2023 New York Laws › BNK - Banking › Article 2 - Department of Financial Services; Superintendent of Financial Services; Supervisory and Regulatory Powers › 12-A - Power of State Chartered Banking Institutions to Exercise the Rights of Counterpart Federally Chartered Banking Institutions.

* §  12-a.  Power  of state chartered banking institutions to exercise
the rights of counterpart federally chartered banking  institutions.  1.
Definitions.  (a)  As  used  in  this  section, "state chartered banking
institution" shall mean any bank, trust company, private banker, savings
bank, savings and loan  association,  foreign  banking  corporation,  or
credit union.
(b) As used in this section and as is applicable, "federally chartered
banking  institution"  shall  mean  (i) any national banking association
organized pursuant to the National Bank Act of 1864, as amended, (12 USC
21 et seq.); (ii) any  federal  savings  association  as  such  term  is
defined  by  the  Federal  Deposit  Insurance  Act,  as amended, (12 USC
1813(b)(2)); (iii) a federal branch and agency of  a  foreign  bank,  as
such  terms  are  defined  by  the International Banking Act of 1978, as
amended, (122 USC 3101); or (iv) a federal credit union, as such term is
defined by the Federal Credit Union Act, as amended, (12 USC 1752(1)).
(c) As used in this section, "charter"  shall  mean  the  organization
certificate  or  comparable  document of a state banking institution, or
the  license  for  a  state  branch  or  agency  of  a  foreign  banking
corporation,  or a similar organizational document for a federal banking
institution or a federal branch or agency, and  "chartered"  shall  mean
the  formal act of the state or appropriate federal regulatory agency in
approving and conveying such charter of a banking institution.
(d) As used in this section, "federally permitted  power"  shall  mean
any  right,  power,  privilege  or  benefit,  any activity, or any loan,
investment  or  transaction  which   a   federally   chartered   banking
institution  directly  or  through  a  subsidiary  or  subsidiaries, may
lawfully exercise or into which it may lawfully engage or enter.
(e) As used in this section "foreign banking corporation" shall mean a
banking corporation organized under the laws of a  foreign  country  and
acting   through  a  branch  or  agency  licensed  pursuant  to  section
twenty-six of this article.
(f) As used in this section, unless the  context  requires  otherwise,
the  term  "subsidiary"  shall  have  the  same  meaning as set forth in
subdivision five of section  one  hundred  forty-one  of  this  chapter,
except that (i) any reference therein to "bank holding company" shall be
deemed to refer to a "state chartered banking institution" as defined in
this  section,  and  (ii)  with  respect  to  a  credit  union, the term
"subsidiary" as  used  in  this  section  shall  mean  a  "credit  union
organization".
2. Pursuant to this section and notwithstanding any other provision of
law,  except  as  otherwise  provided  in its charter, a state-chartered
banking institution may exercise any federally permitted  power  of  its
counterpart federally chartered banking institution as herein set forth:
(a)  a  bank,  private  banker,  or  trust  company  may  exercise any
federally permitted power of a national banking association;
(b) a savings bank or savings and loan association  may  exercise  any
federally permitted power of a federal savings association;
(c) a foreign banking corporation acting through a branch may exercise
any federally permitted power of a foreign bank acting through a federal
branch;
(d)  a  foreign  banking  corporation  acting  through  an  agency may
exercise any federally permitted power of a foreign bank acting  through
a federal agency;
(e)  a  credit  union  may exercise any federally permitted power of a
federal credit union.
Nothing contained in this section shall be deemed to  permit  a  state
chartered  banking institution to exercise any federally permitted power
except in a manner consistent with the following provisions of  law,  in

each case, as the terms contained in such provisions may be amended from
time to time:
(i) chapter one of the laws of nineteen hundred ninety-four;
(ii) chapter nine of the laws of nineteen hundred ninety-six; and
(iii)  sections fourteen-c, twenty-eight-b, thirty-nine and forty-four
of this article, and sections  six  hundred  five  through  six  hundred
thirty-four  of  this  chapter,  and  with  respect to savings banks and
savings and loan associations, respectively, section two  hundred  forty
and section three hundred ninety-six of this chapter.
