143-B - Acquisition by companies of control of banking institutions.

§ 143-b.  Acquisition by companies of control of banking institutions.  1. It shall be unlawful except with the prior approval  of  the  banking  board  by a three-fifths vote of all the members thereof for any company  to acquire control of any banking institution, directly  or  indirectly,  provided,  however,  that the provisions of this section shall not apply  to a company which  has  submitted  to  the  superintendent  a  plan  of  acquisition  pursuant  to  section  one  hundred  forty-three-a  of this  article for an acquisition not involving a  change  of  control  of  the  banking  institution.  As used in this section, the term "control" means  the possession, directly or indirectly, of the power to direct or  cause  the  direction  of the management and policies of a banking institution,  whether  through  the  ownership  of  voting  stock  of   such   banking  institution,  the  ownership  of  voting  stock  of  any  company  which  possesses such power or otherwise. Control shall be presumed to exist if  any company, directly or indirectly, owns, controls or  holds  with  the  power  to vote ten per centum or more of the voting stock of any banking  institution or of any company which owns, controls or holds  with  power  to  vote  ten  per  centum  or  more of the voting stock of such banking  institution, but  no  person  shall  be  deemed  to  control  a  banking  institution  solely by reason of his or her being an officer or director  of such banking institution or company. The superintendent may in his or  her discretion, upon the application of a  banking  institution  or  any  company  which,  directly  or  indirectly,  owns, controls or holds with  power to vote or seeks to own, control or hold with power  to  vote  any  voting  stock  of such banking institution, determine whether or not the  ownership, control or holding of  such  voting  stock  would  constitute  control of such banking institution for purposes of this section.    2.  A company desiring to acquire control of a banking institution may  file application therefor, in writing, with the superintendent  and  pay  an  investigation  fee  as  prescribed pursuant to section eighteen-a of  this chapter to the superintendent. The application shall  contain  such  information   as  the  superintendent  or  banking  board,  by  rule  or  regulation, may prescribe as necessary or appropriate for the purpose of  making the determination required by subdivision three of this section.    3. Upon receipt of such application,  the  superintendent  shall  post  notice  of  the  receipt  thereof upon the bulletin board of the banking  department. The superintendent shall submit  such  application  together  with his recommendation in regard thereto and all papers, correspondence  and  other  information  in  his possession and relating thereto, to the  banking board which shall by order grant or  deny  the  application  and  shall state the reasons for such grant or denial. An order granting such  application  may  be  made only by three-fifths votes of all the members  thereof. An order shall be issued within one hundred twenty  days  after  the  date of the submission of the application to the superintendent and  a copy thereof shall be posted upon the bulletin board  of  the  banking  department.   In   determining  whether  or  not  to  approve  any  such  application, the banking board shall take  into  consideration  (i)  the  declaration  of  policy  contained  in  section ten of the chapter, (ii)  whether the effect of such action shall be consistent with  adequate  or  sound banking and the preservation thereof, or result in a consolidation  of  assets  beyond  limits  consistent with effective competition, (iii)  whether such acquisition of control may result in such  a  lessening  of  competition  as  to  be  injurious to the interest of the public or tend  toward monopoly, and (iv) primarily, the public interest and  the  needs  and convenience thereof.    4.  A  company does not control a banking institution by virtue of its  ownership or control of: (a) stock acquired by a company in  good  faith  in a fiduciary capacity, except where such stock is held for the benefitof  stockholders  or members of such company; (b) voting rights of stock  acquired in the course of a proxy solicitation by a company  formed  for  the  sole  purpose  of participating in proxy solicitations by virtue of  its  control  of  voting  rights of stock acquired in the course of such  solicitation; (c) stock acquired by a company  in  connection  with  its  underwriting  of securities if such shares are held only for such period  of time as will permit the sale thereof on a reasonable basis; (d) stock  acquired by a company in settlement or reduction of a loan,  or  advance  of  credit,  or  in  exchange  for an investment previously made in good  faith and in the ordinary course of business, provided that any stock so  acquired shall be disposed of within a period of two years from the date  upon which it was acquired unless the superintendent shall, in  writing,  authorize  such  banking  institution  to  hold  such stock for a longer  period; or (e)  stock  dividends,  stock  splits,  or  additional  stock  acquired  by  a  bank  holding company, or by any subsidiary thereof, in  exercise of its preemptive right as a stockholder.    5. For a period of six months from the date of  qualification  thereof  and  for  such  additional  period  of  time  as  the superintendent may  prescribe in writing, the provisions of subdivisions one, two and  three  of this section shall not apply to a transfer of control by operation of  law  to  the  legal representative, as hereinafter defined, of a company  which has control of  a  banking  institution.  Thereafter,  such  legal  representative  shall comply with the provisions of subdivisions one and  two of this section. The provisions of subdivision three of this section  shall be applicable to an application made under this section by a legal  representative.    The term "legal representative," for the  purposes  of  this  section,  shall  mean  one  duly appointed by a court of competent jurisdiction to  act as  executor,  administrator,  trustee,  committee,  conservator  or  receiver,  including  one  who  succeeds  a legal representative and one  acting  in  an  ancillary  capacity  thereto  in  accordance  with   the  provisions of such court appointment.    If any provision of this section, or the application of such provision  to  any  individual, company, corporation or circumstance, shall be held  invalid, the remainder of this section, and the application  thereof  to  anyone other than one to which it is held invalid, shall not be affected  thereby.