city for the  purposes  of  taxation,
the  obligations of such city or of any school district or of any county
coterminous with or which includes such  city,  shall,  thereafter,  and
until  such  indebtedness  shall  be reduced to twelve per centum of the
valuation of real property in said city for the  purposes  of  taxation,
cease to be an authorized investment for the moneys of savings banks. If
there  is  no county wholly or in part within such city or if the county
wholly or in part within such city  has  neither  any  indebtedness  nor
power  to  incur  indebtedness,  the  obligations of such city or of any
school district coterminous with or which includes such city, shall  not
cease  to  be  an  authorized  investment unless such indebtedness shall
exceed the percentage  above  provided  plus  an  additional  three  per
centum.  If  at  any  time  the  indebtedness of any county described in
paragraphs (a) or (b) shall exceed five per centum of the  valuation  of
real  property  for  the  purposes  of taxation, the obligations of such

county shall thereafter, and until such indebtedness shall be reduced to
five per centum of the valuation of real property for  the  purposes  of
taxation, cease to be an authorized investment for the moneys of savings
banks.  A proportionate part of any indebtedness for the purpose of this
paragraph shall be, unless otherwise apportioned by law, that proportion
which the valuation of taxable real  property  of  a  county,  district,
municipal  corporation  or  subdivision  within the boundaries of a city
bears to the total valuation  of  all  taxable  real  property  of  said
county,   district,   municipal  corporation  or  subdivision.  Contract
liability shall be excluded unless represented by stocks, bonds,  notes,
certificates  of  indebtedness  or other like instruments and water debt
shall be excluded and sinking funds applicable  to  debts  not  excluded
shall  be  deducted,  in  determining  the  amount  of  any indebtedness
hereunder.
(d) The provisions of paragraph (c) shall not apply to the obligations
of any city which has taxable real property with  a  valuation  for  the
purposes  of taxation in excess of two hundred million dollars and which
has a population as shown by the last decennial federal  census  of  not
less  than one hundred fifty thousand inhabitants and shall not apply to
the obligations of any school district or  county  coterminous  with  or
which  includes  such  city, provided that the city, school district, or
county, as the case may be, has power to levy taxes on the taxable  real
property  therein for the payment of such obligations without limitation
of rate or amount.
(e) The valuation of property for  purposes  of  taxation  under  this
subdivision  and  under subdivision twenty-five of this section shall be
an official valuation duly made and recorded  and  in  cases  where  the
assessed  valuation is based on a percentage of such official valuation,
the percentage used  shall  have  been  authorized  under  statutory  or
charter power prior to the determination of such assessed valuation.
(f) No obligations issued after the year nineteen hundred thirty-eight
by  any city, county, school district or other municipality of any state
other than New York shall be an authorized investment for savings  banks
unless  such  city,  county, school district or other municipality shall
have power to levy taxes on the taxable real property  therein  for  the
payment of such obligation without limitation of rate or amount.
(g)  Obligations  issued by a city, village, town, county, department,
agency, district, authority, commission or other  public  body  in  this
state  or  any  other  state  of  the  United  States payable out of the
revenues of a public utility system providing water, electricity, gas or
sewerage service, provided that if the public utility system is  located
outside the state, it must serve an area having a population of not less
than one hundred thousand. Said city, village, town, county, department,
agency,  district,  authority,  commission or other public body shall be
legally obligated by statute, charter, indenture  or  covenant  to  fix,
maintain  and collect charges or taxes, or both, to provide net revenues
after operation and maintenance of the facilities used to  provide  such
service sufficient to meet maturing interest, principal and sinking fund
payments  on  such  obligations  or  shall  be  empowered to require the
fixing, maintaining, and collecting of such charges or taxes,  or  both,
by duly authorized public officers or bodies, and shall be restrained by
statute,  charter,  indenture  or  covenant from disposing of all or any
substantial portion of such facilities unless provision is  made  for  a
continuance  of the interest, principal and sinking fund payments due on
such obligations, or for the retirement of  such  obligations,  provided
said   city,   village,  town,  county,  department,  agency,  district,
authority, commission or other public body shall have had  net  earnings
during   each   of  the  five  years  immediately  preceding  investment

sufficient to cover all debt service and further provided that  the  net
earnings  available  for debt service for the year immediately preceding
investment shall have been sufficient to meet the  maximum  annual  debt
service  of  the obligations outstanding, and said obligations shall not
have been in default as to principal or interest.
5-a. Bonds and mortgages and notes and mortgages  on  unimproved  real
property   in  this  state  or  outside  this  state,  subject  to  such
limitations as the superintendent of financial services may prescribe.
6. Bonds and mortgages  and  notes  and  mortgages  on  improved  real
property,  including  leasehold  estates, in this state, and, subject to
such limitations and  conditions  as  the  superintendent  of  financial
services  may  prescribe  by  general  regulation, in any other location
outside this  state.  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.
(c) For the purposes of this  subdivision  real  property  upon  which
there  is  a  building  in process of construction, which when completed
will constitute a permanent  improvement  with  a  value  of  more  than
twenty-five  per  centum  of  the  value  of such real property shall be
considered  improved  real  property,  as  shall  real   property   with
improvements  thereon that are capable of producing income sufficient to
pay all costs of operation and maintenance of such  real  property,  all
taxes  thereon and to effect full repayment of principal and interest in
accordance with the terms of the mortgage loan to be  made  pursuant  to
this subdivision.
(e)  Except  as  hereinafter  provided  no  investment in any bond and
mortgage or any note and mortgage shall be  made  by  any  savings  bank
except upon the written and signed certificate of an appraiser appointed
pursuant  to  policies established by the board of trustees stating that
in such appraiser's judgment  it  affords  adequate  security  for  such
investment.  Such  certificate  shall  be  filed and preserved among the
records of the savings bank.
(f) For the purpose of protecting its interests  a  savings  bank  may
release any obligation to pay, or guarantee of the payment of, principal
or  interest,  or  otherwise  waive  or  modify  any  of  the  terms and
conditions of any bond and mortgage, and of any note and  mortgage,  and
may  extend or reextend any bond and mortgage and any note and mortgage,
and may also accept a sum less than the principal amount thereof in full
payment and satisfaction of the same.
A savings bank may also waive its right to enforce payment of any bond
or note secured by a mortgage on real property and may waive  its  right
to  obtain  a  deficiency  judgment against the borrower in the event of
foreclosure of such mortgage.
(g) Every mortgage and every assignment of a mortgage taken or held by
a savings bank shall immediately be recorded or registered in the office
of the proper recording officer of the county in which the real property
described in the mortgage is located. This paragraph shall not apply  to
a  participating interest in any mortgage which shall have been acquired
by a savings bank  under  the  provisions  of  subdivision  fourteen  of
section  two hundred thirty-four, paragraph (h) of this subdivision, and
subdivision eighteen of section two hundred thirty-five.
(h) A savings bank may, subject to such regulations  and  restrictions
as  the  superintendent  of financial services finds to be necessary and
proper, participate and invest in  (1)  loans  of  a  type  that  it  is
authorized  to  invest in pursuant to subparagraph (a) of paragraph four
of subdivision eight of section two hundred thirty-five of this  chapter
and  (2)  in  any bond and mortgage or note and mortgage on improved and
unencumbered real property including leasehold estates, in which  it  is

individually  authorized to invest, which said mortgage is duly recorded
or registered in the office of  the  proper  recording  officer  of  the
county  in which the real property described in the mortgage is located,
provided  that no such investment shall be made by a savings bank in any
part interest in such mortgage which is junior  or  subordinate  to  any
other part interest nor if the aggregate amount of all part interests in
such  mortgage  when  added  together  will exceed any percentage of the
appraised value of such real  property  by  which  the  authority  of  a
savings  bank  to  invest  individually  in  such  mortgage  is limited.
Investments made by any savings bank in mortgage loans pursuant to  this
subdivision  and  pursuant  to  subdivision twenty-eight of this section
shall be  included  in  the  computation  of  permissive  investment  in
mortgage  loans  pursuant  to  paragraph  (d) of subdivision six of this
section.
(i) A mortgage loan upon a leasehold estate shall not be  made  unless
such  leasehold  estate  shall  have  an unexpired term of not less than
twenty-one years, which term may include the term provided by an  option
of  renewal enforceable at the exclusive discretion of the savings bank.
No mortgage loan upon a leasehold estate shall be made or acquired by  a
savings  bank  unless the terms thereof shall provide, regardless of the
period of the loan, for payments to be  made  by  the  borrower  on  the
principal  thereof  at least once in each year in amounts which would be
sufficient to completely amortize  a  loan  whose  period  extended  for
four-fifths  of  the unexpired term of the lease, which term may include
the term provided by an option of renewal enforceable at  the  exclusive
discretion  of the savings bank; or, in the case of a mortgage loan upon
a leasehold estate in real property upon which there is  a  building  in
process of construction, such payments of principal need not be required
during  the  period  of  construction  or  the  first three years of the
mortgage, whichever is shorter. The provisions of paragraphs  (c),  (d),
(e),  (f), (g), and (h) of this subdivision shall be applicable to loans
made upon leasehold estates.
6-a. A savings bank may, in addition to the  authority  granted  under
any  other subdivisions of this section, 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 savings bank 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.
7.   Railroad   obligations  as  provided  in  this  subdivision.  (1)
Obligations issued, assumed or guaranteed as to principal  and  interest
by endorsement, or so guaranteed which guaranty has been assumed; or
(2) Obligations for the payment of the principal and interest of which
a  railroad  corporation  such  as  is  described  in  this paragraph is
obligated under the terms of a lease made or assumed; or
(3) Equipment obligations in  respect  of  which  liability  has  been
incurred:  by  a railroad corporation incorporated under the laws of the
United States, or any state thereof, and owning and operating within the
United States  not  less  than  five  hundred  miles  of  standard-gauge

