Senate Bill S3426

2009-2010 Legislative Session

Requires inclusion and explanation of additional annual data in assessing record of performance of banking institutions in meeting community credit needs

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Archive: Last Bill Status - In Senate Committee Banks 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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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to banks
Mar 18, 2009	referred to banks

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2009-S3426 (ACTIVE) - Details

See Assembly Version of this Bill:: A8121
Current Committee:: Senate Banks
Law Section:: Banking Law
Laws Affected:: Amd §28-b, Bank L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S4406, A1362
2013-2014: A3512
2015-2016: A3385
2017-2018: A1921
2019-2020: A1772

2009-S3426 (ACTIVE) - Summary

Requires inclusion and explanation of additional annual data in assessing record of performance of banking institutions in meeting community credit needs; additional data to include but not be limited to: loans for housing low and moderate-income residents of low and moderate income areas, the scope of efforts to market housing and small business loans in low and moderate-income areas and other data.

2009-S3426 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S3426

 TITLE OF BILL :
An act to amend the banking law, in relation to assessment of the
record of performance of banking institutions in helping to meet the
credit needs of local communities

 PURPOSE OR GENERAL IDEA OF BILL :
Under current law, the Department makes a periodic assessment of a
bank's record in the requirements of the Community Reinvestment Act
(CRA).

This legislation requires the assessment to also include a separate
explanation of the record of the bank pertaining to each of the twelve
individual assessment factors listed under the CRA, with a separate
discussion of how well the bank satisfied each factor.

The discussion relates to loans the bank has made in its community and
the scope of its efforts to market small business loans in low and
moderate income areas. The explanation is to be made available to the
public.

 SUMMARY OF SPECIFIC PROVISIONS :
This bill amends section 28-b (3) (a) of the banking law to require a
bank's CRA evaluation to include a discussion of their performance
record on each of the 12 assessment factors listed in the Community

Reinvestment Act; an explanation of how each of the 12 factors was
considered by the Department in making the assessments. Also, this
bill makes reference to the Superintendent of Banks in a gender
neutral manner.

 JUSTIFICATION :
The lack of detail in the CRA assessments results in assessments that
are uninformative to community leaders and others seeking to work with
banks to increase the bank's local community lending and overall
social responsiveness.

The problem with the CRA rating became particularly apparent when a
law requiring the Banking Department to annually provide each bank
with a numerical CRA "rating" came into effect. Banks which had
engaged in widespread closing of branches in poor and middle income
neighborhoods were nevertheless given a "1" or "outstanding" CRA
rating. The assessment summaries released to the public with these
ratings were very short and did not include any sort of detailed
discussion of how the Department considered each of the twelve CRA
factors; it was impossible to see what weight the Department gave the
bank's record of performance in opening and closing branches.

 PRIOR LEGISLATIVE HISTORY :
A.1801 of 2007-08

 FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS :
None.

 EFFECTIVE DATE :
120th day after enactment.

2009-S3426 (ACTIVE) - Bill Text download pdf

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

                                  3426

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             March 18, 2009
                               ___________

Introduced  by  Sen. SERRANO -- 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 assessment of the record
  of performance of banking institutions in helping to meet  the  credit
  needs of local communities

