Banking Interpretations

Banking Law §105 and 113

November 7, 2005

[ ]

Re: Home Office Protection

Dear [ ]:

Your October 3, 2005 letter to the New York State Banking Department (“the Department”) has been referred to me for response. In your letter, you state that your client, [ ] National Bank [ ], currently maintains a branch at [ ] in the Village of [ ], New York, which was opened in 1997. [ ] would like to relocate this branch from [ ] to [ ] in the same Village of [ ]. You also explain that [ ] State Bank [ ] was chartered in 1998 and opened its principal office at [ ] in the Village. [ ] has enjoyed the benefit of home office protection in the Village. In your letter, you ask that we confirm that the relocation of the branch at [ ] to [ ] within the village is permissible in light of Section 105(1)(a) of the Banking Law. Your analysis is correct and it has been the position of the Banking Department that the relocation of the branch within a home office protected area is not violative of the restrictions in Banking Law Section 105(1)(a).

Banking Law Section 105(1)(a) contains the restriction that a bank may open and occupy (emphasis added) a branch anywhere in the state other than in a home office protected area. The restriction in this Section is directed at the establishment of a new branch, as opposed to, for example, the acquisition of an existing branch through a legitimate transaction, or, as in your case, the relocation of an existing branch. Since your branch at [ ] is already opened and was opened prior to the establishment of the [ ] principal office within the village, the Department’s position is that this is a relocation, governed by Banking Law Section 113, and the restriction does not apply to your situation.

I trust that this has been responsive to your inquiry.

Very truly yours,

Megan Prendergast
Associate Attorney