railroad line, exclusive of sidings, or if the mileage so owned shall be
less  than  five hundred miles, the railroad operating revenues from the
operation of all railroad operated by it, including such  revenues  from
the  operation  of  all  railroad  controlled  through  ownership of all
(except directors' qualifying shares) of the voting stock of the  owning
corporation, shall have been not less than ten million dollars each year
for  at  least  five  of  the  six  fiscal  years  next  preceding  such
investment; provided, however, (1) that in the five  fiscal  years  next
preceding  such  investment,  the  amount  of  income  of  such railroad
corporation, available for its fixed charges,  as  hereinafter  defined,
shall  have  averaged not less than two and one-half times the amount of
fixed charges at the time of investment,  as  hereinafter  defined;  (2)
that  at  no  time  within  such  period  of  five  years  such railroad
corporation, unless in process of reorganization or  readjustment  since
completed,  pursuant  to applicable law, shall have failed regularly and
punctually to pay the matured principal and interest on its mortgage and
funded indebtedness; and  (3)  that  the  security,  if  any,  for  such
obligations shall be property wholly or in part within the United States
and which obligations shall be
(a)  fixed  interest-bearing  bonds  secured  by  direct  mortgage  on
railroad owned or operated by such railroad corporation; or
(b) fixed  interest-bearing  bonds  secured  by  first  mortgage  upon
terminal,  depot  or  tunnel  property,  including  lands, buildings and
appurtenances, used in the service of transportation by one or more such
railroad corporations, provided that such bonds be the direct obligation
of, or that payment of principal and interest thereof be  guaranteed  by
endorsement  by,  or  guaranteed  by endorsement which guaranty has been
assumed by, one or more such railroad corporations; or
(c) equipment  obligations,  comprising  bonds,  notes,  certificates,
conditional   sale   agreements   or  assignments  of  conditional  sale
agreements and participations therein, issued or made in connection with
the purchase for use on railroads of new  standard-gauge  rolling  stock
through  the medium of an equipment agreement, and which obligations, so
long as any thereof shall be outstanding and unpaid or  unprovided  for,
shall be secured by an instrument (1) vesting title to such equipment in
a  trustee  free  of  encumbrance,  or (2) creating a first lien on such
equipment, or, pending such vesting of title, by the deposit of cash  in
trust,  which deposit may be invested in whole or in part in obligations
of the United States or obligations for which the faith  of  the  United
States  is  pledged  to  provide  for  the  payment  of the interest and
principal, or obligations of any public housing agency as defined in the
United States housing act of nineteen hundred thirty-seven, as  amended,
in  the  United States as are secured either (1) by an agreement between
the public housing agency and the public housing administration in which
the public housing agency agrees  to  borrow  from  the  public  housing
administration,  and the public housing administration agrees to lend to
the public housing agency, prior to the maturity  of  such  obligations,
which  obligations  shall  have  a  maturity  of  not more than eighteen
months, moneys in an  amount  which,  together  with  any  other  moneys
irrevocably  committed  to  the payment of interest on such obligations,
will suffice to pay the principal of such obligations with  interest  to
maturity  thereon,  which  moneys  under the terms of said agreement are
required to be used for the purpose of paying the principal of  and  the
interest  on  such  obligations at their maturity, or (2) by a pledge of
annual contributions under an annual contributions contract between such
public housing agency and the  public  housing  administration  if  such
contract shall contain the covenant by the public housing administration
which  is  authorized by section 1421a(b) of Title 42, U.S. Code, and if

the maximum sum and  the  maximum  period  specified  in  such  contract
pursuant  to  section 1421a(b) of Title 42, U.S. Code, shall not be less
than the annual amount and the period for payment which are requisite to
provide  for the payment, when due, of all installments of principal and
interest on such obligations, to an amount equal to the face  amount  of
such  equipment obligations issued in respect of such equipment title to
which is not yet so vested; provided further, that the maximum amount of
such obligations so issuable shall not exceed eighty per centum  of  the
cost  of such equipment; and provided further, that the owner, purchaser
or lessee, or the owners, purchasers or lessees, of such equipment shall
be obligated by the terms of such obligations or of such instrument  (a)
to  maintain such equipment in proper repair; (b) to replace any thereof
that may be destroyed or released with other equipment of  equal  value,
or,  if  released  in  connection  with  a  sale thereof, to deposit the
proceeds of such sale in trust for the benefit of the  holders  of  such
obligations  pending  replacement  of such equipment; (c) to pay any and
all taxes or other governmental charges that may be required by  law  to
be  paid  upon  such  equipment;  (d)  to  pay,  in  accordance with the
provisions of such obligations or of such instrument, to holders, or  to
such  trustee for the benefit of holders, of such obligations the amount
of interest due thereon or of the dividends payable in respect  thereof;
and  (e)  to  pay  the amount of the entire issue of such obligations in
such annual or semi-annual installment each year throughout a period  of
not  exceeding fifteen years from the first date of issue of any thereof
that the amount of the respective unmatured  installments  at  any  time
outstanding shall be approximately equal; provided, further, that unless
the  owner, purchaser or lessee of such equipment or one or more of such
owners, purchasers or lessees shall be such railroad corporation  as  is
described  in  and  meets the requirements of this subdivision preceding
paragraph (a), such obligations shall be guaranteed by endorsement as to
principal and as to interest or dividends by such railroad corporations;
or
(d) fixed interest-bearing bonds of such railroad corporation  secured
by  irrevocable  pledge  as  collateral under a trust agreement of other
railroad bonds that are legal investments for savings banks  under  this
section, have a maturity not earlier than the bonds that they secure and
of  a total face amount not less than the total face amount of the bonds
that they secure; or
(e) fixed interest-bearing mortgage bonds other than  those  described
in paragraphs (a) or (b) hereof, income mortgage bonds, collateral trust
bonds or obligations other than those described in paragraph (d) hereof,
or  unsecured  bonds or obligations, issued, assumed or guaranteed as to
principal and  interest  by  endorsement  by,  or  so  guaranteed  which
guaranty  has  been assumed by, such railroad corporation, provided that
(a) the annual fixed charges and contingent  interest  charges  of  such
railroad  at  the time of investment shall not exceed thirty per cent of
the average annual income available for such charges for the five fiscal
years next preceding, and (b) the net income of such railroad after  all
taxes  and  charges  shall  have  averaged not less than fifteen million
dollars annually in such period.
The amount of income available for fixed charges shall be  the  amount
obtained  by  deducting  from  gross  income  all  items  deductible  in
ascertaining net income other  than  federal  income  taxes,  contingent
income  interest  and  those  constituting  fixed charges. Fixed charges
shall be: rent for leased roads, miscellaneous rents, fixed interest  on
funded  debt,  interest on unfunded debt and amortization of discount on
funded debt.
Accounting terms used in the preceding paragraph shall  be  deemed  to
refer  to  those  used  in  the  accounting  reports  prescribed  by the
accounting regulations for common carriers subject to the provisions  of
the interstate commerce act. If the interstate commerce commission shall
prescribe  accounting  regulations  wherein  shall  be  defined the term
income available for fixed charges  and  the  term  fixed  charges,  the
definitions  thereof as so prescribed shall be taken and used in lieu of
the definitions set forth in the preceding paragraph of this subdivision
for all purposes hereof, except that federal income taxes shall  not  be
deducted, nor shall federal income tax credits be included, in computing
income  available for fixed charges. In determining income available for
fixed charges and fixed  charges  pursuant  to  this  paragraph  or  the
immediately  preceding paragraph interest, dividends and rentals paid by
a railroad corporation and  included  in  both  such  amounts  shall  be
eliminated.
For  all  purposes  of this subdivision seven, the revenues, earnings,
income and fixed  charges  of,  and  dividends  paid  by,  any  railroad
corporation  prior to the acquisition of all or substantially all of its
railroad  lines  by  another  railroad  corporation,   through   merger,
consolidation,  conveyance  or  lease, shall, while such lines remain in
the possession of the acquiring corporation,  be  deemed  to  have  been
revenues,  earnings, income and fixed charges of, and dividends paid by,
such acquiring corporation.
Whenever a railroad corporation  shall  own  (directly  or  through  a
subsidiary  all  of  the  stock  of  which, except directors' qualifying
shares, is owned by such corporation) at least ninety per  cent  of  the
capital  stock  of one or more other railroad corporations, the property
of which is operated by it under lease, the consolidated  statements  of
all  such railroad corporations may be used in determining the amount of
income available for fixed charges and the amount of fixed charges.
Obligations of a railroad corporation the railroad lines of which have
been so leased prior to April fifth, nineteen hundred  twenty-nine,  for
the  payment  of which the lessee is not obligated, that are outstanding
and officially listed by the department of  financial  services  of  the
state of New York as authorized investments prior to that date, shall be
and   remain  authorized  investments  hereunder;  provided,  that  such
railroad lines shall be in the  possession  of  and  be  operated  by  a
railroad  corporation such as is described in and meets the requirements
of the provisions of this subdivision preceding paragraph (a).
Notwithstanding any other provisions of  this  subdivision,  equipment
obligations  described  in  paragraph  (c) which shall have been issued,
assumed or guaranteed by any  railroad  corporation  classified  by  the
interstate commerce commission as a class one railroad and which are not
in default, shall be authorized investments hereunder.
Notwithstanding  any  of  the  provisions  of  this subdivision, fixed
interest-bearing  obligations  of   railroad   corporations,   excluding
terminal, depot and tunnel corporations, which are eligible for purchase
by  savings  banks  on December thirty-first, nineteen hundred fifty-two
under the provisions of subdivisions seven or nineteen of this  section,
or  which shall thereafter become eligible pursuant to the provisions of
this subdivision seven, as amended, if not  in  default,  shall  be  and
remain  eligible hereunder, provided that the income available for fixed
charges, as herein  defined,  of  the  railroad  corporation  which  has
issued,  assumed or guaranteed such obligations, or which operates under
lease the railroad lines of the corporation which has issued, assumed or
guaranteed such obligations, shall have averaged  for  the  five  fiscal
years  next  preceding  the  time  of investment not less than twice the
interest charges  for  the  last  such  fiscal  year  on  all  equipment

