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2010 New York Code
BNK - Banking
Article 6 - (229 - 260-B) SAVINGS BANKS
235 - Investment of funds.
§ 235. Investment of funds. A savings bank may invest in the following
property and securities and no others:
1. Obligations of the United States, or those for which the faith of
the United States is pledged to provide for the payment of the interest
and principal, or those for which annual contributions to be paid
pursuant to contract by the United States government or any of its
instrumentalities in accordance with an act of congress entitled the
"Housing Act of 1949", are pledged as security for the payment of the
interest and principal.
2. Obligations of this state, issued pursuant to the authority of any
law of the state, or those for which the faith of this state is pledged
to provide for the payment of the interest and principal.
3. Obligations of any state of the United States, or those for which
the faith of any state of the United States is pledged to provide for
the payment of the interest and principal, upon which there is no
default and upon which there has been no default for more than ninety
days; provided, that within ten years immediately preceding the
investment such state has not been in default for more than ninety days
in the payment of any part of principal or interest of any debt duly
authorized by the legislature of such state to be contracted by such
state after the first day of January, eighteen hundred seventy-eight,
except debts representing a refunding or adjustment of any indebtedness
originally contracted or in existence at that date or prior thereto.
4. Obligations of or those for which the faith of any city, county,
town, village, school district, poor district, water district, sewer
district or fire district in this state is pledged to provide for the
payment of principal and interest, provided that they were issued
pursuant to law and the faith and credit of the issuing municipal
corporation or district is pledged for their payment, bonds and
debentures or other obligations of any public authority or commission or
similar body created or approved by the state of New York having assets
of not less than fifty million dollars; and bonds and debentures of any
other public authority, commission or similar body which is legally
obligated to establish rates which while any debt is outstanding will
provide sufficient revenues for the cost of operation, maintenance and
debt service, such debt service to include interest on all outstanding
obligations and serial maturities and sinking funds, provided such other
authority, commission or similar body shall issue financial statements
at least annually which shall be available to the public, shall have had
receipts from operations during each of the five fiscal years
immediately preceding date of investment sufficient after meeting
operation and maintenance expenses to cover debt service, and provided
further that the revenues available for debt service received during the
fiscal year immediately preceding investment or the average amount
available for debt service for the three fiscal years preceding
investment shall have been adequate to meet the maximum annual debt
service of the bonds outstanding, and said obligations have not been in
default as to principal or interest; and bonds, debentures or other
obligations of any public authority or commission or similar body
created by the state of New York, the average of receipts from the
operations of which, during the three years immediately preceding the
date of investment, after meeting operation and maintenance expenses,
were not less than one hundred twenty-five per cent of the maximum
annual debt service on the bonds outstanding and which obligations have
not been in default as to principal or interest.
5. (a) Obligations, excluding however, non-negotiable warrants, of any
city or of any school district coterminous with or which includes such
city, or of any county situated in one of the states of the United
States which adjoins the state of New York, provided said city or county
has a population, as shown by the last federal census next preceding
such investment, of not less than ten thousand inhabitants, and has not,
within twenty-five years preceding said investment, defaulted for more
than one hundred and twenty days in the payment of any part either of
principal or interest of any bond, note, or other evidence of
indebtedness. The term "city" in this paragraph shall include any city,
town, borough, village, township or other incorporated municipality. An
investment made before August first, nineteen hundred twenty-eight,
shall not under the population provision of this paragraph, as to the
then owner thereof, cease to be an authorized investment for the moneys
of savings banks.
(b) Obligations, excluding however, non-negotiable warrants, of any
city or of any school district or county coterminous with or which
includes such city, situated in any other of the states of the United
States the obligations of which state are an authorized investment for
the moneys of savings banks, provided said city has a population, as
shown by the last federal census next preceding said investment, of not
less than thirty thousand inhabitants, and was incorporated as a city at
least twenty-five years prior to the making of said investment, and has
not, within twenty-five years preceding said investment, defaulted for
more than one hundred and twenty days in the payment of any part either
of principal or interest of any bond, note, or other evidence of
indebtedness. Provided further, that obligations issued by a city having
a population of less than forty-five thousand inhabitants as shown by
said census or by a school district or county shall not be an authorized
investment for the moneys of savings banks unless the city, school
district or county has power to levy taxes on the taxable real property
therein for the payment of such obligations without limitation of rate
or amount.
(c) If at any time the indebtedness of any city described in
paragraphs (a) or (b) of this subdivision or in paragraph (c) of
subdivision twenty-five of this section, together with the indebtedness
of any district, municipal corporation or subdivision, except a county,
which is wholly within the boundaries of such city, and together with a
proportionate part of the indebtedness of any district, municipal
corporation or subdivision, except a county, which is partly within the
boundaries of such city, and together with so much of the indebtedness
of any county wholly within the boundaries of such city and a
proportionate part of so much of the indebtedness of any county partly
within the boundaries of such city, as shall be in excess of five per
centum of the valuation for the purposes of taxation of the real
property in any such county, shall exceed twelve per centum of the
valuation of real property in said city for the purposes of taxation,
the obligations of such city or of any school district or of any county
coterminous with or which includes such city, shall, thereafter, and
until such indebtedness shall be reduced to twelve per centum of the
valuation of real property in said city for the purposes of taxation,
cease to be an authorized investment for the moneys of savings banks. If
there is no county wholly or in part within such city or if the county
wholly or in part within such city has neither any indebtedness nor
power to incur indebtedness, the obligations of such city or of any
school district coterminous with or which includes such city, shall not
cease to be an authorized investment unless such indebtedness shall
exceed the percentage above provided plus an additional three per
centum. If at any time the indebtedness of any county described in
paragraphs (a) or (b) shall exceed five per centum of the valuation of
real property for the purposes of taxation, the obligations of such
county shall thereafter, and until such indebtedness shall be reduced to
five per centum of the valuation of real property for the purposes of
taxation, cease to be an authorized investment for the moneys of savings
banks. A proportionate part of any indebtedness for the purpose of this
paragraph shall be, unless otherwise apportioned by law, that proportion
which the valuation of taxable real property of a county, district,
municipal corporation or subdivision within the boundaries of a city
bears to the total valuation of all taxable real property of said
county, district, municipal corporation or subdivision. Contract
liability shall be excluded unless represented by stocks, bonds, notes,
certificates of indebtedness or other like instruments and water debt
shall be excluded and sinking funds applicable to debts not excluded
shall be deducted, in determining the amount of any indebtedness
hereunder.
(d) The provisions of paragraph (c) shall not apply to the obligations
of any city which has taxable real property with a valuation for the
purposes of taxation in excess of two hundred million dollars and which
has a population as shown by the last decennial federal census of not
less than one hundred fifty thousand inhabitants and shall not apply to
the obligations of any school district or county coterminous with or
which includes such city, provided that the city, school district, or
county, as the case may be, has power to levy taxes on the taxable real
property therein for the payment of such obligations without limitation
of rate or amount.
(e) The valuation of property for purposes of taxation under this
subdivision and under subdivision twenty-five of this section shall be
an official valuation duly made and recorded and in cases where the
assessed valuation is based on a percentage of such official valuation,
the percentage used shall have been authorized under statutory or
charter power prior to the determination of such assessed valuation.
(f) No obligations issued after the year nineteen hundred thirty-eight
by any city, county, school district or other municipality of any state
other than New York shall be an authorized investment for savings banks
unless such city, county, school district or other municipality shall
have power to levy taxes on the taxable real property therein for the
payment of such obligation without limitation of rate or amount.
(g) Obligations issued by a city, village, town, county, department,
agency, district, authority, commission or other public body in this
state or any other state of the United States payable out of the
revenues of a public utility system providing water, electricity, gas or
sewerage service, provided that if the public utility system is located
outside the state, it must serve an area having a population of not less
than one hundred thousand. Said city, village, town, county, department,
agency, district, authority, commission or other public body shall be
legally obligated by statute, charter, indenture or covenant to fix,
maintain and collect charges or taxes, or both, to provide net revenues
after operation and maintenance of the facilities used to provide such
service sufficient to meet maturing interest, principal and sinking fund
payments on such obligations or shall be empowered to require the
fixing, maintaining, and collecting of such charges or taxes, or both,
by duly authorized public officers or bodies, and shall be restrained by
statute, charter, indenture or covenant from disposing of all or any
substantial portion of such facilities unless provision is made for a
continuance of the interest, principal and sinking fund payments due on
such obligations, or for the retirement of such obligations, provided
said city, village, town, county, department, agency, district,
authority, commission or other public body shall have had net earnings
during each of the five years immediately preceding investment
sufficient to cover all debt service and further provided that the net
earnings available for debt service for the year immediately preceding
investment shall have been sufficient to meet the maximum annual debt
service of the obligations outstanding, and said obligations shall not
have been in default as to principal or interest.
5-a. Bonds and mortgages and notes and mortgages on unimproved real
property in this state or outside this state, subject to such
limitations as the banking board may prescribe.
6. Bonds and mortgages and notes and mortgages on improved real
property, including leasehold estates, in this state, and, subject to
such limitations and conditions as the banking board may prescribe by
general regulation, in any other location outside this state. The
provisions of this subdivision shall not constitute the authority to
make a loan to a natural person upon the security of a mortgage which is
not a first lien.
(c) For the purposes of this subdivision real property upon which
there is a building in process of construction, which when completed
will constitute a permanent improvement with a value of more than
twenty-five per centum of the value of such real property shall be
considered improved real property, as shall real property with
improvements thereon that are capable of producing income sufficient to
pay all costs of operation and maintenance of such real property, all
taxes thereon and to effect full repayment of principal and interest in
accordance with the terms of the mortgage loan to be made pursuant to
this subdivision.
(e) Except as hereinafter provided no investment in any bond and
mortgage or any note and mortgage shall be made by any savings bank
except upon the written and signed certificate of an appraiser appointed
pursuant to policies established by the board of trustees stating that
in such appraiser's judgment it affords adequate security for such
investment. Such certificate shall be filed and preserved among the
records of the savings bank.
(f) For the purpose of protecting its interests a savings bank may
release any obligation to pay, or guarantee of the payment of, principal
or interest, or otherwise waive or modify any of the terms and
conditions of any bond and mortgage, and of any note and mortgage, and
may extend or reextend any bond and mortgage and any note and mortgage,
and may also accept a sum less than the principal amount thereof in full
payment and satisfaction of the same.
A savings bank may also waive its right to enforce payment of any bond
or note secured by a mortgage on real property and may waive its right
to obtain a deficiency judgment against the borrower in the event of
foreclosure of such mortgage.
