S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5669
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              March 13, 2023
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Banks
 
 AN ACT in relation to the study of the utilization of  state  government
   payments  as  an  opportunity  to  transition unbanked and underbanked
   state residents into the banking system

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The superintendent of the department of financial services,
 in  conjunction  with  the director of the state budget, the director of
 state operations and the commissioner of the department of taxation  and
 finance, and in consultation with the state comptroller, shall study and
 issue  a comprehensive report on methods and opportunities to transition
 unbanked and underbanked state residents entitled  to  state  government
 payments into the banking system.
   1.  For  purposes  of this section, the following terms shall have the
 following meanings:
   a. "unbanked" shall mean an individual not served by an insured insti-
 tution in any capacity;
   b. "underbanked" shall mean  an  individual  with  an  account  at  an
 insured  institution but who has obtained alternative, nonbank financial
 services in the past twelve months; and
   c. "state agency" shall mean any agency, department,  bureau,  commis-
 sion,  board,  task  force,  committee,  public  benefit corporation, or
 public authority, where a member is appointed by the governor.
   2. Such study shall:
   a. examine the types of payments made by state agencies to state resi-
 dents including but not limited to tax returns, benefits, credits, unem-
 ployment insurance, and the lottery, which  are  made  in  a  sufficient
 amount to the unbanked and underbanked;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10095-01-3
 S. 5669                             2
 
              

   b.  examine  what  methods  of  payment are used by state agencies and
 whether direct deposit and debit  cards  are  included  as  options  for
 recipients of such state payments;
   c.  determine whether opportunities exist when state payments are made
 to enable state agencies to provide financial education as it relates to
 the value of participation in the banking system;
   d. examine any barriers to choice of direct deposit and the use of the
 banking system based on contact with state agencies;
   e. examine the use of debit cards of other new financial  technologies
 as  a  method  for  disbursement  of  state payments to the unbanked and
 underbanked as a bridge to the banking system;
   f. examine whether a contractual relationship with a minority bank  or
 banks that define specific terms of financial service would be an effec-
 tive measure in encouraging use of direct deposit;
   g.  determine in which, if any, circumstances state payments should be
 exempted from an execution of judgment to encourage use of  the  banking
 system for the unbanked and the underbanked;
   h.  examine barriers and opportunities to charter minority-owned banks
 in unbanked or underbanked communities  including  capital  availability
 and use of state deposits to incentivize their formation; and
   i.  include any concerns or recommendations that the superintendent of
 the department of financial services deems necessary.
   3. A comprehensive report summarizing all of the findings from  subdi-
 vision two of this section shall be sent to the governor, the speaker of
 the  assembly  and  the  temporary president of the senate no later than
 eighteen months after the effective date of this act.
   4. The superintendent of the  department  of  financial  services  may
 request  and  is  authorized  to  receive any information from any state
 agencies that is relevant and material to the completion of  this  study
 and  report.    Such  information  received by the superintendent of the
 department of financial services shall be subject to the  same  require-
 ments  for confidentiality and limitations on use, if any, as are appli-
 cable to such state agency's use of such information.
   § 2. This act shall take effect immediately.