senate Bill S7610

Authorizes the New York state department of financial services to oversee the planned closing of bank branch offices by federally chartered banking organizations

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Bill Status


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

  • 15 / May / 2014
    • REFERRED TO BANKS

Summary

Authorizes the New York state department of financial services to oversee the planned closing of bank branch offices by federally chartered banking organizations.

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Bill Details

Versions:
S7610
Legislative Cycle:
2013-2014
Current Committee:
Senate Banks
Law Section:
Banking Law
Laws Affected:
Amd ยง28-c, Bank L

Sponsor Memo

BILL NUMBER:S7610

TITLE OF BILL: An act to amend the banking law, in relation to
federally chartered banking organizations

PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to
expand the authority of the superintendent of the New York state
department of financial services to obtain detailed information and to
conduct meetings concerning the planned closing of branch offices
proposed not only by state-chartered banking organizations, but also
federally chartered banking organizations.

SUMMARY OF PROVISIONS:

Section one amends section 28-c of the banking law by authorizing the
superintendent of the New York state department of financial services
to obtain detailed information concerning the planned closing of
branch offices by state-chartered and federally chartered banking
organizations, the availability of alternative financial services
within the general area served by such branch and the economic impact
upon the community resulting from such closing, and to provide the
superintendent with authority to conduct meetings with banking
organizations and community groups in areas where a branch closing is
planned.

Section two sets forth an immediate effective date.

JUSTIFICATION: Bank branches serve an essential role in creating and
maintaining an economically vibrant community. A bank branch provides
a convenient and safe place for local residents to deposit their
money, accumulate savings and obtain home and small business loans. In
addition, a bank branch serves to attract businesses to the local
neighborhood since they can deposit business earnings at the end of
the day without having to drive a long distance and easily access safe
and trustworthy lending services. Furthermore, a local branch plays a
critical role in the lives of senior citizens and individuals with
limited transportation options.

For these reasons, a branch closure can have a severe impact upon the
local community. The negative impacts are even more exacerbated in low
and moderate income neighborhoods. According to a study conducted by
the National Community Reinvestment Coalition, from 2007 through 2010,
bank and credit union branches increased by 1,000 in middle- and
upper-income neighborhoods while decreasing by 530 in low- and
moderate-income neighborhoods across the country. In addition,
branches increased in predominantly white neighborhoods by 598 while
decreasing by 186 in minority neighborhoods where more than 50 percent
of the residents are minority.

The disparity in branches and the negative impact resulting from a
branch closure highlight the importance of ensuring that concerns and
input of the local community are taken into consideration in the
decision making process.

Currently, federally-chartered banking organizations are required to
provide advanced notice to an appropriate federal agency and its
customers. However, under the existing federal regulation, the


community does not have the meaningful input in the decision making
process and the federal notice requirement does not go far enough in
addressing the concerns of the community and protecting the interest
of such branch customers.

In comparison to the federal regulation, New York state banking law
imposes more stringent notice requirements upon state-chartered
banking organizations planning to close a branch. Specifically, state
law authorizes the superintendent of the department of financial
services to obtain more comprehensive information, which includes
availability of alternative financial services within the general
area, economic impact upon the community resulting from such closing,
and a description of any planned, limited or full service banking
facility to be opened within such area. In addition, it allows the
superintendent to conduct meetings with banking organizations and
community groups in areas where a branch closing is planned.

This legislation purports to ensure that bank branches are accessible
to all communities by requiring that not only state-chartered, but
federally chartered bank organizations also comply with the relevant
New York state banking law concerning the planned closing of branch
offices.

LEGISLATIVE HISTORY: None

FISCAL IMPLICATION: None.

EFFECTIVE DATE: This legislation shall take effect immediately.

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

                                  7610

                            I N  S E N A T E

                              May 15, 2014
                               ___________

Introduced  by  Sen.  AVELLA -- read twice and ordered printed, and when
  printed to be committed to the Committee on Banks

AN ACT to amend the banking law,  in  relation  to  federally  chartered
  banking organizations

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

  Section 1. The opening paragraph of subdivision 1 of section  28-c  of
the  banking  law,  as  amended  by  chapter 180 of the laws of 2012, is
amended to read as follows:
  This section is intended to provide the superintendent  with  detailed
information  concerning  the planned closing of branch offices by state-
chartered AND FEDERALLY CHARTERED banking organizations, the availabili-
ty of alternative financial services within the general area  served  by
such  branch  and  the economic impact upon the community resulting from
such closing, and  to  provide  the  superintendent  with  authority  to
conduct  meetings  with  banking  organizations  and community groups in
areas where a branch  closing  is  planned.  The  requirements  of  this
section shall not apply to the following:
  S 2. This act shall take effect immediately.






 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14694-01-4

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