N.Y. Comp. Codes R. & Regs. tit. 3, § 6.10 – Investment in a public deposit bank subsidiary by a savings bank or savings and loan association.

(a) The superintendent hereby finds that the promulgation of this section is consistent with the policy of the State of New York as declared in section 10 of the New York Banking Law and thereby protects the public interest, including the interests of depositors, creditors, shareholders, stockholders and consumers and is necessary to achieve or maintain parity between savings banks and savings and loan associations (hereafter thrift institutions) and Federal savings associations with respect to rights, powers, privileges, benefits, activities, loans, investments or transactions.
(b) The superintendent hereby finds that title 12, Code of Federal Regulations, section 559(3)(3) and (g), promulgated pursuant to title 12 United States Code, section 1462 et seq., permit a Federal savings association to invest without limitation as to amount in the shares of a subsidiary which is an insured depository institution, including an insured depository institution which may accept deposits of public moneys.
(c) For purposes of this section, public deposit bank subsidiary means a bank as that term is defined in title 12 United States Code, section 1841(c)(1):
1. (1) more than 50 percent of the voting shares of which are owned, directly or indirectly, by the thrift institution with no other person or entity exercising effective operating control; and
2. (2) which accepts only deposits of public moneys and the other types of deposits as enumerated in title 12 United States Code, section 1841(a)(5)(E)(ii).
(d) Subject to receipt of any required regulatory approvals, a thrift institution may invest in a public deposit bank subsidiary without limitation as to amount; provided, however, that if such investment would cause the aggregate amount invested by such thrift institution in such subsidiary to exceed one per centum of the assets of such thrift institution, it may do so upon 30 days prior written notice to the superintendent unless the superintendent notifies the thrift institution within such 30-day period that:
1. (1) he or she requires additional time or information in connection with the proposed investment; or
2. (2) the proposed investment may not be made. The proposed investment must be permitted by the organization certificate of the public deposit bank subsidiary.