NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7604
SPONSOR: Buttenschon
 
TITLE OF BILL: An act to amend chapter 3 of the laws of 1997, amend-
ing the banking law and the insurance law relating to authorizing the
banking board to permit banks and trust companies to exercise the rights
of national banks, in relation to the effectiveness of certain
provisions of such chapter; and to amend chapter 322 of the laws of
2007, amending the banking law relating to the power of banks, private
bankers, trust companies, savings banks, savings and loan associations,
credit unions and foreign banking corporations to exercise the rights of
national banks, federal savings associations, federal credit unions and
federal branches and agencies of foreign banks, in relation to the
effectiveness of certain provisions of such chapter
 
PURPOSE OR GENERAL IDEA OF BILL:
To extend, for an additional five years, the banking "wild card" law,
which provides an administrative mechanism to keep the state banking
charter viable and competitive with the federal banking charter.
 
SUMMARY OF SPECIFIC PROVISIONS:
The effective date provisions of Chapter 322 of 2007 and Chapter 3 of
the Laws of 1997 are amended to extend the sunset date from September
10, 2019 to September 10, 2024.
 
EXISTING LAW:
Under the "wild card" law (Section 12-a of the Banking Law), the Super-
intendent of Financial Services is authorized to permit state-chartered
banking organizations to exercise banking powers that are available to
corresponding federally-chartered institutions, but which are not
expressly authorized under the Banking Law.
 
JUSTIFICATION:
Under the nation's dual banking system, banking institutions may choose
to operate under either a state or federal charter. Almost every state
has a banking "wild card" law which provides an administrative mechanism
to help maintain parity in regard to the powers of state banks and
national banks.
In general, a banking wild card law enables a state regulator to admin-
istratively authorize state banks to exercise the same powers as
national banks. A wild card law can provide a timely, flexible and effi-
cient mechanism for keeping a state's banking charter competitive,
attractive and viable in comparison with the federal charter.
In 1997, a banking wild card law was enacted in New York State to help
retain and promote the state banking charter and state banking system.
With this law, the State sought to reassure its state-chartered banking
institutions that it was committed and determined to keep the state
charter competitive with the federal charter.
With the rapid and continuing changes in the financial system, state-
chartered institutions were becoming increasingly concerned that they
would find themselves at a significant disadvantage. While federally-
chartered institutions were positioned to immediately take advantage of
any expanded powers and new opportunities granted at the federal level,
state institutions feared that lengthy delays and uncertainty at the
state level would place them at a significant disadvantage.
The wild card law is intended to help address these concerns by estab-
lishing an administrative process to enable New York State to quickly
respond to significant parity issues. New York's wild card law included
a sunset date, and the law has been extended several times since its
original enactment in 1997. This bill would extend the law for an addi-
tional five years.
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None to the State.
 
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
7604
2019-2020 Regular Sessions
IN ASSEMBLY
May 13, 2019
___________
Introduced by M. of A. BUTTENSCHON -- read once and referred to the
Committee on Banks
AN ACT to amend chapter 3 of the laws of 1997, amending the banking law
and the insurance law relating to authorizing the banking board to
permit banks and trust companies to exercise the rights of national
banks, in relation to the effectiveness of certain provisions of such
chapter; and to amend chapter 322 of the laws of 2007, amending the
banking law relating to the power of banks, private bankers, trust
companies, savings banks, savings and loan associations, credit unions
and foreign banking corporations to exercise the rights of national
banks, federal savings associations, federal credit unions and federal
branches and agencies of foreign banks, in relation to the effective-
ness of certain provisions of such chapter
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 7 of chapter 3 of the laws of 1997, amending the
2 banking law and the insurance law relating to authorizing the banking
3 board to permit banks and trust companies to exercise the rights of
4 national banks, as amended by chapter 113 of the laws of 2014, is
5 amended to read as follows:
6 § 7. This act shall take effect immediately provided that section two
7 of this act shall take effect on the thirtieth day after it shall have
8 become a law and shall apply to violations prescribed in section 44 of
9 the banking law that occur on or after such date; and provided further
10 that sections one, three, four and five shall expire and be deemed
11 repealed September 10, [2019] 2024; and provided further that any rules
12 and regulations promulgated pursuant to sections one, three, four and
13 five shall remain in full force and effect on and after such expiration
14 date and shall not be affected by such expiration date.
15 § 2. Section 6 of chapter 322 of the laws of 2007, amending the bank-
16 ing law relating to the power of banks, private bankers, trust compa-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11355-01-9
A. 7604 2
1 nies, savings banks, savings and loan associations, credit unions and
2 foreign banking corporations to exercise the rights of national banks,
3 federal savings associations, federal credit unions and federal branches
4 and agencies of foreign banks, as amended by chapter 113 of the laws of
5 2014, is amended to read as follows:
6 § 6. This act shall take effect immediately; provided, however that
7 sections one, two, three and four of this act shall take effect Septem-
8 ber 1, 2007; and provided further that sections one, two, three and four
9 of this act shall expire and be deemed repealed September 10, [2019]
10 2024; and provided further that any federally permitted powers approved
11 under section three of this act shall remain in full force and effect on
12 and after such repeal date and shall not be affected by such repeal.
13 § 3. This act shall take effect immediately.