2006 New York Code - Examinations; Right Of Inspection; Penalties For Refusing To Permit Examination.

 
    § 36.  Examinations;  right  of  inspection; penalties for refusing to
  permit examination. 1.  The  superintendent  shall  have  the  power  to
  examine  every  banking organization, every bank holding company and any
  non-banking subsidiary thereof (as such terms "bank holding company" and
  "non-banking subsidiary" are defined in article three-A of this chapter)
  and every licensed lender at any time prior to its dissolution  whenever
  in his judgment such examination is necessary or advisable.
    2.  At least once in each calendar year upon such date or dates within
  each  such  period  as  in  his  discretion   he   deems   proper,   the
  superintendent  shall  cause  every banking organization to be examined;
  provided, however, that:
    (a) the provisions of this subdivision shall not be applicable  to  an
  investment   company   unless  (i)  such  investment  company  has  been
  authorized by the banking board to receive deposits, in accordance  with
  the  terms  of  subdivision  three of section five hundred eight of this
  chapter, (ii) a bank, trust company or industrial bank, or  any  two  or
  more  of  such  organizations, shall own an aggregate of twenty-five per
  centum or more of the capital stock of such investment company, or (iii)
  such investment company is a  corporation  which,  under  the  terms  of
  subdivision  six  of  this  section,  is deemed for the purposes of this
  section  to  be  a  corporation  affiliated  with  a  corporate  banking
  organization, and
    (b)  the  superintendent  may  extend the examination interval from at
  least once in each calendar year to at least once in each eighteen month
  period if the banking organization to be examined:
    (1) has total assets of less than two hundred fifty million dollars;
    (2) is well-capitalized, which  for  purposes  of  this  paragraph  is
  defined  as  having  capital  which  significantly  exceeds the required
  minimum level for each  relevant  capital  measure  or  as  having  such
  capital as the superintendent shall otherwise define by regulation;
    (3)  at  its most recent examination, was found to be well-managed and
  its composite condition was found to be outstanding or good;
    (4) is not currently subject to a  formal  enforcement  proceeding  or
  order  by  the superintendent, the federal deposit insurance corporation
  or any other federal banking agency; and
    (5) has not been acquired by any person during the twelve month period
  in which an examination would be required but for this paragraph.
    3. On every such examination of any banking organization inquiry shall
  be made as to (a) its financial condition, (b) the security afforded  to
  those  by  whom  its  engagements  are  held,  (c)  the  policies of its
  management, (d) whether the requirements of law have been complied  with
  in  the administration of its affairs, and (e) such other matters as the
  superintendent may prescribe. Examination of a licensed lender shall  be
  made   only  for  the  purposes  set  forth  in  section  three  hundred
  forty-eight of this chapter.
    4. The superintendent shall also have power at  any  time  to  examine
  every  agency,  branch  or  office  located in this state of any foreign
  banking corporation, including, but not limited to, all  of  the  books,
  accounts  or  records  of every agency, branch or office located in this
  state of such foreign banking corporation as well as all of  the  books,
  accounts  or  records  maintained in this state of any agency, branch or
  office not located in this state of such foreign banking corporation for
  the purpose of ascertaining whether it has violated any law and for  any
  other purpose.
    5.  The  superintendent  shall  have  the  power  to make such special
  investigations as he shall  deem  necessary  to  determine  whether  any
  individual,  partnership,  unincorporated association or corporation has
  violated any of the provisions  of  this  chapter;  and  to  the  extent
  necessary  for  this  purpose the superintendent shall have the power to
  examine all relevant books, records, accounts and documents.