obligations,  and other obligations eligible hereunder, of such railroad
corporation which remain outstanding at time of investment.
Fixed  interest-bearing  bonds of terminal, depot and tunnel companies
which  are  eligible  for  purchase  by  savings   banks   on   December
thirty-first,   nineteen  hundred  fifty-two  under  the  provisions  of
subdivisions  seven  or  nineteen  of  this  section,  or  which   shall
thereafter   become   eligible   pursuant  to  the  provisions  of  this
subdivision seven, as amended, shall be and remain  eligible  hereunder,
provided  that  the  principal  and  interest  thereof  be guaranteed by
endorsement by, or guaranteed by endorsement  which  guaranty  has  been
assumed  by,  a railroad corporation which meets the requirements of the
preceding paragraph for continuing the  eligibility  of  its  own  fixed
interest-bearing obligations.
Not more than twenty-five per centum of the assets of any savings bank
shall   be  loaned  or  invested  in  the  bonds,  notes,  certificates,
conditional sale agreements, assignments of conditional sale  agreements
and  participations  therein  in this subdivision seven defined, and not
more than ten per centum of such assets shall be invested in such bonds,
notes,  certificates,  conditional  sale  agreements,   assignments   of
conditional sale agreements and participations therein for which any one
railroad corporation of this state shall be obligated, and not more than
five  per  centum  of such assets shall be invested in the bonds, notes,
certificates, conditional sale agreements,  assignments  of  conditional
sale  agreements  and  participations therein for which any one railroad
corporation not of this state shall be obligated.
Street  railroad  corporations  shall  not  be   considered   railroad
corporations within the meaning of this subdivision.
7-a.  Any  savings  bank  which prior to April first, nineteen hundred
thirty-eight acquired any railroad obligation eligible at  the  time  of
acquisition  for  investment  by savings banks may continue to hold such
obligation as though the same continue to be eligible  by  law  for  new
investment by such savings bank.
8.   Promissory  notes  and  other  agreements  as  provided  in  this
subdivision.
(1) Promissory notes payable to the order of the  savings  bank  which
are:
(a)  Secured  by  one  or  more  mortgages in which a savings bank may
invest; provided the amount loaned is not in excess of ninety per centum
of the  principal  sum  secured  by  such  mortgage  or  mortgages.  The
assignment  of  every mortgage taken as security for any such note shall
be recorded or registered in the office of the proper recording  officer
of  the  county in which the real property described in such mortgage is
located, unless such mortgage or mortgages have been so  assigned  by  a
savings bank.
(b) Secured by any of the stocks and bonds in which a savings bank may
invest;  provided  that  (1)  the amount of the loan is not in excess of
ninety per centum of the market value of such stocks and bonds; and  (2)
the  term  "stocks," as used in this paragraph, shall be deemed to refer
to stocks eligible for investment  by  a  savings  bank  other  than  in
accordance  with  the  provisions  of  subdivision  twenty-six  of  this
section.
(c) Made by a savings and loan association which has been incorporated
three years or more and has an accumulated capital  of  at  least  fifty
thousand dollars.
(2)  Promissory  notes  payable to the order of the savings bank which
are secured by the assignment of a deposit in any savings bank; provided
the amount of the loan is not in excess of the amount of such deposit.
(3) Any loan secured  by  not  less  than  a  like  amount  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.
(4) (a) Promissory notes representing loans and advances of credit for
the  purpose  of financing alterations, repairs and improvements upon or
in connection with, or as the superintendent may authorize the equipping
of existing structures, and the building of new structures, upon  urban,
suburban,   or   rural   real   property   (including  the  restoration,
rehabilitation, rebuilding and replacement of  such  improvements  which
have  been  damaged  or destroyed by earthquake, conflagration, tornado,
hurricane, cyclone, flood or other catastrophe), by the  owners  thereof
or by lessees of such real property under a lease expiring not less than
six  months  after  the  maturity of the loan or advance of credit or by
lessees under proprietary  leases  from  a  corporation  or  partnership
formed  for  the  purpose  of  the cooperative ownership of real estate,
provided: (1) the amount of such loan, advance of  credit,  or  purchase
made  for  the purpose of financing the alteration, repair, equipping or
improvement of existing structure or the building of new structure  does
not  exceed  twenty  thousand dollars; (2) the maturity thereof does not
exceed one hundred twenty-one months; (3) the rate which may be paid  by
the borrower for interest, discount, and fees of all kinds in connection
with the transaction shall be the rate or rates agreed to by the savings
bank  and the borrower in the promissory note; and (4) the loan shall be
paid in equal or substantially  equal  monthly  installments  calculated
from  the  date of the note; provided, however, that in addition thereto
the savings bank may contract to  charge  the  borrower:  (i)  the  fees
payable  to  the appropriate public officer to perfect any lien or other
security interest taken to secure the loan or the premium, not in excess
of such filing fee, payable for any insurance in lieu  of  such  filing;
(ii)  in  case  of default, and in accordance with the provisions of the
instrument evidencing the obligation, either a fine in an amount not  to
exceed five cents per dollar on any installment which has become due and
remained  unpaid  for  a  period in excess of ten days, but no such fine
shall exceed five dollars and only one fine shall be  collected  on  any
such  installment  regardless  of  the period during which it remains in
default, and provided further that should the aggregate  of  such  fines
collected  in  connection  with  any  loan exceed two per centum of such
loan, or in any event twenty-five dollars, the savings bank shall refund
such excess to the borrower within sixty days after the loan is paid  in
full,  or  subject  to an allowance of unearned interest attributable to
the amount in default, interest on each amount past due at a rate not in
excess of the  rate  provided  for  in  the  instrument  evidencing  the
obligation;   (iii)   the   actual  expenditures,  including  reasonable
attorney's fees, for necessary court  process;  and  (iv)  in  case  the
savings  bank  insures  a borrower under a credit unemployment insurance
policy, group life insurance  policy,  group  health  insurance  policy,
group  accident insurance policy, or group health and accident insurance
policy, or requires insurance on personal  property  securing  any  such
loan,  an  amount not in excess of the premiums chargeable in accordance
with rate schedules then in effect and on file with  the  superintendent
of financial services for such insurance by the insurer. No savings bank
shall  require  a  borrower  to  place  any  sum  on deposit, or to make
deposits in lieu of regular periodic installment payments, or to  do  or
refrain  from  doing any other act which would entail additional expense
or sacrifice, as a condition precedent to granting a loan or advance  of
credit  under  the  authority  of  this subdivision. Notwithstanding the

provisions of this paragraph no refund of excess fines shall be required
if it amounts to less than one dollar.
(b) Promissory notes representing loans and advances of credit for the
purpose  of defraying the cost of attendance of one or more students the
income of whose family is fifteen thousand dollars or more per  year  at
the  time the loan or loan commitment is made at a university or college
or for the purpose of defraying the cost of attendance of  one  or  more
students  at  an  elementary  or  secondary  school  providing education
required for minors; provided, however, that no such  loan  shall  bring
the  total  unpaid  principal  balances of any one or more loans made by
such savings bank to the borrower pursuant to this  subparagraph  to  an
amount  in  excess of thirty thousand dollars; and further provided that
the maturity of any such loan does not exceed  eighty-five  months;  and
further  provided  that  the  rate which may be paid by the borrower for
interest, discount, and  fees  of  all  kinds  in  connection  with  the
transaction shall be the rate or rates agreed to by the savings bank and
the  borrower  in  the promissory note, reckoned on each loan or advance
from the date thereof, calculated on any of the following bases: (i)  on
the unpaid principal amount of such loans and advances from time to time
outstanding,  or  (ii)  for each month on an average balance outstanding
determined by dividing  by  two  the  sum  of  the  balances  of  unpaid
principal  of  such  loans  and advances outstanding on two dates during
such month, as specified in such agreement; the  first  of  which  dates
being  not  later  than  the  fifteenth day of such month and the second
being not earlier than the sixteenth day of such month and not less than
ten nor more than twenty days after the first day,  or  (iii)  for  each
month on a fixed amount selected from a schedule, which fixed amount may
exceed the average daily balance under (i) above, or the average balance
if  determined under (ii) above, by a differential of not more than five
dollars, provided the same fixed  amount  is  also  used  for  computing
interest  for any month for which such balance exceeds said fixed amount
by any amount up to at least the same differential; and further provided
that the loan shall be paid in  equal  or  substantially  equal  monthly
installments  calculated  from the date of the note. No fee, commission,
expense, or other charge whatsoever shall be taken,  received,  reserved
or contracted for in addition to the maximum rate of interest authorized
by  this  subparagraph  except  (i)  the fees payable to the appropriate
public officer to perfect any lien or other security interest  taken  to
secure  the  loan  or  the  premium,  not  in excess of such filing fee,
payable for any insurance in lieu  of  such  filing;  (ii)  in  case  of
default,  and  in  accordance  with  the  provisions  of  the instrument
evidencing the obligation, either a fine in an amount not to exceed five
cents per dollar on any installment which has become  due  and  remained
unpaid for a period in excess of ten days, but no such fine shall exceed
five  dollars  and  only  one  fine  shall  be  collected  on  any  such
installment regardless of the period during which it remains in default,
and provided further that should the aggregate of such  fines  collected
in  connection  with  any loan exceed two per centum of such loan, or in
any event twenty-five dollars, the savings bank shall refund such excess
to the borrower within sixty days after the loan is paid  in  full,  or,
subject  to an allowance of unearned interest attributable to the amount
in default, interest on each amount past due at a rate not in excess  of
the rate provided for in the instrument evidencing the obligation; (iii)
the  actual  expenditures,  including  reasonable  attorney's  fees, for
necessary court process; and (iv) in case the  savings  bank  insures  a
borrower  under  a  credit  unemployment  insurance  policy,  group life
insurance  policy,  group  health  insurance  policy,   group   accident
insurance  policy,  or  group  health  and accident insurance policy, or

requires insurance on personal  property  securing  any  such  loan,  an
amount  not in excess of the premiums chargeable in accordance with rate
schedules then  in  effect  and  on  file  with  the  superintendent  of
financial  services  for  such insurance by the insurer. No savings bank
shall require a borrower to  place  any  sum  on  deposit,  or  to  make
deposits  in  lieu of regular periodic installment payments, or to do or
refrain from doing any other act which would entail  additional  expense
or  sacrifice, as a condition precedent to granting a loan or advance of
credit under the authority of this subparagraph, except under such terms
and conditions as the superintendent may  from  time  to  time  approve.
Notwithstanding  the provisions of this subparagraph no refund of excess
fines shall be required if it amounts to less than one dollar.
(c) Promissory notes secured by mobile home chattel paper evidencing a
monetary obligation incurred to finance the purchase of  a  mobile  home
located  at  the  time  of such purchase, or to be located within ninety
days, at a semipermanent site within the state or in a contiguous  state
and  to  be  maintained  as  a residence of the borrower, the borrower's
spouse, child, grandchild, parent or grandparent.
(1) For this subparagraph:
(i) "mobile home chattel paper"  means  written  evidence  of  both  a
monetary  obligation  and  a  security  interest  of first priority in a
mobile home and any equipment installed or to be installed therein; and
(ii)  "mobile  home"  or  "manufactured  home"  means   a   structure,
transportable  in  one or more sections, which in the traveling mode, is
eight body feet or more in width or forty body feet or more  in  length,
or  when  erected  on site, is three hundred twenty or more square feet,
and which is built on a permanent chassis and designed to be used  as  a
dwelling  with  or  without  a  permanent  foundation  when connected to
required utilities, and includes the plumbing, heating, air-conditioning
and electrical systems contained therein.
(2) If the loan is for the purpose of financing the purchase of a  new
mobile home,
(i)  it shall mature not later than two hundred forty months after the
date thereof, and
(ii) the amount advanced shall not exceed one hundred per cent of  the
sum  of  (a)  the  purchase  price  of  such  mobile home (including any
installed equipment) plus (b) the price of any new  equipment  installed
or to be installed by the dealer.
(3)  If  the  loan for the purpose of financing the purchase of a used
mobile home,
(i) it shall mature not later than two hundred forty months after  the
date thereof, and
(ii)  the amount advanced shall not exceed one hundred per cent of the
purchase price of the mobile home actually paid (including any installed
equipment).
(4) The loan shall be payable in equal or substantially equal  monthly
installments  calculated  from the date of the loan. Interest, which may
be taken in advance, may be charged thereon, computed from the  date  of
the  loan to the date of the last installment payable thereunder, if the
loan has a maturity (i) not exceeding thirty-seven months, at a rate not
to exceed six dollars per annum discount per one hundred dollars of  the
face amount or ten dollars if the interest so computed is less than that
amount,  or  (ii) exceeding thirty-seven months, at a rate not to exceed
five dollars per annum discount, per one hundred  dollars  of  the  face
amount  or  ten  dollars  if  the interest so computed is less than that
amount; provided that the interest which may be charged; if  it  exceeds
ten  dollars,  shall  not  exceed  one  per cent per month on the unpaid
principal balance.
(5) The authorized interest shall  include  all  charges  incident  to
investigating and making any loan. No fee, commission, expense, or other
charge  shall  be permitted except that the savings bank may contract to
charge the borrower (i) the fees payable to a public officer to  perfect
any  lien  or  other  security interest taken to secure the loan, or the
premium, not in excess of such fee, payable for any insurance in lieu of
such filing; (ii) in  case  of  default,  and  in  accordance  with  the
instrument  evidencing the obligation, either a fine in an amount not to
exceed five per cent  on  any  installment  which  has  become  due  and
remained  unpaid  for  a  period in excess of ten days, but no such fine
shall exceed five dollars and only one fine shall be  collected  on  any
such installment regardless of the duration of the default, and provided
further  that should the aggregate of such fines collected in connection
with any loan exceed two per cent of such loan or  twenty-five  dollars,
the  savings  bank  shall refund such excess within sixty days after the
loan is paid in full, or, subject to an allowance of  unearned  interest
attributable  to the amount in default, interest on each amount past due
at a  rate  not  in  excess  of  one  per  cent  per  month  during  the
delinquency;   (iii)   the  actual  expenditures,  including  reasonable
attorney's fees for necessary  court  process,  and  (iv)  in  case  the
savings  bank  insures  a borrower under a credit unemployment insurance
policy, group life, health,  accident,  or  group  health  and  accident
insurance  policy,  or  requires insurance on the property securing such
loan, an amount not in excess of the premiums  lawfully  chargeable.  No
savings bank shall require a borrower to place any sum on deposit, or to
make deposits in lieu of regular periodic installment payments, or to do
or  refrain  from  doing  any  other  act  which would entail additional
expense or sacrifice, as a condition to a mobile home loan except as the
superintendent may from time to time approve. No refund of excess  fines
need be made if it amounts to less than one dollar.
(6)  As  a  condition  of  any loan made pursuant hereto, the borrower
shall certify that the mobile home, against which the loan is  made,  is
intended  to  be  maintained  in the state or in a contiguous state as a
residence of the borrower, the  borrower's  spouse,  child,  grandchild,
parent  or grandparent. If the mobile home shall not be so maintained on
the ninetieth day next succeeding the date of  the  loan  or  if  it  is
relocated  so  as  to  no longer be located in the state or a contiguous
state at any time before the first anniversary of the date of the  loan,
then,  in  either  event and notwithstanding anything to the contrary in
this subparagraph, the loan and  all  authorized  charges  shall  become
immediately  due  and  payable  subject  to  the  refund  provisions  of
subparagraph (c) of paragraph four and the borrower may, if the contract
so provides, be required to pay as an additional  authorized  charge,  a
penalty  in  an  amount not to exceed two per cent of the face amount of
the loan.
(7) No investment shall be made by a savings bank pursuant  hereto  if
the  total  amount invested by it pursuant to this subparagraph exceeds,
or by the making of such investment will  exceed,  an  amount  equal  to
thirty per cent of the assets of the savings bank.
(8)  Subject  to such limitations and conditions as the superintendent
of financial services may prescribe by  general  regulation,  a  savings
bank  may  make  a  loan pursuant to this subparagraph which the federal
housing administrator has insured or has made a commitment to insure and
may receive and hold such  debentures  as  are  issued  by  the  federal
housing  administrator  in  payment  of  such  insurance,  or  which  is
guaranteed pursuant to the provisions of the act  of  congress  entitled
the  "Servicemen's  Readjustment  Act  of  1944."  No  law of this state
prescribing the nature, amount or form of security or requiring security

