senate Bill S3654A

2011-2012 Legislative Session

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

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 19, 2012 print number 3654a
amend and recommit to banks
Jan 04, 2012 referred to banks
Feb 28, 2011 referred to banks

Bill Amendments

Original
A (Active)
Original
A (Active)

S3654 - Bill Details

Current Committee:
Law Section:
Banking Law
Laws Affected:
Amd §§96-d & 451, Bank L
Versions Introduced in 2009-2010 Legislative Session:
S4873

S3654 - Bill Texts

view 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.

view sponsor memo
BILL NUMBER:S3654

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

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, 2011, 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, with provisions.

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

                                  3654

                       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

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, 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
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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04666-01-1

S. 3654                             2

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 banking board
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,  2011,
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 and provided, further that the amendments to subdi-
vision 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 as provided in section 4 of chapter 526 of  the
laws  of  1998;  provided, however, that any branch established prior to
the expiration and repeal of this act by a credit union or federal cred-
it union in a banking development district pursuant to  this  act  shall
continue to operate in accordance with the provisions of the banking law
as amended by this act and remain eligible for all the rights and privi-
leges authorized by this act.

S3654A (ACTIVE) - Bill Details

Current Committee:
Law Section:
Banking Law
Laws Affected:
Amd §§96-d & 451, Bank L
Versions Introduced in 2009-2010 Legislative Session:
S4873

S3654A (ACTIVE) - Bill Texts

view 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.

view 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 full text
download pdf
                    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.

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