S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3352
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 2, 2023
                                ___________
 
 Introduced  by  M. of A. HUNTER, FAHY, DAVILA, GALLAGHER, RIVERA, GONZA-
   LEZ-ROJAS, STERN, JEAN-PIERRE, MAMDANI, DICKENS, REYES,  SIMON,  LUNS-
   FORD,  JACOBSON,  FALL, DINOWITZ, MITAYNES, THIELE, BICHOTTE HERMELYN,
   BURKE, HEVESI, L. ROSENTHAL, BURGOS, BRONSON, AUBRY, EPSTEIN, CARROLL,
   ROZIC, ANDERSON, SEPTIMO, TAYLOR, BURDICK, FORREST, OTIS, KIM,  CLARK,
   SILLITTI,  COLTON,  CRUZ,  SAYEGH,  JACKSON, SEAWRIGHT, GLICK, KELLES,
   TAPIA,  CUNNINGHAM,   MEEKS,   WILLIAMS,   LUCAS,   PRETLOW,   WALKER,
   DE LOS SANTOS -- read once and referred to the Committee on Banks
 
 AN  ACT  to amend the banking law, the state finance law and the general
   municipal law, in relation to establishing the "New York public  bank-
   ing act"
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "New York public banking act".
   §  2. It is the intent of the legislature that this act (i) authorizes
 municipal and other local governments to form and control  public  banks
 through the ownership of capital stock or other ownership interests, and
 to loan or grant public funds or lend public credit to such public banks
 for  the  public purposes of achieving cost savings, strengthening local
 economies, supporting community  economic  development,  and  addressing
 infrastructure  and  housing needs for localities; and (ii) codifies the
 common law interpretation  of  the  New  York  state  constitution  that
 cities, counties, and other municipalities may own stock or other owner-
 ship interests in, and lend or grant money to, public and private corpo-
 rations,  limited liability companies or not-for-profit corporations, so
 long as such actions are pursuant to public purposes.
   § 3. Subdivisions 1 and 11 of section 2 of the banking  law,  subdivi-
 sion  1 as amended by chapter 684 of the laws of 1938 and subdivision 11
 as amended by chapter 154 of the laws of 2007, are amended  to  read  as
 follows:

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02375-01-3
              

 A. 3352                             2
 
   1. Bank. The term, "bank," when used in this chapter, unless a differ-
 ent  meaning appears from the context, means any corporation, other than
 a trust company, organized under or subject to the provisions of article
 three OR THREE-C of this chapter.
   11.  Banking  organizations.  The  term, "banking organizations," when
 used in this chapter, means and includes  all  banks,  trust  companies,
 private bankers, savings banks, safe deposit companies, savings and loan
 associations,  credit  unions,  PUBLIC  BANKS  ORGANIZED  UNDER  ARTICLE
 THREE-C OF THIS CHAPTER, and investment companies.
   § 4. The banking law is amended by adding a new article 3-C to read as
 follows:
                                ARTICLE 3-C
                               PUBLIC BANKS
 SECTION 156.   DEFINITIONS.
         156-A. SPONSORS AND CORPORATE STRUCTURE.
         156-B. GOVERNANCE.
         156-C. PUBLIC BANK CHARTER REQUIREMENTS.
         156-D. FINANCIAL AND OPERATIONS FRAMEWORK.
         156-E. INSURANCE.
         156-F. DEPOSITS.
         156-G. PERMITTED ACTIVITIES OF THE PUBLIC BANK.
         156-H. INCONSISTENCY WITH OTHER LAWS.
         156-I. OWNERS NOT TO BE CONSIDERED BANK HOLDING COMPANIES.
   § 156. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE:
   1. "ADVISORY BOARD" MEANS A BOARD ESTABLISHED PURSUANT TO SECTION  ONE
 HUNDRED FIFTY-SIX-B OF THIS ARTICLE.
   2. "AFFILIATE" MEANS:
   (A) IN THE CASE OF A PERSON (OTHER THAN AN INDIVIDUAL), ANOTHER PERSON
 THAT  DIRECTLY,  OR  INDIRECTLY  THROUGH  ONE  OF  MORE  INTERMEDIARIES,
 CONTROLS, OR IS CONTROLLED BY, OR IS  UNDER  COMMON  CONTROL  WITH  SUCH
 PERSON.
   (B)  IN  THE  CASE  OF  AN INDIVIDUAL, (I) ANY MEMBER OF THE IMMEDIATE
 FAMILY OF SUCH INDIVIDUAL, INCLUDING PARENTS, SIBLINGS, SPOUSE AND CHIL-
 DREN (INCLUDING THOSE BY ADOPTION) AND ANY OTHER  PERSON  WHO  LIVES  IN
 SUCH  INDIVIDUAL'S HOUSEHOLD; THE PARENTS, SIBLINGS, SPOUSE, OR CHILDREN
 (INCLUDING THOSE BY ADOPTION) OF SUCH IMMEDIATE FAMILY  MEMBER,  AND  IN
 ANY  SUCH CASE ANY TRUST WHOSE PRIMARY BENEFICIARY IS SUCH INDIVIDUAL OR
 ONE OR MORE MEMBERS OF SUCH IMMEDIATE FAMILY  AND/OR  SUCH  INDIVIDUAL'S
 LINEAL  DESCENDANTS;  (II)  THE LEGAL REPRESENTATIVE OR GUARDIAN OF SUCH
 INDIVIDUAL OR OF ANY SUCH IMMEDIATE FAMILY  MEMBER  IN  THE  EVENT  SUCH
 INDIVIDUAL OR ANY SUCH IMMEDIATE FAMILY MEMBER BECOMES MENTALLY INCOMPE-
 TENT;  AND  (III)  ANY PERSON CONTROLLING, CONTROLLED BY OR UNDER COMMON
 CONTROL WITH SUCH INDIVIDUAL.
