NY State Senate Bill 2025-S1996

Senate Bill S1996

2025-2026 Legislative Session

Establishes a temporary state commission to conduct a feasibility study on the formation and control of a state public bank

download bill text pdf

Current Bill Status - In Senate Committee Finance 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 14, 2025	referred to finance

2025-S1996 (ACTIVE) - Details

Current Committee:: Senate Finance
Law Section:: Banks

2025-S1996 (ACTIVE) - Summary

Establishes a temporary state commission to conduct a feasibility study to evaluate and make recommendations concerning the formation and control of a state public bank; provides if such study finds that the state bank is feasible, the commission may recommend legislation to create a state public bank for New York.

2025-S1996 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S1996

SPONSOR: SANDERS
 
TITLE OF BILL:

An act establishing a New York state public bank commission to study the
benefits of a public bank or network of public banks owned by the state
of New York or by a public authority constituted by the state of New
York; making an appropriation therefor; and providing for the repeal of
such provisions upon expiration thereof

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would establish a temporary state commission, to be known as
the New York state public bank commission, hereinafter referred to as
the commission, to conduct a study of the benefits a public bank or
network of public banks owned by the state of New York or by a public
authority constituted by the state of New York can provide.

 
SUMMARY OF PROVISIONS:

-Establish a temporary state commission, to be known as the New York

state commission on establishing a bank owned by New York state,
herein-after referred to as the commission, is hereby established to
hire a consultant to study the feasibility of establishing a bank owned
by the state of New York or by a public authority constituted by the
state of New York for the public interest.

-The commission shall consist of thirteen members, to be appointed as
follows:

*six members shall be appointed by the governor, one of whom shall be a
representative of the New York state department of financial services,
one shall be a representative from the New York state department of
taxation and finance, the remaining four governor's appointees shall not
be employees of the executive branch and at least one member shall
represent the banking and financial industries of the state including,
but not limited to, the New York bankers association, at least one
member shall represent community banking, and no more than one member
may be a representative of any financial services firm located within
the state, including, but not limited to, the New York state small busi-
ness development center;

*three members shall be appointed by the temporary president of the
senate, one of whom shall be a member of the senate;

*three members shall be appointed by the speaker of the assembly, one of
whom shall be a member of the assembly;

*and the state comptroller or a proxy.

-The majority of the members of the entire commission shall designate
one of the commissioners to serve as the chair of the commission.

-The members of the commission shall be appointed no later than ninety
days after the effective date of this act.

-The commission is directed to hire a reputable consultant that has the
capacity, capability, and experience to conduct a feasibility study to
evaluate and make recommendations concerning the formation and control
of a state public bank. Consultants that have conducted a previous
feasibility study of a public bank at the request of a government entity
in the United States will be given preference. Such study shall make
recommendations, with the advice of the department of financial
services, including but not limited to, on the feasability of establish-
ing a state bank in New York and may recommend legislation for the
legislature to consider in order to to create a state public bank for
New York.

 
JUSTIFICATION:

A public bank is a financial institution created by the state for a
"public benefit" of the community. Who benefits from a Public Bank?
Taxpayers will benefit from both: (a) the profits the bank makes that
return to the general fund of the state to hold the line on taxes; and
(b) the provide banking services to economic disadvantaged communities.
The state will benefit by financing public projects at a reduced cost.
Public banks help local businesses and MWBEs by providing them access to
credit lines, loans, and other forms of financing to help them grow and
succeed. The community benefits because the public bank could provide
affordable loans for students to attend college. Homebuyers seeking
reasonable mortgage loans with reasonable terms and rates also would
benefit.

The Bank of North Dakota, founded in 1919, is currently the only public
bank that exists in the United States. Since 2010, 28 States in the
United States have passed legislation to establish a public banking
taskforce or to create a public bank in their state. The State of Cali-
fornia enacted a law in 2019 allowing municipalities to form a public
bank.

 
PRIOR LEGISLATIVE HISTORY:

New bill

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

$500,000 to the State

 
EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law and shall expire and be deemed repealed one year after such
effective date.

2025-S1996 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1996
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             January 14, 2025
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Finance
 