3.  Except  with  respect  to  a  federally  permitted  power approved
pursuant to subdivision  four  of  this  section,  prior  to  any  state
chartered   banking   institution  initially  exercising  any  federally
permitted power pursuant to this section, such banking institution shall
make an application individually or with one  or  more  state  chartered
banking   institutions   to  the  superintendent  indicating  that  such
institution or institutions intend to exercise such federally  permitted
power  and  the  basis on which such institution or institutions believe
such power is a federally permitted power. The superintendent shall have
one hundred twenty days from receipt of  the  application  to  determine
whether  it  meets  the requirements of this section, provided that such
period may be extended for an additional period of time with the written
consent of the applicant or applicants. If such  application  meets  the
requirements  of  this  section,  the  superintendent  shall  post  such
application upon the  bulletin  board  of  the  department  pursuant  to
section forty-two of this article. If such application does not meet the
requirements  of this section, the superintendent shall, within ten days
of such determination, notify the applicant or applicants of the reasons
why the application fails to meet the requirements.  The  superintendent
shall  determine, consistent with the standards set forth in subdivision
five of this section, whether to approve  such  application  subject  to
such terms and conditions as the superintendent may deem appropriate, in
the  superintendent's sole discretion. Such determination, shall be made
by the superintendent within forty-five days after the posting  of  such
application,  provided  however  that  the superintendent may notify the
applicant or applicants that the review  of  the  application  shall  be
extended for an additional period of time not exceeding sixty days after
the  posting  of such application, and provided further that such period
of time may be extended for  an  additional  period  of  time  with  the
written consent of the applicant or applicants. The superintendent shall
not act upon the application prior to thirty days after such application
has  been  posted.  If the superintendent approves such application, the
superintendent shall, within ten  days  of  approving  the  application,
notify the applicant or applicants in writing thereof, and the applicant
or  applicants  may  exercise  such federally permitted power subject to
such terms and conditions as the superintendent may  have  approved.  If
the  superintendent declines such application, the superintendent shall,
within ten days of making such determination, notify  the  applicant  or
applicants  in writing thereof. An applicant or applicants may, upon the
superintendent's failure to  comply  with  this  section,  petition  the
superintendent   to  act  upon  the  application.  The  failure  of  the
superintendent to act upon the application or notify  the  applicant  or
applicants,  in  writing,  as  to the reasons why action cannot be taken
within thirty days of receipt of such petition shall be deemed a  denial
of   the  application,  which  shall  be  subject  to  judicial  review.
Notwithstanding any other law, the superintendent may make the  approval
of  an  application  under  this  section  applicable  to  one  or  more
additional state chartered banking institutions that  are  qualified  to
exercise  the  same  federally  permitted  powers  as  the  applicant or

applicants pursuant to subdivision two of this section, subject to  such
terms  and  conditions  as  the  superintendent shall find necessary and
appropriate.
4.   Notwithstanding   any  other  law,  the  superintendent,  in  the
superintendent's discretion,  may,  when  the  superintendent  deems  it
necessary  and  appropriate after considering the standards set forth in
subdivision five of this section, by order, authorize one or more  state
chartered  banking institutions to exercise a federally permitted power,
subject to such terms and conditions as the  superintendent  shall  find
necessary   and   appropriate.   Prior   to   issuing  such  order,  the
superintendent shall post notice of the  superintendent's  intention  to
issue  such  order upon the bulletin board of the department pursuant to
section forty-two of this article, and shall not act upon such intention
prior to thirty days after such notice has been posted.
5.  Prior  to  approving  any  application  or  proposal  pursuant  to
subdivision three or four of this section, the superintendent shall make
a finding that the approval of such application or proposal is:
(i) consistent with the policy of the state of New York as declared in
section  ten  of  this article and thereby protects the public interest,
including  the  interests  of   depositors,   creditors,   shareholders,
stockholders and consumers; and
(ii)  necessary  to achieve or maintain parity between state chartered
banking institutions and their counterpart federally  chartered  banking
institutions  with  respect  to  rights,  powers,  privileges, benefits,
activities, loans, investments or transactions.
6. A federally permitted power authorized  pursuant  to  this  section
shall  not exceed and shall be limited by any conditions, qualifications
or restrictions on the same when exercised by  a  counterpart  federally
chartered  banking  institution of a state chartered banking institution
unless the state chartered banking institution is so authorized by other
New York state law, or a rule, regulation or policy adopted pursuant  to
such   other   New   York   state   law,  or  by  a  judicial  decision.
