senate Bill S3654A

Includes credit unions and federal credit unions within the definition of bank, trust company or national bank for purpose of banking development district program

download pdf

Sponsor

Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
view actions

actions

  • 28 / Feb / 2011
    • REFERRED TO BANKS
  • 04 / Jan / 2012
    • REFERRED TO BANKS
  • 19 / Jan / 2012
    • AMEND AND RECOMMIT TO BANKS
  • 19 / Jan / 2012
    • PRINT NUMBER 3654A

Summary

Includes credit unions and federal credit unions within the definition of bank, trust company or national bank for the purpose of the banking development district program (which was created to encourage the establishment of bank branches in geographic locations where there is a demonstrated need for banking services); directs the banking board to promulgate rules and regulations to authorize the participation of credit unions and federal credit unions in such program; and provides that for purposes of such program, a credit union may include in its membership any person or organization located within a local community, neighborhood or rural district where there is a demonstrated need for banking services.

do you support this bill?

Bill Details

Versions:
S3654
S3654A
Legislative Cycle:
2011-2012
Current Committee:
Senate Banks
Law Section:
Banking Law
Laws Affected:
Amd ยงยง96-d & 451, Bank L
Versions Introduced in 2009-2010 Legislative Cycle:
S4873

Sponsor Memo

BILL NUMBER:S3654A

TITLE OF BILL:
An act
to amend the banking law, in relation to including credit unions and
federal credit unions within provisions regarding banking development
district program
and providing for the repeal of certain provisions upon
expiration thereof

PURPOSE:
To enable state-chartered credit unions and federal credit unions to
participate in the Banking Development District Program.

SUMMARY OF PROVISIONS:
Section 1 amends subdivision 5 of section 96-d of the banking law to
include credit unions and federal credit unions in the Banking
Development District Program.

Section 2 amends Section 451(2) of the banking law to state that, for
the purposes of section 96-d of this chapter, the credit union may
include in its membership any person or organization located within a
local community, neighborhood or rural district where there is a
demonstrated need for banking services as determined by the
superintendent.

EXISTING LAW:
Currently, only commercial banks, trust companies, savings banks and
savings and loan associations may participate in the Program.

JUSTIFICATION:
Chapter 204 of the Laws of 1997 authorized the creation of a Banking
Development District Program, which enables municipalities and New
York state to offer certain economic incentives to encourage the
establishment of commercial bank branches in areas where there is a
demonstrated need for banking services. Chapter 526 of the Laws of
1998 amended the law to allow savings banks and savings and loan
associations to participate in this program.

This legislation includes credit unions within the economic
development program. Credit unions will be able to offer small
business services, such as member business lending, similar to those
currently offered by commercial banks and thrift institutions. By
enabling credit unions to participate in this program, there will be
more opportunities for municipalities to work with different types of
banking institutions to encourage better banking services in
developing areas.

LEGISLATIVE HISTORY:
S.3143 of 2005-06
S.2867A of 2007-08
S.4873 of 2009-10
S.3654 of 2011-12

FISCAL IMPLICATIONS:


If the State chooses to enter into an agreement with a particular
credit union in which it would earn interest at a lower rate then the
institution's posted 2-year CD rate, then the State would forgo
interest income on those deposits. The State would also forgo a
minimal amount of revenue by waiving the $750 application fee for
establishing a branch.

LOCAL FISCAL IMPLICATIONS:
If a local government chooses to enter into an agreement with a
participating credit union in which it would earn interest at a lower
rate than the institution's posted 2-year CD rate, then the local
government would forgo interest income on those municipal funds.
Because the banking development district program is intended to. spur
the development of a bank facility which would not otherwise exist,
any branches established by credit unions should actually result in a
net increase in property tax revenue. Such increase would grow each
year as the partial property tax exemption declines.

EFFECTIVE DATE:
This act shall take effect immediately and shall be deemed to have
been in full force and effect on or after January 1, 2012, provided
however, that the amendments to subdivision 2 of section 451 of the
banking law made by section two of this act shall expire and be
deemed repealed on the same date as section 4 of chapter 526 of the
laws of 1998.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 3654--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            February 28, 2011
                               ___________

Introduced  by  Sen.  SMITH  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Banks  --  recommitted  to
  the  Committee  on  Banks  in accordance with Senate Rule 6, sec. 8 --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted to said committee

AN  ACT to amend the banking law, in relation to including credit unions
  and federal credit unions within provisions regarding banking develop-
  ment  district  program  and  providing  for  the  repeal  of  certain
  provisions upon expiration thereof

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 5 of section 96-d of the banking law, as  added
by  chapter 526 of the laws of 1998, paragraph (a) as amended by chapter
328 of the laws of 1999 and paragraph (b) as further amended by  section
104  of  part A of chapter 62 of the laws of 2011, is 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, A CREDIT
UNION OR A FEDERAL CREDIT  UNION  eligibility  to  accept  municipal  or
public  funds  or  municipal or public moneys other than for the limited
purposes of the establishment of  a  branch  in  a  banking  development
district pursuant to this section. Any such municipal or public funds or

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04666-02-2

S. 3654--A                          2

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
municipal  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.
  S  2.  Subdivision  2  of section 451 of the banking law is amended by
adding a new paragraph (c-1) to read as follows:
  (C-1) FOR THE PURPOSES OF SECTION NINETY-SIX-D OF  THIS  CHAPTER,  THE
CREDIT  UNION  MAY  INCLUDE IN ITS MEMBERSHIP ANY PERSON OR ORGANIZATION
LOCATED WITHIN A LOCAL COMMUNITY, NEIGHBORHOOD, OR RURAL DISTRICT  WHERE
THERE  IS  A DEMONSTRATED NEED FOR BANKING SERVICES AS DETERMINED BY THE
SUPERINTENDENT.
  S 3. This act shall take effect immediately and  shall  be  deemed  to
have  been  in  full  force  and  effect  on  and after January 1, 2012,
provided, however, that the amendments to subdivision 2 of  section  451
of  the  banking law made by section two of this act shall expire and be
deemed repealed on the same date as section 4 of chapter 526 of the laws
of 1998, as amended, expires and repeals, and provided, further that the
amendments to subdivision 5 of section 96-d of the banking law  made  by
section  one of this act shall not affect the repeal of such subdivision
and shall be deemed to be repealed therewith;  provided,  however,  that
any  branch  established  prior  to  the  expiration  and  repeal of the
provisions of this act by a credit union or federal credit  union  in  a
banking  development  district  pursuant  to  the provisions of this act
shall continue to operate in accordance with the provisions of the bank-
ing law, as amended by this act, and remain eligible for all the  rights
and privileges authorized by this act.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.