BILL NUMBER: S957

SPONSOR: SANDERS
 
TITLE OF BILL:

An act to amend the banking law, in relation to assessment of the record
of performance of banking institutions in supporting persons, small
businesses, minority- and women-owned businesses, and certain not-for-
profit corporations affected by the outbreak of COVID-19

 
PURPOSE:

To provide relief to families impacted by the COVID-19 outbreak, through
incentivizing banks to provide aid and support, through the Community
Reinvestment Act.

 
SUMMARY OF PROVISIONS:

Section 1 amends the Banking Law, through adding a criteria for assess-
ment of how banks provide low-to-no interest loans, the waiving of fees,
and the modification or extension of existing loans, and other financial
              

instruments conducted by the banking industry to support persons, small
businesses, M/WBEs, and certain nonprofits affected by the COVID-19
outbreak for 6 months after the state of emergency ends.

Section 2 establishes the effective date.

 
AMENDED FROM THE PREVIOUS VERSION:

-This version includes a provision that requires the NYS Superintendent
of Financial Services to certify that the banking institution has gone
beyond the guidelines set by the federal Paycheck Protection Program, to
ensure that banks and financial institutions are encouraged to provide
generous resources to persons, small businesses, M/WBEs, and certain
nonprofits.

-This version of the bill excludes low interest loans to employees,
small businesses, M/WBEs and certain non-profits, and would only provide
credit to banking and financial institutions that provide them with no
interest loans. This is based on testimony that was provided during the
Assembly's Public Hearing on the Federal Response to COVID-19 on Small
Businesses in New York City, which occurred on Monday, June 22nd, 2020.

 
JUSTIFICATION:

During COVID-19 outbreak, employees and small business owners have been
left without pay, due to state and local restrictions on non-essential
businesses. Workers, their families, and the economy have lost critical
funding. As recently established federal programs have not offered
substantial relief from this crisis and have greatly impacted minority
communities, it is important for the State of New York to identify ways
that they can provide more support to these small business owners and
their employees, especially if that means influencing the banking indus-
try to use their resources for the betterment of society.

This bill amends the NYS Community Reinvestment Act to provide financial
institutions with credit for providing assistance during the COVID-19
crisis. It will incentivize banks to provide employees, small busi-
nesses, minority-and-women owned business enterprises (MBEs), and
certain nonprofits impacted by COVID-19 with extensions for existing
loans, provide low- to no-interest loans, to waive certain fees, and
other positive financial instruments to benefit the public. This legis-
lation would expand the Department of Financial Services' power to
assess and rate banking institutions' ability to support underserved
communities, like those impacted by the COVID-19 outbreak and have a
high concentration of poverty.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
Immediately