    6. For the purpose of determining the financial condition of a banking
  organization,  the  superintendent  shall have the power, when in his or
  her judgment it is necessary or advisable, to  examine  corporations  or
  any  other  entity  affiliated  with  any such banking organization. The
  following are deemed for the purposes of this section to be corporations
  or other entities affiliated with a banking organization:
    (a) (i) Any corporation or other entity, the capital  stock  of  which
  such   banking   organization  directly  or  indirectly,  or  through  a
  subsidiary or subsidiaries, owns or controls ten per centum or  more  of
  the  voting  shares  of  such  corporation  or other entity; or (ii) any
  corporation or other entity the election of a majority of the  board  of
  directors of which is in any manner directly or indirectly controlled by
  such  banking organization; or (iii) any corporation or other entity the
  management or policies over  which  the  banking  organization  has  the
  power,  directly  or indirectly, to exercise a controlling influence, as
  determined by  the  superintendent;  provided,  however,  the  foregoing
  definition  of affiliate corporations and other entities shall not apply
  to small business investment  companies  as  defined  in  and  operating
  pursuant  to  the  provisions  of  an  act  of  congress entitled "Small
  Business Investment Act of 1958," and such companies shall be deemed  to
  be  corporations  affiliated  with  the  banking  organization  for  the
  purposes of this subdivision, if such banking organization  directly  or
  indirectly owns or controls twenty-five per centum or more of the voting
  shares  or  more than twenty-five per centum of the shares voted for the
  election of directors at the preceding  annual  meeting  of  such  small
  business  investment  company;  or  any  such  small business investment
  company the election of at least twenty-five per centum of the board  of
  directors  of  which  is  in  any  other  manner  directly or indirectly
  controlled by such banking organization; or
    (b) Any corporation or other entity which directly or  indirectly,  or
  through a subsidiary or subsidiaries, owns or controls ten per centum or
  more of the voting shares of capital stock of such banking organization;
  or  any  corporation  or  other  entity  which in any manner directly or
  indirectly controls the election of a majority of the board of directors
  of such banking organization; or  with  respect  to  the  management  or
  policies  of  such  banking  organization  has  the  power,  directly or
  indirectly, to exercise a controlling influence, as  determined  by  the
  superintendent.
    6-a.  (a) For the purposes of determining the financial condition of a
  banking organization, the superintendent shall have the power,  when  in
  his  or  her  judgment  it  is  necessary  or  advisable,  to  examine a
  non-banking  subsidiary  of  a  corporation  or   other   entity   which
  corporation  or  other  entity, pursuant to paragraph (b) of subdivision
  six of this  section,  is  deemed  to  be  an  affiliate  of  a  banking
  organization.
    (b)  For  the  purposes  of  this  subdivision, a "subsidiary" of such
  affiliated corporation or other entity shall mean:
    (1) Any corporation or other entity ten per centum or  more  of  whose
  voting  stock  is  directly  or  indirectly,  or through a subsidiary or
  subsidiaries, owned, controlled, or held  with  power  to  vote,  by  an
  affiliated  corporation or other entity; or (2) any corporation or other
  entity, the election of a majority of whose directors is  controlled  in
  any  manner  by  an  affiliated  corporation or other entity; or (3) any
  corporation or other entity, ten per centum  or  more  of  whose  voting
  stock is directly or indirectly owned, controlled, or held with power to
  vote,  by  a  trustee or trustees for the benefit of the stockholders or
  members of an  affiliated  corporation  or  other  entity;  or  (4)  any
  corporation or other entity, at least ten per centum of the voting stock
  of  which  is  directly  or  indirectly,  or  through  a  subsidiary  or
  subsidiaries,  owned,  controlled  or  held  with  power  to  vote  by a
  combination of an affiliated  corporation  or  other  entity  and  by  a
  trustee  or  trustees  for the benefit of the stockholders or members of
  such  affiliated  corporation  or  other  entity;  or  (5)  any  entity,
  corporate  or unincorporated, with respect to the management or policies
  of which such affiliated corporation or  other  entity  has  the  power,
  directly   or  indirectly,  to  exercise  a  controlling  influence,  as
  determined by the superintendent, after notice  and  opportunity  for  a
  hearing. For the purposes of this subdivision, voting stock shall not be
  deemed  to  include  voting  stock  owned by the United States or by any
  corporation wholly owned by the United States.