upon which loans or advances of credit may be  made  or  prescribing  or
limiting the period for which loans or advances of credit may be made or
limiting  the  amount  of  any  class  of  loans,  advances of credit or
purchases  which may be made shall be deemed to apply to loans, advances
of credit or purchases made or to loans acquired by purchase pursuant to
this item.
(d) A borrower may prepay in  full  any  loan  made  pursuant  to  the
provisions  of  subparagraph  (a), (b) or (c) of this paragraph or, with
the consent of the savings bank, may refinance the loan. In the event of
such prepayment or refinancing, the savings bank shall refund:  (1)  the
unearned  portion  of  the  interest to the borrower the amount of which
portion shall be determined according to a generally accepted  actuarial
method;  provided,  however,  that  if the amount of interest previously
deducted (i) was less than ten dollars, no refund shall be required;  or
(ii)  exceeded  the  sum  of ten dollars and the earned interest is less
than that amount, the savings bank may retain such an additional  amount
as  will  bring the earned interest to the sum of ten dollars and refund
the remainder, and provided further, that unless the loan is refinanced,
no refund shall be required if it amounts to less than one  dollar;  and
(2)  if  a charge was made to the borrower for premiums for insuring the
borrower under  a  credit  unemployment  insurance  policy,  group  life
insurance  policy,  or  under  a  group  health, group accident or group
health and accident insurance policy, the excess of the  charge  to  the
borrower therefor over the premiums paid or payable by the savings bank,
if  such  premiums were paid or payable by the savings bank periodically
or the refund for such insurance premium received or receivable  by  the
savings  bank,  if such premium was paid or payable in a lump sum by the
savings bank, provided that no such  refund  shall  be  required  if  it
amounts  to  less  than one dollar. In the event (i) the maturity of the
loan is accelerated due to the default of the borrower or otherwise  and
judgment  is  obtained,  or  (ii) repayment is made pursuant to any such
insurance policy, the borrower or his legal representative, as the  case
may  be,  shall  be  entitled to the same refund as if the loan had been
prepaid in full on the date of acceleration or repayment.
(5) Promissory notes from a resident of the state of New York provided
that payment of each such note is guaranteed  by  the  New  York  Higher
Education  Assistance  Corporation, or promissory notes that are insured
or covered by a commitment to insure or are guaranteed or covered  by  a
commitment  to guarantee issued by the Federal Education Commissioner in
accordance with the provisions of the act of congress  entitled  "Higher
Education Act of 1965".
8-a.  Promissory notes representing loans 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 cooperative ownership of real estate within or  without  this
state, as provided in this subdivision.
A  savings bank may, subject to such regulations as the superintendent
of financial services finds necessary and proper, invest  to  an  amount
not  exceeding  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 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 within or without this state, for  the  purpose

of financing a purchase of or refinancing an existing ownership interest
in  such  a  corporation or partnership, provided (a) such investment is
secured within ninety days from the making of the loan by an  assignment
or  transfer  of the stock or other evidence of an ownership interest of
the borrower and a proprietary lease; and (b) repayment of principal and
interest shall be  effected  within  the  same  number  of  years  as  a
conventional mortgage loan previously described in this subdivision. 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 of this chapter by no more than
one and one-half per centum per annum.
8-b. Personal loan departments. Subject to  such  regulations  as  the
superintendent  of  financial services may prescribe, a savings bank may
operate a personal loan department under the same terms  and  conditions
as  are  provided  under the provisions of subdivisions four and five of
section one hundred eight of this chapter.
The superintendent of financial services shall  be  empowered  (a)  to
prescribe  the  terms and conditions governing the conduct and operation
of personal loan departments including, the maximum amount, expressed as
a percentage of assets or otherwise, which a  savings  bank  may  invest
pursuant  to  the  provisions  of  this subdivision or in the aggregate,
taking into account such other provisions of law authorizing investments
by savings banks, and (b) to prescribe such terms and conditions as  may
be appropriate to effect or facilitate the transfer of accounts operated
pursuant  to  the provisions of any other section of this chapter to the
personal loan departments authorized to be operated hereunder.
In pursuance of the authority granted hereunder savings banks shall be
empowered to issue credit cards, extend credit in connection  therewith,
and otherwise engage in or participate in credit card operations, and to
act  as financing agency as defined in subdivision nine of section three
hundred one and subdivision eighteen of section four hundred one of  the
personal property law.
8-c.  Subject  to  such regulations as the superintendent of financial
services  may  prescribe,  promissory  notes  and  other  evidences   of
indebtedness  representing  commercial,  corporate  or  business  loans,
provided that the aggregate amount of all such loans outstanding at  any
time  to any borrower shall, if unsecured, not exceed fifteen per centum
of the net worth of such savings bank or, if  secured,  subject  to  the
same limitations as to amount in relation to net worth as are applicable
to  banks and trust companies pursuant to article three of this chapter.
For purposes of this section the term "net worth" shall have the meaning
ascribed to it by subdivision four of section two hundred forty-four  of
this chapter.
8-d.  Subject  to  such regulations as the superintendent of financial
services may prescribe and subject to the limits of subdivision  eight-c
of  this section and any other applicable limits or requirements imposed
by  law  or  regulation,  promissory  notes  and   other   evidence   of
indebtedness  that  represent linked loans, each authorized and approved
pursuant to article fifteen of the state finance  law  and  each  in  an
amount  equal  to  a  corresponding linked deposit made pursuant to such
article.
8-e. Subject to such regulations as the  superintendent  of  financial
services  may prescribe and subject to the limits of subdivision eight-c
of this section and any other applicable limits or requirements  imposed
by   law   or   regulation,  promissory  notes  and  other  evidence  of
indebtedness that represent linked loans, each authorized  and  approved
pursuant  to  article  sixteen  of  the state finance law and each in an

