senate Bill S5016

2013-2014 Legislative Session

Relates to credit unions

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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
May 07, 2014 reported and committed to finance
Jan 08, 2014 referred to banks
May 29, 2013 reported and committed to finance
May 06, 2013 referred to banks

Votes

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May 7, 2014 - Banks committee Vote

S5016
14
0
committee
14
Aye
0
Nay
5
Aye with Reservations
0
Absent
0
Excused
0
Abstained
show Banks committee vote details

May 29, 2013 - Banks committee Vote

S5016
13
0
committee
13
Aye
0
Nay
5
Aye with Reservations
0
Absent
1
Excused
0
Abstained
show Banks committee vote details

Co-Sponsors

S5016 - Bill Details

See Assembly Version of this Bill:
A7198
Current Committee:
Law Section:
Banking Law
Laws Affected:
Add Art 2-D §§89 - 91, add §454-a, Bank L; amd §§98-a & 105, St Fin L

S5016 - Bill Texts

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Relates to credit unions.

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BILL NUMBER:S5016

TITLE OF BILL: An act to amend the banking law and the state finance
law, in relation to credit unions

PURPOSE:

To create the credit union deposit program.

SUMMARY OF PROVISIONS:

This bill amends Article 2 and section 454 of the Banking Law and
section 98-a and 105 of the State Finance Law to create the credit
union deposit program.

JUSTIFICATION:

This legislation creates the credit union deposit program which seeks
to encourage the State Comptroller and the Commissioner of Taxation
and Finance to consider placing State funds into local credit unions.
This program recognizes that local credit unions are well-positioned
to use their deposits to support economic activities in their
communities.

By encouraging the placement of State deposits in local credit unions,
this program creates an opportunity for New York State to help
stimulate local economic development. Currently, much of the State's
funds may be placed in brokerage firms or in large banking
institutions, many of which may be head quartered in another state.
In either of those cases, the economic benefits of the State deposits
may flow out of the state, and the resulting local economic benefit
can be minimal.

In contrast, deposits in local credit unions can have a significant
impact within that particular community. The placement of state
deposits would help enable these community banking institutions to
meet the economic needs of their local communities. Because many small
communi- ties are home to credit unions, creating the program would be
of benefit to the economies of these small communities.

The intent of this legislation is to encourage the State to consider
placing a portion of its funds in local credit unions. While the
Comptroller and the Commissioner are not required to make such
deposits, they are encouraged to consider the benefits of such an
approach. This would enhance the ability of credit unions to support
the economies of their communities by making loans to their members.

LEGISLATIVE HISTORY:

New Bill

FISCAL IMPLICATIONS:

None

EFFECTIVE DATE:


Immediately.

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

                                  5016

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               May 6, 2013
                               ___________

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

AN ACT to amend the banking law and the state finance law,  in  relation
  to credit unions

