S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3028
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             January 31, 2019
                                ___________
 
 Introduced  by  Sens.  FUNKE, RITCHIE -- 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.
   §  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.
   § 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.
              

                                                            LBD07000-01-9

 S. 3028                             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.
   §  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.
   § 2. The banking law is amended by adding a new section 454-a to  read
 as follows:
   §  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.
   §  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. 3028                             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:
   § 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. 3028                             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] (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.
   § 5. This act shall take effect immediately.