 AN ACT establishing a New York state public bank commission to study the
   benefits of a public bank or network of  public  banks  owned  by  the
   state of New York or by a public authority constituted by the state of
   New  York;  making  an  appropriation  therefor; and providing for the
   repeal of such provisions upon expiration thereof
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  A temporary state commission, to be known as the New York
 state public bank commission, hereinafter referred to as the commission,
 is hereby established to hire a consultant to study the  feasibility  of
 establishing  a  bank  owned  by  the  state  of New York or by a public
 authority constituted by the state of New York for the public interest.
   § 2. (a) The commission shall  consist  of  thirteen  members,  to  be
 appointed  as follows:  (i) six members shall be appointed by the gover-
 nor, one of whom shall be a representative of the New York state depart-
 ment of financial services, one shall be a representative from  the  New
 York state department of taxation and finance, the remaining four gover-
 nor's  appointees  shall not be employees of the executive branch and at
 least one member shall represent the banking and financial industries of
 the state including, but not limited to, the New  York  bankers  associ-
 ation,  at  least one member  shall represent community  banking, and no
 more than one member may be a representative of any  financial  services
 firm  located  within the state,  including, but not limited to, the New
 York state small business development center;
   (ii) three members shall be appointed by the  temporary  president  of
 the senate, one of whom shall be a member of the senate;
   (iii) three members shall be appointed by the speaker of the assembly,
 one of whom shall be a member of the assembly; and
   (iv) the state comptroller or a proxy.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05646-02-5

 S. 1996                             2
 
   (b) The majority of the members of the entire commission  shall desig-
 nate one of the commissioners to serve as the chair of the commission.
   (c)  The  members  of  the commission shall be appointed no later than
 ninety days after the effective date of this act.
   (d) The commission is directed to hire a reputable consultant that has
 the capacity, capability, and experience to conduct a feasibility  study
 to  evaluate  and  make  recommendations  concerning  the  formation and
 control of a state public bank. Consultants that have conducted a previ-
 ous feasibility study of a public bank at the request  of  a  government
 entity  in  the United States will be given preference. Such study shall
 make recommendations, with the advice of  the  department  of  financial
 services, including but not limited to, on the feasibility of establish-
 ing  a  state  bank  in  New  York and may recommend legislation for the
 legislature to consider in order to create a state public bank  for  New
 York.
   §  3.  The scope of such study shall include, but shall not be limited
 to:
   (a) the purposes of such public bank in the public interest;
   (b) an analysis of cost savings,  impacts  on  the  state's  finances,
 economic development and infrastructure, housing and additional needs of
 the state, including but not limited to:
   (i) appropriate governance structures;
   (ii) minimum capitalization requirements;
   (iii) appropriate insurance and risk management tools;
   (iv) charter requirements;
   (v) financial and operations framework;
   (vi) deposits;
   (vii) permitted activities;
   (viii) benefits;
   (ix) potential challenges that such public banks may encounter;
   (x)  how  the lack of accessible financial services contributes to the
 cycle of poverty;
   (xi) barriers to small business formation and growth;
   (xii) impacts of such public  banks  on  small  businesses,  including
 minority- and women-owned business enterprises;
   (xiii)  impacts  of such public banks on the unbanked, the underbanked
 and banking deserts; and
   (xiv) how a state public bank may  provide  banking  to  the  cannabis
 industry;
   (c) a fiscal analysis of costs associated with formation;
   (d) an analysis that considers the effects of an economic recession on
 the financial results of such public banks;
   (e)  a  legal analysis of whether the proposed structure and operation
 of such public bank complies with the New York state constitution;
   (f) an analysis of how  the  proposed  governance  structure  of  such
 public  bank would protect such public bank from unlawful insider trans-
 actions and apparent conflicts of interest;
   (g) a fiscal analysis of the benefits associated with the creation  of
 such  public  bank,  including,  but  not limited to, cost savings, jobs
 created, jobs retained, economic activity generated and private  capital
 leveraged;
   (h)  a  qualitative assessment of social and environmental benefits of
 such public bank;
   (i) a review of feasibility studies on public banking,  including  the
 city  of  Philadelphia public bank feasibility study and the city of San
 Francisco public bank feasibility study; and
 S. 1996                             3
 
   (j) a review of AB-857 (2019 Cal. Stats. Ch. 442).
   §  4.  The sum of five hundred thousand dollars ($500,000), or so much
 thereof as may be necessary, is hereby appropriated to the department of
 financial services from any moneys in the state treasury in the  general
 fund to the credit of the state purposes account not otherwise appropri-
 ated  for the purposes of carrying out the provisions of this act.  Such
 sum shall be payable on the audit and warrant of the  state  comptroller
 on  vouchers  certified  or  approved by the superintendent of financial
 services, or such superintendent's duly designated representative in the
 manner provided by law.
   § 5. No earlier than six months and no later than seven  months  after
 the  effective date of this act, the commission shall submit a report to
 the governor, the temporary president of the senate, the speaker of  the
 assembly,  the  chair of the senate banks committee and the chair of the
 assembly banks committee on the findings and conclusions  of  the  study
 conducted  pursuant  to  sections  two  and  three of this act and shall
 submit any legislative recommendations deemed to  be  necessary.    Such
 report  shall  be contemporaneously published on the official website of
 the department of financial services.
   § 6. This act shall take effect on the thirtieth day  after  it  shall
 have become a law and shall expire and be deemed repealed one year after
 such effective date.

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