Current through Register Vol. 46, No. 12, March 20, 2024
(a) Except as
provided in subdivisions (b) and (c) of this section, a bank or trust company
which seeks to acquire, establish, make an additional investment (exceeding the
lesser of one percent of the bank or trust company's capital stock, surplus
fund and undivided profits or five million dollars) in, or perform new
activities in an operating subsidiary, or acquire, establish, or make an
additional investment in an Edge Act subsidiary, shall submit a notice to the
superintendent containing a detailed description of the applicant's investment
in the subsidiary (including, but not limited to, the purchase price, whether
any shares are to be purchased from officers or executive officers of the bank
or trust company, and the identity of any other investors), the activities or
proposed activities of the subsidiary, the location of the subsidiary's offices
and records, the organizational structure and management of the subsidiary, the
relations between the applicant and the subsidiary (including, but not limited
to, whether the bank or trust company intends to lend money to or guaranty the
obligations of the subsidiary), and any other information the superintendent
may request. The investment may be made or the new activity performed 30 days
after the superintendent's receipt of the notice unless within that 30-day
period the superintendent notifies the bank or trust company in writing that:
(1) it may make the investment or perform the
new activity earlier;
(2) it may
not make the investment or perform the new activity; or
(3) the superintendent requires additional
time or information.
In the event the superintendent notifies the bank or trust
company that he or she requires additional time or information, the bank or
trust company may not make the investment or perform the new activity prior to
receiving written approval from the superintendent.
(b) A bank or trust company which
establishes or makes an additional investment in a subsidiary engaged in, or to
be formed to engage in, factoring, personal property leasing, or, in the case
of investments in excess of five thousand dollars, the ownership or operation
of real or personal property acquired through foreclosure or in settlement or
in reduction of debts or obligations to such bank or trust company which were
previously contracted in the regular course of its business, or additional
investments in operating subsidiaries not reportable under subdivision (a) of
this section, shall notify the superintendent within 30 days after the
investment is made. The notice shall provide the name of the subsidiary, the
location of its head office, and the amount and form of the investment. The
bank or trust company also shall provide a certification that the investment
was made in conformity with the terms of this Part. No notification shall be
required with respect to investments in a subsidiary which shall own or operate
real property for use as a bank premises.
(c) A bank or trust company that:
(1) is "adequately capitalized" or "well
capitalized" as those terms are defined in title 12, Code of Federal
Regulations,[FN*] part 325;
(2) at
its immediately prior examination, had a composite CAMELS rating of 1 (strong)
or 2 (satisfactory) under the Uniform Financial Institution Rating System
(UFIRS) as those terms are defined in the UFIRS notice in the December 19, 1996
Federal Register* (61 Fed. Reg. 67021); and
(3) is currently not subject to a cease and
desist order, a consent order, or a formal written agreement, issued by the
superintendent, the Federal Deposit Insurance Corporation or any other Federal
banking agency; may acquire or establish an operating subsidiary, make an
additional investment in an existing operating subsidiary or perform a new
activity in an existing operating subsidiary, by providing the superintendent
with written notice within 30 days after acquiring or establishing the
subsidiary, making the additional investment or commencing the activity,
provided that the activity is listed in subdivision (d) of this section. The
written notice must contain a detailed description of the applicant's
investment in the subsidiary (including, but not limited to, the purchase
price, whether any shares are to be purchased from officers or executive
officers of the bank or trust company, and the identity of any other
investors), the activities or proposed activities of the subsidiary, the
location of the subsidiary's offices and records, the organizational structure
and management of the subsidiary, the relations between the applicant and the
subsidiary (including, but not limited to, whether the bank or trust company
intends to lend money to or guarantee the obligations of the subsidiary), a
representation that the activity will be conducted in accordance with the terms
of this Part, and any other information that the superintendent may request. A
bank or trust company providing notice pursuant to this subdivision is deemed
to have agreed that the subsidiary will conduct the activity in a manner
consistent with New York State Banking Department statutes, regulations and
supervisory guidance.
(d) The following activities qualify for the
preapproved notice procedures under subdivision (c) of this section:
(1) business services for the bank or trust
company and its affiliates: furnishing services for the internal operations of
the bank or trust company, or its affiliates, including accounting, auditing,
appraising, advertising and public relations, data processing and data
transmission services, databases or facilities;
(2) financial advice and consulting for the
bank or its affiliates;
(3) selling
money orders, savings bonds or travelers checks;
(4) management consulting, operational advice
and specialized services for other depository institutions;
(5) courier services between financial
institutions;
(6) providing check
guaranty and verification services;
(7) data processing and warehousing products,
services, and related activities, included associated equipment and technology,
for the operating subsidiary, its parent bank and their affiliates;
(8) acting as investment or financial advisor
(not involving the exercise of investment discretion), or providing financial
counseling, including:
(i) serving as the
advisory company for a mortgage or real estate investment trust;
(ii) furnishing general economic information
and advice, general economic statistical forecasting services and industry
studies;
(iii) providing financial
advice to state or local governments or foreign governments with respect to
issuance of securities;
(iv)
providing tax planning and preparation; and
(v) providing consumer financial
counseling;
(9)
providing financial and transactional advice to customers and assisting
customers in structuring, arranging and executing various financial
transactions (provided that the bank and its affiliates do not participate as a
principal), including mergers, acquisitions, divestitures, joint ventures,
leveraged buyouts, recapitalizations, capital structurings and financial
transactions (including private and public financings and loan syndications);
conducting financial feasibility studies; and arranging commercial real estate
equity financing;
(10) investment
advice (not involving the exercise of investment discretion) on futures and
options on futures;
(11) making,
purchasing, selling, servicing, or warehousing loans or other extensions of
credit, or interests therein, for the subsidiary's account, or for the account
of others, including consumer loans, credit card loans, commercial loans,
residential mortgage loans, and commercial mortgage loans; provided, however,
that the preapproved notice procedure set forth in subdivision (c) of this
section is not available if the notice involves the direct or indirect
acquisition by the bank of any low quality asset from an affiliate in
connection with a transaction subject to this section; for purposes of this
paragraph, the terms low quality asset and affiliate have the same meaning as
provided in section 23A of the Federal Reserve Act (title 12, United States
Code,[FN*]371(c); and
(12) owning,
holding, and managing all or part of the parent bank's investment securities
portfolio.
[FN*] For information regarding the United States Code (USC
or U.S.C.), the Code of Federal Regulations (CFR) and the Federal Register, see
Supervisory Policy G 1.
[FN*] For information regarding the United States Code (USC
or U.S.C.), the Code of Federal Regulations (CFR) and the Federal Register, see
Supervisory Policy G 1.