Notwithstanding any other law, the  superintendent  may,  at  any  time,
impose  by  order  any  other  terms  and  conditions as he or she finds
necessary and proper including, but not limited to, a  requirement  that
any  federally  permitted power authorized by this section be exercised,
conducted  or  held  in  a  subsidiary  of  a  state  chartered  banking
institution.  In the event that federally chartered banking institutions
located in the state of New  York  lose  the  authority  to  exercise  a
federally  permitted  power,  based  upon which comparable authority was
granted to the counterpart state chartered banking institutions pursuant
to this section, then unless such authority is authorized by  other  New
York state law, or a rule, regulation or policy adopted pursuant to such
other  New  York state law, or by a judicial decision, the authorization
for such state chartered banking institutions pursuant to  this  section
shall  be  deemed  revoked,  provided, however, that any such revocation
shall be subject to such terms and conditions as may be imposed upon the
counterpart  federally  chartered  banking  institutions   or   by   the
superintendent.
7.  (a)  In those instances where state chartered banking institutions
are permitted to engage in the business of insurance  pursuant  to  this
section,  they  shall  do  so  subject to all insurance laws, rules, and
regulations; provided, however, that the superintendent may exempt state
chartered  banking  institutions  from  any  insurance  law,   rule   or
regulation   which  has  been  preempted  under  federal  law,  rule  or
regulation for federally chartered banking  institutions  if  such  law,
rule  or  regulation  has been preempted because it applies to insurance

activities of federally chartered banking institutions and not to  those
of other entities.
(b)  In  those  instances where a federally permitted power authorized
pursuant to this section is subject  to  regulation  by  an  agency,  as
defined  in  subdivision  one  of  section  one hundred two of the state
administrative procedure act, other than the superintendent, then when a
state chartered banking institution exercises such  federally  permitted
power,  unless  it  is  so  authorized by other New York state law, or a
rule, regulation or policy adopted pursuant to such other New York state
law, or by  a  judicial  decision,  it  shall  do  so  subject  to  such
regulation  to  the  same  extent  and in the same manner as such agency
regulates entities other  than  state  chartered  banking  institutions,
except  to  the extent that federally chartered banking institutions are
not subject to such regulation.
(c) Any state chartered banking  institution  or  federally  chartered
banking  institution  and  any  subsidiary or affiliate thereof which is
licensed to sell insurance in this state  shall  maintain  separate  and
distinct  books  and  records  relating  to  its insurance transactions,
including all files relating to and reflecting consumer complaints,  and
such  insurance  books  and  records  shall  be  made  available  to the
superintendent for inspection upon reasonable notice.
8. On or before June first of  each  year,  the  superintendent  shall
submit  a  report  to  the  governor,  the  speaker of the assembly, the
temporary president of the senate, the minority leaders  of  the  senate
and  assembly, and the chairs and ranking minority members of the senate
and assembly banks committees, which shall include, with respect to  the
authority  provided  for  in this section, with respect to the preceding
calendar year, (1) a listing of  state  chartered  banking  institutions
that were established, (2) a listing of institutions that have converted
to  a  federal charter or have been acquired by, or merged with, another
banking institution, (3) the number of  New  York  banking  institutions
exercising  the insurance activities authorized by this section, (4) the
total number of New York chartered banking institutions located in  this
state,  and  (5)  the  total  amount of assets of such chartered banking
institutions by type.
9. Any rules or regulations promulgated by the banking board  pursuant
to  former  sections  fourteen-g and fourteen-h of this chapter prior to
September first, two thousand seven, and any resolutions adopted by  the
banking  board  pursuant  to  this  section  after  September first, two
thousand seven and before the effective date of the chapter of the  laws
of  two  thousand  eleven  which amended this subdivision, including any
such rules, regulations and resolutions which in whole or in part impose
conditions, qualifications or restrictions on  any  federally  permitted
powers authorized thereby which exceed the conditions, qualifications or
restrictions imposed on the same when exercised by a federally chartered
banking  institution,  shall remain in full force and effect on or after
such date, unless any such rule, regulation or resolution is  thereafter
superseded,  modified,  or revoked by the superintendent pursuant to the
provisions of subdivisions three and four of this section.
* NB Repealed September 10, 2024