(g) Every mortgage and every assignment of a mortgage taken or held by
a savings bank shall immediately be recorded or registered in the office
of the proper recording officer of the county in which the real property
described in the mortgage is located. This paragraph shall not apply to
a participating interest in any mortgage which shall have been acquired
by a savings bank under the provisions of subdivision fourteen of
section two hundred thirty-four, paragraph (h) of this subdivision, and
subdivision eighteen of section two hundred thirty-five.
(h) A savings bank may, subject to such regulations and restrictions
as the banking board finds to be necessary and proper, participate and
invest in (1) loans of a type that it is authorized to invest in
pursuant to subparagraph (a) of paragraph four of subdivision eight of
section two hundred thirty-five of this chapter and (2) in any bond and
mortgage or note and mortgage on improved and unencumbered real property
including leasehold estates, in which it is individually authorized to
invest, which said mortgage is duly recorded or registered in the office
of the proper recording officer of the county in which the real property
described in the mortgage is located, provided that no such investment
shall be made by a savings bank in any part interest in such mortgage
which is junior or subordinate to any other part interest nor if the
aggregate amount of all part interests in such mortgage when added
together will exceed any percentage of the appraised value of such real
property by which the authority of a savings bank to invest individually
in such mortgage is limited. Investments made by any savings bank in
mortgage loans pursuant to this subdivision and pursuant to subdivision
twenty-eight of this section shall be included in the computation of
permissive investment in mortgage loans pursuant to paragraph (d) of
subdivision six of this section.
(i) A mortgage loan upon a leasehold estate shall not be made unless
such leasehold estate shall have an unexpired term of not less than
twenty-one years, which term may include the term provided by an option
of renewal enforceable at the exclusive discretion of the savings bank.
No mortgage loan upon a leasehold estate shall be made or acquired by a
savings bank unless the terms thereof shall provide, regardless of the
period of the loan, for payments to be made by the borrower on the
principal thereof at least once in each year in amounts which would be
sufficient to completely amortize a loan whose period extended for
four-fifths of the unexpired term of the lease, which term may include
the term provided by an option of renewal enforceable at the exclusive
discretion of the savings bank; or, in the case of a mortgage loan upon
a leasehold estate in real property upon which there is a building in
process of construction, such payments of principal need not be required
during the period of construction or the first three years of the
mortgage, whichever is shorter. The provisions of paragraphs (c), (d),
(e), (f), (g), and (h) of this subdivision shall be applicable to loans
made upon leasehold estates.
6-a. A savings bank may, in addition to the authority granted under
any other subdivisions of this section, make a loan to a natural person
upon the security of a mortgage which is not a first lien at the rate or
rates agreed to by the savings bank and the borrower, subject to such
regulations as the banking board may prescribe. Such regulations by the
banking board may include such restrictions as the banking board finds
necessary or proper, including without limitation, a restriction as to
the percentage of total assets which may be invested in such loans or a
restriction on the loan to appraisal value of property securing such
loan.
For purposes of this subdivision, the term mortgage shall include a
lien on an existing ownership interest in certificates of stock or other
evidence of an ownership interest in, and a proprietary lease from, a
corporation or partnership formed for the purpose of the cooperative
ownership of real estate.
7. Railroad obligations as provided in this subdivision. (1)
Obligations issued, assumed or guaranteed as to principal and interest
by endorsement, or so guaranteed which guaranty has been assumed; or
(2) Obligations for the payment of the principal and interest of which
a railroad corporation such as is described in this paragraph is
obligated under the terms of a lease made or assumed; or
(3) Equipment obligations in respect of which liability has been
incurred: by a railroad corporation incorporated under the laws of the
United States, or any state thereof, and owning and operating within the
United States not less than five hundred miles of standard-gauge
railroad line, exclusive of sidings, or if the mileage so owned shall be
less than five hundred miles, the railroad operating revenues from the
operation of all railroad operated by it, including such revenues from
the operation of all railroad controlled through ownership of all
(except directors' qualifying shares) of the voting stock of the owning
corporation, shall have been not less than ten million dollars each year
for at least five of the six fiscal years next preceding such
investment; provided, however, (1) that in the five fiscal years next
preceding such investment, the amount of income of such railroad
corporation, available for its fixed charges, as hereinafter defined,
shall have averaged not less than two and one-half times the amount of
fixed charges at the time of investment, as hereinafter defined; (2)
that at no time within such period of five years such railroad
corporation, unless in process of reorganization or readjustment since
completed, pursuant to applicable law, shall have failed regularly and
punctually to pay the matured principal and interest on its mortgage and
funded indebtedness; and (3) that the security, if any, for such
obligations shall be property wholly or in part within the United States
and which obligations shall be
(a) fixed interest-bearing bonds secured by direct mortgage on
railroad owned or operated by such railroad corporation; or
(b) fixed interest-bearing bonds secured by first mortgage upon
terminal, depot or tunnel property, including lands, buildings and
appurtenances, used in the service of transportation by one or more such
railroad corporations, provided that such bonds be the direct obligation
of, or that payment of principal and interest thereof be guaranteed by
endorsement by, or guaranteed by endorsement which guaranty has been
assumed by, one or more such railroad corporations; or
(c) equipment obligations, comprising bonds, notes, certificates,
conditional sale agreements or assignments of conditional sale
agreements and participations therein, issued or made in connection with
the purchase for use on railroads of new standard-gauge rolling stock
through the medium of an equipment agreement, and which obligations, so
long as any thereof shall be outstanding and unpaid or unprovided for,
shall be secured by an instrument (1) vesting title to such equipment in
a trustee free of encumbrance, or (2) creating a first lien on such
equipment, or, pending such vesting of title, by the deposit of cash in
trust, which deposit may be invested in whole or in part in obligations
of the United States or obligations for which the faith of the United
States is pledged to provide for the payment of the interest and
principal, or obligations of any public housing agency as defined in the
United States housing act of nineteen hundred thirty-seven, as amended,
in the United States as are secured either (1) by an agreement between
the public housing agency and the public housing administration in which
the public housing agency agrees to borrow from the public housing
administration, and the public housing administration agrees to lend to
the public housing agency, prior to the maturity of such obligations,
which obligations shall have a maturity of not more than eighteen
months, moneys in an amount which, together with any other moneys
irrevocably committed to the payment of interest on such obligations,
will suffice to pay the principal of such obligations with interest to
maturity thereon, which moneys under the terms of said agreement are
required to be used for the purpose of paying the principal of and the
interest on such obligations at their maturity, or (2) by a pledge of
annual contributions under an annual contributions contract between such
public housing agency and the public housing administration if such
contract shall contain the covenant by the public housing administration
which is authorized by section 1421a(b) of Title 42, U.S. Code, and if
the maximum sum and the maximum period specified in such contract
pursuant to section 1421a(b) of Title 42, U.S. Code, shall not be less
than the annual amount and the period for payment which are requisite to
provide for the payment, when due, of all installments of principal and
interest on such obligations, to an amount equal to the face amount of
such equipment obligations issued in respect of such equipment title to
which is not yet so vested; provided further, that the maximum amount of
such obligations so issuable shall not exceed eighty per centum of the
cost of such equipment; and provided further, that the owner, purchaser
or lessee, or the owners, purchasers or lessees, of such equipment shall
be obligated by the terms of such obligations or of such instrument (a)
to maintain such equipment in proper repair; (b) to replace any thereof
that may be destroyed or released with other equipment of equal value,
or, if released in connection with a sale thereof, to deposit the
proceeds of such sale in trust for the benefit of the holders of such
obligations pending replacement of such equipment; (c) to pay any and
all taxes or other governmental charges that may be required by law to
be paid upon such equipment; (d) to pay, in accordance with the
provisions of such obligations or of such instrument, to holders, or to
such trustee for the benefit of holders, of such obligations the amount
of interest due thereon or of the dividends payable in respect thereof;
and (e) to pay the amount of the entire issue of such obligations in
such annual or semi-annual installment each year throughout a period of
not exceeding fifteen years from the first date of issue of any thereof
that the amount of the respective unmatured installments at any time
outstanding shall be approximately equal; provided, further, that unless
the owner, purchaser or lessee of such equipment or one or more of such
owners, purchasers or lessees shall be such railroad corporation as is
described in and meets the requirements of this subdivision preceding
paragraph (a), such obligations shall be guaranteed by endorsement as to
principal and as to interest or dividends by such railroad corporations;
or
(d) fixed interest-bearing bonds of such railroad corporation secured
by irrevocable pledge as collateral under a trust agreement of other
railroad bonds that are legal investments for savings banks under this
section, have a maturity not earlier than the bonds that they secure and
of a total face amount not less than the total face amount of the bonds
that they secure; or
(e) fixed interest-bearing mortgage bonds other than those described
in paragraphs (a) or (b) hereof, income mortgage bonds, collateral trust
bonds or obligations other than those described in paragraph (d) hereof,
or unsecured bonds or obligations, issued, assumed or guaranteed as to
principal and interest by endorsement by, or so guaranteed which
guaranty has been assumed by, such railroad corporation, provided that
(a) the annual fixed charges and contingent interest charges of such
railroad at the time of investment shall not exceed thirty per cent of
the average annual income available for such charges for the five fiscal
years next preceding, and (b) the net income of such railroad after all
taxes and charges shall have averaged not less than fifteen million
dollars annually in such period.
The amount of income available for fixed charges shall be the amount
obtained by deducting from gross income all items deductible in
ascertaining net income other than federal income taxes, contingent
income interest and those constituting fixed charges. Fixed charges
shall be: rent for leased roads, miscellaneous rents, fixed interest on
funded debt, interest on unfunded debt and amortization of discount on
funded debt.
Accounting terms used in the preceding paragraph shall be deemed to
refer to those used in the accounting reports prescribed by the
accounting regulations for common carriers subject to the provisions of
the interstate commerce act. If the interstate commerce commission shall
prescribe accounting regulations wherein shall be defined the term
income available for fixed charges and the term fixed charges, the
definitions thereof as so prescribed shall be taken and used in lieu of
the definitions set forth in the preceding paragraph of this subdivision
for all purposes hereof, except that federal income taxes shall not be
deducted, nor shall federal income tax credits be included, in computing
income available for fixed charges. In determining income available for
fixed charges and fixed charges pursuant to this paragraph or the
immediately preceding paragraph interest, dividends and rentals paid by
a railroad corporation and included in both such amounts shall be
eliminated.
