Banking Interpretations

NYSBL 105(1) and 240

July 26, 2005

David C. Mancuso
President and CEO
Lake Shore Savings
128 East 4th Street
P.O. Box 512
Dunkirk , NY 14048

Re: Greater Buffalo Savings Bank

Dear Mr. Mancuso:

This is in response to your letter of June 7, 2005 in which you object to the application filed By Greater Buffalo Savings Bank for permission to open and occupy a branch office at 1170 Central Avenue in Dunkirk, New York . You state that Dunkirk has been the principal office and headquarters for Lake Shore Savings and Loan Association since it was chartered in 1891. Specifically, you believe that allowing Greater Buffalo Savings Bank to open a branch in this area would be contrary to Sections 10, 29 and 105 of the New York State Banking Law.

Since Greater Buffalo Savings Bank is a savings bank, the opening of branch offices is subject to Section 240 (not Section 105) of the Banking Law and the relevant subsection provides as follows:

2(c) Except for the city or village in which its principal office is located, no branch office may be opened and occupied pursuant to paragraph (a) of this subdivision in any city or village with a population of fifty thousand or less and in which is located the principal office of a bank, trust company or national banking association, other than a bank holding company, if such bank holding company is a banking institution, or a banking subsidiary of a bank holding company, as such terms "bank holding company", "banking institution" and "banking subsidiary" are defined in article three-A of this chapter (emphasis added).

As indicated by the plain language of the statute, home office protection is only afforded to the principal offices of banks, trust companies and national banking associations. As the law is currently written, there is no protection afforded to savings and loan associations, such as Lake Shore Savings, or to savings banks. A review of the legislative history regarding home office protection found that as of January 1, 1976 home office protection for savings banks and savings and loan associations was eliminated entirely. See New York State Legislative Annual 1971, Ch. 380 (copy attached).

In accordance with Section 29 of the Banking Law, if the Superintendent finds that the opening of a branch office is consistent with the declaration of policy set forth in Section 10 of the Banking Law (Declaration of policy) and that the applicant is in compliance with Section 28-b of the Banking Law (Credit needs of local communities), she may authorize the opening of such branch office. The Superintendent has no evidence that the opening of the branch would violate Section 10 of the Banking Law. Accordingly, Greater Buffalo Savings Bank's branch office application cannot be denied based on the objections you have raised.


Sara Kelsey
Deputy Superintendent and Counsel