   (C) AS USED IN THIS DEFINITION,  THE  TERM  "CONTROL,"  INCLUDING  THE
 CORRELATIVE  TERMS  "CONTROLLING,"  "CONTROLLED  BY"  AND  "UNDER COMMON
 CONTROL WITH," MEANS POSSESSION, DIRECTLY OR INDIRECTLY, OF THE POWER TO
 DIRECT OR CAUSE THE DIRECTION OF MANAGEMENT OR POLICIES (WHETHER THROUGH
 OWNERSHIP OF SECURITIES OR ANY PARTNERSHIP OR OTHER OWNERSHIP  INTEREST,
 BY CONTRACT OR OTHERWISE) OF A PERSON. SUCH CONTROL SHALL BE PRESUMED TO
 EXIST WHERE A PERSON OWNS A TEN PERCENT OR GREATER OWNERSHIP INTEREST IN
 ANOTHER PERSON.
   (D)  "PERSON"  SHALL  BE  CONSTRUED BROADLY AND SHALL INCLUDE, WITHOUT
 LIMITATION, AN INDIVIDUAL, A PARTNERSHIP, A LIMITED LIABILITY COMPANY, A
 CORPORATION, AN ASSOCIATION, A JOINT STOCK COMPANY,  A  TRUST,  A  JOINT
 VENTURE, AN UNINCORPORATED ORGANIZATION AND A GOVERNMENTAL ENTITY OR ANY
 DEPARTMENT, AGENCY OR POLITICAL SUBDIVISION THEREOF.
 A. 3352                             3
 
   3.  "BANK"  MEANS  ANY  CORPORATION,  OTHER  THAN A TRUST CORPORATION,
 ORGANIZED UNDER OR SUBJECT TO THE PROVISIONS OF THIS ARTICLE OR  ARTICLE
 THREE OF THIS CHAPTER.
   4. "BOARD" MEANS A BOARD OF DIRECTORS OR BOARD OF MANAGERS OF A PUBLIC
 BANK.
   5.  "COMMUNITY  BANKING  EXPERIENCE"  MEANS CURRENT OR PAST EMPLOYMENT
 EXPERIENCE AS AN OFFICER, DIRECTOR OR  EXECUTIVE,  OR  CURRENT  OR  PAST
 EMPLOYMENT  EXPERIENCE IN A SENIOR LEADERSHIP ROLE AT ANY OF THE FOLLOW-
 ING:
   (A) A COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION  THAT  IS  A  CREDIT
 UNION, LOAN FUND, MINORITY DEPOSITORY INSTITUTION, UNION CONTROLLED BANK
 OR LOCALLY BASED COMMUNITY BANK; OR
   (B)  A CREDIT UNION, LOAN FUND, MINORITY DEPOSITORY INSTITUTION, UNION
 CONTROLLED BANK OR LOCALLY BASED COMMUNITY BANK  THAT  OTHERWISE  SERVES
 LOW-INCOME, RURAL OR OTHER UNDERSERVED OR ECONOMICALLY DISTRESSED COMMU-
 NITIES.
   6.  "COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION" MEANS AN ENTITY THAT
 HAS BEEN CERTIFIED AS MEETING THE ELIGIBILITY  REQUIREMENTS  OF  SECTION
 1805.201 OF TITLE 12 OF THE CODE OF FEDERAL REGULATIONS.
   7. "DEPOSIT" MEANS THE PLACING OF MONEY WITH A PUBLIC BANK TO BE WITH-
 DRAWN  UPON  THE  DEPOSITOR'S  DEMAND OR UNDER THE RULES AND REGULATIONS
 AGREED UPON BETWEEN THE BANK AND THE DEPOSITOR.
   8. "ECONOMICALLY DISTRESSED COMMUNITIES" MEANS THOSE COMMUNITIES WHERE
 AT LEAST THIRTY PERCENT OF RESIDENTS HAVE INCOMES THAT ARE LESS THAN THE
 NATIONAL POVERTY LEVEL OR WHERE THE UNEMPLOYMENT RATE  IS  GREATER  THAN
 THE  NATIONAL UNEMPLOYMENT RATE; OR ECONOMIC OPPORTUNITY ZONE DESIGNATED
 COMMUNITIES, EXCLUDING CONTIGUITY ECONOMIC OPPORTUNITIES ZONES.
   9. "INDEPENDENT" MEANS, WITH RESPECT TO A MEMBER OF  A  PUBLIC  BANK'S
 BOARD  OF DIRECTORS, BOARD OF MANAGERS, OR ADVISORY BOARD, AN INDIVIDUAL
 WHO:
   (A) AT THE TIME OF HIS OR HER ELECTION  TO  THE  BOARD  OF  DIRECTORS,
 BOARD  OF  MANAGERS, OR ADVISORY BOARD OF A PUBLIC BANK, IS NOT A HOLDER
 OF ANY PUBLIC OFFICE WITHIN THE SPONSOR; AND
   (B) WITHIN THE PAST FIVE YEARS HAS NOT BEEN A HOLDER OF PUBLIC  OFFICE
 WITHIN SUCH SPONSOR.
   10.  "LOCAL  ELECTED OFFICIAL" MEANS ANY OFFICER ELECTED TO A POSITION
 WITHIN A COUNTY, CITY, TOWN, VILLAGE, SCHOOL DISTRICT OR DISTRICT CORPO-
 RATION, OR ANY AGENCY, DEPARTMENT, DIVISION, BOARD, COMMISSION OR BUREAU
 THEREOF; PROVIDED, THAT, SUCH  TERM  SHALL  NOT  INCLUDE  ANY  JUDGE  OR
 JUSTICE OF A COURT.
