Governor David A. Paterson of New York signed into law a bill, supported by the New York State Banking Department, that permits interstate de novo branching in New York (the “New Branching Law”). The New Branching Law was enacted through the addition of new Sections 223-B (covering authority for interstate de novo banking in New York) and 223-C (applications by an out-of-state bank to establish a de novo branch in New York) of the New York Banking Law.The New Branching Law allows out-of-state banks to branch de novo into New York State provided that New York’s banks have the reciprocal legal right (under conditions that are no more restrictive than those imposed by New York law) to branch de novo into the state where the out-of-state bank has its principal office. New York State Superintendent of Banks Richard H. Neiman stated that the New Branching Law complements the Regional Interstate Branching Memorandum of Understanding agreed to in April 2008 by the banking regulators of New York, New Jersey and Pennsylvania (see the May 6, 2008 Alert). The New Branching Law became effective immediately upon Governor Paterson’s signature on July 22, 2008.
Alert July 29, 2008