senate Bill S58

2013-2014 Legislative Session

Authorizes credit unions to participate in the excelsior linked deposit program and raises the limit on the amount permitted to be on deposit at any given time

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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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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to finance
Jan 09, 2013 referred to finance

S58 - Bill Details

Current Committee:
Law Section:
State Finance Law
Laws Affected:
Amd §213, St Fin L; amd §454, Bank L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S359
2009-2010: S7908

S58 - Bill Texts

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Authorizes credit unions to participate in the excelsior linked deposit program and raises the limit on the amount permitted to be on deposit at any given time.

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BILL NUMBER:S58

TITLE OF BILL:
An act
to amend the state finance law and the banking law, in relation to
authorizing credit unions to participate in the excelsior linked deposit
program

PURPOSE:
This legislation authorizes credit unions to participate in the
Excelsior Linked Deposit Program and raises the limit on the amount
permitted to be on deposit at any given time.

SUMMARY OF PROVISIONS:
Sections 1 and 2 amend subdivisions 14 and 15 of § 213 of the State
Finance Law to include state and federal credit unions.

Section 3 amends § 213 of the State Finance Law by adding a new
subdivision 24 defining the term "credit union."

Section 4 amends § 454 of the Banking Law to allow state chartered
credit unions to accept deposits and make loans pursuant to the
Excelsior Linked Deposit Program and pledge assets or other security
to repay such moneys.

Section 5 states that this act shall take effect immediately.

JUSTIFICATION:
In the past 35 years as New York has shifted from a manufacturing to a
service economy, some of the largest companies in the state (many of
which sponsor a credit union for the benefit of their employees) have
downsized, forcing thousands of credit union members to become
self-employed. Credit unions have responded to the needs of their
members by offering business loans" In most instances, members have
sought assistance from their credit union for business loans
primarily for the same reason they joined the credit union; because
they were denied a loan (in this example, a business loan) at another
financial institution.

With the State's economic and employment fortunes resting on the
success of small business, it is increasingly evident that small
businesses must have greater access to capital through a wider range
of lenders. Since their inception, credit unions have filled an
important niche in serving communities underserved by commercial
banks and thrifts. Over 700 credit unions across the State play an
integral role in serving the financial needs of 3.5 million New
Yorkers. Credit unions were created as a not-for-profit alternative
to other financial institutions primarily because working-class
individuals were being denied business through the ELDP which is a
natural extension of the credit union mission.

LEGISLATIVE HISTORY:
2011-12: S.359
2010: S.7908/A.26130A
2008: A.3205 - Passed Assembly
2005: A.4070 - Passed Assembly


2004: A.2078 - Passed Assembly
2001: A.9809B - Passed Assembly
2000: A.2565 - Passed Assembly
1998: A.10024 - Passed Assembly

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect immediately.

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

                                   58

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

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

AN ACT to amend the state finance law and the banking law,  in  relation
  to  authorizing  credit  unions to participate in the excelsior linked
  deposit program

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

  Section 1. Paragraph (b) of subdivision 14 of section 213 of the state
finance  law,  as added by chapter 25 of the laws of 1995, is amended to
read as follows:
  (b) any thrift OR CREDIT UNION which an  authorized  depositor  deter-
mines  is eligible to accept linked deposits based upon criteria applied
by the authorized depositor in making determinations under  section  one
hundred  five  of  this  chapter, and which agrees to participate in the
program, provided that any linked deposit in such thrift OR CREDIT UNION
shall be secured in the same manner  as  moneys  deposited  pursuant  to
section  one  hundred  five  of  this chapter and such thrifts OR CREDIT
UNIONS shall pledge assets or furnish  other  security  satisfactory  in
form and amount to the authorized depositor for the repayment of moneys.
Until  April first, nineteen hundred ninety-six, in the determination of
thrifts eligible to accept linked  deposits,  the  authorized  depositor
shall  give  priority  to  applications by those thrifts seeking to make
linked loans in economic development regions in  which  fewer  than  ten
linked  loans  have been made on or before April first, nineteen hundred
ninety-five. Provided, however, that the granting of such priority shall
in no way relieve an authorized depositor of his or her duty  and  obli-
gation  to  review all thrift applications from all economic development
regions in the state on a timely basis.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01097-01-3

S. 58                               2

  S 2. The closing paragraph of subdivision 15 of  section  213  of  the
state  finance  law,  as  amended by chapter 291 of the laws of 2004, is
amended to read as follows:
  This  article  and  the related statutes that refer to this article do
not grant thrifts, CREDIT UNIONS, farm credit system institutions or the
New York business development corporation eligibility to  accept  public
funds or public moneys from public entities for investment purposes. For
farm credit system institutions, the linked deposit program is available
for loans with an agricultural purpose as defined by the farm credit act
of  nineteen hundred seventy-one, as amended and regulations promulgated
thereunder. A linked deposit is intended to enable a lender  to  make  a
linked loan to an eligible business and such deposit earns a yield lower
than posted rates in order to accomplish the goals of this article.
  S  3.  Section 213 of the state finance law is amended by adding a new
subdivision 24 to read as follows:
  24. "CREDIT UNION" MEANS ANY  CREDIT  UNION  CHARTERED  UNDER  ARTICLE
ELEVEN OF THE BANKING LAW OR ANY FEDERAL CREDIT UNION.
  S  4. Section 454 of the banking law is amended by adding a new subdi-
vision 33-a to read as follows:
  33-A. TO ACCEPT MONEYS DEPOSITED BY THE COMMISSIONER OF  TAXATION  AND
FINANCE  OR  THE  COMPTROLLER  AS  LINKED DEPOSITS AND MAKE LINKED LOANS
PURSUANT TO ARTICLE FIFTEEN OF THE  STATE  FINANCE  LAW  AND  TO  PLEDGE
ASSETS  OR FURNISH OTHER SECURITY SATISFACTORY IN FORM AND AMOUNT TO THE
DEPOSITOR, FOR REPAYMENT OF SUCH MONEYS.
  S 5. This act shall take effect immediately.

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