amount equal to a corresponding linked deposit  made  pursuant  to  such
article.
9. Real estate as provided in this subdivision.
(a) A savings bank may purchase or acquire the following real estate:
(1)  A plot whereon there is or may be erected a building suitable for
the convenient transaction of the business of  the  savings  bank,  from
portions of which not required for its own use a revenue may be derived,
and  a  plot whereon parking accommodations are, or are to be, provided,
with or without charge, primarily for  its  customers  or  employees  or
both.  The  aggregate of all investments of a savings bank in such plots
and buildings shall not exceed five per centum of  the  assets  of  such
savings bank, except with the approval of the superintendent.
(2)  Such  as  shall  be  conveyed  to  it  in  satisfaction  of debts
previously contracted in the course of its business.
(3) Such as it shall purchase at sales  under  judgments,  decrees  or
mortgages held by it.
(4)  In  lieu of instituting an action to foreclose a mortgage lien, a
savings bank may purchase a deed to the underlying real property.
(5) A whole or part interest in a "project" as defined in the New York
state urban development corporation act, pursuant  to  sections  six  or
eight  of  such act. An investment by a savings bank in a single project
shall not exceed one per centum of the assets or ten per centum  of  the
net  worth of such savings bank, whichever is less, and the aggregate of
all investments of a savings bank in such projects  and  investments  in
securities   pursuant   to   subparagraph  one-a  of  paragraph  (a)  of
subdivision twenty-one of this section shall not exceed five per  centum
of the assets or fifty per centum of the net worth of such savings bank,
whichever  is less. For the purposes of this subdivision, "net worth" of
a savings bank shall mean the excess of its assets at book  value,  less
allocated reserves, over known liabilities.
* (6) Improved or unimproved real property (either by purchase, lease,
exchange  or  otherwise),  or any interest therein, to erect, construct,
rebuild, enlarge, alter, improve, maintain, manage and operate buildings
or other improvements  of  any  description  thereon,  to  sell,  lease,
sublet,  mortgage,  exchange  or  otherwise dispose of same and execute,
perform  and  carry  out   contracts   for   construction,   alteration,
improvement, maintenance, management or repair thereof, to make loans in
connection  therewith,  as owner, co-owner or otherwise, subject to such
specific or general approvals and limitations as shall  be  required  by
regulations  promulgated  from  time  to  time  by the superintendent of
financial services pursuant to  this  subparagraph;  provided,  however,
that  no  activity specified herein, shall be undertaken pursuant to the
authority contained in this subparagraph  until  the  superintendent  of
financial   services   shall  have  issued  regulations  specifying  the
limitations and requirements which shall be imposed in  connection  with
the  investments  and  activities  referred to herein including, without
limitation, the consideration of such savings bank's record  in  meeting
the  credit  needs  of  local  communities within the meaning of section
twenty-eight-b of this chapter.
* NB Expired June 30, 1988
(b) Every parcel of real estate acquired by a savings  bank  shall  be
conveyed  to  it  directly  by name, or, subject to such regulations and
restrictions as the superintendent of financial  services  finds  to  be
necessary  and  proper,  may  be  taken in the name of a duly authorized
nominee, and the conveyance shall be immediately recorded or  registered
in  the  office  of  the proper recording officer of the county in which
such real estate is located.
10. Bonds and other obligations of Savings and Loan Bank of the  State
of New York.
11.  Farm  loan bonds, including consolidated bonds, issued by federal
land banks,  federal  intermediate  credit  bank  debentures,  including
consolidated debentures, issued by federal intermediate credit banks and
bonds,  debentures  or  other  obligations  of  banks  for cooperatives,
including consolidated  debentures  issued  by  banks  for  cooperatives
organized under the laws of the United States.
12.  Bankers' acceptances and bills of exchange which are eligible for
purchase in the open market by federal reserve banks and which have been
accepted by a bank, a trust company, a private banker or  an  investment
company,  as  those  terms  are defined in this chapter, or by a banking
corporation which is organized under the laws of the United States or of
any state thereof and which is a member of the federal reserve system.
Aggregate liability  of  any  bank,  trust  company,  private  banker,
investment  company  or  banking  corporation  to  any  savings bank for
acceptances shall not exceed twenty-five per centum of the  capital  and
surplus  of such bank, trust company, private banker, investment company
or banking corporation, or five  per  centum  of  the  aggregate  amount
credited  to  the  depositors  of such savings bank, whichever amount is
less.
12-a. * (a) Obligations of any corporation organized under the laws of
any state of the United States maturing within two hundred seventy days,
provided  that  such  obligations  receive  the  highest  rating  of  an
independent rating service designated by the superintendent of financial
services.
* NB  Effective  until notification of the superintendent of financial
services
* (a) Obligations of any corporation organized under the laws  of  any
state  of  the  United  States maturing within two hundred seventy days,
provided that such obligations meet the  standards  of  creditworthiness
established by regulation by the superintendent.
* NB  Effective  upon  notification of the superintendent of financial
services
(b) Subject to such regulations as  the  superintendent  of  financial
services  may  impose,  certificates of deposit issued by or accounts of
(1) a bank, trust company or national bank having a principal, branch or
trust office in this state, (2) a banking  corporation  organized  under
the laws of the United States or of any state thereof whose deposits are
insured  by  an  agency of the United States, or (3) an agency or branch
located within the United States of a foreign banking  corporation  with
total worldwide bank assets in excess of one billion dollars.
12-b.  Advances  of federal funds to designated depositaries, provided
such advances are made on the condition that they be repaid on the  next
business  day  following  the  day  on  which  the  advance is made. For
purposes of this subdivision and subdivision twelve of this section, the
term "federal funds" shall mean  funds  which  a  savings  bank  has  on
deposit at a depositary which are exchangeable for funds on deposit at a
federal  reserve bank; and the term "business day" shall mean any day on
which the savings bank, the depositary  and  the  federal  reserve  bank
where the funds are on deposit are all open for general business.
13.  Bonds  of any corporation which at the time of such investment is
incorporated under the laws of the United States or any  state  thereof,
or  the  District of Columbia, and transacting the business of supplying
electrical energy or artificial  gas,  or  natural  gas  purchased  from
another  corporation  and  supplied  in  substitution for, or in mixture
with, artificial gas, for light, heat,  power  and  other  purposes,  or
transacting  any  or  all of such business, provided at least eighty per

centum of the gross operating  revenues  of  any  such  corporation  are
derived from such business, subject to the following conditions:
(a) Such corporation shall have all franchises necessary to operate in
territory  in which at least seventy-five per centum of its gross income
is earned. Such  corporation  shall  file  with  the  superintendent  of
financial services and make public in each year a statement and a report
giving  the  income  account  covering  the  previous  fiscal year and a
balance sheet showing in reasonable detail the assets and liabilities at
the end of the year.
(b) Either the outstanding  full  paid  capital  stock  together  with
premiums  thereon  and the surplus of such corporation shall be not less
than two-thirds of the total debt secured by mortgage lien on  any  part
or  all  of  its  property,  or  the outstanding full paid capital stock
together with premiums  thereon  and  surplus  and  unsecured  debt  not
maturing within five years and not in excess of fifty per centum of such
capital  stock,  premiums  and  surplus  shall  be  equal  to  at  least
three-fourths of the total debt secured by mortgage lien on any part  or
all  of  its  property, provided, however, that in case of a corporation
having no-par value shares, the amount  of  capital  which  such  shares
represent shall be the capital as shown by the books of the corporation.
(c)  Such corporation shall have been in existence for a period of not
less than eight fiscal years and at no time within such period of  eight
fiscal  years  next  preceding  the  date  of such investment shall said
corporation have failed  to  pay  promptly  and  regularly  the  matured
principal  and  interest  of  all  its  indebtedness  direct, assumed or
guaranteed, but the period of life of the corporation, together with the
period of life of any predecessor corporation or corporations from which
a major portion of its property was acquired by consolidation, merger or
purchase shall  be  considered  together  in  determining  the  required
period.
(d)  For  a period of five fiscal years next preceding such investment
the net earnings of such corporation shall have averaged  per  year  not
less  than  two  times  the average annual interest charges on its total
funded debt applicable to that period, and  for  the  last  fiscal  year
preceding  such  investment  such  net earnings shall have been not less
than twice the interest charges for a full year on its total funded debt
outstanding at the time of such investment,  and  for  such  period  the
gross operating revenues of any such corporation shall have averaged per
year not less than two million dollars.
(e)   In  determining  the  qualifications  of  any  bond  under  this
subdivision where a corporation shall have acquired its property or  any
substantial  part  thereof  within  five years immediately preceding the
date of such investment by consolidation or merger, or by  the  purchase
of all or a substantial portion of the property of any other corporation
or  corporations,  the  gross  operating  revenues,  net  earnings,  and
interest charges of the several predecessor or constituent  corporations
shall  be  consolidated  and  adjusted  so  as  to ascertain whether the
requirements of paragraph (d) of this  subdivision  have  been  complied
with.
(f)  Such  bonds  shall  be  (1) bonds secured by a first or refunding
mortgage  on  property  owned  and  operated,  or  controlled,  by   the
corporation  issuing  or  assuming  them,  or  underlying mortgage bonds
secured by a lien on property owned and operated, or controlled, by  the
corporation  issuing  or  assuming  them,  provided that such underlying
mortgage bonds are to be refunded by a  junior  mortgage  providing  for
their  retirement, that the bonds under such junior mortgage comply with
the requirements of this subdivision, and that such underlying  mortgage
is  either  a  closed  mortgage  or remains open solely for the issue of

