N.Y. Comp. Codes R. & Regs. tit. 3 § 321.2

Current through Register Vol. 46, No. 49, December 4, 2024

Section 321.2 - General provisions

(a) Except as provided in subdivision (b) of this section, each of the following shall be considered to be a loan to, extension of credit to or indebtedness of an executive officer or director of a bank under the provisions of Banking Law, sections 103(8), 130(5) and 130(6):

(1) any transaction as a result of which an executive officer or director of a bank becomes obligated, or renews his obligation, to such bank upon any note, draft, bill of exchange or other indebtedness, as maker, drawer, endorser, guarantor, surety or otherwise;

(2) any transaction as a result of which a corporation, in which such executive officer or director, or any combination of such persons, owns or controls a majority of the stock, or as a result of which a partnership in which an executive officer or director is a partner, becomes obligated, or renews its obligation, to such bank upon any note, draft, bill of exchange or other indebtedness, as maker, drawer, endorser, guarantor, surety or otherwise;

(3) any advance by means of an overdraft; and

(4) any issuance of a standby letter of credit.

(b) None of the following shall be considered to be a loan to, extension of credit to or indebtedness of an executive officer or director of a bank, under the provisions of Banking Law, sections 103(8), 130(5) and 130(6):

(1) an advance against accrued salary or other accrued compensation;

(2) an advance of unearned salary or other unearned compensation, provided the salary or other compensation so advanced is to become due and payable not more than 30 days from the date of such advance;

(3) an advance to provide for the payment of authorized travel or other expenses incurred or to be incurred on behalf of the bank;

(4) the acquisition by the bank of any check deposited in or delivered to the bank in the usual course of business, unless it results in the carrying of a cash item for or the granting of an overdraft (other than an inadvertent overdraft in a nominal amount that is promptly repaid) to (i) an executive officer or director of the bank, (ii) a corporation in which such executive officer or director, or any combination of such persons, owns or controls a majority of the stock, or (iii) a partnership in which such executive officer or director is a partner;

(5) the acquisition of any note, draft, bill of exchange or other evidence of indebtedness (i) through a merger or consolidation of the bank with another bank or banking institution or a similar transaction by which the bank acquires assets and assumes liabilities of another bank or banking institution, or (ii) through foreclosure on collateral or similar proceeding for the protection of the bank;

(6) an advance made pursuant to an agreement evidencing a credit card, check credit or similar plan, whereby the bank is committed to extend credit up to a specified maximum amount, provided (i) the aggregate unpaid principal amount of all such advances by such bank to any person at any time outstanding shall not exceed $25,000, and (ii) the advance is made in compliance with section 321.3(a)(1)-(2) of this Part; nor

(7)

(i) an endorsement or guarantee for the protection of a bank of any loan or other asset previously acquired by the bank in good faith; or

(ii) any indebtedness to a bank for the purpose of protecting the bank against loss or of giving financial assistance to it.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 321.2