    (c) A "non-banking subsidiary" for the purposes  of  this  subdivision
  means one which is not a banking organization or which is not engaged in
  the  banking  business  as  defined  in  subdivision  one of section one
  hundred thirty-one of this chapter.
    (d) The superintendent may use the reports of regulatory  agencies  of
  this  state,  of other states, of any foreign government, and of federal
  regulatory agencies in making such examinations or in  conjunction  with
  such  examination.  All  regulatory  agencies  of this state, shall upon
  request of the superintendent, furnish or make available to him  or  her
  reports of examination made by them of any such non-banking subsidiary.
    6-b.  For  purposes of subdivisions six and six-a of this section, any
  references contained therein to "voting stock" or "voting shares"  shall
  be  deemed  to include any ownership interest with respect to any entity
  other  than  a  corporation,  any  references   to   "stockholders"   or
  "shareholders"  shall  include  persons  or  entities who have an equity
  interest in any entity other than a corporation, and any  references  to
  "board  of  directors"  shall  be deemed to mean the governing body with
  respect to any entity other than a corporation.
    7. The  superintendent  may  cause  any  corporation,  association  or
  partnership having business transactions or relations with any corporate
  banking  organization  to  be examined if such examination is found by a
  justice of the supreme court, on application of the  superintendent  and
  on  notice  to  such  company,  to be necessary or expedient in order to
  ascertain  whether  the  capital  stock  of   such   corporate   banking
  organization  is  impaired  or  whether safety of depositors with it has
  been imperilled.
    8. Examinations may be made and inquiries instituted or  continued  in
  the  discretion  of  the superintendent after he has taken possession of
  the property and business of any banking organization or  after  it  has
  entered upon voluntary dissolution until it shall resume business or its
  affairs shall be finally liquidated.
    9.   Any   individual,   partnership,  unincorporated  association  or
  corporation which refuses to  permit  examination  or  investigation  in
  accordance with the terms of this section shall forfeit to the people of
  the  state  the  sum  of  two hundred dollars for every day such refusal
  continues.
    10. All reports of examinations and investigations, correspondence and
  memoranda  concerning  or  arising   out   of   such   examination   and
  investigations,  including any duly authenticated copy or copies thereof
  in the possession of any banking organization, bank holding  company  or
  any  subsidiary  thereof  (as  such  terms  "bank  holding  company" and
  "subsidiary" are defined  in  article  three-A  of  this  chapter),  any
  corporation  or  any other entity affiliated with a banking organization
  within  the  meaning  of  subdivision  six  of  this  section  and   any
  non-banking  subsidiary of a corporation or any other entity which is an
  affiliate of a banking organization within the  meaning  of  subdivision
  six-a  of  this  section,  foreign banking corporation, licensed lender,
  licensed casher of checks, licensed mortgage banker, registered mortgage
  broker,  licensed  sales  finance  company,  licensed  insurance premium
  finance agency, licensed transmitter of money, licensed budget  planner,
  or  the  department,  shall be confidential communications, shall not be
  subject to subpoena and shall not be made public unless, in the judgment
  of the superintendent, the ends of justice and the public advantage will
  be  subserved  by  the  publication  thereof,   in   which   event   the
  superintendent may publish or authorize the publication of a copy of any
  such  report or any part thereof in such manner as may be deemed proper.
  For the purposes of  this  subdivision,  "reports  of  examinations  and
  investigations,  and  any  correspondence  and  memoranda  concerning or
  arising out of such examinations and investigations", includes any  such
  materials  of  a  bank, insurance or securities regulatory agency or any
  unit of the federal government or that of this state any other state  or
  that of any foreign government which are considered confidential by such
  agency  or  unit  and  which  are in the possession of the department or
  which are otherwise confidential materials that have been shared by  the
  department  with  any  such  agency or unit and are in the possession of
  such agency or unit.