senate Bill S4672

2013-2014 Legislative Session

Allows credit unions, savings banks, savings and loan associations and federal savings associations to accept and secure deposits from municipal corporations

download bill text pdf

Sponsored By

Archive: Last Bill Status - In Committee


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

do you support this bill?

Actions

view actions (2)
Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to local government
Apr 17, 2013 referred to local government

S4672 - Bill Details

See Assembly Version of this Bill:
A1112
Current Committee:
Senate Local Government
Law Section:
General Municipal Law
Laws Affected:
Amd §10, Gen Muni L; amd §§454, 237, 234 & 383, add §454-a, Bank L
Versions Introduced in Previous Legislative Sessions:
2011-2012: A3239
2009-2010: A4370A

S4672 - Bill Texts

view summary

Allows credit unions, savings banks, savings and loan associations and federal savings associations to accept and secure deposits from municipal corporations.

view sponsor memo
BILL NUMBER:S4672

TITLE OF BILL: An act to amend the general municipal law and the
banking law, in relation to allowing credit unions, savings banks,
savings and loan associations and federal savings associations to
accept and secure deposits from municipal corporations

PURPOSE:

To allow savings banks, savings and loan associations and federal
savings banks to accept deposits from municipalities.

SUMMARY:

Section 1 changes the definition of "bank" to include credit unions,
or federal credit unions, savings banks and savings & loan
associations.

Section 2. adds accepting deposits from a local government to the
general powers of a credit union.

Section 3 requires credit unions to pledge assets or furnish other
security for deposits accepted from local governments.

Section 4 removes restrictions on savings banks from accepting
deposits from a local government.

Section 5 requires savings banks to pledge assets or furnish other
security for deposits accepted from local governments.

Section 6 requires savings and loan associations to pledge assets or
furnish other security for deposits accepted from local governments.

Section 7 sets forth the effective date of 90 days.

CURRENT LAW:

Under current law, only commercial banks and trust companies are
allowed to accept municipal deposits.

JUSTIFICATION:

The current law restricting municipal deposits to commercial banks is
an anachronism, stemming from the days when commercial banks were the
most secure option for these types of investments. At that time,
savings banks, savings & loan associations and credit unions, were
smaller, less secure entities that primarily served individual
investors by providing investment opportunities and offering loans,
particularly mortgages to residents of the communities they served.
However, savings banks, savings & loan associations and credit unions
are now on par with commercial banks in many of the services they
provide as well as the security they offer to their investors.
Allowing savings banks, savings & loans and credit unions to accept
municipal deposits would be beneficial to the communities they are
serving by offering a competitive alternative to commercial banks, who
are often a large corporate entity with no real affiliation or
commitment to the community they serve.


LEGISLATIVE HISTORY:

A6511 of the 2007-2008 legislative session., A.4370 of the laws of
2009-2010, and A3239 of the 2011-2012 legislative session.

FISCAL IMPLICATIONS:

None to the State

EFFECTIVE DATE:

Ninety days following enactment.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4672

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             April 17, 2013
                               ___________

Introduced  by  Sen.  ROBACH -- read twice and ordered printed, and when
  printed to be committed to the Committee on Local Government

AN ACT to amend the general  municipal  law  and  the  banking  law,  in
  relation  to  allowing  credit unions, savings banks, savings and loan
  associations and federal savings associations  to  accept  and  secure
  deposits from municipal corporations

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

  Section 1. Paragraph d of subdivision 1 of section 10 of  the  general
municipal law, as amended by chapter 623 of the laws of 1998, is amended
to read as follows:
  d.  "Bank"  shall  mean  a  bank  as  defined  by the banking law or a
national banking association located and authorized to  do  business  in
New  York;  A  CREDIT  UNION  AS DEFINED BY THE BANKING LAW OR A FEDERAL
CREDIT UNION LOCATED AND AUTHORIZED TO DO BUSINESS IN NEW YORK WHICH HAS
ITS PRINCIPAL OFFICE IN A LOCATION DESCRIBED IN PARAGRAPH (A) OF  SUBDI-
VISION  THIRTY-SEVEN  OF  SECTION FOUR HUNDRED FIFTY-FOUR OF THE BANKING
LAW, OR A BRANCH OFFICE IN A LOCATION  DESCRIBED  IN  PARAGRAPH  (B)  OF
SUBDIVISION THIRTY-SEVEN OF SECTION FOUR HUNDRED FIFTY-FOUR OF THE BANK-
ING  LAW; OR A SAVINGS BANK AS DEFINED BY THE BANKING LAW, A SAVINGS AND
LOAN ASSOCIATION AS DEFINED BY THE BANKING  LAW  OR  A  FEDERAL  SAVINGS
ASSOCIATION  LOCATED AND AUTHORIZED TO DO BUSINESS IN NEW YORK WHICH HAS
ITS PRINCIPAL OFFICE IN A LOCATION DESCRIBED IN PARAGRAPH (A) OF  SUBDI-
VISION  TWO OF SECTION TWO HUNDRED THIRTY-SEVEN OF THE BANKING LAW, OR A
BRANCH OFFICE IN A LOCATION DESCRIBED IN PARAGRAPH  (B)  OF  SUBDIVISION
TWO OF SECTION TWO HUNDRED THIRTY-SEVEN OF THE BANKING LAW.
  S  2. Section 454 of the banking law is amended by adding a new subdi-
vision 37 to read as follows:
  37. (A) TO ACCEPT DEPOSITS  FOR  CREDIT  TO  A  LOCAL  GOVERNMENT,  AS
DEFINED  IN PARAGRAPH A OF SUBDIVISION ONE OF SECTION TEN OF THE GENERAL

