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Notice of Intention to Establish or Share an Electronic Facility

UNOFFICIAL COPY OF GENERAL REGULATIONS OF THE BANKING BOARD PART 73 ELECTRONIC FACILITIES
(Statutory authority: Banking Law, §§ 14[1], 105-a, 240-a, 396-a)

§ 73.1  General statement.

A banking organization may conduct a banking business at electronic facilities that are either established (i.e., owned or rented by a single organization) or shared, on a transaction fee or similar basis, by such banking organization, subject to the provisions of this Part.  Such facilities are not branches but are subject to the limitations contained in sections 28-b and 105(1)(ii), 240(2)(b) or 396(2)(b) of the Banking Law, as the case may be, as if they were branches. In addition to the requirements of this Part, automated teller machines must comply with the security measures and reporting requirements set forth in Article II-AA of the New York Banking Law and Part 301 of the Superintendent's Regulations.

§ 73.2  Definitions.

For the purposes of this Part:

(a)  Electronic facilities shall mean automated teller machines, point-of-sale terminals, and similar facilities at which the banking business may be conducted.  Such term shall not include home banking terminals, telexes and similar equipment.

(b)  Automated teller machines shall mean electronic devices, either on-line or off-line, which permit deposits, withdrawals, transfers of funds from one account to another, loan repayments or disbursements of funds pursuant to prearranged lines of credit.  Except for facilities staffed for the purposes cited in section 73.7 of this Part, they shall not include staffed facilities.

(c)  Point-of-sale terminals shall mean electronic devices, either on-line or off-line, whose function is to transfer funds or record transfers of funds in connection  with the sale of goods or services but which may also be used to accept deposits and loan repayments, make cash withdrawals, and obtain funds pursuant to prearranged lines of credit.  These terminals may be located only at bona fide checkout counters, cashier stations, customer convenience counters or other counters at which store functions are performed, or sales desks of other establishments, and may not be staffed by bank employees, with the exceptions noted in section 73.7 of this Part.

(d)  Similar facilities shall mean electronic devices, either on-line or off-line, which may be used for making deposits, withdrawals, transfers of funds, loan repayments or disbursements of funds pursuant to prearranged lines of credit.  Except as otherwise provided in section 73.7 of this Part, such facilities, if part of a store's bona fide customer convenience counter or other counter at which store functions are performed, or sales desks of other establishments, may be staffed but only by nonbank employees; if located anywhere else, they may not be staffed.

(e)  Banking organizations shall mean banks, trust companies, savings banks, savings and loan associations, and out-of-state state banks with one or more branches in New York.

§ 73.3  Establishment or sharing of electronic facilities.

Any banking organization that has given the Superintendent the notice described in section 73.6 of this Part, may establish or share an electronic facility upon receipt of written notification from the Superintendent that he or she does not object to the establishment or sharing of such facility.  The Superintendent shall not object to the establishment or sharing of an electronic facility unless the banking organization submitting the notice fails to meet the requirements of Banking Law, section 28-b and Part 76 of this Title or the establishment or sharing of such facility is prohibited by the home office protection provisions of Banking Law, section 105(1)(ii), 240(2)(b) or 396(2)(b).

§ 73.4  Sharing facilities.

To the extent consistent with law, banking organizations may share electronic facilities they have established with other banking organizations, banking institutions not subject to the provisions of this Part, and nonbanking entities, and may share electronic facilities established by other banking organizations, banking institutions not subject to this Part or nonbanking entities.

§ 73.5  Facilities not requiring notification.

The following activities do not require notification to the Superintendent under this Part:

(a)  the establishment by a banking organization of an electronic facility on the premises of one of its authorized, staffed banking offices or attached to the outer wall of such an office;

(b)  the establishment or sharing of an electronic facility to the extent it is used solely to effect transactions among banking institutions, clearinghouses, clearing corporations, governmental institutions or governmental agencies, business firms or similar organizations, or between two or more of these types of organizations; and

(c)  the sharing of an electronic facility when the customers of the sharing institution may use the facility solely to obtain information about account balances, make cash withdrawals (including those that require transfers of funds among a customer's accounts), and obtain cash advances against credit lines.

§ 73.6  Contents of notice.

The notice to the Superintendent for the establishment or sharing of an electronic facility shall include the following:

(a)  the complete address of the proposed facility, including the name of the city, village, hamlet, or town in which the site is physically located (rather that that which is used in the mailing address, if different):

(b)  identification of the type of facility and a statement as to whether the facility will have deposit-taking capability;

(c)  a statement as to whether the facility will be shared initially;

(d)  details of any transaction involving the establishment or initial sharing of the facility with an insider as defined in Part 11 of this Title or with any related interest of such a person; and

(e)  Any additional information which the Department may require on a case-by-case basis.

§ 73.7  Restrictions on electronic facilities.

(a)  No electronic facility may be staffed by employees of a banking organization.  However, employees of a banking organization may be used to demonstrate the equipment, to train nonbank employees for a reasonable period of time, to provide information, to repair and service the electronic equipment, or as security guards.

(b)  All banking organizations shall take the necessary steps to protect their interests in the activities of their electronic facilities, including the acquisition of appropriate fidelity and other insurance coverage, and to safeguard the identity of bank customers in the use of such facilities.

(c)  No new accounts may be opened at electronic facilities, and no cash, check, money order or draft of any kind may be taken with application forms if such forms are filled out and left at the electronic facility.

 

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