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No shares pledged as security for a mortgage loan may be withdrawn while the mortgage loan against which they are pledged is outstanding.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 Apr. 20, 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
Green check means up to date. Up to date

Accessed:
Apr. 20, 2024

Last modified:
Sep. 22, 2014

§ 393’s source at nysenate​.gov

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