The department was asked whether mutual savings institutions may use the “leeway” investment authorization (Banking Law, § 235[29]) for the purpose of making investments which are specifically authorized under one of the other 28 subdivisions of section 235. The department took the position that since the opening sentence of subdivision 29 explicitly states that the “leeway” provision is applicable to “[i]nvestments which do not qualify under any of the preceding subdivisions,” such use of the authorization would be improper. Thus, the department concluded that a savings institution may not, for example, carry on its books, as a “leeway” investment, bonds and mortgages or notes and mortgages on improved and unencumbered real property which would satisfy the requirements of section 235(6) of the Banking Law, or preferred, guaranteed or common stock of a corporation which would meet the requirements of section 235(26).

The department was also asked whether “leeway” may be used for investments which do not “qualify” under preceding subdivisions of section 235 of the Banking Law because the limitation on the aggregate amount of the investment, recited in the subdivision under which the investment would otherwise be authorized, has already been met. The department stated that such use of the “leeway” authorization, too, would be improper, because paragraph (d) of subdivision 29 provides that “[t]his subdivision shall not be deemed to alter any provision of this chapter limiting the aggregate amount which may be invested in any class of loan or investment.” Accordingly, the department stated that a savings institution may not, for example, exceed the subdivision (9)(a)(1) limitation on its bank premises account by carrying bank premises real estate on its books as a “leeway” investment.