N.Y. Banking Law 143-B – Acquisition by companies of control of banking institutions
§ 143-b. Acquisition by companies of control of banking institutions. 1. It shall be unlawful except with the prior approval of the superintendent for any company to acquire control of any banking institution, directly or indirectly, provided, however, that the provisions of this section shall not apply to a company which has submitted to the superintendent a plan of acquisition pursuant to section one hundred forty-three-a of this article for an acquisition not involving a change of control of the banking institution. As used in this section, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a banking institution, whether through the ownership of voting stock of such banking institution, the ownership of voting stock of any company which possesses such power or otherwise. Control shall be presumed to exist if any company, directly or indirectly, owns, controls or holds with the power to vote ten per centum or more of the voting stock of any banking institution or of any company which owns, controls or holds with power to vote ten per centum or more of the voting stock of such banking institution, but no person shall be deemed to control a banking institution solely by reason of his or her being an officer or director of such banking institution or company. The superintendent may in the superintendent's discretion, upon the application of a banking institution or any company which, directly or indirectly, owns, controls or holds with power to vote or seeks to own, control or hold with power to vote any voting stock of such banking institution, determine whether or not the ownership, control or holding of such voting stock would constitute control of such banking institution for purposes of this section.
Terms Used In N.Y. Banking Law 143-B
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Bank holding company: when used in this article, means any company which (a) directly or indirectly, or through a subsidiary or subsidiaries, owns, controls, or holds with power to vote (i) ten per centum or more of the voting stock of a company which is or becomes a bank holding company by virtue of this article, or (ii) ten per centum or more of the voting stock of a banking institution, or (b) controls in any manner the election of a majority of the directors of (i) a banking institution, or (ii) a company which is or becomes a bank holding company by virtue of this article, or (c) is a company, for the benefit of whose stockholders or members ten per centum or more of the voting stock of a banking institution or of a company which is or becomes a bank holding company by virtue of this article is held, directly or indirectly, by a trustee or trustees, or (d) through a combination of (i) ownership, control or holding, directly or indirectly, of voting stock and (ii) voting stock and held, directly or indirectly, by a trustee or trustees for the benefit of the members or stockholders of such company, if such voting stock is voting stock of one or more banking institutions or of one of more companies which are or become bank holding companies by virtue of this article, as the case may be, is a company which would be a bank holding company if the aggregate of such voting stock were either entirely owned, controlled or held, directly or indirectly, by such company or entirely held, directly or indirectly, by a trustee or trustees for the benefit of the members or stockholders of such company. See N.Y. Banking Law 141
- Banking institution: when used in this article, means a bank, a trust company, a stock-form savings bank or a stock-form savings and loan association. See N.Y. Banking Law 141
- Company: when used in this article, means any corporation, partnership, trust, unincorporated association, joint stock association or similar organization organized under the laws of the state of New York, or if not so organized, doing business in the state of New York, or any individual residing or doing business in the state of New York, or any combination of individuals which combination is residing or is doing business in the state of New York, any combination of the foregoing which combination is residing or is doing business in the state of New York, or any such individual and any of the foregoing acting in concert, but shall not include (a) any corporation the majority of the stock of which is owned by the United States or by any state unless the superintendent determines that it would be in the public interest to deem such a corporation to constitute a company, or (b) any corporation or community chest, fund, or foundation, organized and operated exclusively for religious, charitable, or educational purposes, no part of the net earnings of which inures to the benefit of any private stockholder or individual, and no substantial part of the activities of which is the carrying on of propaganda, or otherwise attempting to influence legislation unless the superintendent determines that it would be in the public interest to deem such a corporation, community chest, fund, or foundation to constitute a company, or (c) any corporation or partnership owning or controlling stock acquired in connection with an underwriting of securities and which is held only for such period of time as will permit the sale thereof upon a reasonable basis. See N.Y. Banking Law 141
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Executor: A male person named in a will to carry out the decedent
- Fiduciary: A trustee, executor, or administrator.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- Subsidiary: when used in this article, means (a) any company ten per centum or more of whose voting stock is directly or indirectly, or through a subsidiary or subsidiaries, owned, controlled, or held with power to vote, by a bank holding company; or (b) any company the election of a majority of whose directors is controlled in any manner by a bank holding company; or (c) any company ten per centum or more of whose voting stock is directly or indirectly owned, controlled, or held with power to vote, by a trustee or trustees for the benefit of the stockholders or members of a bank holding company; or (d) any company at least ten per centum of the voting stock of which is directly or indirectly, or through a subsidiary or subsidiaries, owned, controlled or held with power to vote by a combination of a bank holding company and by a trustee or trustees for the benefit of the stockholders or members of such bank holding company. See N.Y. Banking Law 141
- Trustee: A person or institution holding and administering property in trust.
