2023 New York Laws › BNK - Banking › Article 6 - Savings Banks › 247 - Restrictions Upon Trustees and Officers.

§ 247.  Restrictions  upon  trustees  and  officers. 1. A trustee of a
savings bank shall not
(a) Have any interest, direct or  indirect,  in  the  profits  of  the
savings  bank,  but may receive interest upon the amounts contributed by
him or her to the surplus fund, may make deposits in  the  savings  bank
and  receive  interest  thereon  and may acquire from the life insurance
department of the savings bank, or through the savings bank as agent for
the life insurance department of another savings  bank,  life  insurance
issued  on  his  or her life, or that of another, in accordance with the
provisions of article six-A of this chapter and  may  receive  dividends
thereon. Notwithstanding the provisions of this paragraph, an officer of
a  savings  bank  who  also  serves as a trustee of such institution may
receive compensation as an officer of such institution, as  approved  by
the  board  of  trustees,  which  in  whole or in part is based upon the
financial performance of the institution.
(b) Become a member of the board of directors of a bank, trust company
or national bank of which board enough other  trustees  of  the  savings
bank  are  members  to  constitute  with  him a majority of the board of
trustees.
(c) Become a director or trustee of a bank, trust company or  national
bank  located in this state, operating a special interest department, or
of a mortgage or title  company  organized  under  the  banking  law  or
insurance law, if, after election as such director or trustee a majority
of  the  trustees  of  the savings bank will be directors or trustees of
such other institutions.
2. Neither a trustee nor an executive officer of a savings bank shall
(a) Receive directly or indirectly and retain for his or her  own  use
any  commission on or benefit from any loan made by the savings bank, or
any pay or emolument for services rendered  to  any  borrower  from  the
savings bank in connection with such loan, except as provided in section
two hundred forty-nine of this article.
(b) Direct or require a borrower on a mortgage to negotiate any policy
of  insurance on the mortgaged property through any particular insurance
broker or brokers, or attempt to  divert  to  any  particular  insurance
broker  or  brokers  the business of borrowers from the savings bank, or
refuse to accept any such insurance policy because it was not negotiated
through a particular insurance broker or brokers.
(c) Become an indorser, surety, or guarantor,  or  in  any  manner  an
obligor, for any loan made by the savings bank.
(d)  For  himself  or  as  agent  or  partner  of another, directly or
indirectly borrow or use any of the funds of the savings bank or  become
the owner of real property on which the savings bank holds a mortgage.
2-a.  Notwithstanding  paragraph (c) or (d) of subdivision two of this
section an executive officer of a savings  bank  may  borrow  from  such
savings  bank  or become the owner of real property on which the savings
bank holds a mortgage if the loan is secured by (a) a first mortgage  or
is  a cooperative apartment unit loan, which property or apartment is to
be  occupied  as  the  executive  officer's  primary  residence  and  is
specifically  approved  in  writing  by  the  board of trustees or (b) a
deposit maintained by the executive officer with the savings bank.
2-b. As used in subdivisions two and two-a of this section,  the  term
"executive officer" shall be defined as set forth in section 22(h)(9)(C)
of  the  Federal  Reserve  Act  12  U.S.C.  375b(9)(C),  and regulations
promulgated thereunder, as amended.
3. A loan to or  a  purchase  by  a  corporation  in  which  he  is  a
stockholder to the amount of fifteen per centum of the total outstanding
stock,  or in which he and other trustees of the savings bank hold stock
to the amount of twenty-five per centum of the total outstanding  stock,

shall  be  deemed  a  loan  to  or a purchase by such trustee within the
meaning of this section; except when the loan to  or  purchase  by  such
corporation  shall  have  occurred  without his knowledge or against his
protest. A deposit with a banking corporation shall not be deemed a loan
within the meaning of this section.
4. This section shall not be construed to prohibit a savings bank from
making  a  loan  to  a  religious corporation, club, or other membership
corporation of which one or more trustees of such savings  bank  may  be
members  or  officers  but in which they have no financial interest, nor
shall it be construed to prohibit a savings bank from making loans to or
purchasing guaranteed mortgages from any stock corporation, provided  no
trustee  owns  more than fifteen per centum of the capital stock of such
corporation, and the total  amount  of  such  stock  owned  by  all  the
trustees  of  such  savings  bank is less than twenty-five per centum of
such capital stock.
5. (a) No executive officer of a savings  bank  may  be  an  executive
officer,  director  or  trustee of another savings bank, or of a bank or
trust company, savings and  loan  association,  national  bank,  federal
savings  bank  or  federal  savings association, the principal office of
which institution is located in this  state,  bank  holding  company  or
foreign  banking  corporation maintaining a branch in this state, unless
permission therefor has been granted by the superintendent  pursuant  to
the provisions of paragraph (b) of this subdivision.
(b) The superintendent shall have the power to determine by regulation
who shall be considered, under the provisions of this subdivision, to be
an  executive  officer,  and  by  regulation,  to grant permission to an
executive officer of a savings bank to be an executive officer, director
or trustee or both an executive  officer  and  director  or  trustee  of
another  savings  bank  or  a  bank  or  trust company, savings and loan
association, national bank, federal  savings  bank  or  federal  savings
association,  the  principal  office  of which institution is located in
this  state,  bank  holding  company  or  foreign  banking   corporation
maintaining  a branch in this state. Such permission may be granted only
if in the judgment of the superintendent such service by  the  executive
officer  will  be consistent with the policy of the state of New York as
declared in section ten of this chapter. The superintendent  shall  have
the  power  to revoke such permission whenever the superintendent finds,
after reasonable notice and an opportunity to be heard, that the  public
interest requires such revocation.
(c)  For  the  purposes  of  this  subdivision, the term "bank holding
company" shall be given the same meaning as is contained in section  one
hundred  forty-one  of  this  chapter,  and  the definition of the term,
"banking institution" is modified to include a  national  bank,  federal
savings  bank  or  federal  savings association, the principal office of
which institution is located  in  this  state,  and  a  foreign  banking
corporation maintaining a branch in this state.
(d)  All other restrictions and limitations imposed by this chapter on
officers and trustees of savings banks shall continue in effect.