New York Banking Law
Article 13-D
Misconduct Related to Banking Organizations
ARTICLE XIII-D
MISCONDUCT RELATING TO BANKING ORGANIZATIONS
Section 660. Misconduct of officers, directors, trustees or employees
of banking corporations and of private bankers.
661. Officer or agent of banking corporation or a private
banker making guaranty or endorsement beyond the legal
limit.
662. Bank officer or employee overdrawing his account or
asking for or receiving commissions or gratuities from
persons procuring loans or making overdrafts of their
accounts.
663. Receiving deposits in insolvent bank.
664. Unlawful investments by officers of mutual savings banks.
665. Misconduct by directors of banking corporations.
666-a. Loans to be guaranteed by New York state higher education
assistance corporation.
668. Use of checks with certain photographs or drawings
reproduced thereon prohibited.
669. Unauthorized use of the term "bank" or "trust company."
671. False statements or rumors as to banking institutions.
672. Falsification of books, reports or statements of private
bankers or corporations subject to the banking law.
673. Abstraction or misappropriation of money, funds or
property, or misapplication of credit of private
bankers or corporations to which the banking law is
applicable, by an officer, director, trustee, employee
or agent thereof.
674. Presumption of knowledge of corporate condition and
business and of assent thereto by directors;
definitions.
674-a. Unlawful undertakings.
S 660. Misconduct of officers, directors, trustees, or employees of
banking corporations and of private bankers. A director of a
corporation, organized under the laws of this state, having banking
powers, who concurs in any vote or act of the directors of such
corporation, or any of them, by which it is intended to make a loan or
discount to any director of such corporation, or upon paper upon which
any such director is liable or responsible to an amount exceeding the
amount allowed by statute; or, any director, trustee, officer or
employee of any corporation to which the banking law is applicable who
makes or maintains, or attempts to make or maintain, a deposit of such
corporation`s funds with any other corporation on condition, or with the
understanding, express or implied, that the corporation receiving such
deposit make a loan or advance, directly or indirectly, to any director,
trustee, officer or employee of the corporation so making or maintaining
or attempting to make or maintain such deposit; or any director,
trustee, officer, or employee of any banking corporation organized under
the laws of another state which is doing business in New York, who makes
or maintains, or attempts to make or maintain, a deposit of such
corporation`s funds with any banking organization or any branch of a
foreign banking corporation licensed under article five of this chapter,
on condition, or with the understanding, express or implied, that the
banking organization or branch receiving such deposit make a loan or
advance, directly or indirectly, to any director, trustee, officer or
employee of such banking corporation so making or maintaining or
attempting to make or maintain such deposit; or any director, trustee,
officer, or employee of any banking organization or any branch or agency
of a foreign banking corporation licensed under article five of this
chapter who receives, or attempts to receive, a deposit of funds from
any other banking organization, or any national banking association,
federal savings and loan association, federal credit union, or a banking
corporation organized under the laws of another state or country, on
condition, or with the understanding, express or implied, that such
banking organization or foreign banking corporation licensed under
article five of this chapter receiving, or attempting to receive, such
deposit make a loan or advance, directly or indirectly, to any director,
trustee, officer or employee of the banking organization, national
banking association, federal savings and loan association, federal
credit union or banking corporation organized under the laws of another
state or country, so making or attempting to make, such deposit; or, any
officer or employee of any corporation to which the banking law is
applicable who intentionally conceals from the directors or trustees of
such corporation any discounts or loans made by it between the regular
meetings of its board of directors or trustees, or the purchase of any
securities or the sale of any of its securities during the same period,
or knowingly fails to report to its board of directors or trustees when
required to do so by law, all discounts or loans made by it and all
securities purchased or sold by it between the regular meetings of its
board of directors or trustees; or any director, officer or employee of
a bank or trust company, or a private banker or his employee, who makes
any agreement express or implied, before or at the time of issuing a
certificate of deposit, by which its holder may demand or receive
payment thereof in advance of its maturity, is guilty of a misdemeanor.
Nothing in this section shall render any loan made by the directors of
any such corporation, in violation thereof, invalid.
S 661. Officer or agent of banking corporation or a private banker
making guaranty or endorsement beyond the legal limit. An officer or
agent of any banking corporation, or a private banker or his agent, who
makes or delivers any guaranty or indorsement on behalf of such
corporation or private banker, whereby such corporation or private
banker may become liable on any of its or his discounted notes, bills or
obligations, in a sum beyond the amount of loans and discounts which
such corporation or private banker may legally make, is guilty of a
misdemeanor.