   11. "MINORITY DEPOSITORY INSTITUTION" MEANS ANY DEPOSITORY INSTITUTION
 THAT IS OWNED IN ANY OF THE FOLLOWING MANNERS:
   (A)  A PRIVATELY OWNED INSTITUTION OF WHICH FIFTY-ONE PERCENT IS OWNED
 BY ONE OR MORE INDIVIDUALS WHO ARE MINORITIES;
   (B) A PUBLICLY OWNED INSTITUTION OF WHICH  FIFTY-ONE  PERCENT  OF  THE
 STOCK IS OWNED BY ONE OR MORE MINORITIES; OR
   (C)  AN  INSTITUTION  OTHERWISE  DESIGNATED  AS  A MINORITY DEPOSITORY
 INSTITUTION BY THE INSTITUTION'S APPLICABLE FEDERAL REGULATORS.
   12. "MINORITY" MEANS ANY PERSON WHO IS A MEMBER OF ONE OF THE  FOLLOW-
 ING GROUPS: (A) BLACK PERSONS HAVING ORIGINS IN ANY OF THE BLACK AFRICAN
 RACIAL  GROUPS;  (B)  HISPANIC/LATINO  PERSONS OF MEXICAN, PUERTO RICAN,
 DOMINICAN, CUBAN, CENTRAL OR SOUTH AMERICAN OF EITHER INDIAN OR HISPANIC
 ORIGIN, REGARDLESS OF  RACE;  (C)  NATIVE  AMERICAN  OR  ALASKAN  NATIVE
 PERSONS  HAVING ORIGINS IN ANY OF THE ORIGINAL PEOPLES OF NORTH AMERICA;
 AND (D) ASIAN AND PACIFIC ISLANDER PERSONS HAVING ORIGINS IN ANY OF  THE
 A. 3352                             4

 FAR  EAST  COUNTRIES,  SOUTH  EAST  ASIA, THE INDIAN SUBCONTINENT OR THE
 PACIFIC ISLANDS.
   13.  "PUBLIC  BANK" MEANS A NOT-FOR-PROFIT CORPORATION, A STOCK CORPO-
 RATION, INCLUDING A PUBLIC BENEFIT CORPORATION INCORPORATED PURSUANT  TO
 ARTICLE  SEVENTEEN OF THE BUSINESS CORPORATION LAW, OR LIMITED LIABILITY
 COMPANY THAT IS CHARTERED PURSUANT TO THIS ARTICLE AS A BANK.  A  PUBLIC
 BANK FORMED AS A STOCK CORPORATION OR A NOT-FOR-PROFIT CORPORATION SHALL
 BE A PUBLIC CORPORATION, AND A PUBLIC BANK FORMED AS A LIMITED LIABILITY
 CORPORATION SHALL BE A PUBLIC LIMITED LIABILITY COMPANY.
   14.  "PUBLIC  BANK  APPLICATION  DOCUMENTS"  MEANS A BUSINESS PLAN AND
 APPLICATION TO BE SUBMITTED TO THE DEPARTMENT PURSUANT  TO  SECTION  ONE
 HUNDRED  FIFTY-SIX-C  OF  THIS  ARTICLE  FOR THE PURPOSE OF CHARTERING A
 PUBLIC BANK.
   15. "PUBLIC CORPORATION" MEANS A STOCK CORPORATION, INCLUDING A PUBLIC
 BENEFIT CORPORATION INCORPORATED PURSUANT TO ARTICLE  SEVENTEEN  OF  THE
 BUSINESS CORPORATION LAW, OR A NOT-FOR-PROFIT CORPORATION THAT IS INCOR-
 PORATED, OWNED AND CONTROLLED BY A COUNTY, CITY, TOWN OR VILLAGE.
   16. "PUBLIC FUNDS" MEANS FUNDS OF THE SPONSOR.
   17.  "PUBLIC  LIMITED  LIABILITY  COMPANY"  MEANS  A LIMITED LIABILITY
 COMPANY THAT IS INCORPORATED, OWNED AND CONTROLLED BY  A  COUNTY,  CITY,
 TOWN OR VILLAGE.
   18.  "STATE  OR LOCAL AUTHORITY" MEANS A LOCAL GOVERNMENT OR AGENCY, A
 GROUP OF TWO OR MORE LOCAL  GOVERNMENTS  OR  AGENCIES  ACTING  TOGETHER,
 SPECIAL  DISTRICT,  A  GROUP  OF  TWO  OR  MORE SPECIAL DISTRICTS ACTING
 TOGETHER, STATE AGENCY, OR A GROUP OF TWO OR MORE STATE AGENCIES  ACTING
 TOGETHER.
   19.  "SPONSOR"  MEANS ONE OR MORE CITIES, TOWNS, VILLAGES AND/OR COUN-
 TIES WITHIN THE STATE OF NEW YORK WITH AN  AGGREGATE  POPULATION  OF  AT
 LEAST ONE HUNDRED THOUSAND RESIDENTS.
