Section 36. Examinations; right of inspection; penalties for refusing to permit examination

1.  The  superintendent  shall  have  the  power  to  examine  every  banking organization, every bank holding company and any
  non-banking subsidiary thereof (as such terms "bank holding company" and
  "non-banking subsidiary" are defined in article three-A of this chapter)
  and every licensed lender at any time prior to its dissolution  whenever
  in his judgment such examination is necessary or advisable.
    2.  At least once in each calendar year upon such date or dates within
  each such period as in his or her discretion he or she deems proper, the
  superintendent shall cause every banking organization  to  be  examined;
  provided, however, that:
    (a)  the  provisions of this subdivision shall not be applicable to an
  investment  company  unless  (i)  such  investment  company   has   been
  authorized  by the banking board to receive deposits, in accordance with
  the terms of subdivision three of section five  hundred  eight  of  this
  chapter,  (ii)  a  bank  or  trust  company,  or any two or more of such
  organizations, shall own an aggregate of twenty-five per centum or  more
  of  the  capital  stock  of  such  investment  company,  or  (iii)  such
  investment  company  is  a  corporation  which,  under  the   terms   of
  subdivision  six  of  this  section,  is deemed for the purposes of this
  section  to  be  a  corporation  affiliated  with  a  corporate  banking
  organization, and
    (b)  the  superintendent  may  extend the examination interval from at
  least once in each calendar year to at least once in each eighteen month
  period if the banking organization to be examined:
    (1) has total assets of less than two hundred fifty million dollars;
    (2) is well-capitalized, which  for  purposes  of  this  paragraph  is
  defined  as  having  capital  which  significantly  exceeds the required
  minimum level for each  relevant  capital  measure  or  as  having  such
  capital as the superintendent shall otherwise define by regulation;
    (3)  at  its most recent examination, was found to be well-managed and
  its composite condition was found to be outstanding or good;
    (4) is not currently subject to a  formal  enforcement  proceeding  or
  order  by  the superintendent, the federal deposit insurance corporation
  or any other federal banking agency; and
    (5) has not been acquired by any person during the twelve month period
  in which an examination would be required but for this paragraph, and
    (c)  the  superintendent  may  modify  the  examination  intervals  as
  prescribed  by  this  subdivision to the extent the superintendent deems
  appropriate, in his or her sole  discretion,  in  order  to  obtain  the
  efficient   use  of  the  personal  and  nonpersonal  resources  of  the
  department  by  maximizing  coordination  with  identical  or   parallel
  examinations  having differing or varying intervals performed by federal
  banking  regulators,  whether  such  examinations   are   performed   in
  conjunction  with the department or on an alternating schedule with such
  federal banking regulators; provided, that  nothing  in  this  paragraph
  shall  be  deemed  in  any  manner  to  lessen or modify the requirement
  imposed pursuant to section ten of this article.
    3. On every such examination of any banking organization inquiry shall
  be made as to (a) its financial condition, (b) the security afforded  to
  those  by  whom  its  engagements  are  held,  (c)  the  policies of its
  management, (d) whether the requirements of law have been complied  with
  in  the administration of its affairs, and (e) such other matters as the
  superintendent may prescribe. Examination of a licensed lender shall  be
  made   only  for  the  purposes  set  forth  in  section  three  hundred
  forty-eight of this chapter.
    4. The superintendent shall also have power at  any  time  to  examine
  every  agency,  branch  or  office  located in this state of any foreign

  banking corporation, including, but not limited to, all  of  the  books,
  accounts  or  records  of every agency, branch or office located in this
  state of such foreign banking corporation as well as all of  the  books,
  accounts  or  records  maintained in this state of any agency, branch or
  office not located in this state of such foreign banking corporation for
  the purpose of ascertaining whether it has violated any law and for  any
  other purpose.
    5.  The  superintendent  shall  have  the  power  to make such special
  investigations as he shall  deem  necessary  to  determine  whether  any
  individual,  partnership,  unincorporated association or corporation has
  violated any of the provisions  of  this  chapter;  and  to  the  extent
  necessary  for  this  purpose the superintendent shall have the power to
  examine all relevant books, records, accounts and documents.