For all purposes of this subdivision seven, the revenues, earnings,
income and fixed charges of, and dividends paid by, any railroad
corporation prior to the acquisition of all or substantially all of its
railroad lines by another railroad corporation, through merger,
consolidation, conveyance or lease, shall, while such lines remain in
the possession of the acquiring corporation, be deemed to have been
revenues, earnings, income and fixed charges of, and dividends paid by,
such acquiring corporation.
Whenever a railroad corporation shall own (directly or through a
subsidiary all of the stock of which, except directors' qualifying
shares, is owned by such corporation) at least ninety per cent of the
capital stock of one or more other railroad corporations, the property
of which is operated by it under lease, the consolidated statements of
all such railroad corporations may be used in determining the amount of
income available for fixed charges and the amount of fixed charges.
Obligations of a railroad corporation the railroad lines of which have
been so leased prior to April fifth, nineteen hundred twenty-nine, for
the payment of which the lessee is not obligated, that are outstanding
and officially listed by the banking department of the state of New York
as authorized investments prior to that date, shall be and remain
authorized investments hereunder; provided, that such railroad lines
shall be in the possession of and be operated by a railroad corporation
such as is described in and meets the requirements of the provisions of
this subdivision preceding paragraph (a).
Notwithstanding any other provisions of this subdivision, equipment
obligations described in paragraph (c) which shall have been issued,
assumed or guaranteed by any railroad corporation classified by the
interstate commerce commission as a class one railroad and which are not
in default, shall be authorized investments hereunder.
Notwithstanding any of the provisions of this subdivision, fixed
interest-bearing obligations of railroad corporations, excluding
terminal, depot and tunnel corporations, which are eligible for purchase
by savings banks on December thirty-first, nineteen hundred fifty-two
under the provisions of subdivisions seven or nineteen of this section,
or which shall thereafter become eligible pursuant to the provisions of
this subdivision seven, as amended, if not in default, shall be and
remain eligible hereunder, provided that the income available for fixed
charges, as herein defined, of the railroad corporation which has
issued, assumed or guaranteed such obligations, or which operates under
lease the railroad lines of the corporation which has issued, assumed or
guaranteed such obligations, shall have averaged for the five fiscal
years next preceding the time of investment not less than twice the
interest charges for the last such fiscal year on all equipment
obligations, and other obligations eligible hereunder, of such railroad
corporation which remain outstanding at time of investment.
Fixed interest-bearing bonds of terminal, depot and tunnel companies
which are eligible for purchase by savings banks on December
thirty-first, nineteen hundred fifty-two under the provisions of
subdivisions seven or nineteen of this section, or which shall
thereafter become eligible pursuant to the provisions of this
subdivision seven, as amended, shall be and remain eligible hereunder,
provided that the principal and interest thereof be guaranteed by
endorsement by, or guaranteed by endorsement which guaranty has been
assumed by, a railroad corporation which meets the requirements of the
preceding paragraph for continuing the eligibility of its own fixed
interest-bearing obligations.
Not more than twenty-five per centum of the assets of any savings bank
shall be loaned or invested in the bonds, notes, certificates,
conditional sale agreements, assignments of conditional sale agreements
and participations therein in this subdivision seven defined, and not
more than ten per centum of such assets shall be invested in such bonds,
notes, certificates, conditional sale agreements, assignments of
conditional sale agreements and participations therein for which any one
railroad corporation of this state shall be obligated, and not more than
five per centum of such assets shall be invested in the bonds, notes,
certificates, conditional sale agreements, assignments of conditional
sale agreements and participations therein for which any one railroad
corporation not of this state shall be obligated.
Street railroad corporations shall not be considered railroad
corporations within the meaning of this subdivision.
7-a. Any savings bank which prior to April first, nineteen hundred
thirty-eight acquired any railroad obligation eligible at the time of
acquisition for investment by savings banks may continue to hold such
obligation as though the same continue to be eligible by law for new
investment by such savings bank.
8. Promissory notes and other agreements as provided in this
subdivision.
(1) Promissory notes payable to the order of the savings bank which
are:
(a) Secured by one or more mortgages in which a savings bank may
invest; provided the amount loaned is not in excess of ninety per centum
of the principal sum secured by such mortgage or mortgages. The
assignment of every mortgage taken as security for any such note shall
be recorded or registered in the office of the proper recording officer
of the county in which the real property described in such mortgage is
located, unless such mortgage or mortgages have been so assigned by a
savings bank.
(b) Secured by any of the stocks and bonds in which a savings bank may
invest; provided that (1) the amount of the loan is not in excess of
ninety per centum of the market value of such stocks and bonds; and (2)
the term "stocks," as used in this paragraph, shall be deemed to refer
to stocks eligible for investment by a savings bank other than in
accordance with the provisions of subdivision twenty-six of this
section.
(c) Made by a savings and loan association which has been incorporated
three years or more and has an accumulated capital of at least fifty
thousand dollars.
(2) Promissory notes payable to the order of the savings bank which
are secured by the assignment of a deposit in any savings bank; provided
the amount of the loan is not in excess of the amount of such deposit.
(3) Any loan secured by not less than a like amount of direct
obligations of the United States or of this state, or of any city,
county, town, village or school district of this state or of any such
department, agency or instrumentality of the United States or this
state.
(4) (a) Promissory notes representing loans and advances of credit for
the purpose of financing alterations, repairs and improvements upon or
in connection with, or as the superintendent may authorize the equipping
of existing structures, and the building of new structures, upon urban,
suburban, or rural real property (including the restoration,
rehabilitation, rebuilding and replacement of such improvements which
have been damaged or destroyed by earthquake, conflagration, tornado,
hurricane, cyclone, flood or other catastrophe), by the owners thereof
or by lessees of such real property under a lease expiring not less than
six months after the maturity of the loan or advance of credit or by
lessees under proprietary leases from a corporation or partnership
formed for the purpose of the cooperative ownership of real estate,
provided: (1) the amount of such loan, advance of credit, or purchase
made for the purpose of financing the alteration, repair, equipping or
improvement of existing structure or the building of new structure does
not exceed twenty thousand dollars; (2) the maturity thereof does not
exceed one hundred twenty-one months; (3) the rate which may be paid by
the borrower for interest, discount, and fees of all kinds in connection
with the transaction shall be the rate or rates agreed to by the savings
bank and the borrower in the promissory note; and (4) the loan shall be
paid in equal or substantially equal monthly installments calculated
from the date of the note; provided, however, that in addition thereto
the savings bank may contract to charge the borrower: (i) the fees
payable to the appropriate public officer to perfect any lien or other
security interest taken to secure the loan or the premium, not in excess
of such filing fee, payable for any insurance in lieu of such filing;
(ii) in case of default, and in accordance with the provisions of the
instrument evidencing the obligation, either a fine in an amount not to
exceed five cents per dollar on any installment which has become due and
remained unpaid for a period in excess of ten days, but no such fine
shall exceed five dollars and only one fine shall be collected on any
such installment regardless of the period during which it remains in
default, and provided further that should the aggregate of such fines
collected in connection with any loan exceed two per centum of such
loan, or in any event twenty-five dollars, the savings bank shall refund
such excess to the borrower within sixty days after the loan is paid in
full, or subject to an allowance of unearned interest attributable to
the amount in default, interest on each amount past due at a rate not in
excess of the rate provided for in the instrument evidencing the
obligation; (iii) the actual expenditures, including reasonable
attorney's fees, for necessary court process; and (iv) in case the
savings bank insures a borrower under a credit unemployment insurance
policy, group life insurance policy, group health insurance policy,
group accident insurance policy, or group health and accident insurance
policy, or requires insurance on personal property securing any such
loan, an amount not in excess of the premiums chargeable in accordance
with rate schedules then in effect and on file with the superintendent
of insurance for such insurance by the insurer. No savings bank shall
require a borrower to place any sum on deposit, or to make deposits in
lieu of regular periodic installment payments, or to do or refrain from
doing any other act which would entail additional expense or sacrifice,
as a condition precedent to granting a loan or advance of credit under
the authority of this subdivision. Notwithstanding the provisions of
this paragraph no refund of excess fines shall be required if it amounts
to less than one dollar.
(b) Promissory notes representing loans and advances of credit for the
purpose of defraying the cost of attendance of one or more students the
income of whose family is fifteen thousand dollars or more per year at
the time the loan or loan commitment is made at a university or college
or for the purpose of defraying the cost of attendance of one or more
students at an elementary or secondary school providing education
required for minors; provided, however, that no such loan shall bring
the total unpaid principal balances of any one or more loans made by
such savings bank to the borrower pursuant to this subparagraph to an
amount in excess of thirty thousand dollars; and further provided that
the maturity of any such loan does not exceed eighty-five months; and
further provided that the rate which may be paid by the borrower for
interest, discount, and fees of all kinds in connection with the
transaction shall be the rate or rates agreed to by the savings bank and
the borrower in the promissory note, reckoned on each loan or advance
from the date thereof, calculated on any of the following bases: (i) on
the unpaid principal amount of such loans and advances from time to time
outstanding, or (ii) for each month on an average balance outstanding
determined by dividing by two the sum of the balances of unpaid
principal of such loans and advances outstanding on two dates during
such month, as specified in such agreement; the first of which dates
being not later than the fifteenth day of such month and the second
being not earlier than the sixteenth day of such month and not less than
ten nor more than twenty days after the first day, or (iii) for each
month on a fixed amount selected from a schedule, which fixed amount may
exceed the average daily balance under (i) above, or the average balance
if determined under (ii) above, by a differential of not more than five
dollars, provided the same fixed amount is also used for computing
interest for any month for which such balance exceeds said fixed amount
by any amount up to at least the same differential; and further provided
that the loan shall be paid in equal or substantially equal monthly
installments calculated from the date of the note. No fee, commission,
expense, or other charge whatsoever shall be taken, received, reserved
or contracted for in addition to the maximum rate of interest authorized
by this subparagraph except (i) the fees payable to the appropriate
public officer to perfect any lien or other security interest taken to
secure the loan or the premium, not in excess of such filing fee,
payable for any insurance in lieu of such filing; (ii) in case of
default, and in accordance with the provisions of the instrument
evidencing the obligation, either a fine in an amount not to exceed five
cents per dollar on any installment which has become due and remained
unpaid for a period in excess of ten days, but no such fine shall exceed
five dollars and only one fine shall be collected on any such
installment regardless of the period during which it remains in default,
and provided further that should the aggregate of such fines collected
in connection with any loan exceed two per centum of such loan, or in
any event twenty-five dollars, the savings bank shall refund such excess
to the borrower within sixty days after the loan is paid in full, or,
subject to an allowance of unearned interest attributable to the amount
in default, interest on each amount past due at a rate not in excess of
the rate provided for in the instrument evidencing the obligation; (iii)
the actual expenditures, including reasonable attorney's fees, for
necessary court process; and (iv) in case the savings bank insures a
borrower under a credit unemployment insurance policy, group life
insurance policy, group health insurance policy, group accident
insurance policy, or group health and accident insurance policy, or
requires insurance on personal property securing any such loan, an
amount not in excess of the premiums chargeable in accordance with rate
schedules then in effect and on file with the superintendent of
insurance for such insurance by the insurer. No savings bank shall
require a borrower to place any sum on deposit, or to make deposits in
lieu of regular periodic installment payments, or to do or refrain from
doing any other act which would entail additional expense or sacrifice,
as a condition precedent to granting a loan or advance of credit under
the authority of this subparagraph, except under such terms and
conditions as the superintendent may from time to time approve.