   §  156-A.  SPONSORS  AND CORPORATE STRUCTURE.   A PUBLIC BANK MAY BE A
 NOT-FOR-PROFIT CORPORATION, A LIMITED LIABILITY COMPANY  OR  A  BUSINESS
 CORPORATION THAT IS FORMED BY A SPONSOR, SUBJECT TO THE FOLLOWING CORPO-
 RATE STRUCTURE REQUIREMENTS:
   1.   IF INCORPORATED AS A BUSINESS CORPORATION, A PUBLIC BANK MAY, BUT
 IS NOT REQUIRED TO:
   (A) INCORPORATE AS A PUBLIC BENEFIT CORPORATION UNDER  ARTICLE  SEVEN-
 TEEN OF THE BUSINESS CORPORATION LAW; OR
   (B)  IDENTIFY  IN  ITS  CERTIFICATE OF INCORPORATION A SPECIFIC PUBLIC
 BENEFIT, CONSISTENT WITH THE PROVISIONS  OF  ARTICLE  SEVENTEEN  OF  THE
 BUSINESS CORPORATION LAW. SPECIFIC PUBLIC BENEFITS WITHIN THE MEANING OF
 THIS  SECTION SHALL INCLUDE, BUT ARE NOT LIMITED TO, STRENGTHENING LOCAL
 ECONOMIES, SUPPORTING COMMUNITY ECONOMIC DEVELOPMENT, ADDRESSING INFRAS-
 TRUCTURE AND HOUSING NEEDS FOR LOCALITIES AND PROVIDING BANKING SERVICES
 TO UNBANKED OR UNDERBANKED COMMUNITIES.
   2. THE SPONSOR SHALL BE (A) THE SOLE MEMBER OF A NOT-FOR-PROFIT PUBLIC
 BANK, (B) THE MAJORITY AND CONTROLLING MEMBER  OF  A  LIMITED  LIABILITY
 COMPANY PUBLIC BANK, AND (C) THE MAJORITY AND CONTROLLING SHAREHOLDER OF
 A CORPORATION PUBLIC BANK.
   3.  A  PUBLIC  BANK ORGANIZED AS A LIMITED LIABILITY COMPANY OR CORPO-
 RATION MAY HAVE OTHER MEMBERS OR SHAREHOLDERS BUT SUCH OTHER MEMBERS  OR
 SHAREHOLDERS SHALL ONLY BE PASSIVE MEMBERS OR SHAREHOLDERS AND SHALL NOT
 HAVE  ANY  CONSENT OR VETO RIGHTS OVER ANY DECISIONS, ANY REMOVAL RIGHTS
 OF THE SPONSOR, ANY RIGHTS TO ELECT OR CHOOSE THE BOARD  OR  ANY  VOTING
 RIGHTS WHATSOEVER.
   4.  PASSIVE MEMBERS OR PASSIVE SHAREHOLDERS SHALL BE ALLOWED TO INVEST
 CAPITAL INTO A PUBLIC BANK SO LONG AS SUCH PASSIVE  MEMBERS  OR  PASSIVE
 A. 3352                             5

 SHAREHOLDERS  ARE  APPROVED BY THE SPONSOR AND THE SPONSOR MAINTAINS THE
 RIGHT TO DIRECT THE PUBLIC BANK TO PURCHASE THE INTERESTS OF ANY PASSIVE
 MEMBERS OR SHAREHOLDERS AT A MARKET PRICE DETERMINED BY  AN  INDEPENDENT
 THIRD PARTY SELECTED BY THE SPONSOR AT ANY TIME.
   5.  THE  SPONSOR  SHALL  OWE  NO  FIDUCIARY DUTY NOR ANY OTHER DUTY TO
 PASSIVE INVESTORS. NO PASSIVE INVESTOR MAY PURSUE LEGAL  ACTION  AGAINST
 THE  SPONSOR  FOR  ANY  REASON  OTHER  THAN  FAILURE TO DISTRIBUTE FUNDS
 REQUIRED TO BE DISTRIBUTED PURSUANT TO GOVERNING DOCUMENTS OF THE PUBLIC
 BANK.
   § 156-B. GOVERNANCE. 1. THE PUBLIC  BANK  SHALL  BE  GOVERNED  BY  THE
 BOARD.  SUCH  BOARD SHALL BE COMPOSED OF NINE DIRECTORS OR ELEVEN DIREC-
 TORS. EACH DIRECTOR SHALL LIVE WITHIN THE JURISDICTIONAL  BOUNDARIES  OF
 THE SPONSOR.
   2.  THE SPONSOR SHALL DETERMINE THE PUBLIC BANK'S INITIAL BOARD IN THE
 FOLLOWING MANNER:
   (A) THE MAYOR, OR HEAD OF THE EXECUTIVE BRANCH OF  GOVERNMENT  OF  THE
 SPONSOR  OR  SPONSORS, SHALL APPOINT THREE MEMBERS, AT LEAST ONE OF WHOM
 SHALL HAVE COMMUNITY BANKING EXPERIENCE AND AT LEAST ONE OF  WHOM  SHALL
 BE INDEPENDENT;
   (B) THE CITY COUNCIL, OR LEGISLATIVE BRANCH OF THE SPONSOR OR SPONSORS
 SHALL  APPOINT  TWO  MEMBERS,  AT LEAST ONE OF WHOM SHALL HAVE COMMUNITY
 BANKING EXPERIENCE AND AT LEAST ONE OF WHOM SHALL BE INDEPENDENT;
   (C) THE TREASURER, CONTROLLER OR ELECTED OFFICIAL CHARGED  WITH  OVER-
 SEEING  THE  SPONSOR  OR  SPONSORS'  FINANCES  AND THE ADMINISTRATION OF
 PUBLIC FUNDS SHALL APPOINT ONE MEMBER WHO SHALL HAVE  COMMUNITY  BANKING
 EXPERIENCE AND BE INDEPENDENT; AND
   (D)  THE BOARD MEMBERS SELECTED PURSUANT TO PARAGRAPHS (A) THROUGH (C)
 OF THIS SUBDIVISION SHALL,  PURSUANT  TO  A  TWO-THIRDS  MAJORITY  VOTE,
 APPOINT AT THEIR DISCRETION AND IN ACCORDANCE WITH SUBDIVISIONS FIVE AND
 SIX OF THIS SECTION, EITHER THREE OR FIVE ADDITIONAL BOARD MEMBERS, WITH
 THE  PURPOSE  OF  MAXIMIZING BOARD DIVERSITY TO INCLUDE A VARIETY OF THE
 SPONSOR'S COMMUNITY STAKEHOLDERS,  INCLUDING  COMMUNITY-BASED  ORGANIZA-
 TIONS,  LABOR  ORGANIZATIONS  AND THOSE GROUPS PRIORITIZED BY THE PUBLIC
 BANK'S UNDERWRITING AND FINANCIAL POLICIES, AS REFLECTED IN SECTION  ONE
 HUNDRED FIFTY-SIX-G OF THIS ARTICLE. FOR ANY SPONSOR THAT IS ALSO A CITY
 WITH  A  POPULATION  OF  ONE MILLION OR MORE, THE BOARD MEMBERS SELECTED
 PURSUANT TO PARAGRAPHS (A) THROUGH (C) OF THIS SUBDIVISION MAY, PURSUANT
 TO A TWO-THIRDS MAJORITY VOTE, APPOINT EITHER SEVEN OR  NINE  ADDITIONAL
 BOARD MEMBERS TO MAXIMIZE BOARD DIVERSITY.
