N.Y. Banking Law Section 393
Repayment of mortgage loans

  • application of pledged shares

1.

For the purpose of making payment on his mortgage loan a member may at any time, without forfeiture of dividends, transfer from the amount credited upon the shares pledged by him as security, a sum equal to the matured value of one or more instalment shares.

2.

Any mortgage loan made by a savings and loan association to a member may be repaid in whole or in part at any time, but the loan contract may expressly provide for a period during which prepayment may not be made without incurring prepayment penalties. When such provision is contained therein, the loan contract must also expressly provide for prepayment penalties or no prepayment penalties may be collected when the loan is prepaid. However, where a loan is secured by mortgage on a one to six family residence, or is extended to finance the purchase of a cooperative under subdivision two-a of § 380 (Power to make loans)section three hundred eighty of this chapter which residence or cooperative is or will be occupied in whole or in part by the member, prepayment penalties may be imposed only during the first twelve months from the date the mortgage or cooperative loan was made and may not exceed:

(a)

Interest for a period of three months on the principal so prepaid; or

(b)

Interest for the remaining months of the first year on the principal so prepaid if the prepayment is made at any time within one year from the date the loan is made. The book value of instalment shares pledged as security for any such loan shall be deducted from the amount of the loan in determining the amount of principal upon which such interest may be charged.

3.

Whenever any mortgage is foreclosed, the withdrawal value of the shares transferred and pledged to any such association as security for the loan shall be applied toward the payment of the indebtedness of the member and his rights under such shares shall terminate.

4.

In event of the voluntary or involuntary liquidation of any association, the holder of shares pledged as security for a mortgage loan pursuant to the provisions of subdivision one of § 380 (Power to make loans)section three hundred eighty of this article shall be entitled to have the payments on such shares and the dividends credited or entitled to be credited thereon applied in reduction of such mortgage loan.

5.

No shares pledged as security for a mortgage loan may be withdrawn while the mortgage loan against which they are pledged is outstanding.

Source: Section 393 — Repayment of mortgage loans; application of pledged shares, https://www.­nysenate.­gov/legislation/laws/BNK/393 (updated Sep. 22, 2014; accessed Jun. 22, 2024).

375
Incorporation
376
Proposed by-laws
377
When corporate existence begins
378
Power to issue shares
378‑A
Time deposits
378‑B
Club accounts
378‑C
Excelsior linked deposit program
378‑D
Preservation of books and records
378‑E
Water pollution control linked deposit program
379
Power to invest in securities
379‑B
Service corporation owned by associations
380
Power to make loans
380‑A
Power to purchase mortgage, loan or investment
380‑B
Power to purchase mortgages from mortgage holders
380‑C
Power to participate in certain loans and mortgage investments
380‑E
Effect of usury
380‑F
Power to make advances of federal funds
380‑G
Power to engage in line of credit financing of residential real estate
380‑H
Trust powers
380‑I
Personal loan departments
380‑J
Authorization to acquire and lease personal property
380‑K
Investment in promissory notes
380‑L
Excelsior linked deposit program
380‑M
Water pollution control linked deposit program
381
Power to take and hold real estate
382
Power to borrow
382‑A
Power to act as trustee under self-employed retirement trust and of individual retirement account
382‑B
Power to issue certain obligations
383
Other powers
383‑A
Rental of safe deposit boxes
384
Entries in books
385
Surplus account
386
Profits
387
Credits to surplus account and undivided profits
388
Fines and penalties for failure to make payments on instalment shares
389
Matured shares
390
Withdrawal of unpledged shares
392
Retirement of shares
393
Repayment of mortgage loans
394
Joint shares
395
Alternative provisions relative to payment of interest to shareholders
396
Change of location
396‑A
Electronic facilities
396‑B
Acceptance of United States currency
397
Number, qualifications and disqualifications of directors
397‑A
Report to directors
398
Filling of vacancies in board of directors
398‑A
Forfeiture of office of director
398‑B
Duties of directors and officers
398‑C
Executive committee and other committees
399
Restrictions on directors and officers
399‑A
Restrictions on holding of certain offices by executive officers of federal savings banks and federal savings associations
400
Pensions
401
Official communications to be submitted to directors and noted in minutes
402
Amendment of articles of association and by-laws
403
Examination by directors
404
Reports to the superintendent
404‑A
Photographic reproduction of records
405
Annual report to shareholders
406
Charters conformed to this article
407
Exemptions
409
Conversion of a state savings and loan association into a federal savings and loan association
410
Conversion of a federal savings and loan association into a state savings and loan association
411
Conversion of a savings and loan association or federal savings and loan association into a savings bank
412
Conversion of federal savings institutions to state charter
413
Reciprocal interstate acquisitions

Accessed:
Jun. 22, 2024

Last modified:
Sep. 22, 2014

§ 393’s source at nysenate​.gov

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