S 662. Bank officer or employee overdrawing his account or asking for
or receiving commissions or gratuities from persons procuring loans or
making overdrafts of their accounts. Any officer, director, agent,
teller, clerk or employee of any bank, banking association, savings
bank, trust company or private banker, who:
1. Knowingly overdraws his account with such bank, banking
association, savings bank, trust company or private banker, and thereby
obtains the money, notes or funds of any such bank, banking association,
savings bank, trust company or private banker; or
2. Asks or receives, or consents or agrees to receive, any commission,
emolument, gratuity or reward, or any promise of any commission,
emolument, gratuity or reward, or any money, property or thing of value
or of personal advantage, for procuring or endeavoring to procure for
any person, firm or corporation, any loan from, or the purchase or
discount of any paper, note, draft, check or bill of exchange, by any
such bank, banking association, savings bank, trust company or private
banker, or for permitting any person, firm or corporation to overdraw
any account with such bank, banking association, savings bank, trust
company or private banker,
Is guilty of a misdemeanor.
S 663. Receiving deposits in insolvent bank. An officer, agent, teller
or clerk of any bank, banking association or savings bank, and every
private banker or his agent and any teller or clerk of a private banker
or any officer, agent or clerk of any corporation transacting any part
of the business which a banking corporation is authorized by law to
transact who receives any deposit, knowing that such bank or association
or banker or corporation is insolvent, is guilty of a misdemeanor, if
the amount or value of such deposit be less than twenty-five dollars; if
the amount or value of such deposit be twenty-five dollars or over, such
person shall be guilty of a felony.
S 664. Unlawful investments by officers of mutual savings banks. Any
officer or trustee of a mutual savings bank authorizing or making any
investment of the funds of the bank in securities not authorized by law,
is guilty of a misdemeanor.
S 665. Misconduct by directors of banking corporations. Every director
of a banking corporation who:
1. In case of the fraudulent insolvency of such corporation, shall
have participated in such fraud; or
2. Wilfully does any act as such director which is expressly forbidden
by statute, or wilfully omits to perform any duty imposed upon him as
such director by statute,
Is guilty of a misdemeanor, if no other punishment is prescribed
therefor by law.
The insolvency of a banking corporation is deemed fraudulent unless
its affairs appear upon investigation to have been administered fairly,
legally and with the same care and diligence that agents receiving a
compensation for their services are bound, by law, to observe.
S 666-a. Loans to be guaranteed by New York state higher education
assistance corporation. It shall be unlawful for any banking corporation
or private banker authorized to carry on the business of banking under
the laws of this state to require that a person making application for a
loan to be guaranteed by the New York state higher education assistance
corporation be a depositor with the bank prior to the time of such
application.
S 668. Use of checks with certain photographs or drawings reproduced
thereon prohibited. It shall be unlawful for any person, firm or
corporation to use any bank check in this state that has printed or
embossed thereon a photograph, drawing or other reproduction of any
public building of the United States or of this or any other state or of
any municipality, or the shield, coat of arms, flag or other insignia of
the United States or of this or any other state or municipality.
Violation of the provisions of this section shall constitute a
misdemeanor.
S 669. Unauthorized use of the term "bank" or "trust company." Any
person not authorized by the superintendent of banks, who:
1. Uses an office sign at the place where his business is transacted,
having thereon any artificial or corporate name, or other words
indicating that such place or office is the place or office of a bank or
trust company; or,
2. Uses or circulates any letter-heads, bill-heads, blank notes, blank
receipts, certificates, circulars or any written or printed paper
whatever, having thereon any artificial or corporate name, or other word
or words indicating that such business is the business of a bank or
trust company.
Is guilty of a misdemeanor; provided, however, that nothing in this
section shall be deemed to prevent a bank holding company from using any
corporate name it is duly authorized to use under subdivision (b) of
section three hundred two of the business corporation law.
S 671. False statements or rumors as to banking institutions. Any
person who wilfully and knowingly makes, circulates or transmits to
another or others any statement or rumor, written, printed or by word of
mouth, which is untrue in fact and is directly or by inference
derogatory to the financial condition or effects the solvency or
financial standing of any bank, private banker, savings bank, banking
association, building and loan association or trust company doing
business in this state, or who knowingly counsels, aids, procures or
induces another to start, transmit or circulate any such statement or
rumor, is guilty of a misdemeanor.