additional bonds which are to be pledged under such junior mortgage  and
provided  that  the  aggregate principal amount of bonds secured by such
first or refunding  mortgage  plus  the  principal  amount  of  all  the
underlying  outstanding  bonds  shall  not  exceed two-thirds of the net
value of the physical property owned or controlled as shown by the books
of the owning corporation, and subject to the lien of such  mortgage  or
mortgages securing the total mortgage debt and provided further, that if
a  refunding  mortgage,  it must provide for the retirement on or before
the date of their maturity of all bonds secured by prior  liens  on  the
property,  or  (2)  bonds, other than mortgage bonds, provided, that (a)
for a period of five fiscal years next preceding such investment the net
earnings of such corporation shall have averaged per year not less  than
two  and one-half times the average annual interest charges on its total
funded debt applicable to that period, and  for  the  last  fiscal  year
preceding  such  investment  such  net earnings shall have been not less
than two and one-half times the interest charges for a full year on  its
total  funded  debt  outstanding at the time of such investment, and (b)
the capital stock together with premiums thereon  and  surplus  of  such
corporation  shall  not be less than two-thirds of its total funded debt
outstanding, and (c) such bonds,  if  issued  for  a  term  longer  than
fifteen  years,  shall  have been issued under an indenture containing a
covenant providing for the establishment  of  a  sinking  fund  for  the
benefit  of such bonds whereby such bonds shall be redeemed at an annual
rate of not less than two per centum of the largest principal amount  of
their  issue  at any one time outstanding, and (d) the mortgage bonds of
such corporation, if any, shall qualify under  the  provisions  of  this
subdivision.
(g) (1) The gross operating revenues and expenses of a corporation for
the  purposes  of  this  subdivision  shall  be, respectively, the total
amount  earned  from  the  operation  of,  and  the  total  expense   of
maintaining  and  operating,  all property owned and operated, or leased
and operated, by such corporation, as determined by a system of accounts
adopted by a federal, state  or  municipal  public  service  commission,
public  utility  commission  or other similar regulatory body. The gross
operating  revenues  and  expenses,  as  defined  above,  of  subsidiary
companies  may  be  included,  provided  all  the  mortgage  bonds and a
controlling interest in stock or stocks of such subsidiary companies are
pledged as part security for the mortgage debt of the principal company.
The net value of any property shall be its value as shown by  the  books
of  the  corporation  less the amounts of any reserves for depreciation,
retirement or amortization thereof.  Property  shall  be  deemed  to  be
controlled  by a corporation if such corporation shall own not less than
ninety per cent of the capital stock  of  the  corporation  owning  such
property.
(2)  The  net  earnings  of  any  corporation for the purposes of this
subdivision shall be the balance obtained by deducting  from  its  gross
operating  revenues, its operating and maintenance expenses, taxes other
than federal and state income taxes, rentals and provision for  renewals
and retirements of the physical assets of the corporation, and by adding
to said balance its income from securities and miscellaneous sources but
not,  however,  to  exceed  fifteen per centum of said balance. The term
funded debt  shall  be  construed  to  mean  all  interest-bearing  debt
maturing more than one year from date of issue.
(3)  In  the  computation  for the purposes of this subdivision of the
ratio of mortgage debt to net mortgaged property value  there  shall  be
excluded from the amount of outstanding mortgage bonds the amount of any
cash  deposited  with  the  trustee  of  the  mortgage and held in trust
pursuant to the terms of such mortgage.
(h) Not more than twenty-five per centum of the assets of any  savings
bank  shall  be  loaned on or invested in bonds of such electric and gas
corporations, and not more than two per centum  of  the  assets  of  any
savings bank shall be invested in the bonds of any one such corporation,
as authorized by this subdivision.
(i)  As  used  in this subdivision, the term "bond" includes a note or
debenture.
14. Bonds of any corporation which at the time of such  investment  is
incorporated  under  the laws of the United States or any state thereof,
or the District of Columbia, and authorized to engage, and engaging,  in
the  business  of  furnishing  telephone  service  in the United States,
subject to the following conditions:
(a) Such corporation shall have been in existence for a period of  not
less  than eight fiscal years and at no time within such period of eight
fiscal years next preceding the  date  of  such  investment  shall  said
corporation  have  failed  to  pay  promptly  and  regularly the matured
principal and interest of  all  its  indebtedness  direct,  assumed,  or
guaranteed, but the period of life of the corporation, together with the
period of life of any predecessor corporation or corporations from which
a major portion of its property was acquired by consolidation, merger or
purchase,  shall  be  considered  together  in  determining the required
period; and such corporation  shall  file  with  the  superintendent  of
financial services and make public in each year a statement and a report
giving  the  income  account  covering  the  previous  fiscal year and a
balance sheet showing in reasonable detail the assets and liabilities at
the end of the year.
(b) The outstanding full paid capital  stock  together  with  premiums
thereon  and  the  surplus of such corporation shall at the time of such
investment be equal to at least  two-thirds  of  the  aggregate  of  its
funded debt and the total funded debt, exclusive of any such funded debt
held  by  such corporation, of every telephone corporation a majority of
the capital stock of which is owned by such corporation.
(c) For a period of five fiscal years next preceding  such  investment
the  net  earnings  of such corporation shall have averaged per year not
less than two and one-half times the average annual interest charges  on
its  total  debt applicable to that period, and for the last fiscal year
preceding such investment such net earnings shall  have  been  not  less
than twice the interest charges for a full year on its total funded debt
outstanding  at  the  time  of  such investment, and for such period the
gross operating revenues of any such corporation shall have averaged per
year not less than five million dollars.
(d)  In  determining  the  qualifications  of  any  bond  under   this
subdivision  where a corporation shall have acquired its property or any
substantial part thereof within five  years  immediately  preceding  the
date  of  such investment by consolidation or merger, or by the purchase
of all or a substantial portion of the property of any other corporation
or corporations, the gross operating revenues, net earnings and interest
charges of the several predecessor or constituent corporations shall  be
consolidated and adjusted so as to ascertain whether the requirements of
paragraph (c) of this subdivision have been complied with.
(e) The gross operating revenues and expenses of a corporation for the
purposes  of  this  subdivision shall be, respectively, the total amount
earned from the operation of, and the total expense of  maintaining  and
operating,  all  property owned and operated, or leased and operated, by
such corporation, as determined by a system of accounts adopted  by  the
federal  communications  commission,  a  public  service  commission, or
public utility commission, or other similar federal or state  regulatory
body.
(f)  The  net  earnings  of  any  corporation for the purposes of this
subdivision shall be the balance obtained by deducting  from  its  gross
operating  revenues,  its  operating and maintenance expenses, provision
for depreciation of the physical assets of the corporation, taxes  other
than  federal and state income taxes, rentals and miscellaneous charges,
and  by  adding  to  said  balance  its  income  from   securities   and
miscellaneous  sources but not, however, to exceed fifteen per centum of
said balance. The term funded  debt  shall  be  construed  to  mean  all
interest-bearing debt maturing more than one year from date of issue.
Whenever  a  corporation  shall own a majority of the capital stock of
one or more other telephone corporations, the consolidated statements of
all such telephone corporations shall be used in determining the  amount
of  net  earnings  available  for  interest  charges,  and the amount of
interest charges, of such corporation.
(g) Not more than twenty-five per centum of the assets of any  savings
bank  shall  be  loaned  on  or  invested  in  bonds  of  such telephone
corporations, and not more than three per centum of the  assets  of  any
savings  bank  shall  be  invested  in  the  bonds  of any one telephone
corporation, as authorized by this subdivision.
(h) As used in this subdivision, the term "bond" includes  a  note  or
debenture.
15. Bonds, debentures, consolidated debentures or other obligations of
any  federal  home loan bank or banks, or of Tennessee Valley Authority,
and obligations of, or instruments issued by or fully guaranteed  as  to
principal and interest by, the Federal National Mortgage Association, or
Federal  Home  Loan  Mortgage Corporation, and notes, bonds, debentures,
mortgages and other evidences  of  indebtedness  of  the  United  States
Postal Service.
16. Stock of a federal reserve bank in the amount necessary to qualify
for membership in such bank.
17.  Stock  of  a  federal  home  loan bank in the amount necessary to
qualify for membership in such bank and in such  additional  amounts  as
are approved by the superintendent of financial services.
19.  Securities of corporations which securities are made eligible for
investment by savings banks by the superintendent of financial services.
20. Subject to such regulations and restrictions as the superintendent
of financial services finds to be necessary and proper, (a) (1) any bond
and mortgage insured by the federal housing commissioner, or for which a
commitment to insure has been made by the federal housing  commissioner,
or  (2)  any  bond and mortgage guaranteed pursuant to the provisions of
the act of congress  entitled  the  "Servicemen's  Readjustment  Act  of
1944",  or  (3)  provided  the  mortgage  is  a first lien, any bond and
mortgage at least twenty per centum of which is guaranteed  pursuant  to
the provisions of such act, or (4) a participation in any loan or a part
interest  in  any  bond  and  mortgage, secured by real property, to the
extent that the small business administration is committed  to  pay  the
principal  and  interest  thereof; (b) any whole or part interest in any
such bond and mortgage or in any whole or part interest in any such bond
and mortgage, which bond and mortgage is held for  the  benefit  of  the
holder  or  holders of a whole interest or part interests therein by any
entity  or  entities  with  which  a  savings  bank  is  authorized   to
participate  pursuant to this paragraph, but no such investment shall be
made in any part interest which is junior or subordinate  to  any  other
part  interest  therein;  (c)  any  bond secured by any such mortgage or
mortgages, which mortgage is, or  which  mortgages  are,  held  for  the
benefit  of  the holder or holders of the bond or bonds secured thereby,
by a savings bank or  bank  or  trust  company;  and  (d)  any  property
improvement  note  issued  pursuant  to  the  provisions of the national

housing act, provided the savings bank investing in such note shall have
qualified for  and  received  in  connection  therewith  a  contract  of
insurance  from  the  federal  housing  commissioner. A savings bank may
receive  and  hold  such debentures as are issued in payment of any such
insurance. No law of this state prescribing  or  limiting  the  interest
rate  upon  loans  or  advances  of  credit or prescribing a penalty for
violation thereof or prescribing the nature, amount or form of  security
or requiring security upon which loans or advances of credit may be made
or  prescribing  or  limiting  the period for which loans or advances of
credit may be made or  limiting  the  amount  of  any  class  of  loans,
advances  of  credit  or  purchases which may be made shall be deemed to
apply to loans, advances  of  credit  or  purchases  made  or  to  loans
acquired by purchase pursuant to this subdivision.
The  provisions  of  subdivision  six of this section, except those of
paragraph (f) thereof, shall not apply to investments made  pursuant  to
this  subdivision  by  any  savings bank. Paragraphs (a), (b) and (c) of
section one of  chapter  eight  hundred  ninety-seven  of  the  laws  of
nineteen  hundred  thirty-four  as  amended  shall  not apply to savings
banks. The term "bond", as used in this subdivision,  includes  a  note.
The  authority  provided  in  this subdivision to invest in any bond and
mortgage guaranteed pursuant to the provisions of the  act  of  congress
entitled  the  "Servicemen's  Readjustment  Act  of 1944", shall include
authority to acquire title to real property in connection with investing
in an installment contract for the sale of real property, so guaranteed,
where the purchaser under such contract is in possession and control  of
the  property,  and  title  is  acquired  by  the savings bank solely as
security for the obligations of the purchaser.
21.  (a)  Subject  to  such  regulations  and  restrictions   as   the
superintendent of financial services finds to be necessary and proper:
(1)  Stock  and  obligations, not otherwise eligible for investment by
the savings bank, of any corporation organized under  any  law  of  this
state  for  the purpose of acquiring, constructing, owning, maintaining,
operating, selling or conveying  a  housing  project  or  projects  (not
including  hotels but including accommodations for retail stores, shops,
offices  and  other  community  services  reasonably  incident  to  such
projects)  located  within  this  state, provided that all the stock and
obligations of any such corporation have been or are  originally  issued
to one or more savings banks of this state.
(1-a). Stock and obligations, not otherwise eligible for investment by
the  savings  bank,  of  any  "subsidiary"  of  the New York state urban
development  corporation,  as  defined  in  the  New  York  state  urban
development corporation act, provided that all the stock and obligations
of any such subsidiary is or is to be owned by one or more savings banks
of  this state, or by such other owners of such stock and obligations as
may be approved by the superintendent of financial services.
(2) Corporate interest-bearing securities, other than those issued  by
any  corporation  organized  under  the laws of a foreign country except
Canada whose securities  are  not  registered  with  the  United  States
Securities  and  Exchange  Commission or listed on a national securities
exchange in accordance with the Securities  Exchange  Act  of  1934,  as
amended,  and  interest-bearing  securities  of  any state in the United
States  or  of  any  public  authority,  commission  or  instrumentality
organized  under  the  laws  of any state of the United States or of any
political subdivision of any such  state,  not  otherwise  eligible  for
investment  by  the  savings bank, which are not in default as to either
principal or interest when acquired, provided that no  investment  shall
be  made  pursuant  to  this  subparagraph  (2) in the securities of any
corporation if the total direct liabilities of such corporation  to  the

savings  bank  exceed,  or by the making of such investment will exceed,
ten per centum of the total direct liabilities of  such  corporation  or
one  per  centum  of the assets of the savings bank, whichever amount is
less.  The  term  "securities",  as used in this subparagraph (2), means
such bonds, notes, debentures and other obligations for payment of money
as are  negotiable,  or  conditional  sale  agreements,  assignments  of
conditional  sale agreements and participations therein which are issued
or made by railroads for the purchase of rolling stock, and which have a
maturity of not less than five years from the date of issue  or  making,
or,  if  issued  or  made  in  a series or repayable in installments, an
average maturity of not less than five years from the date of  issue  or
making.
(b)  No  investment  shall  be  made  by  a  savings  bank pursuant to
subparagraphs one and two of paragraph (a) of this  subdivision  if  the
total  amount  invested  by it pursuant to such paragraph, together with
the total amount invested by it pursuant to any provisions  of  any  law
other than the banking law, exceeds, or by the making of such investment
will  exceed,  an  amount  equal  to ten per centum of the assets of the
savings bank. An investment by a savings bank in a single subsidiary  of
the   New   York   state   urban  development  corporation  pursuant  to
subparagraph one-a of paragraph a of this subdivision shall  not  exceed
one  per centum of the assets or ten per centum of the net worth of such
savings bank, whichever is less, and the aggregate of all investments of
a savings bank  in  such  subsidiaries  and  investments  in  securities
pursuant  to  subparagraph  five of paragraph (a) of subdivision nine of
this section shall not exceed five per centum of the assets or fifty per
centum of the net worth of such savings bank, whichever is less. For the
purposes of this paragraph, "net worth" of a savings bank shall mean the
excess of its assets at book value, less allocated reserves, over  known
liabilities.
(d) For the purposes of sections two hundred seventy-four, two hundred
eighty-five  and  four  hundred thirty-five of this chapter, investments
authorized by this subdivision shall not be deemed investments in  which
savings  banks may legally invest, except that investments authorized by
subparagraph one-a of paragraph (a) of this subdivision shall be  deemed
investments  in  which savings banks may legally invest for the purposes
of section three hundred seventy-nine of this chapter.
(e) For the purposes of section  three  hundred  fifty-nine-f  of  the
general  business  law,  investments  authorized by sub-paragraph (2) of
paragraph (a) of this subdivision shall not  be  deemed  investments  in
which savings banks may legally invest.
* 21-a.  Interest-bearing  obligations  payable in United States funds
which at the time of investment are rated in one of  the  three  highest
rating  grades  by each rating service, designated by the superintendent
of financial services, which has rated such obligations,  provided  that
the  aggregate  amount  invested in the obligations of any single issuer
pursuant to  this  subdivision  and  pursuant  to  subparagraph  (2)  of
paragraph  (a)  of subdivision twenty-one of this section may not exceed
one per centum of the assets of the savings bank, and  provided  further
that  the  aggregate amount invested in the interest-bearing obligations
of any single issuer pursuant to this subdivision and  pursuant  to  any
provision  of this section specifically authorizing such investment, may
not exceed the percentage limitations contained in any such provision.
* NB Effective until notification of the superintendent  of  financial
services
* 21-a.  Interest-bearing  obligations  payable in United States funds
which at the time of investment meet the standards  of  creditworthiness
established  by  regulation  by  the  superintendent,  provided that the