Notwithstanding the provisions of this subparagraph no refund of excess
fines shall be required if it amounts to less than one dollar.
(c) Promissory notes secured by mobile home chattel paper evidencing a
monetary obligation incurred to finance the purchase of a mobile home
located at the time of such purchase, or to be located within ninety
days, at a semipermanent site within the state or in a contiguous state
and to be maintained as a residence of the borrower, the borrower's
spouse, child, grandchild, parent or grandparent.
(1) For this subparagraph:
(i) "mobile home chattel paper" means written evidence of both a
monetary obligation and a security interest of first priority in a
mobile home and any equipment installed or to be installed therein; and
(ii) "mobile home" or "manufactured home" means a structure,
transportable in one or more sections, which in the traveling mode, is
eight body feet or more in width or forty body feet or more in length,
or when erected on site, is three hundred twenty or more square feet,
and which is built on a permanent chassis and designed to be used as a
dwelling with or without a permanent foundation when connected to
required utilities, and includes the plumbing, heating, air-conditioning
and electrical systems contained therein.
(2) If the loan is for the purpose of financing the purchase of a new
mobile home,
(i) it shall mature not later than two hundred forty months after the
date thereof, and
(ii) the amount advanced shall not exceed one hundred per cent of the
sum of (a) the purchase price of such mobile home (including any
installed equipment) plus (b) the price of any new equipment installed
or to be installed by the dealer.
(3) If the loan for the purpose of financing the purchase of a used
mobile home,
(i) it shall mature not later than two hundred forty months after the
date thereof, and
(ii) the amount advanced shall not exceed one hundred per cent of the
purchase price of the mobile home actually paid (including any installed
equipment).
(4) The loan shall be payable in equal or substantially equal monthly
installments calculated from the date of the loan. Interest, which may
be taken in advance, may be charged thereon, computed from the date of
the loan to the date of the last installment payable thereunder, if the
loan has a maturity (i) not exceeding thirty-seven months, at a rate not
to exceed six dollars per annum discount per one hundred dollars of the
face amount or ten dollars if the interest so computed is less than that
amount, or (ii) exceeding thirty-seven months, at a rate not to exceed
five dollars per annum discount, per one hundred dollars of the face
amount or ten dollars if the interest so computed is less than that
amount; provided that the interest which may be charged; if it exceeds
ten dollars, shall not exceed one per cent per month on the unpaid
principal balance.
(5) The authorized interest shall include all charges incident to
investigating and making any loan. No fee, commission, expense, or other
charge shall be permitted except that the savings bank may contract to
charge the borrower (i) the fees payable to a public officer to perfect
any lien or other security interest taken to secure the loan, or the
premium, not in excess of such fee, payable for any insurance in lieu of
such filing; (ii) in case of default, and in accordance with the
instrument evidencing the obligation, either a fine in an amount not to
exceed five per cent on any installment which has become due and
remained unpaid for a period in excess of ten days, but no such fine
shall exceed five dollars and only one fine shall be collected on any
such installment regardless of the duration of the default, and provided
further that should the aggregate of such fines collected in connection
with any loan exceed two per cent of such loan or twenty-five dollars,
the savings bank shall refund such excess within sixty days after the
loan is paid in full, or, subject to an allowance of unearned interest
attributable to the amount in default, interest on each amount past due
at a rate not in excess of one per cent per month during the
delinquency; (iii) the actual expenditures, including reasonable
attorney's fees for necessary court process, and (iv) in case the
savings bank insures a borrower under a credit unemployment insurance
policy, group life, health, accident, or group health and accident
insurance policy, or requires insurance on the property securing such
loan, an amount not in excess of the premiums lawfully chargeable. No
savings bank shall require a borrower to place any sum on deposit, or to
make deposits in lieu of regular periodic installment payments, or to do
or refrain from doing any other act which would entail additional
expense or sacrifice, as a condition to a mobile home loan except as the
superintendent may from time to time approve. No refund of excess fines
need be made if it amounts to less than one dollar.
(6) As a condition of any loan made pursuant hereto, the borrower
shall certify that the mobile home, against which the loan is made, is
intended to be maintained in the state or in a contiguous state as a
residence of the borrower, the borrower's spouse, child, grandchild,
parent or grandparent. If the mobile home shall not be so maintained on
the ninetieth day next succeeding the date of the loan or if it is
relocated so as to no longer be located in the state or a contiguous
state at any time before the first anniversary of the date of the loan,
then, in either event and notwithstanding anything to the contrary in
this subparagraph, the loan and all authorized charges shall become
immediately due and payable subject to the refund provisions of
subparagraph (c) of paragraph four and the borrower may, if the contract
so provides, be required to pay as an additional authorized charge, a
penalty in an amount not to exceed two per cent of the face amount of
the loan.
(7) No investment shall be made by a savings bank pursuant hereto if
the total amount invested by it pursuant to this subparagraph exceeds,
or by the making of such investment will exceed, an amount equal to
thirty per cent of the assets of the savings bank.
(8) Subject to such limitations and conditions as the banking board
may prescribe by general regulation, a savings bank may make a loan
pursuant to this subparagraph which the federal housing administrator
has insured or has made a commitment to insure and may receive and hold
such debentures as are issued by the federal housing administrator in
payment of such insurance, or which is guaranteed pursuant to the
provisions of the act of congress entitled the "Servicemen's
Readjustment Act of 1944." No law of this state prescribing the nature,
amount or form of security or requiring security upon which loans or
advances of credit may be made or prescribing or limiting the period for
which loans or advances of credit may be made or limiting the amount of
any class of loans, advances of credit or purchases which may be made
shall be deemed to apply to loans, advances of credit or purchases made
or to loans acquired by purchase pursuant to this item.
(d) A borrower may prepay in full any loan made pursuant to the
provisions of subparagraph (a), (b) or (c) of this paragraph or, with
the consent of the savings bank, may refinance the loan. In the event of
such prepayment or refinancing, the savings bank shall refund: (1) the
unearned portion of the interest to the borrower the amount of which
portion shall be determined according to a generally accepted actuarial
method; provided, however, that if the amount of interest previously
deducted (i) was less than ten dollars, no refund shall be required; or
(ii) exceeded the sum of ten dollars and the earned interest is less
than that amount, the savings bank may retain such an additional amount
as will bring the earned interest to the sum of ten dollars and refund
the remainder, and provided further, that unless the loan is refinanced,
no refund shall be required if it amounts to less than one dollar; and
(2) if a charge was made to the borrower for premiums for insuring the
borrower under a credit unemployment insurance policy, group life
insurance policy, or under a group health, group accident or group
health and accident insurance policy, the excess of the charge to the
borrower therefor over the premiums paid or payable by the savings bank,
if such premiums were paid or payable by the savings bank periodically
or the refund for such insurance premium received or receivable by the
savings bank, if such premium was paid or payable in a lump sum by the
savings bank, provided that no such refund shall be required if it
amounts to less than one dollar. In the event (i) the maturity of the
loan is accelerated due to the default of the borrower or otherwise and
judgment is obtained, or (ii) repayment is made pursuant to any such
insurance policy, the borrower or his legal representative, as the case
may be, shall be entitled to the same refund as if the loan had been
prepaid in full on the date of acceleration or repayment.
(5) Promissory notes from a resident of the state of New York provided
that payment of each such note is guaranteed by the New York Higher
Education Assistance Corporation, or promissory notes that are insured
or covered by a commitment to insure or are guaranteed or covered by a
commitment to guarantee issued by the Federal Education Commissioner in
accordance with the provisions of the act of congress entitled "Higher
Education Act of l965".
8-a. Promissory notes representing loans for the purpose of financing
the purchase of or refinancing an existing ownership interest in
certificates of stock or other evidence of an ownership interest in, and
a proprietary lease from, a corporation or partnership formed for the
purpose of cooperative ownership of real estate within or without this
state, as provided in this subdivision.
A savings bank may, subject to such regulations as the banking board
finds necessary and proper, invest to an amount not exceeding the
maximum per cent of the loan permitted to be made on real estate
improved by a single family residence occupied by the owner, provided
that for purposes of this section the amount of the purchase price shall
be deemed to equal the appraised value of such certificate of stock or
other evidence of an ownership interest, or, in the case of a
refinancing, the appraised value of certificates of stock or other
evidence of an ownership interest in and a proprietary lease from, a
corporation or partnership formed for the purpose of the cooperative
ownership of real estate within or without this state, for the purpose
of financing a purchase of or refinancing an existing ownership interest
in such a corporation or partnership, provided (a) such investment is
secured within ninety days from the making of the loan by an assignment
or transfer of the stock or other evidence of an ownership interest of
the borrower and a proprietary lease; and (b) repayment of principal and
interest shall be effected within the same number of years as a
conventional mortgage loan previously described in this subdivision. The
maximum rate of interest which may be charged, taken or received upon
any loan or forbearance made pursuant to this subdivision may exceed the
rate of interest prescribed by the banking board in accordance with
section fourteen-a of this chapter by no more than one and one-half per
centum per annum.
8-b. Personal loan departments. Subject to such regulations as the
banking board may prescribe, a savings bank may operate a personal loan
department under the same terms and conditions as are provided under the
provisions of subdivisions four and five of section one hundred eight of
this chapter.