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04287-01-3

S. 4672                             2

MUNICIPAL LAW, AT ITS PRINCIPAL OFFICE WHERE SUCH CREDIT UNION MAINTAINS
ITS PRINCIPAL OFFICE WITHIN THE JURISDICTION OF SUCH LOCAL GOVERNMENT.
  (B) TO ACCEPT DEPOSITS FOR CREDIT TO A LOCAL GOVERNMENT, AS DEFINED IN
PARAGRAPH  A  OF SUBDIVISION ONE OF SECTION TEN OF THE GENERAL MUNICIPAL
LAW, AT ITS BRANCH OFFICE WHERE SUCH CREDIT  UNION  MAINTAINS  A  BRANCH
OFFICE WITHIN THE JURISDICTION OF SUCH LOCAL GOVERNMENT.
  S  3. The banking law is amended by adding a new section 454-a to read
as follows:
  S 454-A. DEPOSITS OF PUBLIC MONEY WITH CREDIT  UNIONS;  SECURITY.    A
CREDIT  UNION MAY ACCEPT DEPOSITS OF PUBLIC MONEY SUBJECT TO THE LIMITA-
TIONS PROVIDED IN  SUBDIVISION  THIRTY-SEVEN  OF  SECTION  FOUR  HUNDRED
FIFTY-FOUR  OF  THIS  ARTICLE.  SUCH CREDIT UNION SHALL PLEDGE ASSETS OR
FURNISH OTHER SECURITY SATISFACTORY IN FORM AND AMOUNT TO THE DEPOSITOR,
FOR THE REPAYMENT OF MONIES HELD IN THE NAME  OF  SUCH  DEPOSITOR,  WHEN
REQUIRED TO BE SECURED BY APPLICABLE LAW, DECREE OR REGULATION.
  S  4.  Subdivision  2 of section 237 of the banking law, as amended by
chapter 360 of the laws of 1984, is amended to read as follows:
  2. [No savings bank shall accept any deposit for credit to any munici-
pal corporation.] (A) A  SAVINGS  BANK  WHICH  MAINTAINS  ITS  PRINCIPAL
OFFICE  WITHIN A LOCAL GOVERNMENT, AS DEFINED IN PARAGRAPH A OF SUBDIVI-
SION ONE OF SECTION TEN OF THE GENERAL MUNICIPAL LAW, MAY ACCEPT  DEPOS-
ITS AT SUCH PRINCIPAL OFFICE FOR CREDIT TO SUCH LOCAL GOVERNMENT.
  (B)  A  SAVINGS  BANK  WHICH  MAINTAINS A BRANCH OFFICE WITHIN A LOCAL
GOVERNMENT, AS DEFINED IN PARAGRAPH A OF SUBDIVISION ONE OF SECTION  TEN
OF  THE GENERAL MUNICIPAL LAW, MAY ACCEPT DEPOSITS AT SUCH BRANCH OFFICE
FOR CREDIT TO SUCH LOCAL GOVERNMENT.
  S 5. Section 234 of the banking law is amended by adding a new  subdi-
vision 26 to read as follows:
  26. PURSUANT TO SUBDIVISION TWO OF SECTION TWO HUNDRED THIRTY-SEVEN OF
THIS ARTICLE, TO PLEDGE ASSETS OR FURNISH OTHER SECURITY SATISFACTORY IN
FORM  AND  AMOUNT  TO THE DEPOSITOR, FOR THE REPAYMENT OF MONIES HELD IN
THE NAME OF SUCH DEPOSITOR, WHEN REQUIRED TO BE  SECURED  BY  APPLICABLE
LAW,  DECREE  OR  REGULATION  AND  TO  EXERCISE  THE POWERS CONTAINED IN
SECTION NINETY-SIX-B OF THIS CHAPTER.
  S 6. Section 383 of the banking law is amended by adding a new  subdi-
vision 17 to read as follows:
  17. PURSUANT TO SUBDIVISION TWO OF SECTION TWO HUNDRED THIRTY-SEVEN OF
THIS CHAPTER, TO PLEDGE ASSETS OR FURNISH OTHER SECURITY SATISFACTORY IN
FORM  AND  AMOUNT  TO THE DEPOSITOR, FOR THE REPAYMENT OF MONIES HELD IN
THE NAME OF SUCH DEPOSITOR, WHEN REQUIRED TO BE  SECURED  BY  APPLICABLE
LAW,  DECREE  OR  REGULATION  AND  TO  EXERCISE  THE POWERS CONTAINED IN
SECTION NINETY-SIX-B OF THIS CHAPTER.
  S 7. This act shall take effect on the ninetieth day  after  it  shall
have become a law.

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.