aggregate amount invested  in  the  obligations  of  any  single  issuer
pursuant  to  this  subdivision  and  pursuant  to  subparagraph  (2) of
paragraph (a) of subdivision twenty-one of this section may  not  exceed
one  per  centum of the assets of the savings bank, and provided further
that the aggregate amount invested in the  interest-bearing  obligations
of  any  single  issuer pursuant to this subdivision and pursuant to any
provision of this section specifically authorizing such investment,  may
not exceed the percentage limitations contained in any such provision.
* NB  Effective  upon  notification of the superintendent of financial
services
22. Certificates of investment in savings banks life insurance fund.
23. Certificates representing advances to the surplus fund of its life
insurance department.
24. Obligations issued or guaranteed by  the  international  bank  for
reconstruction and development.
24-a.   Obligations   issued   or  guaranteed  by  the  inter-American
development bank.
24-b. Obligations issued or guaranteed by the Asian development bank.
24-c. Obligations issued or  guaranteed  by  the  African  Development
Bank.
24-d. Obligations guaranteed by the youth facilities project guarantee
fund and participations therein.
24-e.  Obligations  issued  or guaranteed by the International Finance
Corporation.
25. Obligations of the Dominion of Canada, or of any province or  city
of  the  Dominion  of  Canada,  as  provided  in  this  subdivision. (a)
Obligations of the Dominion of Canada, or those for which the  faith  of
the  Dominion  of  Canada  is  pledged to provide for the payment of the
interest and principal, provided that the principal and interest of such
obligations are payable in United States funds.
(b) Obligations of any province of the Dominion of Canada or those for
which the faith of any such province  is  pledged  to  provide  for  the
payment of the interest and principal upon which there is no default and
upon  which  there  has  been  no  default  for  more  than ninety days;
provided, that within ten years  immediately  preceding  the  investment
such  province  has not been in default for more than ninety days in the
payment of any part of principal or interest of any debt duly authorized
by the legislature of such province; and provided that the principal and
interest of such obligations are payable in  United  States  funds;  and
provided  further,  that  if  at  any  time the net debt, as hereinafter
defined, of any such province shall exceed twenty-five per centum of the
valuation of  real  property  in  such  province  for  the  purposes  of
taxation,  the obligations of such province shall, thereafter, and until
such net debt  shall  be  reduced  to  twenty-five  per  centum  of  the
valuation  of  real  property  in  such  province  for  the  purposes of
taxation, cease to be an authorized investment for the moneys of savings
banks. The term "net debt" as used in  this  paragraph  shall  mean  the
aggregate  of  all  direct  obligations  funded and unfunded of any such
province and all other obligations excluding any on  which  interest  is
being  paid  out  of  other than the ordinary revenues of such province;
less sinking funds applicable to such obligations.
(c) Obligations of any city in Canada, provided that said city  has  a
population,  according  to  the  last  federal  census  of  Canada  next
preceding said investment, of not less than one hundred  fifty  thousand
inhabitants,  and  has  not,  within  twenty-five  years  preceding said
investment, defaulted for more than one hundred and twenty days  in  the
payment  of  any part either of principal or interest of any bond, note,
or other evidence of indebtedness, provided  that  the  indebtedness  of

such  city  does  not exceed the limitations imposed by paragraph (c) of
subdivision five of this section if  applicable;  and  provided  further
that  the  principal  and  interest  of  such obligations are payable in
United  States  funds.  No  obligations  of  any  such  city shall be an
authorized investment for savings banks  unless  such  city  shall  have
power to levy taxes on the taxable real property therein or to require a
levy  thereon  by  municipalities within its area in either case for the
payment of such obligation without limitation of  rate  or  amount.  The
term  "city"  as  used  in  this  paragraph  and  in  paragraph  (d)  of
subdivision five of this  section  shall  include  The  Municipality  of
Metropolitan  Toronto  and  any other similar corporation in Canada, and
the power to require a levy by municipalities within its area  shall  be
deemed  to  be  a  power  to  levy taxes within the meaning of such last
mentioned paragraph.
(d) Not more than ten per centum of the assets of  any  savings  banks
shall  be  invested  in the obligations defined in this subdivision, and
not more than two per centum of such assets shall  be  invested  in  the
obligations of any province, nor more than two per centum of such assets
in the obligations of any city, as authorized by this subdivision.
26. Subject to such regulations and restrictions as the superintendent
of financial services finds to be necessary and proper:
(a)  Preferred stock of any corporation, created or existing under the
laws of the United  States  or  of  any  state,  district  or  territory
thereof, provided (1) the net earnings of such corporation available for
its  fixed  charges for a period of five fiscal years next preceding the
date of investment by such savings bank shall have averaged per year not
less than one and one-half times the sum of the following,  computed  as
of  the  date  of such investment: its annual fixed charges, if any, its
annual maximum contingent interest, if any,  and  its  annual  preferred
dividend  requirements;  and  (2) during either of the last two years of
such period such net earnings shall have been  not  less  than  one  and
one-half  times  the  sum  of its fixed charges, contingent interest and
preferred dividend requirements for such year. As used in this paragraph
(a), the  term  "dividend  requirements"  shall  be  construed  to  mean
cumulative or non-cumulative dividends whether or not paid.
(b)  Guaranteed stock of any corporation created or existing under the
laws of the United  States  or  of  any  state,  district  or  territory
thereof,  provided  (1) the net earnings of the guaranteeing corporation
available for its fixed charges for a period of five fiscal  years  next
preceding  the  date  of  investment  by  such  savings  bank shall have
averaged per year not less than one and one-half times its annual  fixed
charges  computed  as  of  the  time  of such investment; and (2) during
either of the last two years of such period net earnings shall have been
not less than one and one-half times its fixed charges for such year.
(c) Common stock of any corporation created or existing under the laws
of the United States or of any state,  district  or  territory  thereof,
provided  such  common  stock  is  registered  on  a national securities
exchange, as provided in an  act  of  congress  of  the  United  States,
entitled  the  "Securities  Exchange  Act of 1934", approved June sixth,
nineteen hundred thirty-four, as amended.
(e) Stock or shares of any investment  company,  as  defined  by,  and
which  is  registered  under,  an  act of congress of the United States,
entitled  the  "Investment  Company  Act  of  1940",   approved   August
twenty-second, nineteen hundred forty, as amended, provided such company
may  invest  only in such investments as are eligible for savings banks,
including, without limitation, investments  made  eligible  for  savings
banks  by  paragraphs (a), (b) and (c) of this subdivision but excluding
investments made eligible for savings banks by subdivisions five-a, six,

eight, nine, sixteen, seventeen, eighteen, twenty-two  and  twenty-three
of  this  section,  provided that (i) investment restrictions based upon
the assets, surplus fund, net worth or other features of  the  condition
or  operation  of  the  savings  bank  shall  not  be applicable to such
investment company, (ii) the amount of stock of  any  corporation  which
may  be held by such investment company shall not exceed five per centum
of the number of shares of stock of such corporation outstanding at  the
time of investment by such investment company, and (iii) at the time the
investment  is  made,  the  percentage of assets that a savings bank may
invest in the stock or shares of the investment company shall not exceed
the limitation, if any, applicable to a savings bank's investment in any
individual security included  in  the  investment  company's  portfolio.
Nothing  contained  in  the  provisions of this chapter shall prevent an
officer, director, clerk or other employee of any bank or trust  company
from  being  an  officer,  director  or  employee of any such investment
company.
(ee) Stock of any "bank service corporation", as such term is  defined
by  an  act of congress of the United States, entitled the "Bank Service
Corporation  Act",  approved  October  twenty-third,  nineteen   hundred
sixty-two,  as  such act may be amended from time to time, provided such
investment shall have been authorized by the superintendent.
(eee) Stock or shares of any investment company, as  defined  by,  and
which  is  registered  under,  an  act of Congress of the United States,
entitled  the  "Investment  Company  Act  of  1940",   approved   August
twenty-second,  nineteen  hundred  forty, as amended, provided: (1) such
company is managed, advised and has its assets held at a bank  or  trust
company  which is supervised and examined by the superintendent; (2) all
of the stock and shares, other than stock or shares required by  law  to
qualify  directors, of such investment company are or are to be owned by
savings banks, savings and loan associations and pension trusts,  funds,
plans  or  agreements  participated  in  by one or more savings banks or
savings and loan associations to provide retirement benefits, for any or
all of its  or  their  active  officers  and  employees;  and  (3)  such
investment  company  may invest only in investments as are made eligible
for savings banks by subdivisions one, two, three, four and  fifteen  of
this  section.  For  the  purpose  of  investments  authorized  by  this
paragraph, no investment shall be made by a savings bank  if  the  total
amount  invested  by it exceeds, or by the making of the investment will
exceed, an amount equal to thirty-five percent of its assets.
(f) For the purposes of this subdivision, (1) the term  "net  earnings
available  for  fixed  charges"  shall  mean  net income after deducting
operating and maintenance expenses, taxes other than federal  and  state
income  taxes,  depreciation  and depletion, but excluding extraordinary
non-recurring items of  income  or  expense  appearing  in  the  regular
financial   statements   of   the   issuing,  assuming  or  guaranteeing
corporation; provided, however, that in the case  of  preferred  stocks,
federal and state income taxes shall also be deducted in determining net
earnings available for fixed charges; (2) the term "fixed charges" shall
include  interest  on  funded  and  unfunded  debt, amortization of debt
discount and rentals for leased properties;  (3)  if  net  earnings  are
determined  in  reliance upon consolidated earnings statements of parent
and subsidiary corporations, such net earnings shall be determined after
provision for income taxes of subsidiaries and  after  proper  allowance
for  minority stock interest, if any, and the required coverage of fixed
charges shall be  computed  on  a  basis  including  fixed  charges  and
preferred  dividends  of  subsidiaries  other than those payable by such
subsidiaries  to  the  parent  corporation  or  to  any  other  of  such
subsidiaries;  and  (4)  in  applying  the  earnings  tests  under  this