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

  Section 1. The opening paragraph of paragraph (a) of subdivision 3  of
section  28-b  of the banking law, as amended by chapter 315 of the laws
of 2008, is amended to read as follows:
  When taking any action on an application made by a banking institution
under section one hundred five, two  hundred  twenty-four,  two  hundred
forty,  or  three hundred ninety-six of this chapter for a branch office
or under section one hundred ninety-one of this  chapter  for  a  public
accommodation  office or under section six hundred one-b of this chapter
for approval or disapproval of a merger or purchase of assets, or taking
any action on a notice submitted by a banking institution under  section
one hundred five-a, two hundred forty-a or three hundred ninety-six-a of
this chapter for the use or installation of an automated teller machine,
point-of-sale  terminal  or  similar electronic facility or on any other
application to which the banking board shall by rule or regulation  make
applicable the provisions of this section, the superintendent shall take
into  account,  among  other  factors, an assessment, in writing, of the
record of performance of the banking institution in helping to meet  the
credit  needs of its entire community, including low and moderate-income
neighborhoods, consistent with safe and sound operation of  the  banking
institution.  SUCH ASSESSMENT SHALL INCLUDE A SEPARATE DISCUSSION OF THE
RECORD  OF  THE BANKING INSTITUTION PERTAINING TO EACH OF THE ASSESSMENT
FACTORS LISTED IN ALL OF THE  SUBPARAGRAPHS  OF  THIS  PARAGRAPH  AND  A
COMPLETE  EXPLANATION OF HOW EACH OF THESE FACTORS WAS CONSIDERED BY THE
DEPARTMENT IN MAKING THE ASSESSMENT. THIS EXPLANATION SHALL INCLUDE, BUT

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06349-02-9

S. 3426                             2

NOT BE LIMITED TO, ANNUAL DATA FOR THE INSTITUTION AS FOLLOWS: LOANS FOR
HOUSING LOW AND MODERATE-INCOME RESIDENTS  OF  LOW  AND  MODERATE-INCOME
AREAS,  AND  THE  SCOPE  OF EFFORTS TO MARKET HOUSING AND SMALL BUSINESS
LOANS  IN  LOW  AND MODERATE-INCOME AREAS; THE AMOUNT OF LOANS TO FARMS,
AND LOANS TO SMALL BUSINESSES THAT PROVIDE SERVICES TO  LOW  AND  MODER-
ATE-INCOME RESIDENTS OF LOW AND MODERATE-INCOME AREAS; FINANCIAL INVEST-
MENTS  IN  AND CONTRIBUTIONS TO NONPROFIT LOCAL COMMUNITY DEVELOPMENT OR
REDEVELOPMENT PROJECTS OR ENTITIES; MANPOWER RESOURCES COMMITTED TO  LOW
AND MODERATE-INCOME HOUSING LENDING AND SMALL BUSINESS LENDING AND OTHER
FORMS  OF  ADMINISTRATIVE SUPPORT FOR SUCH LENDING; AND PARTICIPATION IN
GOVERNMENTALLY OR  PRIVATELY  SPONSORED  LOAN  INSURANCE,  GUARANTEE  OR
SUBSIDY  PROGRAMS  FOR  HOUSING,  SMALL BUSINESSES AND SMALL FARMS. Such
assessment AND EXPLANATION and any written communications from the bank-
ing department to a banking institution relating to such assessment  AND
EXPLANATION shall be made available to the public upon request, provided
that  nothing  contained  in  this subdivision shall be deemed to alter,
amend or affect the provisions of subdivision ten of section  thirty-six
of  this  chapter. In making such assessment AND EXPLANATION, the super-
intendent shall review all reports and documents filed WITH HIM  OR  HER
pursuant  to  subdivision  one  of  this section and any signed, written
comments received by the superintendent which specifically relate to the
banking institution's performance in helping to meet the credit needs of
its community.  In  addition,  the  superintendent  shall  consider  the
following  factors  in  assessing AND EXPLAINING a banking institution's
record of performance:
  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law. Effective immediately, the addition,  amend-
ment  and/or repeal of any rules or regulations necessary for the imple-
mentation of the foregoing section of this act on its effective date are
authorized to be made on or before such effective date.

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Senate Bill S3426

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Archive: Last Bill Status - In Senate Committee Banks Committee

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co-Sponsors

2009-S3426 (ACTIVE) - Details

2009-S3426 (ACTIVE) - Summary

2009-S3426 (ACTIVE) - Sponsor Memo

2009-S3426 (ACTIVE) - Bill Text download pdf

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Sponsored By

Archive: Last Bill Status - In Senate Committee Banks Committee

Actions

co-Sponsors

2009-S3426 (ACTIVE) - Details

2009-S3426 (ACTIVE) - Summary

2009-S3426 (ACTIVE) - Sponsor Memo

2009-S3426 (ACTIVE) - Bill Text download pdf

Comments