   3.  THE  BOARD  SHALL ADOPT BYLAWS, GOVERNING DOCUMENTS OR THEIR FUNC-
 TIONAL EQUIVALENTS AS REQUIRED BY THE  NOT-FOR-PROFIT  CORPORATION  LAW,
 BUSINESS  CORPORATION LAW, OR LIMITED LIABILITY COMPANY LAW, AS APPLICA-
 BLE, BASED ON THE CORPORATE STRUCTURE OF THE PUBLIC BANK. SUCH GOVERNING
 DOCUMENTS SHALL INCLUDE:
   (A) PROCEDURES TO REMOVE DIRECTORS CONSISTENT WITH THIS ARTICLE;
   (B) PROCEDURES FOR REPLACING DIRECTORS CONSISTENT WITH THIS ARTICLE;
   (C) A PROVISION REQUIRING THAT  THE  BOARD  MEMBERSHIP  OF  ANY  BOARD
 MEMBER WHO ALSO SERVES AS A PUBLIC OFFICIAL OR LOCAL ELECTED OFFICIAL OF
 A  SPONSOR SHALL TERMINATE IMMEDIATELY UPON SUCH BOARD MEMBER CEASING TO
 HOLD SUCH PUBLIC OFFICE; AND
   (D) APPROPRIATE TERM LIMITS FOR BOARD MEMBERS, CONSISTENT  WITH  PARA-
 GRAPH (C) OF THIS SUBDIVISION.
   4.  AT LEAST ONE BOARD MEMBER APPOINTED PURSUANT TO PARAGRAPHS (A) AND
 (B) OF SUBDIVISION TWO OF THIS SECTION SHALL BE A REPRESENTATIVE OF  ONE
 OF  THE  COMMUNITY  STAKEHOLDERS PRIORITIZED BY THE PUBLIC BANK'S UNDER-
 A. 3352                             6
 
 WRITING AND FINANCIAL POLICIES  AS  REFLECTED  IN  SECTION  ONE  HUNDRED
 FIFTY-SIX-G OF THIS ARTICLE.
   5.  WHEN A BOARD MEMBER RESIGNS OR CEASES TO BE A BOARD MEMBER FOR ANY
 REASON, THE INDIVIDUAL APPOINTED TO REPLACE SUCH BOARD MEMBER  SHALL  BE
 APPOINTED  IN ACCORDANCE WITH THE SAME SELECTION CRITERIA AND PROCESS BY
 WHICH SUCH DEPARTING MEMBER WAS APPOINTED UNDER SUBDIVISION TWO OF  THIS
 SECTION.
   6.  THE SPONSOR AND BOARD WILL TAKE ALL STEPS NECESSARY TO ENSURE THAT
 THE COMPOSITION OF THE BOARD REFLECTS THE COMPOSITION OF THE  POPULATION
 IN TERMS OF PEOPLE OF COLOR AND WOMEN.
   7.  A MAJORITY OF THE BOARD SHALL BE COMPOSED OF INDEPENDENT DIRECTORS
 WHO ARE NOT GOVERNMENT EMPLOYEES. THE CHAIR OF  THE  BOARD  MUST  BE  AN
 INDEPENDENT DIRECTOR.
   8.  THE  BOARD  SHALL  SET  POLICY  FOR THE PUBLIC BANK; PROVIDED THAT
 NEITHER THE BOARD NOR ANY DIRECTOR SHALL BE INVOLVED IN DAY TO DAY DECI-
 SIONS REGARDING PARTICULAR INSTRUMENTS. MANAGEMENT  DECISIONS  SHALL  BE
 MADE  INDEPENDENTLY  BY  BANK  MANAGEMENT  WHO SHALL BE APPOINTED BY THE
 BOARD CONSISTENT WITH BANK POLICY.
   9. THE BOARD MAY ESTABLISH ONE OR MORE COMMITTEES TO MANAGE THE PUBLIC
 BANK.
   10. THE BOARD SHALL ADHERE TO ALL REPORTING  REQUIREMENTS  UNDER  THIS
 CHAPTER REGARDING THE PUBLIC BANK'S FINANCIAL CONDITION.
