New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter I - GENERAL REGULATIONS OF THE SUPERINTENDENT › Part 77 - Investments In Commercial, Corporate And Business Loans By Savings Banks And Savings And Loan Associations; Leasing Transactions; Letters Of Credit › Section 77.3 - Loans to one borrower

Current through Register Vol. 46, No. 28, July 10, 2024
(a) The
				aggregate unpaid principal amount of all commercial, corporate and business
				loans (including lease financing) to any borrower made by a savings bank or
				savings and loan association shall, if unsecured, not exceed 15 per centum of
				the net worth of such savings bank or savings and loan association or, if
				secured, shall not exceed such percentage amounts in relation to net worth as
				are applicable to banks and trust companies under the provisions of section 103 (1)  of the Banking
				Law.
(b) In computing the total
				commercial, corporate and business loans by any savings bank or savings and
				loan association:
(1) to any natural person,
				there shall be included all commercial, corporate and business loans by the
				institution to any partnership or unincorporated association of which he is a
				member, and all commercial, corporate and business loans made for his benefit
				or for the benefit of such partnership or association;
(2) to any partnership or unincorporated
				association, there shall be included all commercial, corporate and business
				loans by the institution to its individual members and all commercial,
				corporate and business loans made by the institution for the benefit of such
				partnership or unincorporated association or any member thereof;
(3) to any corporation, there shall be
				included all commercial, corporate and business loans made by the institution
				for the benefit of the corporation. A loan shall be deemed to be made for the
				benefit of a corporation only to the extent that the proceeds of such loan:
(i) are to be loaned to the
				corporation;
(ii) are to be used
				for acquisition (otherwise than in connection with a public offering) from the
				corporation by a person in control of, or under common control with, the
				corporation of any stock or other securities issued by the corporation;
				or
(iii) are to be transferred to
				the corporation without fair and adequate consideration, and the discharge of
				an equivalent amount of debt previously incurred in good faith and for value
				shall be considered fair and adequate consideration. A loan shall not be deemed
				to be made for the benefit of a corporation if such loan is made to a person
				other than the corporation and is secured as provided in section 235 (5-a), 235 (6) or
				380 (1)  of the Banking Law
				and regulations promulgated thereunder or is secured by collateral having an
				ascertained market value, or otherwise having a value as collateral as found in
				good faith by an officer of such institution, at least equal to the amount of
				the loan; provided that stock or other securities issued by, or a lien on
				property of, such corporation shall not be considered collateral for the
				purposes of this provision.