New York Banking Law
Article 6-B
Fund for Insuring Deposits in Savings Banks
and/or
Otherwise Protecting Depositors
Section
282. Creation of fund.
283. Management of fund.
284. Agreement; filing and provisions thereof.
285. Powers which may be granted to trustee.
286. Taxation and exemption of property held in fund;
exemption of mortgages from mortgage recording tax.
287. Member savings banks.
288. Contributions as assets.
289. Confirmation of powers.
289-a. Immunity of trustee and member savings banks.
289-b. Construction.
S 282. Creation of fund. Any seventy-five or more savings banks
organized under the laws of the state of New York whose deposits
aggregate not less than fifty per cent of the total deposit liabilities
of all the savings banks in the state, may enter into an agreement
(hereinafter called the agreement) subject to the approval of the
superintendent of banks to create a fund (hereinafter called the fund)
and from time to time make such contributions to such fund as the said
agreement may provide for, for the purpose of insuring deposits and/or
otherwise protecting the interests of depositors in the banks
(hereinafter referred to as member banks) which become parties to the
said agreement. Once this agreement has become effective, if at any
subsequent time there should be fewer member banks than the number
required to create the fund, the remaining member banks are authorized
to continue the fund.
S 283. Management of fund. The fund shall be collected, held,
administered and disbursed by a corporate trustee or a board of trustees
composed of individuals who are trustees of mutual savings banks, either
of which shall be approved by the superintendent of banks, which
corporate trustee or board of trustees are hereinafter referred to as
the trustee. In the event there be a board of individual trustees, a
majority of them at any time in office shall constitute a quorum, and
the vote of a majority at any meeting, provided a quorum be present,
shall be determinative and any action taken pursuant thereto be the
action of the trustee.
S 284. Agreement; filing and provisions thereof. The agreement when
approved by the superintendent of banks shall be executed by the savings
banks parties thereto and filed in his office. The agreement may be
executed in any number of counterparts, all of which taken together
shall constitute the original. The agreement shall name the trustee and
contain suitable provisions for the removal or resignation of the
trustee, or if the trustee named be a board of trustees, for the removal
or resignation of any or all of them, and for the appointment of a
successor trustee or for the filling of vacancies in such board of
trustees, whether caused by death, resignation, disqualification or
removal; it shall also provide the amount of the initial contributions
to the fund and the manner of making subsequent calls, and may contain
such limitations thereon as the superintendent shall approve, but all
such initial contributions to the fund and payments pursuant to further
calls shall be made ratably by all the member banks in proportion to
their several deposit liabilities, except that the superintendent of
banks may exempt from any such call in whole or in part any member bank
or banks the condition of which makes such exemption in his opinion
desirable; it may also provide for the liquidation of the fund pursuant
to rules and regulations for that purpose acceptable to the
superintendent of banks, provided that on any such liquidation the
liabilities incurred or assumed by the trustee pursuant to the
provisions hereof shall first be paid and the balance, if any, be
distributed among the member banks pro rata according to their
contributions; and the agreement may similarly provide for the change or
amendment thereof with the approval of the superintendent of banks and
with such approval may be amended in such manner as may be provided
therein; and the agreement shall also define the powers of the trustee,
which may be all or any one or more or the powers hereinafter set forth,
together with any additional powers not inconsistent with the powers
herein enumerated or with the purposes of the fund, set forth in the
agreement.
S 285. Powers which may be granted to trustee. In addition to such
other powers as may be set forth in the agreement not inconsistent
herewith or with the purposes of the fund, the trustee shall have such
of the following powers as the agreement may provide:
1. To insure in whole or in part the deposits in member banks, subject
to such terms and conditions as the agreement may provide.
2. To buy any assets owned by any member bank at the book value
thereof notwithstanding such value may exceed the market value thereof,
or such other value as the trustee may elect either with or without an
agreement providing for the repurchase of the same at such price or
value and at such time and subject to such conditions as may be agreed
upon by the trustee in its discretion and to make loans or advances to
any member bank upon such terms and conditions as may seem desirable and
with such security as the trustee may determine or without security; in
any agreement of repurchase or repayment it may be provided that the
savings bank receiving such loan or advance or making such sale of
assets may not be obligated to repay the same or repurchase such assets
until the superintendent of banks shall certify that such savings bank
is in a safe and sound condition to make such repurchase or repayment.
3. To deposit all or any part of any moneys in said fund in any
savings bank or savings banks and such savings bank or savings banks may
receive the same notwithstanding the provisions of section two hundred
thirty-seven of this act and/or in any one or more banks or trust
companies organized under the laws of the state of New York selected by
the trustee with the approval of the superintendent, and such deposits
in case of suspension or liquidation of any such depositary other than a
savings bank shall have the same priority as deposits of savings banks
pursuant to law. In the event of the liquidation of a savings bank which
is such depositary, such deposits shall be subordinate to the claims of
the depositors in such bank but prior to all other claims except those
of the state of New York or of the United States.
4. In addition to any other uses authorized herein and provided in the
agreement, to invest and reinvest the fund in such securities and
property as are legal for investment by savings banks subject to those
limitations applicable to such investments in the case of savings banks.