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

  Section 1. The banking law is amended by adding a new article  2-D  to
read as follows:
                               ARTICLE 2-D
                      CREDIT UNION DEPOSIT PROGRAM
SECTION 89. CREDIT UNION DEPOSIT PROGRAM; PURPOSE.
        90. ELIGIBILITY.
        91. DEPOSITS.
  S  89.  CREDIT  UNION  DEPOSIT PROGRAM; PURPOSE. IN RECOGNITION OF THE
ECONOMIC BENEFITS AND STIMULUS WHICH RESULT FROM THE PLACEMENT OF DEPOS-
ITS IN LOCAL CREDIT UNIONS, THE CREDIT UNION DEPOSIT PROGRAM  IS  HEREBY
CREATED TO AUTHORIZE AND ENCOURAGE THE STATE COMPTROLLER AND THE COMMIS-
SIONER  OF  TAXATION AND FINANCE TO DEPOSIT A PORTION OF THE FUNDS UNDER
THEIR CONTROL INTO CREDIT UNIONS.
  S 90. ELIGIBILITY. 1. TO BE ELIGIBLE TO RECEIVE DEPOSITS, OR TO  RENEW
EXISTING  DEPOSITS  UNDER THIS PROGRAM, A CREDIT UNION MUST BE CHARTERED
UNDER THE PROVISIONS OF THIS CHAPTER AND MUST HAVE A CURRENT EXAMINATION
RATING OF SATISFACTORY OR BETTER. THE SUPERINTENDENT SHALL, IF REQUESTED
BY THE STATE COMPTROLLER OR THE COMMISSIONER OF  TAXATION  AND  FINANCE,
CONFIRM  WHETHER  A PARTICULAR CREDIT UNION MEETS THE CRITERIA SPECIFIED
IN THIS SECTION.
  2. A FEDERAL CREDIT UNION MAY ALSO BE ELIGIBLE TO RECEIVE DEPOSITS, OR
TO RENEW EXISTING DEPOSITS, UNDER THIS PROGRAM  IF:  (A)  ITS  PRINCIPAL
OFFICE IS LOCATED IN THIS STATE; (B) IT HAS A CURRENT EXAMINATION RATING
OF  SATISFACTORY  OR  BETTER;  AND  (C) IT MEETS ANY ADDITIONAL CRITERIA
ESTABLISHED BY THE COMPTROLLER AND  THE  COMMISSIONER  OF  TAXATION  AND

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10390-01-3

S. 5016                             2

FINANCE  TO DETERMINE ELIGIBILITY FOR PARTICIPATION IN THE PROGRAM. SUCH
CRITERIA MAY INCLUDE A CREDIT UNION'S LOAN TO DEPOSIT RATIO, ITS  RECORD
OF SMALL BUSINESS LENDING, AND THE IMPACT SUCH DEPOSITS WOULD HAVE ON AN
AREA'S ECONOMIC ACTIVITY.
  S  91.  DEPOSITS.  1.  NOTWITHSTANDING  ANY  PROVISIONS  OF LAW TO THE
CONTRARY, THE STATE COMPTROLLER AND THE  COMMISSIONER  OF  TAXATION  AND
FINANCE  SHALL,  FOR  THE PURPOSES OF ADMINISTERING MONEYS IN ACCORDANCE
WITH THE PROVISIONS OF SECTIONS NINETY-EIGHT-A AND ONE HUNDRED  FIVE  OF
THE STATE FINANCE LAW, GIVE CONSIDERATION TO DEPOSITING FUNDS INTO THOSE
CREDIT  UNIONS WHICH ARE DEEMED ELIGIBLE TO RECEIVE DEPOSITS PURSUANT TO
SECTION NINETY OF THIS ARTICLE.
  2. THE MAXIMUM AMOUNT OF FUNDS WHICH THE  STATE  COMPTROLLER  AND  THE
COMMISSIONER  OF  TAXATION  AND  FINANCE  MAY DEPOSIT UNDER THIS PROGRAM
SHALL NOT EXCEED TWO HUNDRED FIFTY MILLION DOLLARS EACH.
  3. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, ANY  DEPOSITS
MADE PURSUANT TO THIS ARTICLE SHALL BE MADE AT RATES, AND FOR SUCH PERI-
ODS OF TIME, AS MAY BE AGREED TO BY THE STATE COMPTROLLER OR THE COMMIS-
SIONER OF TAXATION AND FINANCE AND THE ELIGIBLE CREDIT UNION.
  4.  ANY  DEPOSITS  MADE  PURSUANT TO THIS ARTICLE MAY BE SECURED BY AN
IRREVOCABLE LETTER OF CREDIT ISSUED BY A FEDERAL HOME LOAN BANK.
  S 2. 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. A CREDIT UNION
MAY ACCEPT DEPOSITS OF PUBLIC MONEY IN ACCORDANCE WITH THE PROVISIONS OF
SECTION NINETY-ONE OF THIS CHAPTER AND SECTIONS NINETY-EIGHT-A  AND  ONE
HUNDRED FIVE OF THE STATE FINANCE LAW.
  S  3.  The  opening  paragraph of subdivision 1 of section 98-a of the
state finance law, as amended by chapter 545 of the  laws  of  2005,  is
amended to read as follows:
  Except  as  otherwise provided in subdivision two of this section, any
moneys in the general fund of the state or moneys received from the sale
of any bonds or notes issued by the state, any moneys  in  any  fund  or
account  of  the state, heretofore or hereafter established, the invest-
ment of which is not otherwise authorized and which are not  immediately
required  may  be  invested  by  the  comptroller.    Such moneys may be
invested only in obligations of the categories specified in subdivisions
one to five, both inclusive, and subdivision  seven,  subdivision  four-
teen,  as  added by chapters seven hundred ninety-seven and nine hundred
thirty-two of the laws of nineteen  hundred  sixty-three,  respectively,
subdivisions  fifteen,  sixteen and seventeen of section ninety-eight of
this article, maturing or redeemable at the option of the holder  within
twelve  years  of the date of such investment, subdivisions two-a, eigh-
teen, nineteen and twenty of section ninety-eight of this article or  in
a  certificate  of deposit of a bank [or], trust company OR CREDIT UNION
in this state. Any certificate of deposit shall be fully secured by  the
issuer  thereof  depositing with the comptroller stocks, bonds, or notes
of any county, town, city, village, fire district or school district  of
this  state  issued  pursuant to law and maturing within five years from
the date of issuance of such certificate of deposit, bonds or  notes  or
direct  or  guaranteed obligation of the United States of America or its
agencies or of the state of New York or bonds and notes issued  for  any
of  the  corporate  purposes of the municipal assistance corporation for
the city of New York in an amount equal to the amount  of  such  certif-
icate  of deposit. Any bonds, notes or certificates of deposit purchased
with moneys of the general fund shall be available  always  to  pay  any
lawful  appropriation  in  force.  Any  bonds,  notes or certificates of