subdivision to any issuing, assuming, or guaranteeing corporation, where
such corporation shall have acquired its  property  or  any  substantial
part  thereof  within  the  five years immediately preceding the date of
investment  by  consolidation  or merger, or by the purchase of all or a
substantial portion of any other corporation or corporations,  or  shall
have  acquired  the  assets of any unincorporated business enterprise by
purchase or otherwise, the gross  operating  income,  net  earnings  and
interest charges of the several predecessor or constitutent corporations
or  enterprises  shall  be  consolidated and adjusted so as to ascertain
whether or not the applicable requirements of this subdivision have been
complied with.
(g) No investment  shall  be  made  by  a  savings  bank  pursuant  to
paragraphs  (a),  (b)  or  (c)  of  this subdivision in the stock of any
corporation if the total investment by the savings bank in the stock  of
such  corporation  exceeds,  or  by  the  making of such investment will
exceed (1) in amount, one per centum of the assets of the savings  bank,
or  (2)  in  number  of  shares,  two per centum of the total issued and
outstanding shares of stock of such corporation.
(h) No investment  shall  be  made  by  a  savings  bank  pursuant  to
paragraph  (a),  (b)  or  (c) of this subdivision if the total aggregate
amount so invested by it exceeds, or by the making  of  such  investment
will  exceed,  an  amount  equal to seven and one half per centum of its
assets.
(i) No investment in an investment company shall be made by a  savings
bank  pursuant  to paragraph (e) of this subdivision if the total amount
invested by it  in  all  such  investment  companies  pursuant  to  such
paragraph  exceeds,  or by the making of such investment will exceed, an
amount equal to seven and one-half per centum of its assets.
(k) For the purposes of sections two hundred seventy-four, two hundred
eighty-five and four hundred thirty-five of  this  chapter,  investments
authorized  by this subdivision shall not be deemed investments in which
savings banks may legally invest.
(l) For the purposes of any other statutes which restrict  investments
to  securities authorized for investment by savings banks, including but
not limited to section ninety-two of  the  membership  corporation  law,
section  9.27  of  the  mental  hygiene  law  and  sections  fifteen and
twenty-five-a of the workmen's compensation law, investments  authorized
by  this  subdivision,  shall not be deemed investments in which savings
banks may legally invest.
26-a.  (1)  Subject  to  such  regulations  and  restrictions  as  the
superintendent  of  financial services finds to be necessary and proper,
the stock or obligations of one or more corporations engaged, or  to  be
engaged,  primarily  in  originating  and  servicing  mortgages  on real
property, provided, however, that if the savings  bank  shall  own  less
than  all  of  the  stock  and  obligations of any such corporation, the
remainder of the stock, excluding directors' qualifying shares, if  any,
and  obligations  of  such  corporation  shall  be  owned by one or more
savings banks or savings and loan associations located in this state.
(2) No investment shall be made pursuant to  this  subdivision  unless
the  corporation  in  which  such  investment  is  to be made shall have
furnished satisfactory assurance to the superintendent that it  will  be
subject  to  examination by him to the same extent as if the business of
such corporation were being conducted by the savings  bank  on  its  own
premises. No investment shall be made by a savings bank pursuant to this
subdivision  if  the  total  amount so invested by it exceeds, or by the
making of such investment will exceed, an amount equal to one per centum
of its assets.
(4) For the purposes of any other provisions  of  law  which  restrict
investments  to  those  in which savings banks may legally invest, other
than subdivision five of section  three  hundred  seventy-nine  of  this
chapter,  investments authorized by this subdivision shall not be deemed
investments in which savings banks may legally invest.
27.  For  the  purposes  of  this  section the term "state", when used
generally to include every state of the United States, includes also the
commonwealth of Puerto Rico, and the term "city", when used generally to
include cities in every state of the United States,  includes  also  any
municipality of the commonwealth of Puerto Rico.
28.  Bonds, notes or evidences of indebtedness issued by a corporation
organized  for  the  purpose  of  undertaking,   constructing,   owning,
maintaining,  operating,  selling  or  conveying  a  slum  clearance and
redevelopment project, located within this state, pursuant to title  one
of  an  act  of  congress  of the United States approved July fifteenth,
nineteen hundred forty-nine, entitled the  "Housing  Act  of  1949,"  or
organized  pursuant  to  articles  five  and  six of the private housing
finance law, and secured by a  first  mortgage  upon  all  of  the  real
property  owned  by  the  corporation.  A  mortgage loan made under this
subdivision may equal but shall in no event exceed ninety per centum  of
the  cost as estimated prior to the completion of the project, or ninety
per centum of the total actual final cost, if that shall be greater than
the estimated cost, but in no event, shall  such  mortgage  loan  exceed
ninety  per  centum  of  the  appraised  value  of the completed project
determined pursuant to subdivision six of this  section.  The  estimated
cost  and  the  total  actual  final  cost  shall  be  certified  as  to
reasonableness   and   correctness   by   an   independent   engineering
organization  and shall include the cost to the corporation of the lands
owned  by  the  corporation,  the  cost  of  demolition,  the  cost   of
constructing    the   improvements,   including   planning,   designing,
engineering and landscaping, the cost of relocation of tenants, interest
and other carrying charges during  the  period  of  acquisition  and  of
construction,   all   other  costs  necessarily  incurred  and  properly
attributable to undertaking, constructing and  completing  the  project,
and  an  allowance  for working capital which shall not exceed an amount
equal to three per centum of the estimated cost or of the  total  actual
final  cost  of  the project if that shall be greater than the estimated
cost. A mortgage loan made under this subdivision may be participated in
by one or more savings banks. An agreement setting forth the  manner  in
which  the participating banks shall administer the mortgage and acquire
real estate, if any, shall be executed on behalf of  each  bank  by  two
persons  appointed  by  the  board of trustees of such bank. Investments
made by any savings bank in mortgage loans pursuant to this  subdivision
and  pursuant  to paragraph (h) of subdivision six of this section shall
not, in the aggregate, exceed ten per centum of the assets or an  amount
equal  to  the surplus fund and undivided profits and surplus reserve of
such savings bank, whichever is less,  and  shall  be  included  in  the
computation  of  permissive  investment  in  mortgage  loans pursuant to
paragraph (d) of subdivision six of this section.  Investments  in  such
mortgage  loans shall be subject to such regulations and restrictions as
the superintendent of financial  services  finds  to  be  necessary  and
proper.
28-a.  Such  bonds  or  other  evidences  of  indebtedness  issued  or
guaranteed by the State of Israel as are approved by the comptroller  of
the  currency  for investment by national banks; provided, however, that
the principal and interest payable thereon shall be  payable  in  United
States dollars; and provided that such investments may not exceed in the

aggregate  five  percent  of  the  bank's  capital  deposits,  undivided
profits, surplus and reserves.
28-b.  Such  acquisitions  and  leases  of  personal  property  as are
authorized to be made by  commercial  banks  by  subdivision  twelve  of
section  ninety-six  of  this  chapter,  subject  to  those  limitations
applicable to such investments in the case of banks or trust companies.
29. Subject to such restrictions as the  superintendent  of  financial
services  may  prescribe,  stock or other equity interest in one or more
small business investment  companies,  as  authorized  pursuant  to  the
provisions of an act of congress entitled "Small Business Investment Act
of  1958,"  as amended, or in any entity established to invest solely in
such small business investment companies, except that in no event  shall
the  total  amount  of  such  investments  exceed:  (a) for a stock form
savings bank five  percent  of  its  capital  stock,  surplus  fund  and
undivided  profits;  or (b) for a non-stock savings bank five percent of
its net worth.
30. Alternative investment authority of savings  banks  to  invest  in
certain   securities.   Notwithstanding  the  limitations  contained  in
subdivision one, two, three, four, five, seven,  seven-a,  ten,  eleven,
thirteen,   fourteen,   fifteen,  nineteen,  twenty-one-a,  twenty-four,
twenty-four-a, twenty-four-b,  twenty-four-c,  twenty-five,  twenty-six,
twenty-seven,  twenty-eight-a,  or  subparagraph two of paragraph (a) or
paragraph (b) of subdivision twenty-one of this section, and subject  to
such  limitations  as  the  superintendent  of  financial services shall
adopt, a savings bank  shall  be  authorized  to  invest  in  such  debt
securities as are not in default as to either principal or interest when
acquired,  and  in  such  equity  securities,  in both cases as would be
acquired by prudent persons  of  discretion  and  intelligence  in  such
matters  who  are  seeking a reasonable income and preservation of their
capital.
Without  limiting  its  authority  hereunder,  the  superintendent  of
financial  services  shall adopt regulations to require that any savings
bank which shall elect to make investments pursuant to this  subdivision
shall  have  first  established  an investment committee of its board of
trustees to supervise and monitor the investment activities  exercisable
pursuant  to  the authority granted by this subdivision, the majority of
the members of which shall be trustees who  are  not  also  officers  or
employees of such savings bank.
The  superintendent  of  financial  services shall, in addition, adopt
regulations to require that  no  savings  bank,  in  making  investments
pursuant to this subdivision shall (either before or after the making of
such  investments)  control, as the superintendent of financial services
shall define the term "control",  the  issuer  of  any  such  securities
acquired by such savings bank.
For purposes of any other law establishing or limiting the investments
of  any  person  or  entity to those investments which are permitted for
savings banks, the investments authorized by this subdivision shall not,
by virtue of this subdivision alone, be deemed investments  in  which  a
savings bank may legally invest.
31.  Subject  to  such  regulations as the superintendent of financial
services may promulgate, investments which do not qualify under  any  of
the preceding subdivisions of this section, provided that:
(a)  No  investment  shall  be made by a savings bank pursuant to this
subdivision if the amount of such investment exceeds one per  centum  of
the  assets  of the savings bank, or if the aggregate amount of all such
investments by a  savings  bank  exceeds,  or  by  the  making  of  such
investment will exceed, five per centum of its assets;
(b)  No  investment  shall  be  made  by  a savings bank in the equity
securities of any  one  issuer  pursuant  to  this  subdivision  if  the
aggregate  amount  invested  by it pursuant to this subdivision together
with the amount  invested  in  the  equity  securities  of  such  issuer
pursuant to any other provision of law exceeds, or by the making of such
investment  will  exceed,  one  per  centum of the assets of the savings
bank, and no investment shall be made by a savings bank in a loan to, or
in the debt securities of, any one issuer pursuant to this  subdivision,
if  the  aggregate  amount  invested  by it pursuant to this subdivision
together with the  amount  invested  in  a  loan  to,  or  in  the  debt
securities  of,  such  issuer  pursuant  to  any  other provision of law
exceeds, or by the making of such investment will exceed, one per centum
of the assets of the savings bank;
(c) This subdivision shall not be deemed to  alter  any  provision  of
this  chapter limiting the aggregate amount which may be invested in any
class of loan or investment;
(e) For the purposes of this subdivision, "net  worth"  of  a  savings
bank  shall  mean the excess of its assets at book value, less allocated
reserves, over known liabilities; and
(f) For the purposes of sections two hundred seventy-four, two hundred
eighty-five and four hundred thirty-five of this chapter, section  three
hundred  fifty-nine-f  of  the  general  business  law,  and  any  other
provisions of law which restrict investments to those in  which  savings
banks  may  legally  invest, other than subdivision six of section three
hundred seventy-nine of this chapter,  investments  authorized  by  this
subdivision  shall  not be deemed investments in which savings banks may
legally invest.