   11.  A  PUBLIC BANK SHALL FORM ONE OR MORE ADVISORY BOARDS IN ORDER TO
 PROVIDE ADVICE AND CARRY OUT ANY OTHER  DUTIES,  AS  DETERMINED  BY  THE
 SPONSOR, INCLUDING THE FOLLOWING:
   (A)  PROVIDE  INPUT  TO  THE  BOARD  REGARDING  WAYS TO ACCOMPLISH ITS
 MISSION;
   (B) ENSURE THAT THE BOARD FOLLOWS STRICT ETHICAL STANDARDS  AS  DETER-
 MINED  BY  THE SPONSOR IN THE PUBLIC BANK'S GOVERNING DOCUMENTS, THROUGH
 THE APPROVAL OF BYLAWS OR A  CODE  OF  CONDUCT  TO  GOVERN  THE  BOARD'S
 MANAGEMENT;
   (C)  ENSURE  THAT  THE  PUBLIC  BANK'S  OPERATIONS ARE CONSISTENT WITH
 SOCIAL EQUITY PRINCIPLES, INCLUDING RACIAL,  GENDER,  AND  ENVIRONMENTAL
 JUSTICE AND INDIGENOUS RIGHTS;
   (D) PROVIDE TECHNICAL ADVICE AS NEEDED; AND
   (E)  PROVIDE AN ANNUAL REPORT TO THE PUBLIC AND THE SPONSOR EVALUATING
 THE PUBLIC BANK'S PERFORMANCE IN RELATION TO ITS  MISSION,  ITS  ETHICAL
 STANDARDS AND ITS FINANCIAL SOUNDNESS.
   12.  THE SPONSOR WILL DETERMINE THE INITIAL ADVISORY BOARD MEMBERSHIP,
 THE TERM OF ITS MEMBERS, THE QUALIFICATIONS OF MEMBERS  AND  THE  METHOD
 FOR  REPLACING  ITS  MEMBERS,  PROVIDED THAT A MAJORITY OF EACH ADVISORY
 BOARD IS MADE UP OF INDEPENDENT MEMBERS WHO ARE NOT GOVERNMENTAL EMPLOY-
 EES. THE ADVISORY BOARD SHALL BE COMPOSED OF NO FEWER THAN FIVE  AND  NO
 MORE  THAN  ELEVEN  MEMBERS. ANY ADVISORY BOARD MEMBER SHALL LIVE WITHIN
 THE JURISDICTIONAL BOUNDARY OF THE PUBLIC BANK'S SPONSOR OR ITS  MEMBERS
 OR SHAREHOLDERS.
   13.  ANY  ACTION  REQUIRED OR PERMITTED BY THIS CHAPTER TO BE TAKEN BY
 THE BOARD OR AN ADVISORY BOARD MAY BE TAKEN AT A DULY CALLED MEETING  OF
 SUCH BOARD IN ACCORDANCE WITH ITS GOVERNING DOCUMENTS OR WITHOUT A MEET-
 ING  IF  THE  ACTION  TAKEN IS EVIDENCED BY ONE OR MORE WRITTEN CONSENTS
 DESCRIBING THE ACTION TAKEN AND SIGNED BY EACH MEMBER OF  THE  BOARD  OR
 ADVISORY BOARD.
   §  156-C.  PUBLIC BANK CHARTER REQUIREMENTS. 1. A PROPOSED PUBLIC BANK
 SHALL BE CHARTERED BY THE DEPARTMENT UPON SUBMISSION OF THE PUBLIC  BANK
 APPLICATION DOCUMENTS THAT DEMONSTRATE THE FOLLOWING:
 A. 3352                             7
 
   (A)  THE  PURPOSE  OF  THE PROPOSED PUBLIC BANK IS CONSISTENT WITH THE
 PURPOSES REQUIRED UNDER THIS ARTICLE;
   (B)  MINIMUM INITIAL CAPITALIZATION IS NO LESS THAN TEN PERCENT OF THE
 PUBLIC BANK'S PROJECTED LENDING TOTAL FOR THE FIRST  YEAR  OF  OPERATION
 AFTER RECEIPT OF ITS CHARTER;
   (C)  ADEQUATE  RESERVES AND LIQUIDITY EXIST TO COVER THE PUBLIC BANK'S
 OBLIGATIONS RELATING TO DEPOSIT WITHDRAWALS AND DEFAULTED LOANS;
   (D) THE QUALIFICATIONS OF THE PROPOSED DIRECTORS;
   (E) THE QUALIFICATIONS OF THE PROPOSED  CHIEF  EXECUTIVE  OFFICER  AND
 MANAGEMENT TEAM;
   (F) AN ORGANIZATIONAL CHART;
   (G)  POLICIES  AND  PROCEDURES  PROHIBITING  ANY  ELECTED OFFICIAL, OR
 AFFILIATES OF SUCH OFFICIALS, FROM RECEIVING A LOAN OR  OTHER  FINANCIAL
 BENEFIT FROM THE PUBLIC BANK;
   (H) PROCEDURES FOR OBTAINING FIDELITY INSURANCE;
   (I) SUFFICIENT INTERNAL AUDITS AND CONTROLS;
   (J)  A  PRO FORM A FINANCIAL STATEMENT PROJECTING ASSETS, LIABILITIES,
 INCOME AND EXPENSES FOR NO LESS THAN A THREE YEAR PERIOD;
   (K) NO MATERIAL NEGATIVE IMPACT OF THE PUBLIC BANK  ON  THE  SPONSOR'S
 FINANCIAL CONDITION;
   (L)  A  PLAN  TO  COMPLY  WITH THE COMMUNITY REINVESTMENT ACT AND FAIR
 LENDING REQUIREMENTS, PURSUANT TO SECTION TWO  HUNDRED  NINETY-SIX-A  OF
 THE EXECUTIVE LAW;
   (M) A CERTIFICATE OF INCORPORATION;
   (N)  A  NARRATIVE  BUSINESS PLAN DESCRIBING THE BANKING SERVICES TO BE
 PROVIDED; AND
   (O) SUCH OTHER INFORMATION AS THE DEPARTMENT MAY REQUIRE.