    6. For the purpose of determining the financial condition of a banking
  organization, the superintendent shall have the power, when  in  his  or
  her  judgment  it  is necessary or advisable, to examine corporations or
  any other entity affiliated with  any  such  banking  organization.  The
  following are deemed for the purposes of this section to be corporations
  or other entities affiliated with a banking organization:
    (a)  (i)  Any  corporation or other entity, the capital stock of which
  such  banking  organization  directly  or  indirectly,  or   through   a
  subsidiary  or  subsidiaries, owns or controls ten per centum or more of
  the voting shares of such corporation  or  other  entity;  or  (ii)  any
  corporation  or  other entity the election of a majority of the board of
  directors of which is in any manner directly or indirectly controlled by
  such banking organization; or (iii) any corporation or other entity  the
  management  or  policies  over  which  the  banking organization has the
  power, directly or indirectly, to exercise a controlling  influence,  as
  determined  by  the  superintendent;  provided,  however,  the foregoing
  definition of affiliate corporations and other entities shall not  apply
  to  small  business  investment  companies  as  defined in and operating
  pursuant to the  provisions  of  an  act  of  congress  entitled  "Small
  Business  Investment Act of 1958," and such companies shall be deemed to
  be  corporations  affiliated  with  the  banking  organization  for  the
  purposes  of  this subdivision, if such banking organization directly or
  indirectly owns or controls twenty-five per centum or more of the voting
  shares or more than twenty-five per centum of the shares voted  for  the
  election  of  directors  at  the  preceding annual meeting of such small
  business investment company;  or  any  such  small  business  investment
  company  the election of at least twenty-five per centum of the board of
  directors of which  is  in  any  other  manner  directly  or  indirectly
  controlled by such banking organization; or
    (b)  Any  corporation or other entity which directly or indirectly, or
  through a subsidiary or subsidiaries, owns or controls ten per centum or
  more of the voting shares of capital stock of such banking organization;
  or any corporation or other entity  which  in  any  manner  directly  or
  indirectly controls the election of a majority of the board of directors
  of  such  banking  organization;  or  with  respect to the management or
  policies of  such  banking  organization  has  the  power,  directly  or
  indirectly,  to  exercise  a controlling influence, as determined by the
  superintendent.
    6-a. (a) For the purposes of determining the financial condition of  a
  banking  organization,  the superintendent shall have the power, when in
  his or  her  judgment  it  is  necessary  or  advisable,  to  examine  a
  non-banking   subsidiary   of   a  corporation  or  other  entity  which
  corporation or other entity, pursuant to paragraph  (b)  of  subdivision
  six  of  this  section,  is  deemed  to  be  an  affiliate  of a banking
  organization.

    (b) For the purposes of  this  subdivision,  a  "subsidiary"  of  such
  affiliated corporation or other entity shall mean:
    (1)  Any  corporation  or other entity ten per centum or more of whose
  voting stock is directly or  indirectly,  or  through  a  subsidiary  or
  subsidiaries,  owned,  controlled,  or  held  with  power to vote, by an
  affiliated corporation or other entity; or (2) any corporation or  other
  entity,  the  election of a majority of whose directors is controlled in
  any manner by an affiliated corporation or  other  entity;  or  (3)  any
  corporation  or  other  entity,  ten  per centum or more of whose voting
  stock is directly or indirectly owned, controlled, or held with power to
  vote, by a trustee or trustees for the benefit of  the  stockholders  or
  members  of  an  affiliated  corporation  or  other  entity;  or (4) any
  corporation or other entity, at least ten per centum of the voting stock
  of  which  is  directly  or  indirectly,  or  through  a  subsidiary  or
  subsidiaries,  owned,  controlled  or  held  with  power  to  vote  by a
  combination of an affiliated  corporation  or  other  entity  and  by  a
  trustee  or  trustees  for the benefit of the stockholders or members of
  such  affiliated  corporation  or  other  entity;  or  (5)  any  entity,
  corporate  or unincorporated, with respect to the management or policies
  of which such affiliated corporation or  other  entity  has  the  power,
  directly   or  indirectly,  to  exercise  a  controlling  influence,  as
  determined by the superintendent, after notice  and  opportunity  for  a
  hearing. For the purposes of this subdivision, voting stock shall not be
  deemed  to  include  voting  stock  owned by the United States or by any
  corporation wholly owned by the United States.