S 672. Falsification of books, reports or statements of private
bankers or corporations subject to the banking law. 1. Any officer,
director, trustee, employee or agent of any corporation to which the
banking law is applicable who makes a false entry in any book, report or
statement of such corporation with intent to deceive any officer,
director or trustee thereof, or any agent or examiner lawfully appointed
to examine into its condition or into any of its affairs, or any public
officer, office or board to which such corporation is required by law to
report, or which has authority by law to examine into its condition or
into any of its affairs, or who, with like intent, wilfully omits to
make a true entry of any material particular pertaining to the business
of such corporation in any book, report or statement of such corporation
made, written or kept by him under his direction, is guilty of a felony.
2. Any employee or agent of a private banker who makes a false entry
in any book, report or statement of such private banker with intent to
deceive such private banker, or any agent or examiner lawfully appointed
to examine into the condition or affairs of such private banker, or any
public officer, office or board to which such private banker is required
by law to report, or which has authority by law to examine into the
condition of such private banker or into any of its affairs, or who,
with like intent, wilfully omits to make a true entry of any material
particular pertaining to the business of such private banker in any
book, report or statement made, written or kept by such private banker
or under his direction is guilty of a felony.
3. Any private banker who commits any act made punishable by
subdivision two, or who wilfully omits to make the true entry required
thereby, with intent to deceive his co-partner or any such agent,
examiner, public officer, office or board is guilty of a felony.
S 673. Abstraction or misappropriation of money, funds or property, or
misapplication of credit of private bankers or corporations to which the
banking law is applicable, by an officer, director, trustee, employee or
agent thereof. Any officer, director, trustee, employee or agent of any
corporation to which the banking law is applicable, or any employee or
agent of any private banker, who abstracts or wilfully misapplies any of
the money, funds or property of such corporation or private banker, or
wilfully misapplies its or his credit, is guilty of a felony. Nothing in
this section shall be deemed or construed to repeal, amend or impair any
existing provision of law prescribing a punishment for any such offense.
S 674. Presumption of knowledge of corporate condition and business
and of assent thereto by directors; definitions. It is no defense to a
prosecution for a violation of the provisions of this article, that the
corporation is a foreign corporation, if it carries on business or keeps
an office therefor in this state.
The term "director" as used in this article includes any of the
persons having, by law, the direction or management of the affairs of a
corporation, by whatever name described.
A director of a corporation or joint-stock association is deemed to
have such a knowledge of the affairs of the corporation or association
as to enable him to determine whether any act, proceeding or omission of
its directors is a violation of this article. If present at a meeting of
the directors at which any act, proceeding or omission of such directors
in violation of this article occurs, he must be deemed to have concurred
therein, unless he at the time causes or in writing requires his dissent
therefrom to be entered on the minutes of the directors. If absent from
such meeting, he must be deemed to have concurred in any such violation,
if the facts constituting such violation appear on the record or minutes
of the proceedings of the board of directors, and he remains a director
of the corporation for six months thereafter without causing or in
writing requiring his dissent from such violation to be entered on such
record or minutes.
S 674-a. Unlawful undertakings. 1. Every undertaking, whether written
or oral, express or implied, constituting or contained in a contract
heretofore or hereafter entered into, directly or indirectly, between a
banking organization, bank holding company, national banking
association, federal savings and loan association or foreign banking
corporation and the owner of an interest in real property located in the
state, which bars such owner from leasing, selling or otherwise
disposing of any interest in real property to any other banking
organization, bank holding company, national banking association,
federal savings and loan association or foreign banking corporation
shall be null and void.
2. Any banking organization, bank holding company, national banking
association, federal savings and loan association, foreign banking
corporation or any other entity or person injured in his business or
property by reason of an undertaking which violates subdivision one
hereof may sue on account thereof and be entitled to recover three times
the amount of the damages sustained, and the cost of suit, including
reasonable attorneys` fees.
3. If any provision of this section, or the application of such
provision to any individual, company or circumstance, shall be held
invalid, the remainder of this section, and the application of such
section to individuals, companies or circumstances other than those to
which it is held invalid, shall not be affected thereby.