Relates to the definition of branch for the purposes of the interstate branching transactions

BILL NUMBER:S7729

Title of bill

An act to amend the banking law, in relation to the definition of branch for the purposes of the interstate branching transactions

Purpose

This bill would enact a chapter amendment in order to maintain consistent treatment regarding the definition of a bank branch. This will ensure that out-of-state banks must follow the same laws applicable to in-state banks regarding the establishment of ATM facilities.

Summary of provisions

This bill would enact a chapter amendment to bills S.6777-A and A.10567 in order to clarify the definition of the term "branch" as added by such legislation.

Justification

Bill S.6777-A / A.10567 proposes to update and expand New York's interstate banking laws. Some of these amendments help conform state law to recent federal changes which made it easier for banks to open bank branches across state lines. The bill also clarifies the applicability of state law to trust offices and federal savings associations, ensures that New York trust companies may establish trust offices outside the state, and streamlines the regulatory process by which branches and agencies of foreign banks may enter into purchase and assumption agreements with each other.

This legislation corrects an inadvertent error in bill S.6777-A / A.10567 which would result in an inconsistent application of state laws regarding the establishment of ATM facilities.

Bill S.6777-A / A.10567 would add a definition of the term "branch" to Section 222 of the Banking Law as it relates to out-of-state banks seeking to open branches in New York State. The new definition would include any office of a banking institution where deposits are received, checks paid or money lent, but would exclude ATM or other electronic facilities. However, Section 105-a of the Banking Law currently provides that ATMs and similar facilities shall be considered branches for certain purposes under state law, including the provisions of New York's home office protection law.

This new definition, as proposed by bill S.6777-A / A.10567, would create an inconsistency in state law and allow out-of-state banks to operate in ways not allowed to in-state banks. This legislation would enact a chapter amendment in order to maintain the current treatment of ATM facilities and ensure that such treatment applies equally to in-state and out-of-state banks.

Legislative history

New bill

Fiscal implications

None

Effective date

This act shall take effect on the same date as a chapter of the laws of 2012 as proposed in bills S.6777-A and A.10567