New York Codes, Rules and Regulations
Title 3 - BANKING
Chapter III - SUPERINTENDENT'S REGULATIONS
Subchapter A - BANKING ORGANIZATIONS
Part 321 - Loans To Executive Officers And Directors Of Banks And Bank Holding Companies
Section 321.2 - General provisions
Universal Citation: 3 NY Comp Codes Rules and Regs ยง 321.2
Current through Register Vol. 46, No. 12, March 20, 2024
(a) Except as provided in subdivision (b) of this section, each of the following shall be considered to be a loan to, extension of credit to or indebtedness of an executive officer or director of a bank under the provisions of Banking Law, sections 103(8), 130(5) and 130(6):
(1) any transaction as a result of which an
executive officer or director of a bank becomes obligated, or renews his
obligation, to such bank upon any note, draft, bill of exchange or other
indebtedness, as maker, drawer, endorser, guarantor, surety or
otherwise;
(2) any transaction as a
result of which a corporation, in which such executive officer or director, or
any combination of such persons, owns or controls a majority of the stock, or
as a result of which a partnership in which an executive officer or director is
a partner, becomes obligated, or renews its obligation, to such bank upon any
note, draft, bill of exchange or other indebtedness, as maker, drawer,
endorser, guarantor, surety or otherwise;
(3) any advance by means of an overdraft;
and
(4) any issuance of a standby
letter of credit.
(b) None of the following shall be considered to be a loan to, extension of credit to or indebtedness of an executive officer or director of a bank, under the provisions of Banking Law, sections 103(8), 130(5) and 130(6):
(1) an advance against accrued salary or
other accrued compensation;
(2) an
advance of unearned salary or other unearned compensation, provided the salary
or other compensation so advanced is to become due and payable not more than 30
days from the date of such advance;
(3) an advance to provide for the payment of
authorized travel or other expenses incurred or to be incurred on behalf of the
bank;
(4) the acquisition by the
bank of any check deposited in or delivered to the bank in the usual course of
business, unless it results in the carrying of a cash item for or the granting
of an overdraft (other than an inadvertent overdraft in a nominal amount that
is promptly repaid) to (i) an executive officer or director of the bank, (ii) a
corporation in which such executive officer or director, or any combination of
such persons, owns or controls a majority of the stock, or (iii) a partnership
in which such executive officer or director is a partner;
(5) the acquisition of any note, draft, bill
of exchange or other evidence of indebtedness (i) through a merger or
consolidation of the bank with another bank or banking institution or a similar
transaction by which the bank acquires assets and assumes liabilities of
another bank or banking institution, or (ii) through foreclosure on collateral
or similar proceeding for the protection of the bank;
(6) an advance made pursuant to an agreement
evidencing a credit card, check credit or similar plan, whereby the bank is
committed to extend credit up to a specified maximum amount, provided (i) the
aggregate unpaid principal amount of all such advances by such bank to any
person at any time outstanding shall not exceed $25,000, and (ii) the advance
is made in compliance with section
321.3(a)(1)-(2)
of this Part; nor
(7)
(i) an endorsement or guarantee for the
protection of a bank of any loan or other asset previously acquired by the bank
in good faith; or
(ii) any
indebtedness to a bank for the purpose of protecting the bank against loss or
of giving financial assistance to it.
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