New York Codes, Rules and Regulations
Title 3 - BANKING
Legal Interpretations
LI 4 - Savings Banks and Savings and Loan Associations
Section LI 4.9 - Investments in mortgages on real property located in possessions of the united states

The department was asked whether a mortgage on real property, otherwise qualifying as a permissible investment for savings banks and savings and loan associations under section 235(6) and 380(1)(b)(1) of the Banking Law, is rendered impermissible by the fact that such real property is located in the Virgin Islands.

The department replies that the investment is not permissible under the sections cited, which allow investments secured by mortgages on real property located in New York, adjoining States and, subject to regulation, "any other state of the United States, the District of Columbia or the Commonwealth of Puerto Rico ________". In reaching this conclusion the department duly noted section 47 of the General Construction Law, which provides as follows (emphasis supplied):

"The term State, when used generally to include every State of the United States, includes also every territory of the United States and the District of Columbia."

However, because the Legislature in enacting the Banking Law provisions in question added to the word "state" specific references to the District of Columbia and to one United States territory (Puerto Rico) but no others, the department concluded that in this instance the term "state" was not "used generally" in the sense contemplated by the General Construction Law. That only Puerto Rico is a permissible territory for the purposes under review was found to be further supported by the legislative history contained in 1966 New York State Legislative Annual 64, 73, pertaining to L. 1966 ch. 324, which added the language in question to the Banking Law.

In this, as in other legal-investment opinions rendered by the department which do not specifically indicate the contrary, no question was asked nor answer given as to the legality of the investment under "leeway" provisions such as sections 235(29) and 379(7) of the Banking Law.

DATED: January 31, 1974