Banking Interpretations

NYSBL 97(4-b)

December 06, 2004

To: Senior Examiner - Darrel Weisman

From: Harry C. Goberdhan -Associate Counsel

Subject: [ ] ( "Bank") - Application to increase investments in equities pursuant to Section 97 4-b of the Banking Law

The Bank correctly states in its letter of November 2, 2004 to Superintendent Taylor, that in accordance with recent amendments to Section 97 (4-b), it is permitted with the Superintendent's specific approval, to increase its aggregate investment in common and preferred stock to a maximum of "five percent of the assets or one hundred percent of the capital, surplus and undivided profits of the bank or trust company, whichever is less." It should be noted that the additional conditions regarding investments under Section 97 (4-b), such as the requirement that securities be registered on a national securities exchange, and the limitations on exposure to a single issuer, still apply.

It is up to the discretion of the Superintendent whether, given the condition of the Bank and other relevant supervisory factors, the request should be approved in whole, in part or conditionally. [ ]


[1] OCC Interpretive Letter No. 494 (December 20, 1989).  See also, OCC Interpretive Letter No. 507) (May 5, 1990).