Current through Register Vol. 46, No. 12, March 20, 2024
For the purpose of this Part:
(a) The term affiliate shall mean any person
that directly, or indirectly, through one or more intermediaries, controls, or
is controlled by or is under common control with the person
specified.
(b) The term bank shall
mean a bank, trust company, savings bank, savings and loan association and
credit union.
(c)
(1) The term business transaction shall
include, but not be limited to, the following types of transactions:
(i) loans or other extensions of credit
(including, but not limited to, standby letters of credit and
guarantees);
(ii) purchase of
assets or services or agreements to purchase assets (including, but not limited
to, forward foreign exchange contracts) from the bank;
(iii) sales of assets or services or
agreements to sell assets (including, but not limited to, forward foreign
exchange contracts) to the bank;
(iv) use of the bank's facilities, its real
or personal property, or its personnel;
(v) leases of real or personal property to or
from the bank;
(vi) payment of
commissions and fees by the bank, including brokerage commissions and
management, consultant, architectural, legal and appraisal fees; and
(vii) payments on time deposits or other
obligations of the bank by the bank if the payments would result in a yield
which is more favorable than for a comparable transaction made in the ordinary
course or business to persons not deemed insiders of the bank.
(2) For the purpose of this Part,
the term business transaction shall not include (i) deposit account activities,
other than those specified in subparagraph (1)(vii) of this subdivision, (ii)
safekeeping transactions, (iii) credit card transactions, (iv) trust or
fiduciary activities, (v) activities undertaken in the capacity of securities
transfer agent, registrar, exchange agent, or in a similar corporate fiduciary
capacity, and (vi) activities undertaken as a government or municipal
securities dealer.
(d)
The term control (including the terms controlling, controlled by, and under
common control with) shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of management and policies of a person,
whether through the ownership of voting securities, by contract, or otherwise.
Occupation of an office or directorship shall not be deemed by itself, to
constitute control.
(e) The term
insider shall mean:
(1) the chairman of the
board of directors, president, executive vice president, secretary and
treasurer of a bank;
(2) any other
officer or employee of a bank who participates or has authority to participate,
otherwise than in the capacity of a director or trustee of the bank, in major
policy-making functions of the bank, regardless of whether he or she has an
official title or whether his or her title contains a designation of assistant
and regardless further, of whether he or she is serving without salary or other
compensation;
(3) any director or
trustee of a bank; and
(4) any
other person who has direct or indirect control over the voting rights of 10
percent of the shares of any class of voting stocks of a bank or otherwise
controls the management or policies of a bank.
(f)
(1) The
term insider transaction shall mean any business transaction or series of
related business transactions by, between or on behalf of a bank and:
(i) a insider of the bank;
(ii) a person related to an insider of the
bank; or
(iii) any other person
where the transaction is made in contemplation of such person becoming an
insider of the bank.
The phrase series of related business transactions shall
include transactions which are in substance part of an integrated business
arrangement or relationship, such as borrowings on a line of credit, recurring
transactions of a similar nature within a holding company system, or law firm
billings to the bank.
(2) For the purpose of this Part, the term
insider transaction shall not include (i) any business transaction between a
bank holding company (as defined in the Federal Bank Holding Company Act of
1956 as amended) and one or more of its subsidiary banks or between a
subsidiary bank of a holding company and any other subsidiary of such company
if the terms of the transaction are no less favorable to the bank than the
terms which would be available in an arm's length transaction, (ii) any
business transaction by a bank which is a member of the Federal Reserve System
or is a non-member bank insured by the Federal Deposit Insurance Corporation if
the transaction is subject to the requirements and limitations of section 23A
of the Federal Reserve Act (
12 U.S.C. §
371 c ), (iii) any business transaction
between a bank and its Edge Act subsidiary or a wholly owned subsidiary of such
affiliate, (iv) any business transaction between a bank and an affiliate of the
bank engaged solely in holding the bank premises of the bank, in maintaining
and operating properties acquired for banking purposes, in mortgage-servicing
or in the conduct of a safe-deposit business or the business of an agricultural
credit corporation or livestock loan company, or (v) any business transaction
between a bank and a wholly owned subsidiary of the bank which is conducted at
locations at which the bank is authorized to conduct business and which
consists of functions which the bank is empowered to perform
directly.
(3) For the purpose of
this Part, the term insider transaction shall not include a loan or an
extension of credit to an executive officer or a director of a bank made under
section
103(8) of the Banking Law
and Part 321 of this Title; except that any such loan or extension of credit
shall be treated as an insider transaction for the purpose of section
11.4
of this Part.
(g) The
term net worth shall mean (1) the aggregate of the capital stock, surplus,
undivided profits and contingency reserves of the bank in the case of a bank or
trust company, and (2) the excess of assets at book value, less allocated
reserves, over known liabilities in the case of a savings bank, savings and
loan association or credit union.
(h) The term person shall mean a corporation,
partnership, association, or other business entity, any trust or any natural
person.
(i) The phrase person
related to an insider shall mean:
(1) any
corporation or other organization or association in which the insider or any of
the persons specified in paragraph (2) of this subdivision are the beneficial
owners, either singly or in the aggregate, of 10 percent or more of any class
of equity securities or 10 percent of the equity interests;
(2) in the case of a natural person, (i) an
insider's spouse, (ii) any relative of the insider or the insider's spouse, if
such relative has the same home as the insider, and (iii) an insider's parent,
stepparent, child or stepchild; and
(3) any affiliate of the insider.
(j) The term subsidiary shall mean
any affiliate of a specified person which is controlled by such person, whether
controlled directly or indirectly, through one or more
intermediaries.
