Banking Interpretations

June 15, 2001


TO:  Senior Examiner Nebenzahl - Community Financial Services Division

FROM:  Sharon Cherry, Associate Attorney - Legal Division 

RE:  Hudson River Bank & Trust Co. - Consolidation of two branch offices located within the city of Albany


Due to Hudson River Bank & Trust Co.'s (the "Bank") acquisition of Cohoes Savings Bank there are currently two branches located within the city of Albany approximately one-tenth of a mile apart.  The Bank would like to close the branch located at 30 South Pearl Street and consolidate it into the branch located at 41 State Street.  You have asked whether the proposed action is to be considered a branch closing pursuant to section 28-c of the Banking Law which would require the Bank to provide account holders with at least 90 days notice.

The Bank's May 11, 2001 letter and attachments have been reviewed.  The Bank states that the State Street branch provides the same services as the branch to be closed and there are no natural impediments preventing customers of the 30 South Pearl location from using the State Street branch.  The Bank indicated that the State Street branch is adequately staffed to handle the additional accounts from the Pearl Street branch.   In addition, the Bank would like to sublease the Pearl Street branch to Mohawk Community Bank.

Previously, the Legal Division concluded that under certain circumstances, the consolidation of two bank branches in connection with a merger, involves a relocation for purposes of Banking Law section 28 and Supervisory Procedure G105 rather than a branch closing under section 28-c of the Banking Law. (See Memorandum dated February 5, 1997 to Deputy Superintendent Cooper, Subject: Marine Midland- Branch Consolidations)

In this case the Bank's two branches are in the same neighborhood and are only approximately one tenth of a mile apart.  In addition the nature of the business and the customers served by the branch to be closed will be substantially unaffected by the change since the State Street branch will provide customers with the same services.  Accordingly, the notice requirement of section 28-c which is intended to afford customers with enough time to locate a new bank and provide them and the public with an opportunity to contest a closing that could divest a community of banking services, is not applicable in this case.

Accordingly, your Division has the discretion to treat this matter as a relocation pursuant to section 28 of the Banking Law and Supervisory Procedure G105.