The banking board shall be empowered (a) to prescribe the terms and
conditions governing the conduct and operation of personal loan
departments including, the maximum amount, expressed as a percentage of
assets or otherwise, which a savings bank may invest pursuant to the
provisions of this subdivision or in the aggregate, taking into account
such other provisions of law authorizing investments by savings banks,
and (b) to prescribe such terms and conditions as may be appropriate to
effect or facilitate the transfer of accounts operated pursuant to the
provisions of any other section of this chapter to the personal loan
departments authorized to be operated hereunder.
In pursuance of the authority granted hereunder savings banks shall be
empowered to issue credit cards, extend credit in connection therewith,
and otherwise engage in or participate in credit card operations, and to
act as financing agency as defined in subdivision nine of section three
hundred one and subdivision eighteen of section four hundred one of the
personal property law.
8-c. Subject to such regulations as the banking board may prescribe,
promissory notes and other evidences of indebtedness representing
commercial, corporate or business loans, provided that the aggregate
amount of all such loans outstanding at any time to any borrower shall,
if unsecured, not exceed fifteen per centum of the net worth of such
savings bank or, if secured, subject to the same limitations as to
amount in relation to net worth as are applicable to banks and trust
companies pursuant to article three of this chapter. For purposes of
this section the term "net worth" shall have the meaning ascribed to it
by subdivision four of section two hundred forty-four of this chapter.
8-d. Subject to such regulations as the banking board may prescribe
and subject to the limits of subdivision eight-c of this section and any
other applicable limits or requirements imposed by law or regulation,
promissory notes and other evidence of indebtedness that represent
linked loans, each authorized and approved pursuant to article fifteen
of the state finance law and each in an amount equal to a corresponding
linked deposit made pursuant to such article.
8-e. Subject to such regulations as the banking board may prescribe
and subject to the limits of subdivision eight-c of this section and any
other applicable limits or requirements imposed by law or regulation,
promissory notes and other evidence of indebtedness that represent
linked loans, each authorized and approved pursuant to article sixteen
of the state finance law and each in an amount equal to a corresponding
linked deposit made pursuant to such article.
9. Real estate as provided in this subdivision.
(a) A savings bank may purchase or acquire the following real estate:
(1) A plot whereon there is or may be erected a building suitable for
the convenient transaction of the business of the savings bank, from
portions of which not required for its own use a revenue may be derived,
and a plot whereon parking accommodations are, or are to be, provided,
with or without charge, primarily for its customers or employees or
both. The aggregate of all investments of a savings bank in such plots
and buildings shall not exceed five per centum of the assets of such
savings bank, except with the approval of the superintendent.
(2) Such as shall be conveyed to it in satisfaction of debts
previously contracted in the course of its business.
(3) Such as it shall purchase at sales under judgments, decrees or
mortgages held by it.
(4) In lieu of instituting an action to foreclose a mortgage lien, a
savings bank may purchase a deed to the underlying real property.
(5) A whole or part interest in a "project" as defined in the New York
state urban development corporation act, pursuant to sections six or
eight of such act. An investment by a savings bank in a single project
shall not exceed one per centum of the assets or ten per centum of the
net worth of such savings bank, whichever is less, and the aggregate of
all investments of a savings bank in such projects and investments in
securities pursuant to subparagraph one-a of paragraph (a) of
subdivision twenty-one of this section shall not exceed five per centum
of the assets or fifty per centum of the net worth of such savings bank,
whichever is less. For the purposes of this subdivision, "net worth" of
a savings bank shall mean the excess of its assets at book value, less
allocated reserves, over known liabilities.
* (6) Improved or unimproved real property (either by purchase, lease,
exchange or otherwise), or any interest therein, to erect, construct,
rebuild, enlarge, alter, improve, maintain, manage and operate buildings
or other improvements of any description thereon, to sell, lease,
sublet, mortgage, exchange or otherwise dispose of same and execute,
perform and carry out contracts for construction, alteration,
improvement, maintenance, management or repair thereof, to make loans in
connection therewith, as owner, co-owner or otherwise, subject to such
specific or general approvals and limitations as shall be required by
regulations promulgated from time to time by the banking board pursuant
to this subparagraph; provided, however, that no activity specified
herein, shall be undertaken pursuant to the authority contained in this
subparagraph until the banking board shall have issued regulations
specifying the limitations and requirements which shall be imposed in
connection with the investments and activities referred to herein
including, without limitation, the consideration of such savings bank's
record in meeting the credit needs of local communities within the
meaning of section twenty-eight-b of this chapter.
* NB Expired June 30, 1988
(b) Every parcel of real estate acquired by a savings bank shall be
conveyed to it directly by name, or, subject to such regulations and
restrictions as the banking board finds to be necessary and proper, may
be taken in the name of a duly authorized nominee, and the conveyance
shall be immediately recorded or registered in the office of the proper
recording officer of the county in which such real estate is located.
10. Bonds and other obligations of Savings and Loan Bank of the State
of New York.
11. Farm loan bonds, including consolidated bonds, issued by federal
land banks, federal intermediate credit bank debentures, including
consolidated debentures, issued by federal intermediate credit banks and
bonds, debentures or other obligations of banks for cooperatives,
including consolidated debentures issued by banks for cooperatives
organized under the laws of the United States.
12. Bankers' acceptances and bills of exchange which are eligible for
purchase in the open market by federal reserve banks and which have been
accepted by a bank, a trust company, a private banker or an investment
company, as those terms are defined in this chapter, or by a banking
corporation which is organized under the laws of the United States or of
any state thereof and which is a member of the federal reserve system.
Aggregate liability of any bank, trust company, private banker,
investment company or banking corporation to any savings bank for
acceptances shall not exceed twenty-five per centum of the capital and
surplus of such bank, trust company, private banker, investment company
or banking corporation, or five per centum of the aggregate amount
credited to the depositors of such savings bank, whichever amount is
less.
12-a. (a) Obligations of any corporation organized under the laws of
any state of the United States maturing within two hundred seventy days,
provided that such obligations receive the highest rating of an
independent rating service designated by the banking board.
(b) Subject to such regulations as the banking board may impose,
certificates of deposit issued by or accounts of (1) a bank, trust
company or national bank having a principal, branch or trust office in
this state, (2) a banking corporation organized under the laws of the
United States or of any state thereof whose deposits are insured by an
agency of the United States, or (3) an agency or branch located within
the United States of a foreign banking corporation with total worldwide
bank assets in excess of one billion dollars.
12-b. Advances of federal funds to designated depositaries, provided
such advances are made on the condition that they be repaid on the next
business day following the day on which the advance is made. For
purposes of this subdivision and subdivision twelve of this section, the
term "federal funds" shall mean funds which a savings bank has on
deposit at a depositary which are exchangeable for funds on deposit at a
federal reserve bank; and the term "business day" shall mean any day on
which the savings bank, the depositary and the federal reserve bank
where the funds are on deposit are all open for general business.
13. Bonds of any corporation which at the time of such investment is
incorporated under the laws of the United States or any state thereof,
or the District of Columbia, and transacting the business of supplying
electrical energy or artificial gas, or natural gas purchased from
another corporation and supplied in substitution for, or in mixture
with, artificial gas, for light, heat, power and other purposes, or
transacting any or all of such business, provided at least eighty per
centum of the gross operating revenues of any such corporation are
derived from such business, subject to the following conditions:
(a) Such corporation shall have all franchises necessary to operate in
territory in which at least seventy-five per centum of its gross income
is earned. Such corporation shall file with the superintendent of banks
and make public in each year a statement and a report giving the income
account covering the previous fiscal year and a balance sheet showing in
reasonable detail the assets and liabilities at the end of the year.
(b) Either the outstanding full paid capital stock together with
premiums thereon and the surplus of such corporation shall be not less
than two-thirds of the total debt secured by mortgage lien on any part
or all of its property, or the outstanding full paid capital stock
together with premiums thereon and surplus and unsecured debt not
maturing within five years and not in excess of fifty per centum of such
capital stock, premiums and surplus shall be equal to at least
three-fourths of the total debt secured by mortgage lien on any part or
all of its property, provided, however, that in case of a corporation
having no-par value shares, the amount of capital which such shares
represent shall be the capital as shown by the books of the corporation.
(c) Such corporation shall have been in existence for a period of not
less than eight fiscal years and at no time within such period of eight
fiscal years next preceding the date of such investment shall said
corporation have failed to pay promptly and regularly the matured
principal and interest of all its indebtedness direct, assumed or
guaranteed, but the period of life of the corporation, together with the
period of life of any predecessor corporation or corporations from which
a major portion of its property was acquired by consolidation, merger or
purchase shall be considered together in determining the required
period.
(d) For a period of five fiscal years next preceding such investment
the net earnings of such corporation shall have averaged per year not
less than two times the average annual interest charges on its total
funded debt applicable to that period, and for the last fiscal year
preceding such investment such net earnings shall have been not less
than twice the interest charges for a full year on its total funded debt
outstanding at the time of such investment, and for such period the
gross operating revenues of any such corporation shall have averaged per
year not less than two million dollars.
(e) In determining the qualifications of any bond under this
subdivision where a corporation shall have acquired its property or any
substantial part thereof within five years immediately preceding the
date of such investment by consolidation or merger, or by the purchase
of all or a substantial portion of the property of any other corporation
or corporations, the gross operating revenues, net earnings, and
interest charges of the several predecessor or constituent corporations
shall be consolidated and adjusted so as to ascertain whether the
requirements of paragraph (d) of this subdivision have been complied
with.
(f) Such bonds shall be (1) bonds secured by a first or refunding
mortgage on property owned and operated, or controlled, by the
corporation issuing or assuming them, or underlying mortgage bonds
secured by a lien on property owned and operated, or controlled, by the
corporation issuing or assuming them, provided that such underlying
mortgage bonds are to be refunded by a junior mortgage providing for
their retirement, that the bonds under such junior mortgage comply with
the requirements of this subdivision, and that such underlying mortgage
is either a closed mortgage or remains open solely for the issue of
additional bonds which are to be pledged under such junior mortgage and
provided that the aggregate principal amount of bonds secured by such
first or refunding mortgage plus the principal amount of all the
underlying outstanding bonds shall not exceed two-thirds of the net
value of the physical property owned or controlled as shown by the books
of the owning corporation, and subject to the lien of such mortgage or
mortgages securing the total mortgage debt and provided further, that if
a refunding mortgage, it must provide for the retirement on or before
the date of their maturity of all bonds secured by prior liens on the
property, or (2) bonds, other than mortgage bonds, provided, that (a)
for a period of five fiscal years next preceding such investment the net
earnings of such corporation shall have averaged per year not less than
two and one-half times the average annual interest charges on its total
funded debt applicable to that period, and for the last fiscal year
preceding such investment such net earnings shall have been not less
than two and one-half times the interest charges for a full year on its
total funded debt outstanding at the time of such investment, and (b)
the capital stock together with premiums thereon and surplus of such
corporation shall not be less than two-thirds of its total funded debt
outstanding, and (c) such bonds, if issued for a term longer than
fifteen years, shall have been issued under an indenture containing a
covenant providing for the establishment of a sinking fund for the
benefit of such bonds whereby such bonds shall be redeemed at an annual
rate of not less than two per centum of the largest principal amount of
their issue at any one time outstanding, and (d) the mortgage bonds of
such corporation, if any, shall qualify under the provisions of this
subdivision.
