NY State Senate Bill 2019-S2120

Archive: Last Bill Status - In Senate Committee Banks Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to banks
Jan 22, 2019	referred to banks

co-Sponsors

2019-S2120 (ACTIVE) - Details

Current Committee:: Senate Banks
Law Section:: Banking Law
Laws Affected:: Amd §96-d, Bank L; amd §4, Chap 526 of 1998
Versions Introduced in 2017-2018 Legislative Session:: S9094

2019-S2120 (ACTIVE) - Summary

Relates to the banking development district program, such designation shall be valid for 14 years.

2019-S2120 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S2120

SPONSOR: SANDERS
 
TITLE OF BILL:  An act to amend the banking law, in relation to the
banking development district program; and to amend chapter 526 of the
laws of 1998, amending the banking law relating to participation in the
banking development districts program, in relation to the effectiveness
thereof

 
PURPOSE OF THE BILL:

This bill would amend the Banking Law to expand access to banking
services in communities where there is a demonstrated need for addi-
tional products and services.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill would limit the designation of a banking develop-
ment district to fourteen years, yet allow for additional extensions ins
or 10 year increments.

Section 3 of the bill would amend Banking Law § 96-d (5) to allow feder-
al and state credit unions to participate in the banking development
district program.

Sections 2 and 4 of the bill would set forth the effective dates.

 
LEGISLATIVE HISTORY:

New bill.

 
JUSTIFICATION:

Many communities in New York State lack consumer-banking services. In
1997, the Banking Development District (BDD) program was enacted to
incentive banks to locate branches in communities designated as under-
served by the Department of Financial. Services. Such communities either
have no available financial service options, or only offer alternative
(and often problematic) financial service options like check cashers and
Pawn shops.

Under the BDD program, banks that open branches in underserved communi-
ties are eligible to receive below market-rate deposits. Such deposits
lower the financial risk the branches may incur when opening in an
underserved community.

Currently, however, credit unions are currently ineligible to partic-
ipate in the BDD program. Because banks and other eligible financial
institutions have submitted a modest number of applications over the
past twenty years, the program should be expanded to include credit
unions to encourage additional banking services in underserved communi-
ties.

At the same time, it is also appropriate to restrict the unlimited dura-
tion of a BDD designation. Once a banking deficit in an underserved
community is corrected, the incentives provided under the BDD program
are no longer needed. A fourteen year designation limit (with unlimited
extensions as necessary) would make the BDD program more efficient and
allow for the allocation of resources to other communities.
 
FISCAL IMPLICATIONS:

None directly to the state.

 
EFFECTIVE DATE:
This Act shall take effect immediately, however, that the amendments to
subdivision 5 of Section 96-D of the banking law by section three of
this act shall not affect the repeal of such subdivisions and shall be
deemed repealed therewith

2019-S2120 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2120
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             January 22, 2019
                                ___________
 
 Introduced by Sens. SANDERS, MONTGOMERY -- read twice and ordered print-
   ed, and when printed to be committed to the Committee on Banks
 
 AN  ACT to amend the banking law, in relation to the banking development
   district program; and to amend chapter 526 of the laws of 1998, amend-
   ing the banking law relating to participation in the banking  develop-
   ment districts program, in relation to the effectiveness thereof
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 2 of section 96-d of the banking law, as  added
 by chapter 204 of the laws of 1997, is amended to read as follows:
   2.  A  local  government, in conjunction with a bank, trust company or
 national bank, may submit an application to the superintendent  for  the
 designation  of a banking development district. The superintendent shall
 issue a determination on  such  an  application  within  sixty  days  of
 receiving  such  application.  If an application is approved, the super-
 intendent shall transmit notification of [such approval] THE DESIGNATION
 OF A BANKING DEVELOPMENT DISTRICT to the  local  government,  the  bank,
 trust  company or national bank, the state comptroller, the commissioner
 of taxation and finance, the commissioner of the department of  economic
 development,  the  temporary  president of the senate and the speaker of
 the assembly. THE DESIGNATION OF A BANKING DEVELOPMENT DISTRICT SHALL BE
 VALID FOR FOURTEEN YEARS. PRIOR TO THE EXPIRATION OF A BANKING  DEVELOP-
 MENT DISTRICT DESIGNATION, THE SUPERINTENDENT MAY EXTEND THE DESIGNATION
 FOR ONE OR MORE ADDITIONAL FIVE OR TEN YEAR PERIODS.
   §  2. Section 4 of chapter 526 of the laws of 1998, amending the bank-
 ing law relating to participation in the banking  development  districts
 program,  as  amended  by  chapter 46 of the laws of 2016, is amended to
 read as follows:
   § 4. This act shall take effect on  the  first  day  of  January  next
 succeeding  the  date  on  which  it shall have become a law and SECTION
 THREE OF THIS ACT shall remain in effect until January 1, 2023 when upon
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD06016-01-9