   2. THE PUBLIC BANK MAY BUT SHALL NOT BE REQUIRED TO INSURE  OR  COLLA-
 TERALIZE DEPOSITS FROM THE SPONSOR OR ANY OTHER GOVERNMENTAL ENTITY WITH
 INSURANCE  OR  COLLATERAL DETERMINED BY THE PUBLIC BANK IN ITS GOVERNING
 DOCUMENTS.
   3. THE PUBLIC BANK APPLICATION DOCUMENTS ARE NOT REQUIRED  TO  PROVIDE
 THAT THE PUBLIC BANK WILL RECEIVE DEPOSITS IN ITS INITIAL THREE YEARS OF
 OPERATION,  AND  NOT  RECEIVING  DEPOSITS  IN THE INITIAL THREE YEARS OF
 OPERATION SHALL NOT BE A REASON FOR DISAPPROVAL BY THE SUPERINTENDENT.
   4. PUBLIC BANK APPLICATION DOCUMENTS ARE NOT  REQUIRED  TO  INCLUDE  A
 MARKET,  PUBLIC  CONVENIENCE AND ADVANTAGE, COMPETITIVE IMPACT OR A BANK
 PREMISES ANALYSIS OR ADDRESS ANY OTHER MATTERS OTHER THAN  THOSE  LISTED
 IN SUBDIVISION ONE OF THIS SECTION.
   §  156-D.  FINANCIAL  AND OPERATIONS FRAMEWORK. 1. THE PUBLIC BANK MAY
 RAISE CAPITAL THROUGH ANY LEGAL MEANS, INCLUDING BUT NOT LIMITED TO:
   (A) THE RECEIPT AND LEVERAGE OF PUBLIC DEPOSITS,
   (B) SPONSOR EQUITY CONTRIBUTIONS,
   (C) PASSIVE MEMBER OR SHAREHOLDER EQUITY CONTRIBUTIONS,
   (D) SALE OF CORPORATE DEBT TO SPONSOR, AND
   (E) SALE OF CORPORATE DEBT TO THIRD PARTIES.
   2. THE PUBLIC BANK SHALL HAVE ALL THE RIGHTS AND POWERS  CONFERRED  BY
 ARTICLES THREE AND FIFTEEN OF THIS CHAPTER, WHICH MUST BE EXERCISED IN A
 MANNER CONSISTENT WITH ITS MISSION.
   3.  ALL  LENDING  AND  ACTIONS  OF  THE PUBLIC BANK SHALL ABIDE BY THE
 UNITED NATIONS DECLARATION ON THE RIGHTS OF INDIGENOUS PEOPLES.   CONSE-
 QUENTLY,  ALL  PUBLIC  BANKS  THAT ARE FORMED BY A SPONSOR THAT INCLUDES
 INDIGENOUS COMMUNITIES WILL INCLUDE A REPRESENTATIVE NUMBER  OF  INDIGE-
 NOUS  PEOPLE  ON THE BOARD AND ADVISORY COMMITTEE OF THE PUBLIC BANK AND
 PRIORITIZE LOANS TO INDIGENOUS COMMUNITIES.
 A. 3352                             8
 
   4. THE SPONSOR MAY PROHIBIT INVESTMENTS AND LOANS THAT MAY BENEFIT ANY
 TYPE OF DESIGNATED BUSINESS INCLUDING THE FOSSIL FUEL INDUSTRY,  WEAPONS
 OR GUN MANUFACTURERS, MILITARY SYSTEMS COMPANIES, PRIVATE PRISONS, IMMI-
 GRATION  DETENTION  FACILITIES, COMPANIES ENGAGED IN OFFSHORE TAX AVOID-
 ANCE  OR  EXPLOITATIVE BUSINESS OR LABOR PRACTICES OR THE TOBACCO INDUS-
 TRY, ALL AS DETERMINED BY THE SPONSOR IN  THE  PUBLIC  BANK'S  GOVERNING
 DOCUMENTS.
   5.  THE  PUBLIC BANK SHALL BE EXEMPT FROM STATE, COUNTY, AND MUNICIPAL
 TAXES AND LICENSES, OF ANY KIND, INCLUDING INCOME,  CAPITAL  GAIN,  REAL
 ESTATE AND MORTGAGE RECORDING TAXES.
   6.  THE PUBLIC BANK SHALL NOT BE SOLD TO OR MERGED WITH ANOTHER ENTITY
 UNLESS SUCH ENTITY HAS A PUBLIC BANK CHARTER AND THE SALE OR MERGER  HAS
 BEEN APPROVED BY THE SUPERINTENDENT.
   § 156-E.  INSURANCE.  A PUBLIC BANK SHALL OBTAIN INSURANCE OF DEPOSITS
 ONLY TO THE EXTENT THAT IT RECEIVES DEPOSITS FROM THE GENERAL PUBLIC.
   §  156-F.  DEPOSITS.  1.  THE  BOARD  SHALL DEVELOP A PLAN, SUBJECT TO
 APPROVAL BY THE ADVISORY BOARD, TO ACCEPT AND MANAGE DEPOSITS.
   2. THE COMPTROLLER OR CHIEF FINANCIAL OFFICER OF THE SPONSOR SHALL  BE
 AUTHORIZED TO DEPOSIT PUBLIC FUNDS IN THE PUBLIC BANK, PROVIDED THAT THE
 PUBLIC  BANK'S  BUSINESS PLAN PERMITS THE COMPTROLLER OR CHIEF FINANCIAL
 OFFICER TO MEET THE SHORT OR INTERMEDIATE-TERM LIQUIDITY  NEEDS  OF  THE
 SPONSOR.