(g) (1) The gross operating revenues and expenses of a corporation for
the purposes of this subdivision shall be, respectively, the total
amount earned from the operation of, and the total expense of
maintaining and operating, all property owned and operated, or leased
and operated, by such corporation, as determined by a system of accounts
adopted by a federal, state or municipal public service commission,
public utility commission or other similar regulatory body. The gross
operating revenues and expenses, as defined above, of subsidiary
companies may be included, provided all the mortgage bonds and a
controlling interest in stock or stocks of such subsidiary companies are
pledged as part security for the mortgage debt of the principal company.
The net value of any property shall be its value as shown by the books
of the corporation less the amounts of any reserves for depreciation,
retirement or amortization thereof. Property shall be deemed to be
controlled by a corporation if such corporation shall own not less than
ninety per cent of the capital stock of the corporation owning such
property.
(2) The net earnings of any corporation for the purposes of this
subdivision shall be the balance obtained by deducting from its gross
operating revenues, its operating and maintenance expenses, taxes other
than federal and state income taxes, rentals and provision for renewals
and retirements of the physical assets of the corporation, and by adding
to said balance its income from securities and miscellaneous sources but
not, however, to exceed fifteen per centum of said balance. The term
funded debt shall be construed to mean all interest-bearing debt
maturing more than one year from date of issue.
(3) In the computation for the purposes of this subdivision of the
ratio of mortgage debt to net mortgaged property value there shall be
excluded from the amount of outstanding mortgage bonds the amount of any
cash deposited with the trustee of the mortgage and held in trust
pursuant to the terms of such mortgage.
(h) Not more than twenty-five per centum of the assets of any savings
bank shall be loaned on or invested in bonds of such electric and gas
corporations, and not more than two per centum of the assets of any
savings bank shall be invested in the bonds of any one such corporation,
as authorized by this subdivision.
(i) As used in this subdivision, the term "bond" includes a note or
debenture.
14. Bonds of any corporation which at the time of such investment is
incorporated under the laws of the United States or any state thereof,
or the District of Columbia, and authorized to engage, and engaging, in
the business of furnishing telephone service in the United States,
subject to the following conditions:
(a) Such corporation shall have been in existence for a period of not
less than eight fiscal years and at no time within such period of eight
fiscal years next preceding the date of such investment shall said
corporation have failed to pay promptly and regularly the matured
principal and interest of all its indebtedness direct, assumed, or
guaranteed, but the period of life of the corporation, together with the
period of life of any predecessor corporation or corporations from which
a major portion of its property was acquired by consolidation, merger or
purchase, shall be considered together in determining the required
period; and such corporation shall file with the superintendent of banks
and make public in each year a statement and a report giving the income
account covering the previous fiscal year and a balance sheet showing in
reasonable detail the assets and liabilities at the end of the year.
(b) The outstanding full paid capital stock together with premiums
thereon and the surplus of such corporation shall at the time of such
investment be equal to at least two-thirds of the aggregate of its
funded debt and the total funded debt, exclusive of any such funded debt
held by such corporation, of every telephone corporation a majority of
the capital stock of which is owned by such corporation.
(c) For a period of five fiscal years next preceding such investment
the net earnings of such corporation shall have averaged per year not
less than two and one-half times the average annual interest charges on
its total debt applicable to that period, and for the last fiscal year
preceding such investment such net earnings shall have been not less
than twice the interest charges for a full year on its total funded debt
outstanding at the time of such investment, and for such period the
gross operating revenues of any such corporation shall have averaged per
year not less than five million dollars.
(d) In determining the qualifications of any bond under this
subdivision where a corporation shall have acquired its property or any
substantial part thereof within five years immediately preceding the
date of such investment by consolidation or merger, or by the purchase
of all or a substantial portion of the property of any other corporation
or corporations, the gross operating revenues, net earnings and interest
charges of the several predecessor or constituent corporations shall be
consolidated and adjusted so as to ascertain whether the requirements of
paragraph (c) of this subdivision have been complied with.
(e) The gross operating revenues and expenses of a corporation for the
purposes of this subdivision shall be, respectively, the total amount
earned from the operation of, and the total expense of maintaining and
operating, all property owned and operated, or leased and operated, by
such corporation, as determined by a system of accounts adopted by the
federal communications commission, a public service commission, or
public utility commission, or other similar federal or state regulatory
body.
(f) The net earnings of any corporation for the purposes of this
subdivision shall be the balance obtained by deducting from its gross
operating revenues, its operating and maintenance expenses, provision
for depreciation of the physical assets of the corporation, taxes other
than federal and state income taxes, rentals and miscellaneous charges,
and by adding to said balance its income from securities and
miscellaneous sources but not, however, to exceed fifteen per centum of
said balance. The term funded debt shall be construed to mean all
interest-bearing debt maturing more than one year from date of issue.
Whenever a corporation shall own a majority of the capital stock of
one or more other telephone corporations, the consolidated statements of
all such telephone corporations shall be used in determining the amount
of net earnings available for interest charges, and the amount of
interest charges, of such corporation.
(g) Not more than twenty-five per centum of the assets of any savings
bank shall be loaned on or invested in bonds of such telephone
corporations, and not more than three per centum of the assets of any
savings bank shall be invested in the bonds of any one telephone
corporation, as authorized by this subdivision.
(h) As used in this subdivision, the term "bond" includes a note or
debenture.
15. Bonds, debentures, consolidated debentures or other obligations of
any federal home loan bank or banks, or of Tennessee Valley Authority,
and obligations of, or instruments issued by or fully guaranteed as to
principal and interest by, the Federal National Mortgage Association, or
Federal Home Loan Mortgage Corporation, and notes, bonds, debentures,
mortgages and other evidences of indebtedness of the United States
Postal Service.
16. Stock of a federal reserve bank in the amount necessary to qualify
for membership in such bank.
17. Stock of a federal home loan bank in the amount necessary to
qualify for membership in such bank and in such additional amounts as
are approved by the banking board.
19. Securities of corporations which securities are made eligible for
investment by savings banks by the banking board.
20. Subject to such regulations and restrictions as the banking board
finds to be necessary and proper, (a) (1) any bond and mortgage insured
by the federal housing commissioner, or for which a commitment to insure
has been made by the federal housing commissioner, or (2) any bond and
mortgage guaranteed pursuant to the provisions of the act of congress
entitled the "Servicemen's Readjustment Act of 1944", or (3) provided
the mortgage is a first lien, any bond and mortgage at least twenty per
centum of which is guaranteed pursuant to the provisions of such act, or
(4) a participation in any loan or a part interest in any bond and
mortgage, secured by real property, to the extent that the small
business administration is committed to pay the principal and interest
thereof; (b) any whole or part interest in any such bond and mortgage or
in any whole or part interest in any such bond and mortgage, which bond
and mortgage is held for the benefit of the holder or holders of a whole
interest or part interests therein by any entity or entities with which
a savings bank is authorized to participate pursuant to this paragraph,
but no such investment shall be made in any part interest which is
junior or subordinate to any other part interest therein; (c) any bond
secured by any such mortgage or mortgages, which mortgage is, or which
mortgages are, held for the benefit of the holder or holders of the bond
or bonds secured thereby, by a savings bank or bank or trust company;
and (d) any property improvement note issued pursuant to the provisions
of the national housing act, provided the savings bank investing in such
note shall have qualified for and received in connection therewith a
contract of insurance from the federal housing commissioner. A savings
bank may receive and hold such debentures as are issued in payment of
any such insurance. No law of this state prescribing or limiting the
interest rate upon loans or advances of credit or prescribing a penalty
for violation thereof or prescribing the nature, amount or form of
security or requiring security upon which loans or advances of credit
may be made or prescribing or limiting the period for which loans or
advances of credit may be made or limiting the amount of any class of
loans, advances of credit or purchases which may be made shall be deemed
to apply to loans, advances of credit or purchases made or to loans
acquired by purchase pursuant to this subdivision.
The provisions of subdivision six of this section, except those of
paragraph (f) thereof, shall not apply to investments made pursuant to
this subdivision by any savings bank. Paragraphs (a), (b) and (c) of
section one of chapter eight hundred ninety-seven of the laws of
nineteen hundred thirty-four as amended shall not apply to savings
banks. The term "bond", as used in this subdivision, includes a note.
The authority provided in this subdivision to invest in any bond and
mortgage guaranteed pursuant to the provisions of the act of congress
entitled the "Servicemen's Readjustment Act of 1944", shall include
authority to acquire title to real property in connection with investing
in an installment contract for the sale of real property, so guaranteed,
where the purchaser under such contract is in possession and control of
the property, and title is acquired by the savings bank solely as
security for the obligations of the purchaser.
21. (a) Subject to such regulations and restrictions as the banking
board finds to be necessary and proper:
(1) Stock and obligations, not otherwise eligible for investment by
the savings bank, of any corporation organized under any law of this
state for the purpose of acquiring, constructing, owning, maintaining,
operating, selling or conveying a housing project or projects (not
including hotels but including accommodations for retail stores, shops,
offices and other community services reasonably incident to such
projects) located within this state, provided that all the stock and
obligations of any such corporation have been or are originally issued
to one or more savings banks of this state.
(1-a). Stock and obligations, not otherwise eligible for investment by
the savings bank, of any "subsidiary" of the New York state urban
development corporation, as defined in the New York state urban
development corporation act, provided that all the stock and obligations
of any such subsidiary is or is to be owned by one or more savings banks
of this state, or by such other owners of such stock and obligations as
may be approved by the superintendent of banks.