2. A company desiring to acquire control of a banking institution may file application therefor, in writing, with the superintendent and pay an investigation fee as prescribed pursuant to section eighteen-a of this chapter to the superintendent. The application shall contain such information as the superintendent, by rule or regulation, may prescribe as necessary or appropriate for the purpose of making the determination required by subdivision three of this section.
3. Upon receipt of such application, the superintendent shall post notice of the receipt thereof upon the bulletin board of the department of financial services. The superintendent shall by order grant or deny the application and shall state the reasons for such grant or denial. An order shall be issued within one hundred twenty days after the date of the submission of the application to the superintendent and a copy thereof shall be posted upon the bulletin board of the department of financial services. In determining whether or not to approve any such application, the superintendent shall take into consideration (i) the declaration of policy contained in section ten of the chapter, (ii) whether the effect of such action shall be consistent with adequate or sound banking and the preservation thereof, or result in a consolidation of assets beyond limits consistent with effective competition, (iii) whether such acquisition of control may result in such a lessening of competition as to be injurious to the interest of the public or tend toward monopoly, and (iv) primarily, the public interest and the needs and convenience thereof.
4. A company does not control a banking institution by virtue of its ownership or control of: (a) stock acquired by a company in good faith in a fiduciary capacity, except where such stock is held for the benefit of stockholders or members of such company; (b) voting rights of stock acquired in the course of a proxy solicitation by a company formed for the sole purpose of participating in proxy solicitations by virtue of its control of voting rights of stock acquired in the course of such solicitation; (c) stock acquired by a company in connection with its underwriting of securities if such shares are held only for such period of time as will permit the sale thereof on a reasonable basis; (d) stock acquired by a company in settlement or reduction of a loan, or advance of credit, or in exchange for an investment previously made in good faith and in the ordinary course of business, provided that any stock so acquired shall be disposed of within a period of two years from the date upon which it was acquired unless the superintendent shall, in writing, authorize such banking institution to hold such stock for a longer period; or (e) stock dividends, stock splits, or additional stock acquired by a bank holding company, or by any subsidiary thereof, in exercise of its preemptive right as a stockholder.
5. For a period of six months from the date of qualification thereof and for such additional period of time as the superintendent may prescribe in writing, the provisions of subdivisions one, two and three of this section shall not apply to a transfer of control by operation of law to the legal representative, as hereinafter defined, of a company which has control of a banking institution. Thereafter, such legal representative shall comply with the provisions of subdivisions one and two of this section. The provisions of subdivision three of this section shall be applicable to an application made under this section by a legal representative.
The term "legal representative," for the purposes of this section, shall mean one duly appointed by a court of competent jurisdiction to act as executor, administrator, trustee, committee, conservator or receiver, including one who succeeds a legal representative and one acting in an ancillary capacity thereto in accordance with the provisions of such court appointment.
If any provision of this section, or the application of such provision to any individual, company, corporation or circumstance, shall be held invalid, the remainder of this section, and the application thereof to anyone other than one to which it is held invalid, shall not be affected thereby.