BNK-48-08-00004-P Registration of Domestic Representative Offices

11/26/08 N.Y. St. Reg. BNK-48-08-00004-P

NEW YORK STATE REGISTER

VOLUME XXX, ISSUE 48

November 26, 2008

RULE MAKING ACTIVITIES

BANKING DEPARTMENT

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. BNK-48-08-00004-P

Registration of Domestic Representative Offices

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

This is a consensus rule making to amend Supervisory Policy G 8 of Title 3 NYCRR.

Statutory authority:

Banking Law, sections 14(1), 132, 258

Subject:

Registration of domestic representative offices.

Purpose:

Reduce regulatory burden for the establishment of representative offices by domestic banking institutions.

Text of proposed rule:

§ 8.1 General.

Any banking institution seeking to establish or maintain a representative office [in this State] shall submit the information called for by section 8.3 of this Supervisory Policy to the Superintendent of Banks, at the New York City Office of the Banking Department at the address set forth in section 1.1 of Supervisory Policy G-1.

§ 8.2 Definitions.

For purposes of this Supervisory Policy:

(a) Banking institution means any bank, trust company, savings bank, and savings and loan association [, and industrial bank,] chartered under the laws of New York State, [the United States,] Puerto Rico or any other state or territory of the United States.

(b) Representative office means any office located in this State of a banking institution that engages in representational functions (including but not limited to soliciting business, marketing services or acting as liaison with customers) on behalf of the banking institution, but shall not include a branch office of a banking institution or any office that engages solely in administrative or supervisory functions. A representative office shall also include an office of a New York chartered institution located outside this State that engages in representational functions.

§ 8.3 Information required.

(a) The information to be supplied to the superintendent pursuant to section 8.1 of this Supervisory Policy shall be in letter form, shall be submitted prior to the establishment of the office, and shall include:

(1) address of the representative office;

(2) for institutions headquartered outside this State, address of the head office of the banking institution;

[(3) name of the responsible bank officer located in New York State;]

[(4) number of persons employed in the office;]

([5]3) complete description of the activities of the representative office;

([6]4) for institutions headquartered outside this State, opinion of counsel that:

(i) the activities of the representative office are permissible under section 8.4 of this Supervisory Policy; and

(ii) the banking institution has obtained all regulatory approvals required to establish and maintain such representative office.

(b) Any material changes in the above shall be promptly reported to the superintendent.

§ 8.4 Permissible activities.

(a) The activities that may be conducted by a representative office of a banking institution in this State on behalf of such banking institution shall be limited to the following:

(1) approval of loans;

(2) execution of loan documents;

(3) solicitation of loans and, in connection therewith, assembly of credit information, making of property inspections and appraisals, securing of title information, preparation of applications for loans (including making recommendations with respect to action thereon);

(4) solicitation of purchasers of loans from the banking institution;

(5) solicitation of parties to contract with the banking institution for the servicing of its loans;

(6) solicitation of other banking business on behalf of the banking institution;

(7) conduct of research;

(8) acting as liaison with customers of the banking institution; and

(9) other similar activities.

(b) A representative office of a banking institution may not disburse funds, transmit funds, accept loan repayments, or accept or contract for deposits or deposit-type liabilities on behalf of the banking institution.

§ 8.5 Designation as representative office.

Any representative office subject to registration pursuant to this Supervisory Policy shall designate itself as a representative office on any office sign at its office location, telephone listing, print advertisement and on its stationery. It shall also prominently display a notice at its office location that it is not a branch office of a bank and does not engage in general banking transactions at such office.

Text of proposed rule and any required statements and analyses may be obtained from:

Sam L. Abram, Secretary of the Banking Board, Banking Department, One State Street, New York, NY 10004-1511, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

This action was not under consideration at the time this agency's regulatory agenda was submitted.

Consensus Rule Making Determination

No one is likely to object to the proposed amendments, which make technical changes or are otherwise non-controversial.

Supervisory Policy G 8 describes the process to be followed by a domestic banking institution seeking to formally register with the Department its establishment of a representative office in New York.

The proposed amendments to Supervisory Policy G 8:

(1) Eliminate the requirement that federally chartered banks, which are under the purview of the federal Office of the Comptroller of the Currency with respect to the establishment of branch and other offices, comply with G 8;

(2) Replace the informal notification process followed presently by New York banks establishing out-of-state representative offices by extending the scope of the regulation to expressly include such offices, thus enabling the Department, instead of the bank, to deal with the regulatory process in the host state(s);

(3) Eliminate the opinion of counsel requirement in connection with out-of-state representative office registrations by New York banks;

(4) Make it clear that the information required by the regulation must be submitted prior to the establishment of the office; and

(5) Eliminate the requirement that the application name the responsible bank officer and indicate the number of persons to be employed at the proposed office.

Job Impact Statement

The purpose of the proposed amendments to Supervisory Policy G 8 is to eliminate information no longer deemed necessary in connection with the registration of domestic representative offices and to clarify from which institutions and under what circumstances a formal registration should be required.

Accordingly, a job impact statement is not submitted because it is apparent from the nature and purpose of the rule that it will not have a substantial adverse impact on jobs and employment opportunities.