N.Y. Banking Law § 380 Power to Make Loans

• Library: New York Statutes
• Edition: 2023
• Currency: Current through 2023 NY Law Chapter 777
• Year: 2023
• Citation: N.Y. Banking Law § 380

1. A savings and loan association may make a loan upon the security of a mortgage of the type authorized to be made by a savings bank by subdivisions five-a and six of section two hundred thirty-five of this chapter, subject to such regulations as the superintendent of financial services may prescribe.

1-b. A savings and loan association may also lend its funds to borrowers therefrom upon their promissory notes payable to the association which are:

(a) secured by one or more mortgages in which a savings and loan association may invest; provided however, that the amount loaned is not in excess of ninety per centum of the principal sum secured by such mortgage or mortgages. The assignment of every mortgage taken as security for any such note shall be recorded or registered in the office of the proper recording officer of the county in which the real property described in such mortgage is located, unless such mortgage or mortgages have been so assigned by a savings and loan association;

(b) secured by any of the stocks and bonds in which a savings and loan association may invest, except stocks eligible for investment pursuant to the provisions of subdivision twenty-six of section two hundred thirty-five of this chapter; provided however, that the amount of the loan is not in excess of ninety per centum of the market value of such stocks and bonds;

(c) made by a savings bank which has been incorporated three years or more.

(d) secured by any of the stocks eligible for investment by a savings and loan association pursuant to the provisions of subdivision twenty-six of section two hundred thirty-five of this chapter; provided however, that (1) the amount of the loan is not in excess of the lesser of (i) eighty-five per centum of the market value of such stocks, or (ii) the maximum loan value of such stocks determined in accordance with Federal Reserve Regulation U and the supplement thereto of the board of governors of the federal reserve system and as if the savings and loan association were a member bank of such system extending credit secured by such stocks for their purchase as margin stock, and (2) the amount of such loan, together with the aggregate amount outstanding of all loans made pursuant to this paragraph and the aggregate amount of investments in stock eligible for investment by a savings and loan association pursuant to the provisions of subdivision twenty-six of section two hundred thirty-five of this chapter, shall not exceed the aggregate limitations set forth in subdivision twenty-six of section two hundred thirty-five of this chapter;

2. A savings and loan association may lend its funds to its members upon their notes as follows:

(a) secured by the transfer and pledge to the association of shares of any savings and loan association or by the assignment to the association of a time deposit in any savings and loan association, the withdrawal value of which, in either case, shall not be less than the amount of any such loan.

(b) Representing loans and advances of credit for the purpose of financing alterations, repairs and improvements upon or in connection with, or as the superintendent may authorize the equipping of existing structures, and the building of new structures, upon urban, suburban, or rural real property (including the restoration, rehabilitation, rebuilding, and replacement of such improvements which have been damaged or destroyed by earthquake, conflagration, tornado, hurricane, cyclone, flood, or other catastrophe), by the owners thereof or by lessees of such real property under a lease expiring not less than six months after the maturity of the loan or advance of credit or by lessees under proprietary leases from a corporation or partnership formed for the purpose of the cooperative ownership of real estate, provided: (1) the amount of such loan, advance of credit, or purchase made for the purpose of financing the alteration, repair, equipping or improvement of existing structure or the building of new structure does not exceed twenty thousand dollars; (2) the maturity thereof does not exceed one hundred twenty-one months; (3) the rate which may be paid by the borrower for interest, discount, and fees of all kinds in connection with the transaction shall be the rate or rates agreed to by the savings and loan association and the borrower; and (4) the loan shall be paid in equal or substantially equal monthly installments calculated from the date of the note; provided, however, that in addition thereto, the savings and loan association may contract to charge the borrower: (i) the fees payable to the appropriate public officer to perfect any lien or other security interest taken to secure the loan or the premium, not in excess of such filing fee, payable for any insurance in lieu of such filing; (ii) in case of default, and in accordance with the provisions of the instrument evidencing the obligation, either a fine in an amount not to exceed five cents per dollar on any installment which has become due and remained unpaid for a period in excess of ten days, but no such fine shall exceed five dollars and only one fine shall be collected on any such installment regardless of the period during which it remains in default, and provided further that should the aggregate of such fines collected in connection with any loan exceed two per centum of such loan, or in any event twenty-five dollars, the savings and loan association shall refund such excess to the borrower within sixty days after the loan is paid in full, or, subject to an allowance of unearned interest attributable to the amount in default, interest on each amount past due at a rate not in excess of the rate provided for in the instrument evidencing the obligation; (iii) the actual expenditures, including reasonable attorney's fees, for necessary court process; and (iv) in case the savings and loan association insures a borrower under a credit unemployment insurance policy, group life insurance policy, group health insurance policy, group accident insurance policy, or group health and accident insurance policy, or requires insurance on personal property securing any such loan, an amount not in excess of the premiums chargeable in accordance with rate schedules then in effect and on file with the superintendent of financial services for such insurance by the insurer. No savings and loan association shall require a borrower to purchase shares in the association, or to purchase shares in lieu of regular periodic installment payments, or to do or refrain from any other act which would entail additional expense or sacrifice, as a condition precedent to granting a loan or advance of credit under the authority of this paragraph. Notwithstanding the provisions of this paragraph no refund of excess fines shall be required if it amounts to less than one dollar.