    (c) A "non-banking subsidiary" for the purposes  of  this  subdivision
  means one which is not a banking organization or which is not engaged in
  the  banking  business  as  defined  in  subdivision  one of section one
  hundred thirty-one of this chapter.
    (d) The superintendent may use the reports of regulatory  agencies  of
  this  state,  of other states, of any foreign government, and of federal
  regulatory agencies in making such examinations or in  conjunction  with
  such  examination.  All  regulatory  agencies  of this state, shall upon
  request of the superintendent, furnish or make available to him  or  her
  reports of examination made by them of any such non-banking subsidiary.
    6-b.  For  purposes of subdivisions six and six-a of this section, any
  references contained therein to "voting stock" or "voting shares"  shall
  be  deemed  to include any ownership interest with respect to any entity
  other  than  a  corporation,  any  references   to   "stockholders"   or
  "shareholders"  shall  include  persons  or  entities who have an equity
  interest in any entity other than a corporation, and any  references  to
  "board  of  directors"  shall  be deemed to mean the governing body with
  respect to any entity other than a corporation.
    7. The  superintendent  may  cause  any  corporation,  association  or
  partnership having business transactions or relations with any corporate
  banking  organization  to  be examined if such examination is found by a
  justice of the supreme court, on application of the  superintendent  and
  on  notice  to  such  company,  to be necessary or expedient in order to
  ascertain  whether  the  capital  stock  of   such   corporate   banking
  organization  is  impaired  or  whether safety of depositors with it has
  been imperilled.
    8. Examinations may be made and inquiries instituted or  continued  in
  the  discretion  of  the superintendent after he has taken possession of
  the property and business of any banking organization or  after  it  has
  entered upon voluntary dissolution until it shall resume business or its
  affairs shall be finally liquidated.
    9.   Any   individual,   partnership,  unincorporated  association  or
  corporation, or any other entity, which refuses to permit examination or

  investigation in accordance with the terms of this section shall forfeit
  to the people of the state an amount as determined pursuant  to  section
  forty-four of this chapter for every day such refusal continues.
    10. All reports of examinations and investigations, correspondence and
  memoranda   concerning   or   arising   out   of  such  examination  and
  investigations, including any duly authenticated copy or copies  thereof
  in  the  possession of any banking organization, bank holding company or
  any subsidiary  thereof  (as  such  terms  "bank  holding  company"  and
  "subsidiary"  are  defined  in  article  three-A  of  this chapter), any
  corporation or any other entity affiliated with a  banking  organization
  within   the  meaning  of  subdivision  six  of  this  section  and  any
  non-banking subsidiary of a corporation or any other entity which is  an
  affiliate  of  a  banking organization within the meaning of subdivision
  six-a of this section, foreign  banking  corporation,  licensed  lender,
  licensed casher of checks, licensed mortgage banker, registered mortgage
  broker,   licensed  sales  finance  company,  registered  mortgage  loan
  servicer,  licensed   insurance   premium   finance   agency,   licensed
  transmitter  of money, licensed budget planner, or the department, shall
  be confidential communications, shall not be  subject  to  subpoena  and
  shall  not be made public unless, in the judgment of the superintendent,
  the ends of justice and the public advantage will be  subserved  by  the
  publication  thereof,  in  which event the superintendent may publish or
  authorize the publication of a copy of  any  such  report  or  any  part
  thereof in such manner as may be deemed proper. For the purposes of this
  subdivision,  "reports  of  examinations  and  investigations,  and  any
  correspondence  and  memoranda  concerning  or  arising  out   of   such
  examinations and investigations", includes any such materials of a bank,
  insurance  or  securities  regulatory  agency or any unit of the federal
  government or that of this state any other state or that of any  foreign
  government  which are considered confidential by such agency or unit and
  which are in the possession of the department  or  which  are  otherwise
  confidential  materials that have been shared by the department with any
  such agency or unit and are in the possession of such agency or unit.