S. 5016                             3

deposit purchased with moneys received from the sale  of  any  bonds  or
notes  issued by the state shall be available always for the purposes or
purpose for which such bonds or notes were issued.  Any bonds, notes  or
certificates  of  deposit purchased with moneys of any other funds shall
be available always for the purpose for which  such  fund  was  created.
Unless otherwise required by law, income received on any moneys invested
pursuant  to  this  section  shall be credited to the fund or funds from
which such moneys were invested, provided, however, the  comptroller  is
hereby  precluded  from  crediting  interest  earnings to funds/accounts
which:
  S 4. Subdivisions 1 and 2 of section 105 of  the  state  finance  law,
subdivision 1 as amended by chapter 204 of the laws of 2002, subdivision
2 as amended by chapter 154 of the laws of 1953, paragraph b of subdivi-
sion  2  as  amended  by chapter 345 of the laws of 2005, are amended to
read as follows:
  1. All moneys received by the commissioner of taxation and finance  on
account of the state, excepting such moneys as are required by law to be
deposited to the credit of the comptroller, but including such moneys as
are thereafter paid into the state treasury by the comptroller, shall be
deposited  by the commissioner of taxation and finance within three days
after the receipt thereof, either as a demand deposit  or  an  interest-
bearing  time  deposit (other than a time certificate of deposit), as he
and the comptroller may determine, in such banks, trust companies [and],
industrial banks AND CREDIT UNIONS as in his opinion and the opinion  of
the  comptroller  are secure. The moneys so deposited shall be placed to
the account of the commissioner of taxation and finance. He shall keep a
bankbook in which shall be entered his account of deposit in and  moneys
drawn  from  the  banks  and trust companies [and], industrial banks AND
CREDIT UNIONS in which deposits are made by him, which he shall  exhibit
to  the  comptroller  for  his  inspection on the first Tuesday of every
month and oftener if required. He shall not draw any  moneys  from  such
banks, trust companies [or], industrial banks OR CREDIT UNIONS unless by
checks  signed and countersigned in the manner prescribed by section one
hundred one, unless otherwise provided by law. No moneys shall  be  paid
by  any  such  bank, trust company [or], industrial bank OR CREDIT UNION
out of any such deposit except upon such checks.   Moneys  may  be  paid
through  electronic  transfer in accordance with procedures developed by
the commissioner  of  taxation  and  finance  and  the  comptroller  and
consistent with the requirements of this section for recording payments.
Such  payments  through  electronic  transfer  shall  be considered, for
purposes of this chapter, to be moneys drawn by check.  Every such bank,
trust company [or], industrial bank OR CREDIT UNION  shall  transmit  to
the comptroller monthly statements of all moneys received and paid by it
on account of the commissioner of taxation and finance.
  2.  Every  bank, trust company [and], industrial bank AND CREDIT UNION
designated for the deposit of state moneys under the provisions of  this
section shall, before deposits are made:
  a.  Execute  and  file with the commissioner of taxation and finance a
bond to the state in such form and with such surety or sureties for such
sums as may be prescribed and approved by the commissioner  of  taxation
and  finance  and comptroller, for the safekeeping and prompt payment of
such moneys on legal demand therefor with interest, if any; or
  b. In lieu of such surety bond, with the permission of the comptroller
and the commissioner of taxation and finance,  deposit  with  the  comp-
troller outstanding unmatured:

S. 5016                             4

  (1)  bonds  or  notes of the United States of America, or obligations,
the payment of which is guaranteed by the United States of America,
  (2) bonds or notes of the state of New York,
  (3)  bonds  or notes of any county, town, city, village, fire district
or school districts in the state of New York authorized to be issued  by
law,
  (4) bonds of the Port of New York Authority of any year,
  (5) bonds of the Buffalo and Fort Erie Public Bridge Authority,
  (6) bonds of the Triborough bridge and tunnel authority,
  (7) bonds or notes of the New York state thruway authority,
  (8) bonds, notes or other obligations of any municipal housing author-
ity  in  the  state of New York authorized to be issued by law, provided
such bonds, notes or other obligations qualify under the  provisions  of
section forty-nine of the public housing law,
  (9) bonds or notes of the Power Authority of the state of New York,
  (10) bonds or notes of the Niagara Frontier Port Authority,
  (11)  bonds  or  notes  of the Dormitory Authority of the state of New
York,
  (12) bonds or notes of the New York state bridge authority,
  (13) bonds or notes issued for any of the corporate  purposes  of  the
New York state housing finance agency,
  (14)  bonds  or  notes  of  the  Metropolitan  Commuter Transportation
Authority,
  (15) bonds or notes of the New York State Pure Waters  Authority,  for
which the commissioner of taxation and finance and the comptroller shall
deliver  a  certificate  of  deposit  containing  the conditions of such
deposit,
  (16) bonds or notes of the Niagara Frontier Transportation Authority,
  (17) bonds or notes of the Rochester-Genesee  Regional  Transportation
Authority,
  (18) bonds or notes of the Capital District Transportation Authority,
  (19)  bonds  or  notes of the Central New York Regional Transportation
Authority,
  20 Bonds or notes of the New York state project finance agency,
  (21) Bonds or notes of the municipal assistance  corporation  for  the
city of New York,
  (22)  bonds  or  notes issued for any of the corporate purposes of the
New York state medical care facilities finance  agency,  for  which  the
commissioner of taxation and finance and the comptroller shall deliver a
certificate of deposit containing the conditions of such deposit, or
  (23) irrevocable letters of credit issued by a federal home loan bank.
  c. With the permission of the comptroller and commissioner of taxation
and  finance  execute  and  file  with  the commissioner of taxation and
finance an undertaking to the effect that such bank, trust company [or],
industrial bank OR CREDIT UNION will safely keep and promptly  pay  over
all such deposits on legal demand therefor with interest, if any, and as
collateral  to such undertaking deposit with the comptroller a certified
check or checks drawn on and certified by the federal reserve bank with-
in the state payable to his order in such amount or amounts as shall  be
agreed upon by the comptroller and the depositary.
  S 5. This act shall take effect immediately.

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