(2) Corporate interest-bearing securities, other than those issued by
any corporation organized under the laws of a foreign country except
Canada whose securities are not registered with the United States
Securities and Exchange Commission or listed on a national securities
exchange in accordance with the Securities Exchange Act of 1934, as
amended, and interest-bearing securities of any state in the United
States or of any public authority, commission or instrumentality
organized under the laws of any state of the United States or of any
political subdivision of any such state, not otherwise eligible for
investment by the savings bank, which are not in default as to either
principal or interest when acquired, provided that no investment shall
be made pursuant to this subparagraph (2) in the securities of any
corporation if the total direct liabilities of such corporation to the
savings bank exceed, or by the making of such investment will exceed,
ten per centum of the total direct liabilities of such corporation or
one per centum of the assets of the savings bank, whichever amount is
less. The term "securities", as used in this subparagraph (2), means
such bonds, notes, debentures and other obligations for payment of money
as are negotiable, or conditional sale agreements, assignments of
conditional sale agreements and participations therein which are issued
or made by railroads for the purchase of rolling stock, and which have a
maturity of not less than five years from the date of issue or making,
or, if issued or made in a series or repayable in installments, an
average maturity of not less than five years from the date of issue or
making.
(b) No investment shall be made by a savings bank pursuant to
subparagraphs one and two of paragraph (a) of this subdivision if the
total amount invested by it pursuant to such paragraph, together with
the total amount invested by it pursuant to any provisions of any law
other than the banking law, exceeds, or by the making of such investment
will exceed, an amount equal to ten per centum of the assets of the
savings bank. An investment by a savings bank in a single subsidiary of
the New York state urban development corporation pursuant to
subparagraph one-a of paragraph a of this subdivision shall not exceed
one per centum of the assets or ten per centum of the net worth of such
savings bank, whichever is less, and the aggregate of all investments of
a savings bank in such subsidiaries and investments in securities
pursuant to subparagraph five of paragraph (a) of subdivision nine of
this section shall not exceed five per centum of the assets or fifty per
centum of the net worth of such savings bank, whichever is less. For the
purposes of this paragraph, "net worth" of a savings bank shall mean the
excess of its assets at book value, less allocated reserves, over known
liabilities.
(d) For the purposes of sections two hundred seventy-four, two hundred
eighty-five and four hundred thirty-five of this chapter, investments
authorized by this subdivision shall not be deemed investments in which
savings banks may legally invest, except that investments authorized by
subparagraph one-a of paragraph (a) of this subdivision shall be deemed
investments in which savings banks may legally invest for the purposes
of section three hundred seventy-nine of this chapter.
(e) For the purposes of section three hundred fifty-nine-f of the
general business law, investments authorized by sub-paragraph (2) of
paragraph (a) of this subdivision shall not be deemed investments in
which savings banks may legally invest.
21-a. Interest-bearing obligations payable in United States funds
which at the time of investment are rated in one of the three highest
rating grades by each rating service, designated by the banking board,
which has rated such obligations, provided that the aggregate amount
invested in the obligations of any single issuer pursuant to this
subdivision and pursuant to subparagraph (2) of paragraph (a) of
subdivision twenty-one of this section may not exceed one per centum of
the assets of the savings bank, and provided further that the aggregate
amount invested in the interest-bearing obligations of any single issuer
pursuant to this subdivision and pursuant to any provision of this
section specifically authorizing such investment, may not exceed the
percentage limitations contained in any such provision.
22. Certificates of investment in savings banks life insurance fund.
23. Certificates representing advances to the surplus fund of its life
insurance department.
24. Obligations issued or guaranteed by the international bank for
reconstruction and development.
24-a. Obligations issued or guaranteed by the inter-American
development bank.
24-b. Obligations issued or guaranteed by the Asian development bank.
24-c. Obligations issued or guaranteed by the African Development
Bank.
24-d. Obligations guaranteed by the youth facilities project guarantee
fund and participations therein.
24-e. Obligations issued or guaranteed by the International Finance
Corporation.
25. Obligations of the Dominion of Canada, or of any province or city
of the Dominion of Canada, as provided in this subdivision. (a)
Obligations of the Dominion of Canada, or those for which the faith of
the Dominion of Canada is pledged to provide for the payment of the
interest and principal, provided that the principal and interest of such
obligations are payable in United States funds.
(b) Obligations of any province of the Dominion of Canada or those for
which the faith of any such province is pledged to provide for the
payment of the interest and principal upon which there is no default and
upon which there has been no default for more than ninety days;
provided, that within ten years immediately preceding the investment
such province has not been in default for more than ninety days in the
payment of any part of principal or interest of any debt duly authorized
by the legislature of such province; and provided that the principal and
interest of such obligations are payable in United States funds; and
provided further, that if at any time the net debt, as hereinafter
defined, of any such province shall exceed twenty-five per centum of the
valuation of real property in such province for the purposes of
taxation, the obligations of such province shall, thereafter, and until
such net debt shall be reduced to twenty-five per centum of the
valuation of real property in such province for the purposes of
taxation, cease to be an authorized investment for the moneys of savings
banks. The term "net debt" as used in this paragraph shall mean the
aggregate of all direct obligations funded and unfunded of any such
province and all other obligations excluding any on which interest is
being paid out of other than the ordinary revenues of such province;
less sinking funds applicable to such obligations.
(c) Obligations of any city in Canada, provided that said city has a
population, according to the last federal census of Canada next
preceding said investment, of not less than one hundred fifty thousand
inhabitants, and has not, within twenty-five years preceding said
investment, defaulted for more than one hundred and twenty days in the
payment of any part either of principal or interest of any bond, note,
or other evidence of indebtedness, provided that the indebtedness of
such city does not exceed the limitations imposed by paragraph (c) of
subdivision five of this section if applicable; and provided further
that the principal and interest of such obligations are payable in
United States funds. No obligations of any such city shall be an
authorized investment for savings banks unless such city shall have
power to levy taxes on the taxable real property therein or to require a
levy thereon by municipalities within its area in either case for the
payment of such obligation without limitation of rate or amount. The
term "city" as used in this paragraph and in paragraph (d) of
subdivision five of this section shall include The Municipality of
Metropolitan Toronto and any other similar corporation in Canada, and
the power to require a levy by municipalities within its area shall be
deemed to be a power to levy taxes within the meaning of such last
mentioned paragraph.
(d) Not more than ten per centum of the assets of any savings banks
shall be invested in the obligations defined in this subdivision, and
not more than two per centum of such assets shall be invested in the
obligations of any province, nor more than two per centum of such assets
in the obligations of any city, as authorized by this subdivision.
26. Subject to such regulations and restrictions as the banking board
finds to be necessary and proper:
(a) Preferred stock of any corporation, created or existing under the
laws of the United States or of any state, district or territory
thereof, provided (1) the net earnings of such corporation available for
its fixed charges for a period of five fiscal years next preceding the
date of investment by such savings bank shall have averaged per year not
less than one and one-half times the sum of the following, computed as
of the date of such investment: its annual fixed charges, if any, its
annual maximum contingent interest, if any, and its annual preferred
dividend requirements; and (2) during either of the last two years of
such period such net earnings shall have been not less than one and
one-half times the sum of its fixed charges, contingent interest and
preferred dividend requirements for such year. As used in this paragraph
(a), the term "dividend requirements" shall be construed to mean
cumulative or non-cumulative dividends whether or not paid.
(b) Guaranteed stock of any corporation created or existing under the
laws of the United States or of any state, district or territory
thereof, provided (1) the net earnings of the guaranteeing corporation
available for its fixed charges for a period of five fiscal years next
preceding the date of investment by such savings bank shall have
averaged per year not less than one and one-half times its annual fixed
charges computed as of the time of such investment; and (2) during
either of the last two years of such period net earnings shall have been
not less than one and one-half times its fixed charges for such year.
(c) Common stock of any corporation created or existing under the laws
of the United States or of any state, district or territory thereof,
provided such common stock is registered on a national securities
exchange, as provided in an act of congress of the United States,
entitled the "Securities Exchange Act of 1934", approved June sixth,
nineteen hundred thirty-four, as amended.
(e) Stock or shares of any investment company, as defined by, and
which is registered under, an act of congress of the United States,
entitled the "Investment Company Act of 1940", approved August
twenty-second, nineteen hundred forty, as amended, provided such company
may invest only in such investments as are eligible for savings banks,
including, without limitation, investments made eligible for savings
banks by paragraphs (a), (b) and (c) of this subdivision but excluding
investments made eligible for savings banks by subdivisions five-a, six,
eight, nine, sixteen, seventeen, eighteen, twenty-two and twenty-three
of this section, provided that (i) investment restrictions based upon
the assets, surplus fund, net worth or other features of the condition
or operation of the savings bank shall not be applicable to such
investment company, (ii) the amount of stock of any corporation which
may be held by such investment company shall not exceed five per centum
of the number of shares of stock of such corporation outstanding at the
time of investment by such investment company, and (iii) at the time the
investment is made, the percentage of assets that a savings bank may
invest in the stock or shares of the investment company shall not exceed
the limitation, if any, applicable to a savings bank's investment in any
individual security included in the investment company's portfolio.
Nothing contained in the provisions of this chapter shall prevent an
officer, director, clerk or other employee of any bank or trust company
from being an officer, director or employee of any such investment
company.
(ee) Stock of any "bank service corporation", as such term is defined
by an act of congress of the United States, entitled the "Bank Service
Corporation Act", approved October twenty-third, nineteen hundred
sixty-two, as such act may be amended from time to time, provided such
investment shall have been authorized by resolution of the banking board
upon a three-fifths vote of all its members.
(eee) Stock or shares of any investment company, as defined by, and
which is registered under, an act of Congress of the United States,
entitled the "Investment Company Act of 1940", approved August
twenty-second, nineteen hundred forty, as amended, provided: (1) such
company is managed, advised and has its assets held at a bank or trust
company which is supervised and examined by the superintendent; (2) all
of the stock and shares, other than stock or shares required by law to
qualify directors, of such investment company are or are to be owned by
savings banks, savings and loan associations and pension trusts, funds,
plans or agreements participated in by one or more savings banks or
savings and loan associations to provide retirement benefits, for any or
all of its or their active officers and employees; and (3) such
investment company may invest only in investments as are made eligible
for savings banks by subdivisions one, two, three, four and fifteen of
this section. For the purpose of investments authorized by this
paragraph, no investment shall be made by a savings bank if the total
amount invested by it exceeds, or by the making of the investment will
exceed, an amount equal to thirty-five percent of its assets.