5. To make contributions to the surplus fund of any member bank upon
such terms and conditions for the use and the repayment thereof and
evidenced in such manner as the superintendent of banks may approve, and
such savings bank may make such repayment as such agreement may provide
notwithstanding any provisions of law; but no such agreement shall
require such repayment except if, as and when the surplus and surplus
fund of such savings bank shall be not less than five per centum of the
amount due its depositors nor shall any such agreement require any
payment on account of such contribution in such an amount as to reduce
the surplus and surplus fund of such savings bank below five per centum
of the amount owed its depositors. The agreement may provide the manner
in which the surplus and surplus fund shall be computed for the purpose
of this subdivision. Such contributions shall not constitute a liability
of such member bank except as herein provided.
Article 5-B, Continued . . .
6. If it shall appear by certificate of the superintendent of banks
filed in his office, that any member bank to which the trustee with the
approval of the superintendent has made any loan or advance, or to the
surplus fund of which it has made a contribution, or from which the
trustee has purchased any asset at a price in excess of the market value
thereof, would but for such loan, advance, contribution or purchase be
in such condition that the superintendent might take possession of the
business and property of the same pursuant to law, or that any such
member bank to which the trustee with the approval of the superintendent
has made any loan or advance, or to the surplus fund of which it has
made a contribution, or from which the trustee has purchased any asset
at a price in excess of the market value thereof, or the deposits in
which have been insured by the fund in whole or in part shall have
committed such an act or is in such condition that the superintendent
might take possession of the business and property of the same pursuant
to law, the trustee shall have the right if it so elects, and in such
case the superintendent, on such conditions and subject to such rules
and regulations as he shall prescribe, shall permit the trustee to take
possession and control forthwith of the property and business of such
bank and operate and/or liquidate the same. The trustee may, while
carrying on such business, pay to such bank out of the moneys in or
available to the fund such sums as the agreement may authorize as the
trustee deems necessary for the protection of the bank`s depositors.
7. At any time after the trustee has taken over the control,
possession and operation of any savings bank, as provided in subdivision
six hereof, it may, with the approval of the superintendent, turn back
the control, possession and operation thereof to such bank which may
continue or resume business, provided the moneys advanced from the fund
have been repaid or satisfactory arrangements made for the repayment
thereof and the superintendent has certified such bank to be in a safe
and sound condition or upon such other conditions authorized in the
agreement as may seem proper to the trustee.
8. The trustee, with the approval of the superintendent of banks may
at any time after it has taken over the control, possession and
operation of any bank under subdivision six hereof discontinue the
business of such bank and proceed to liquidate its affairs. The trustee
may use the assets in the fund to pay to the depositors of any such
savings bank out of moneys in or available to the fund the excess, if
any, or such portion thereof as the agreement may provide, of the full
amount of their respective deposits over the dividends received therefor
on such liquidation.
9. To carry out the provisions aforesaid, the trustee shall have and
may exercise all the rights, powers, privileges and franchises of any
savings bank taken over by it, and at any time, with the approval of the
superintendent of banks, to suspend the authority of the trustees of any
savings bank and exercise the powers and duties of such trustees, and in
addition to the foregoing, in the event it shall operate and/or
liquidate any such savings bank it shall have and may exercise all of
the rights and powers which the superintendent of banks would have
pursuant to law in connection with the operation and/or liquidation of
such bank and be subject to the same duties and supervision. The
trustee, or any duly authorized agent of the trustee, in connection with
the operation and/or liquidation of any such bank may execute,
acknowledge and deliver in the name of such bank, and under its seal, or
may authorize any officer or officers of any such bank to execute,
acknowledge and deliver in the name of such bank and under its seal any
instrument affecting or relating to the property, business or affairs of
such bank, and in the event any such officer is so authorized by the
trustee, such authorization shall be deemed the authorization of the
board of trustees of such bank and he may swear or affirm the usual
certificate of acknowledgment to the effect that he executed the same
and such seal was affixed by the authority of the board of trustees
thereof. Any instrument executed in any manner provided herein shall be
valid and effectual for all purposes.
10. To borrow money for the purpose of the fund and pledge any assets
in the fund as security for such loans, and in connection therewith may
rehypothecate any securities or collateral pledged to it by any savings
bank.
11. To collect, or enforce by legal proceedings if necessary, the
contributions for which each member bank is liable pursuant to the
provisions of the agreement, or any debt or obligation due to the fund
or mortgage or lien held by the fund.
S 286. Taxation and exemption of property held in fund; exemption of
mortgages from mortgage recording tax. The fund and the income thereof
shall be exempt from all taxation now or hereafter imposed by the state
of New York or by any county, municipality or local authority or
subdivision, except that any real property constituting an asset of the
fund shall be subject to city, county, municipal or local taxation to
the same extent according to its value as other similar real property is
taxed. Mortgages executed by the fund and/or its trustee shall be exempt
from the mortgage recording taxes imposed by article eleven of the tax
law.
S 287. Member savings banks. Any savings bank incorporated in the
state of New York may become a member of the fund upon the terms and
conditions set forth in the agreement by executing the agreement
authorized by this article, or a counterpart thereof.
S 288. Contributions as assets. All contributions and payments
pursuant to call paid into the fund by any member savings bank may be
carried by it as an asset to the extent authorized by the superintendent
of banks.
S 289. Confirmation of powers. Any savings bank shall have the
authority to do and permit to be done any of the acts and things and
make any of the payments and contributions herein authorized.
S 289-a. Immunity of trustee and member savings banks. The trustee
shall in no event be individually liable for anything done or any
liability incurred or assumed by virtue hereof, and any such liability
shall be collectible only out of the fund, nor shall any member bank be
subject to any liability except for its unpaid contributions to the
fund.
S 289-b. Construction. The provisions of this article shall be
liberally construed with a view to the protection of the depositors of
savings banks.