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 321.4 - Additional restrictions on loans to executive officers

Universal Citation: 3 NY Comp Codes Rules and Regs ยง 321.4

Current through Register Vol. 46, No. 12, March 20, 2024

(a) A bank is authorized to make a loan to any executive officer of the bank:

(1) in any amount to finance the education of the executive officer's children;

(2) in any amount to finance or refinance the purchase, construction, maintenance or improvement of a residence of the executive officer if:
(i) the loan is secured by a first lien on the residence and the residence is owned (or expected to be owned) by the executive officer; and

(ii) in the case of a refinancing, that only the amount thereof used to repay the original extension of credit, together with the closing costs of the refinancing, and any additional amount thereof used for any of the purposes enumerated in this paragraph, are included within this category of credit;

(3) in any amount, if the extension of credit is secured by:
(i) a perfected security interest in bonds, notes, certificates of indebtedness, or treasury bills of the United States or in other such obligations fully guaranteed as to principal and interest by the United States; or

(ii) unconditional takeout commitments or guarantees of any department, agency, bureau, board, commission or establishment of the United States or any corporation wholly owned directly or indirectly by the United States;

(iii) a perfected security interest in a segregated deposit account in the lending bank;

(4) for any other purpose not specified in paragraphs (1) through (3) of this subdivision, if the aggregate amount of loans to that executive officer under this paragraph does not exceed at any one time the higher of 2.5 percent of the bank's capital stock, surplus fund and undivided profits, or $25,000, but in no event more than $100,000.

(b) Any loan by a bank to any of its executive officers shall be:

(1) promptly reported to the board of directors;

(2) made in compliance with the requirements of section 321.3 of this Part; and

(3) preceded by the submission of a detailed current financial statement of the executive officer.

(c) For purposes herein, a residence shall include a cooperative apartment, provided the loan is secured by certificates of stock evidencing an ownership interest in the apartment together with an assignment of the proprietary lease.

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