(f) For the purposes of this subdivision, (1) the term "net earnings
available for fixed charges" shall mean net income after deducting
operating and maintenance expenses, taxes other than federal and state
income taxes, depreciation and depletion, but excluding extraordinary
non-recurring items of income or expense appearing in the regular
financial statements of the issuing, assuming or guaranteeing
corporation; provided, however, that in the case of preferred stocks,
federal and state income taxes shall also be deducted in determining net
earnings available for fixed charges; (2) the term "fixed charges" shall
include interest on funded and unfunded debt, amortization of debt
discount and rentals for leased properties; (3) if net earnings are
determined in reliance upon consolidated earnings statements of parent
and subsidiary corporations, such net earnings shall be determined after
provision for income taxes of subsidiaries and after proper allowance
for minority stock interest, if any, and the required coverage of fixed
charges shall be computed on a basis including fixed charges and
preferred dividends of subsidiaries other than those payable by such
subsidiaries to the parent corporation or to any other of such
subsidiaries; and (4) in applying the earnings tests under this
subdivision to any issuing, assuming, or guaranteeing corporation, where
such corporation shall have acquired its property or any substantial
part thereof within the five years immediately preceding the date of
investment by consolidation or merger, or by the purchase of all or a
substantial portion of any other corporation or corporations, or shall
have acquired the assets of any unincorporated business enterprise by
purchase or otherwise, the gross operating income, net earnings and
interest charges of the several predecessor or constitutent corporations
or enterprises shall be consolidated and adjusted so as to ascertain
whether or not the applicable requirements of this subdivision have been
complied with.
(g) No investment shall be made by a savings bank pursuant to
paragraphs (a), (b) or (c) of this subdivision in the stock of any
corporation if the total investment by the savings bank in the stock of
such corporation exceeds, or by the making of such investment will
exceed (1) in amount, one per centum of the assets of the savings bank,
or (2) in number of shares, two per centum of the total issued and
outstanding shares of stock of such corporation.
(h) No investment shall be made by a savings bank pursuant to
paragraph (a), (b) or (c) of this subdivision if the total aggregate
amount so invested by it exceeds, or by the making of such investment
will exceed, an amount equal to seven and onehalf per centum of its
assets.
(i) No investment in an investment company shall be made by a savings
bank pursuant to paragraph (e) of this subdivision if the total amount
invested by it in all such investment companies pursuant to such
paragraph exceeds, or by the making of such investment will exceed, an
amount equal to seven and one-half per centum of its assets.
(k) For the purposes of sections two hundred seventy-four, two hundred
eighty-five and four hundred thirty-five of this chapter, investments
authorized by this subdivision shall not be deemed investments in which
savings banks may legally invest.
(l) For the purposes of any other statutes which restrict investments
to securities authorized for investment by savings banks, including but
not limited to section ninety-two of the membership corporation law,
section 9.27 of the mental hygiene law and sections fifteen and
twenty-five-a of the workmen's compensation law, investments authorized
by this subdivision, shall not be deemed investments in which savings
banks may legally invest.
26-a. (1) Subject to such regulations and restrictions as the banking
board finds to be necessary and proper, the stock or obligations of one
or more corporations engaged, or to be engaged, primarily in originating
and servicing mortgages on real property, provided, however, that if the
savings bank shall own less than all of the stock and obligations of any
such corporation, the remainder of the stock, excluding directors'
qualifying shares, if any, and obligations of such corporation shall be
owned by one or more savings banks or savings and loan associations
located in this state.
(2) No investment shall be made pursuant to this subdivision unless
the corporation in which such investment is to be made shall have
furnished satisfactory assurance to the superintendent that it will be
subject to examination by him to the same extent as if the business of
such corporation were being conducted by the savings bank on its own
premises. No investment shall be made by a savings bank pursuant to this
subdivision if the total amount so invested by it exceeds, or by the
making of such investment will exceed, an amount equal to one per centum
of its assets.
(4) For the purposes of any other provisions of law which restrict
investments to those in which savings banks may legally invest, other
than subdivision five of section three hundred seventy-nine of this
chapter, investments authorized by this subdivision shall not be deemed
investments in which savings banks may legally invest.
27. For the purposes of this section the term "state", when used
generally to include every state of the United States, includes also the
commonwealth of Puerto Rico, and the term "city", when used generally to
include cities in every state of the United States, includes also any
municipality of the commonwealth of Puerto Rico.
28. Bonds, notes or evidences of indebtedness issued by a corporation
organized for the purpose of undertaking, constructing, owning,
maintaining, operating, selling or conveying a slum clearance and
redevelopment project, located within this state, pursuant to title one
of an act of congress of the United States approved July fifteenth,
nineteen hundred forty-nine, entitled the "Housing Act of 1949," or
organized pursuant to articles five and six of the private housing
finance law, and secured by a first mortgage upon all of the real
property owned by the corporation. A mortgage loan made under this
subdivision may equal but shall in no event exceed ninety per centum of
the cost as estimated prior to the completion of the project, or ninety
per centum of the total actual final cost, if that shall be greater than
the estimated cost, but in no event, shall such mortgage loan exceed
ninety per centum of the appraised value of the completed project
determined pursuant to subdivision six of this section. The estimated
cost and the total actual final cost shall be certified as to
reasonableness and correctness by an independent engineering
organization and shall include the cost to the corporation of the lands
owned by the corporation, the cost of demolition, the cost of
constructing the improvements, including planning, designing,
engineering and landscaping, the cost of relocation of tenants, interest
and other carrying charges during the period of acquisition and of
construction, all other costs necessarily incurred and properly
attributable to undertaking, constructing and completing the project,
and an allowance for working capital which shall not exceed an amount
equal to three per centum of the estimated cost or of the total actual
final cost of the project if that shall be greater than the estimated
cost. A mortgage loan made under this subdivision may be participated in
by one or more savings banks. An agreement setting forth the manner in
which the participating banks shall administer the mortgage and acquire
real estate, if any, shall be executed on behalf of each bank by two
persons appointed by the board of trustees of such bank. Investments
made by any savings bank in mortgage loans pursuant to this subdivision
and pursuant to paragraph (h) of subdivision six of this section shall
not, in the aggregate, exceed ten per centum of the assets or an amount
equal to the surplus fund and undivided profits and surplus reserve of
such savings bank, whichever is less, and shall be included in the
computation of permissive investment in mortgage loans pursuant to
paragraph (d) of subdivision six of this section. Investments in such
mortgage loans shall be subject to such regulations and restrictions as
the banking board finds to be necessary and proper.
28-a. Such bonds or other evidences of indebtedness issued or
guaranteed by the State of Israel as are approved by the comptroller of
the currency for investment by national banks; provided, however, that
the principal and interest payable thereon shall be payable in United
States dollars; and provided that such investments may not exceed in the
aggregate five percent of the bank's capital deposits, undivided
profits, surplus and reserves.
28-b. Such acquisitions and leases of personal property as are
authorized to be made by commercial banks by subdivision twelve of
section ninety-six of this chapter, subject to those limitations
applicable to such investments in the case of banks or trust companies.
29. Subject to such restrictions as the banking board may prescribe,
stock or other equity interest in one or more small business investment
companies, as authorized pursuant to the provisions of an act of
congress entitled "Small Business Investment Act of 1958," as amended,
or in any entity established to invest solely in such small business
investment companies, except that in no event shall the total amount of
such investments exceed: (a) for a stock form savings bank five percent
of its capital stock, surplus fund and undivided profits; or (b) for a
non-stock savings bank five percent of its net worth.
30. Alternative investment authority of savings banks to invest in
certain securities. Notwithstanding the limitations contained in
subdivision one, two, three, four, five, seven, seven-a, ten, eleven,
thirteen, fourteen, fifteen, nineteen, twenty-one-a, twenty-four,
twenty-four-a, twenty-four-b, twenty-four-c, twenty-five, twenty-six,
twenty-seven, twenty-eight-a, or subparagraph two of paragraph (a) or
paragraph (b) of subdivision twenty-one of this section, and subject to
such limitations as the banking board shall adopt, a savings bank shall
be authorized to invest in such debt securities as are not in default as
to either principal or interest when acquired, and in such equity
securities, in both cases as would be acquired by prudent persons of
discretion and intelligence in such matters who are seeking a reasonable
income and preservation of their capital.
Without limiting its authority hereunder, the banking board shall
adopt regulations to require that any savings bank which shall elect to
make investments pursuant to this subdivision shall have first estab-
lished an investment committee of its board of trustees to supervise and
monitor the investment activities exercisable pursuant to the authority
granted by this subdivision, the majority of the members of which shall
be trustees who are not also officers or employees of such savings bank.
The banking board shall, in addition, adopt regulations to require
that no savings bank, in making investments pursuant to this subdivision
shall (either before or after the making of such investments) control,
as the banking board shall define the term "control", the issuer of any
such securities acquired by such savings bank.
For purposes of any other law establishing or limiting the investments
of any person or entity to those investments which are permitted for
savings banks, the investments authorized by this subdivision shall not,
by virtue of this subdivision alone, be deemed investments in which a
savings bank may legally invest.
31. Subject to such regulations as the banking board may promulgate,
investments which do not qualify under any of the preceding subdivisions
of this section, provided that:
(a) No investment shall be made by a savings bank pursuant to this
subdivision if the amount of such investment exceeds one per centum of
the assets of the savings bank, or if the aggregate amount of all such
investments by a savings bank exceeds, or by the making of such
investment will exceed, five per centum of its assets;
(b) No investment shall be made by a savings bank in the equity
securities of any one issuer pursuant to this subdivision if the
aggregate amount invested by it pursuant to this subdivision together
with the amount invested in the equity securities of such issuer
pursuant to any other provision of law exceeds, or by the making of such
investment will exceed, one per centum of the assets of the savings
bank, and no investment shall be made by a savings bank in a loan to, or
in the debt securities of, any one issuer pursuant to this subdivision,
if the aggregate amount invested by it pursuant to this subdivision
together with the amount invested in a loan to, or in the debt
securities of, such issuer pursuant to any other provision of law
exceeds, or by the making of such investment will exceed, one per centum
of the assets of the savings bank;
(c) This subdivision shall not be deemed to alter any provision of
this chapter limiting the aggregate amount which may be invested in any
class of loan or investment;
(e) For the purposes of this subdivision, "net worth" of a savings
bank shall mean the excess of its assets at book value, less allocated
reserves, over known liabilities; and
(f) For the purposes of sections two hundred seventy-four, two hundred
eighty-five and four hundred thirty-five of this chapter, section three
hundred fifty-nine-f of the general business law, and any other
provisions of law which restrict investments to those in which savings
banks may legally invest, other than subdivision six of section three
hundred seventy-nine of this chapter, investments authorized by this
subdivision shall not be deemed investments in which savings banks may
legally invest.
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