Banking Interpretations

NYSBL 222 & 223

New York State Banking Department



Economist Kupfer - Research & Technical Assistance Division




Sharon Cherry, Associate Attorney - Legal Division




January 8, 2007


Subject: [---] - Proposed interstate acquisition transaction


Does the proposed acquisition by [---], [---], Connecticut, of certain assets and assumption of certain liabilities of New "York Community Bank’s ("NYCB") branch office located at One Pathmark, Plaza, Mount Vernon, New York, comply with New York's Interstate Branching Act ("NYIBA") (New York Banking Law §§ 222 et. seq.)?
In addition, [---] has submitted an application for permission to change the location of the branch to be acquired from Mount Vernon (Westchester County) to Dover Plains (Dutchess County).

As noted below, in order for the Legal Division to make a determination regarding the proposed acquisition, additional information is needed regarding the deposits to be acquired.

With regard to the proposed lease for the Dover Plains branch, you should request to see a copy in order to confirm that it does not contain a clause that violates Section 674-a of the Banking Law. We note that the Relocation Application to the Department (Exhibit E) dated October 20, 2006 states that the lease will not contain a clause prohibiting the landlord from renting space to another banking institution in violation of 674-a of the Banking Law.

With regard to the posting in the Mount Vernon branch of a branch closing notice, such notice must be posted for at least 90 days.


The branch being purchased is located within a Pathmark Supermarket. [---] will be acquiring approximately $500,000 in certificates of deposit, as well as certain fixed assets of the branch, and will assume the remainder of the lease for the branch.  Immediately prior to the consummation of the acquisition transaction, other deposits currently associated with the Mount Vernon branch will be transferred to another proximate branch office of NYCB.

Upon consummation of the proposed acquisition, or as soon as practicable thereafter, [---] plans to close the Mount Vernon branch and relocate the acquired deposits to a newly established branch in Dover Plains, New York.

As required by Section 225 of the Banking Law, [---]a Connecticut chartered banking institution, has provided the Department with copies of its Interagency Bank Merger Act Application filed with the Federal Deposit Insurance Corp., Application to Establish a Branch in Mount Vernon, New York and Community Reinvestment Plan submitted to the Connecticut Department of Banking, and an Application to Establish a Branch in Dover Plains, New York and Community Reinvestment Plan and Notice of Branch Closing in Mount Vernon, New York submitted to the Connecticut Department of Banking.


Section 223 of the Banking Law permits entry by an out-of-state bank into New York by means of an "acquisition transaction" which is defined in § 222(7) of the NYIBA as "any merger, consolidation or purchase of assets and assumption of liabilities of all or part of a banking institution." We note in this case that [---], the acquiring institution in this transaction, meets the definition of "out-of-state-bank" under Section 222.

We have reviewed the terms of the branch purchase (Purchase and Assumption Agreement dated as of [---] by and between New York Community Bank and [---] which includes among other things, [---]'s assumption of deposits consisting of certificates of deposit in the amount of $500,000 (Schedule 2.3(a)).

The Legal Division is of the opinion that, especially in light of the fact that [---] is not assuming all of the deposit liabilities of the Mount Vernon branch, [---] must provide additional information regarding the certificates of deposit to be assumed. We need to determine whether the certificates of deposits being purchased belong to existing customers of NYCB from the Mount Vernon area, or surrounding areas, where the branch is located. As you suggested, the Department should be provided with a listing of each CD including the dollar amount, the date opened, and the maturity date. In addition, we should be provided with the zip codes of the customers owning the certificates of deposit.

With regard to notice to customers, a branch closing pursuant to Section 28-c of the Banking Law would require the bank to provide account holders with at least 90 days written notice. Supervisory Procedure G112 requires the posting of a notice in the branch which is planned to be closed for at least 90 days. You stated that the Department is treating this as branch relocation. Therefore, as you noted, since the new branch will be outside the immediate neighborhood of the present office, customers are entitled to at least 90 days prior written notice and posting of a notice must be placed in the branch for at least 90 days.