   3.  THE  PUBLIC BANK MAY ACCEPT DEPOSITS, BUT SHALL BE EXEMPT FROM THE
 REQUIREMENTS OF SECTION TEN OF THE GENERAL MUNICIPAL LAW.
   4. THE PUBLIC BANK MAY ACCEPT DEPOSITS FROM ANY SOURCE AND FUNDS  FROM
 ANY SOURCE, INCLUDING FEDERAL FUNDS.
   §  156-G. PERMITTED ACTIVITIES OF THE PUBLIC BANK. 1.  THE PUBLIC BANK
 SHALL HAVE ALL THE RIGHTS AND POWERS CONFERRED  BY  ARTICLES  THREE  AND
 FIFTEEN OF THIS CHAPTER, WHICH SHALL BE EXERCISED IN A MANNER CONSISTENT
 WITH  ITS MISSION.   THE PUBLIC BANK MAY LIMIT AND DEFINE ITS RIGHTS AND
 POWERS IN THE CHARTER THAT IT SUBMITS PURSUANT TO  SECTION  ONE  HUNDRED
 FIFTY-SIX-C OF THIS ARTICLE, BUT IT IS THE INTENTION TO GRANT ANY PUBLIC
 BANK  CREATED  UNDER  THIS  LAW THE FULL RIGHTS AND POWERS THAT ANY BANK
 WOULD BE PERMITTED TO EXERCISE UNDER NEW YORK'S BANKING LAWS, SUBJECT TO
 THOSE LIMITATIONS THAT WILL BE APPROVED BY THE DEPARTMENT.
   2. WITHIN THE OVERALL  UNDERWRITING  AND  FINANCIAL  POLICIES  OF  THE
 PUBLIC  BANK,  THE  PUBLIC  BANK  SHALL  MAXIMIZE  AND  PRIORITIZE LOANS
 SUPPORTING WORKER COOPERATIVES, COMMUNITY LAND  TRUSTS,  LOW-INCOME  AND
 AFFORDABLE  HOUSING, RENEWABLE ENERGY, INFRASTRUCTURE DEVELOPMENT, SMALL
 BUSINESSES, SMALL FARMS, MINORITY- AND WOMEN-OWNED BUSINESS ENTERPRISES,
 STUDENTS IN NEED OF LOW-COST EDUCATION FINANCING OR REFINANCING  STUDENT
 LOAN  DEBTS,  AND  OTHER  INITIATIVES  THAT  FULFILL  THE  PUBLIC BANK'S
 MISSION, WITH A FOCUS ON SERVING UNDERSERVED  AND  UNDERBANKED  COMMUNI-
 TIES, AS WELL AS THOSE WITHIN ECONOMICALLY DISTRESSED COMMUNITIES.
   §  156-H. INCONSISTENCY WITH OTHER LAWS. 1. A PUBLIC BANK SHALL COMPLY
 WITH ALL REQUIREMENTS OF THIS CHAPTER, THE FINANCIAL SERVICES  LAW,  THE
 STATE FINANCE LAW, THE LOCAL FINANCE LAW, THE GENERAL MUNICIPAL LAW, THE
 NOT-FOR-PROFIT  CORPORATION  LAW,  AND  ALL OTHER RELEVANT PROVISIONS OF
 STATE OR LOCAL LAW, EXCEPT TO THE EXTENT THAT A REQUIREMENT  OF  ANY  OF
 THOSE  LAWS  IS  INCONSISTENT WITH A PROVISION OF THIS ARTICLE, IN WHICH
 CASE THE PROVISIONS OF THIS ARTICLE SHALL PREVAIL.
   2. NOTWITHSTANDING ANY PROVISION OF STATE OR LOCAL LAW,  A  COUNTY  OR
 OTHER STATE OR LOCAL AUTHORITY MAY LEND ITS CREDIT TO ANY PUBLIC BANK.
   3.  NOTWITHSTANDING  ANY PROVISION OF STATE OR LOCAL LAW, ANY STATE OR
 LOCAL AUTHORITY MAY INVEST IN COMMERCIAL PAPER, DEBT SECURITIES OR OTHER
 OBLIGATIONS OF A PUBLIC BANK.
 A. 3352                             9

   4. NOTWITHSTANDING ANY PROVISION OF STATE OR LOCAL LAW, A PUBLIC  BANK
 SHALL BE ELIGIBLE TO RECEIVE STATE AND LOCAL AUTHORITY MONEY.
   §  156-I. OWNERS NOT TO BE CONSIDERED BANK HOLDING COMPANIES.  FOR THE
 PURPOSES OF SECTION ONE HUNDRED FORTY-ONE OF THIS CHAPTER, ANY  SPONSOR,
 PERSON  OR  ENTITY,  INCLUDING  A  STATE  OR LOCAL AUTHORITY, THAT OWNS,
 CONTROLS, OR HOLDS AN OWNERSHIP INTEREST IN A PUBLIC BANK IS NOT A  BANK
 HOLDING COMPANY BY REASON OF THAT OWNERSHIP INTEREST.
   §  5.  Section  98 of the state finance law is amended by adding a new
 subdivision 7-a to read as follows:
   7-A. COMMERCIAL PAPER, DEBT SECURITIES, BONDS, NOTES, OR  OTHER  OBLI-
 GATIONS  OF  A PUBLIC BANK, AS DEFINED IN ARTICLE THREE-C OF THE BANKING
 LAW.
   § 6. Paragraph d of subdivision 1 of section 10 of the general munici-
 pal law, as amended by chapter 623 of the laws of 1998,  is  amended  to
 read as follows:
   d.  "Bank"  shall mean a bank OR PUBLIC BANK as defined by the banking
 law or a national banking association located and authorized to do busi-
 ness in New York.
   § 7. This act shall take effect immediately.