 S. 2120                             2
 
 such date it shall expire and be deemed repealed; provided however  that
 any  branch  established  prior  to the expiration and repeal of SECTION
 THREE OF this act by a  savings  bank,  savings  and  loan  association,
 federal  savings bank or federal savings and loan association in a bank-
 ing development district pursuant to this act shall continue to  operate
 in  accordance  with this act and remain eligible for all the rights and
 privileges authorized by this act.
   § 3. Subdivisions 5 and 6 of section 96-d of the banking law, subdivi-
 sion 5 as added by chapter 526 of the laws of  1998,  paragraph  (a)  of
 subdivision  5  as amended by chapter 328 of the laws of 1999, paragraph
 (b) of subdivision 5 as further amended by section  104  of  part  A  of
 chapter  62  of the laws of 2011 and subdivision 6 as amended by chapter
 330 of the laws of 2009, are amended to read as follows:
   5. (a) Notwithstanding the provisions of subdivision  two  of  section
 two  hundred  thirty-seven  of  this  chapter;  for the purposes of this
 section, paragraph c of subdivision two of section ten  of  the  general
 municipal  law, subdivision six of section one hundred five of the state
 finance law and section four hundred eighty-five-f of the real  property
 tax  law,  any reference to a bank, trust company or national bank shall
 be deemed to include a  savings  bank,  savings  and  loan  association,
 federal  savings and loan association [or], federal savings bank, CREDIT
 UNION, OR FEDERAL CREDIT UNION; provided, however, that such  provisions
 of law do not grant a savings bank, savings and loan association, feder-
 al  savings  and  loan  association  [or],  federal savings bank, CREDIT
 UNION, OR FEDERAL CREDIT UNION eligibility to accept municipal or public
 funds or  municipal  or  public  moneys  other  than  for  the  [limited
 purposes]  SOLE  PURPOSE  of  the establishment of a branch in a banking
 development district pursuant to this  section;  PROVIDED,  HOWEVER,  NO
 CREDIT  UNION  OR  FEDERAL  CREDIT  UNION  MAY ACCEPT MUNICIPAL FUNDS OR
 MONEYS FROM A MUNICIPAL CORPORATION IN  EXCESS  OF  THE  STANDARD  SHARE
 INSURANCE  AMOUNT  PER  SHARE  OWNER AS SET BY THE NATIONAL CREDIT UNION
 ADMINISTRATION.  Any such municipal or public funds or moneys  shall  be
 deposited  only  at the branch established pursuant to this section, and
 any municipal funds or moneys may be deposited only  by  the  sponsoring
 municipality  in  which  the branch and banking development district are
 located; provided further that any such municipal  or  public  funds  or
 moneys  shall be subject to the same requirements which apply to munici-
 pal or public funds or moneys deposited in  a  bank,  trust  company  or
 national bank and shall also be subject to the provisions of section one
 hundred  five  of  the  state  finance law or section ten of the general
 municipal law relating to such deposits.
   (b) Notwithstanding any other provision of law, the superintendent  of
 financial  services  shall promulgate rules and regulations to authorize
 the participation of  savings  banks,  savings  and  loan  associations,
 federal  savings  banks  [and],  federal  savings and loan associations,
 CREDIT UNIONS, AND FEDERAL CREDIT  UNIONS  in  the  program  established
 pursuant to this section.
   6.  For  the  purposes of this section, nothing shall preclude a bank,
 trust company or national bank from seeking approval to establish one or
 more branches in an existing banking development district  where  it  or
 another bank has or is authorized to have a branch. The department shall
 have  the  authority to approve any bank, trust company or national bank
 for participation in the banking development district program,  and  any
 branch  approved  pursuant  to  this section shall operate in accordance
 with this section and is eligible for  all  the  rights  and  privileges
 authorized by this section; PROVIDED HOWEVER, AN APPLICATION FOR PARTIC-

 S. 2120                             3
 
 IPATION IN THE BANKING DEVELOPMENT DISTRICT PROGRAM SUBMITTED BY A CRED-
 IT  UNION  OR FEDERAL CREDIT UNION MAY BE APPROVED BY THE SUPERINTENDENT
 ONLY UPON A FINDING THAT: (A) THE APPLICATION MEETS THE CRITERIA  ESTAB-
 LISHED  HEREIN  AND  BY  RULE,  (B) THE BANKING DEVELOPMENT DISTRICT FOR
 WHICH THE APPLICATION IS SUBMITTED  HAS  AN  UNMET  NEED  FOR  FINANCIAL
 SERVICES  AS  DETERMINED BY THE SUPERINTENDENT, AND (C) THAT NO APPLICA-
 TION BY A BANK, TRUST COMPANY OR NATIONAL  BANK,  OTHER  THAN  A  CREDIT
 UNION  OR  FEDERAL  CREDIT  UNION  HAS  A PENDING APPLICATION BEFORE THE
 SUPERINTENDENT THAT, IN THE OPINION OF THE SUPERINTENDENT, WILL  FULFILL
 THE UNMET NEED FOR SUCH SERVICES.
   §  4.  This act shall take effect immediately; provided, however, that
 the amendments to subdivision 5 of section 96-d of the banking law  made
 by  section three of this act shall not affect the repeal of such subdi-
 vision and shall be deemed repealed therewith.

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Senate Bill S2120

Sponsored By

Archive: Last Bill Status - In Senate Committee Banks Committee

co-Sponsors

2019-S2120 (ACTIVE) - Details

2019-S2120 (ACTIVE) - Summary

2019-S2120 (ACTIVE) - Sponsor Memo

2019-S2120 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S2120

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Sponsored By

James Sanders Jr.

Archive: Last Bill Status - In Senate Committee Banks Committee

co-Sponsors

Velmanette Montgomery

2019-S2120 (ACTIVE) - Details

2019-S2120 (ACTIVE) - Summary

2019-S2120 (ACTIVE) - Sponsor Memo

2019-S2120 (ACTIVE) - Bill Text download pdf

Comments