NY State Senate Bill S6079A

Archive: Last Bill Status - In Senate Committee Banks Committee

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

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Actions

view actions (5)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to banks
Jun 13, 2019	print number 6079a
Jun 13, 2019	amend (t) and recommit to banks
May 21, 2019	committee discharged and committed to banks
May 16, 2019	referred to local government

Bill Amendments

Original

A (Active)

Original

A (Active)

Co-Sponsors

S6079 - Details

See Assembly Version of this Bill:: A3262
Current Committee:: Senate Banks
Law Section:: General Municipal Law
Laws Affected:: Amd §10, Gen Muni L; amd §§454, 237, 234, 383, 86 & 87, add §§454-a & 454-b, Bank L
Versions Introduced in Other Legislative Sessions:: 2009-2010: A4370
2011-2012: A3239
2013-2014: S4672, A1112
2015-2016: S4785, A7017
2017-2018: S286, A7619
2021-2022: S670, A7334, A8289
2023-2024: S1453, A3246

S6079 - Summary

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

S6079 - Sponsor Memo

 
BILL NUMBER: S6079

SPONSOR: SANDERS
 
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 Credit unions
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 gener-
al powers of a credit union.

Section 3 requires credit unions to pledge assets or furnish other secu-
rity 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 secu-
rity 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.

 
JUSTIFICATION:

The current law restricting municipal deposits to commercial banks is an
anachronism dating back to 1909 and stemming from the days when commer-
cial banks were the only secure option for these types of investments.
In 1909, credit unions were not even in existence as neither the state
nor federal credit union acts had been enacted. At that time, savings
banks, savings & loan associations unions, were smaller, less secure
entities that primarily served individual investors by providing invest-
ment opportunities and offering loans, particularly mortgages to resi-
dents of the communities they served.  However, savings banks, savings &
loan associations are now on par with commercial banks in many of the
services they provide. Further, credit unions, savings banks and savings
and loan associations can all offer the collateral/security required by
municipalities. Allowing savings banks, savings & loans and credit
unions to accept municipal deposits would be beneficial to the communi-
ties they are serving by offering a competitive alternative to commer-
cial banks, who are often a large corporate entity with no real affil-
iation or commitment to the community they serve.

 
LEGISLATIVE HISTORY:

2017-18 Referred to Committee on Local Government

 
FISCAL IMPLICATIONS:

None to the State

 
EFFECTIVE DATE:
Ninety days following enactment.

S6079 - Bill Text download pdf


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

                                  6079

                       2019-2020 Regular Sessions

                            I N  S E N A T E

                              May 16, 2019
                               ___________

Introduced  by  Sens. SANDERS, 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-EIGHT  OF  SECTION FOUR HUNDRED FIFTY-FOUR OF THE BANKING
LAW, OR A BRANCH OFFICE IN A LOCATION  DESCRIBED  IN  PARAGRAPH  (B)  OF
SUBDIVISION THIRTY-EIGHT 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.
  §  2. Section 454 of the banking law is amended by adding a new subdi-
vision 38 to read as follows:
  38. (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.
                                                           LBD02132-01-9

S. 6079                             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.
  §  3. 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;  SECURITY.    A
CREDIT  UNION MAY ACCEPT DEPOSITS OF PUBLIC MONEY SUBJECT TO THE LIMITA-
TIONS PROVIDED IN  SUBDIVISION  THIRTY-EIGHT  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.
  §  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  THE  JURISDICTION  OF  A LOCAL GOVERNMENT, AS DEFINED IN
PARAGRAPH A OF SUBDIVISION ONE OF SECTION TEN OF THE  GENERAL  MUNICIPAL
LAW,  MAY  ACCEPT  DEPOSITS  AT SUCH PRINCIPAL OFFICE FOR CREDIT TO SUCH
LOCAL GOVERNMENT.
  (B) A SAVINGS BANK WHICH MAINTAINS A BRANCH OFFICE WITHIN  THE  JURIS-
DICTION  OF 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.
  §  5. Section 234 of the banking law is amended by adding a new subdi-
vision 27 to read as follows:
  27. 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.
  §  6. Section 383 of the banking law is amended by adding a new subdi-
vision 18 to read as follows:
  18. 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.
  §  7.  This  act shall take effect on the ninetieth day after it shall
have become a law.

Co-Sponsors

S6079A (ACTIVE) - Details

See Assembly Version of this Bill:: A3262
Current Committee:: Senate Banks
Law Section:: General Municipal Law
Laws Affected:: Amd §10, Gen Muni L; amd §§454, 237, 234, 383, 86 & 87, add §§454-a & 454-b, Bank L
Versions Introduced in Other Legislative Sessions:: 2009-2010: A4370
2011-2012: A3239
2013-2014: S4672, A1112
2015-2016: S4785, A7017
2017-2018: S286, A7619
2021-2022: S670, A7334, A8289
2023-2024: S1453, A3246

S6079A (ACTIVE) - Summary

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

S6079A (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S6079A

SPONSOR: SANDERS
 
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; to direct the depart-
ment of financial services to conduct a study and issue a report
concerning the impact of allowing certain financial institutions to
accept local government public deposits; and providing for the repeal of
certain provisions upon the expiration thereof

 
PURPOSE OR GENERAL IDEA OF BILL:

To allow savings banks, savings and loan associations and federal
savings banks to accept deposits from municipalities and allow credit
unions to accept deposits under certain limitations.

 
SUMMARY OF PROVISIONS:

Section one of the bill amends section 10 of the general municipal law

as it relates to changing the definition of "bank" to include savings
banks and savings and loan associations.

Section two of the bill amends section 10 of the general municipal law
as it relates to allowing credit unions to accept deposits from a local
government with certain limitations.

Section three of the bill amends the banking law as it relates to allow-
ing credit unions to accept deposits from local governments if a branch
or principal office is within a credit union's jurisdiction.

Section four of the bill amends the banking law as it relates to requir-
ing credit unions to pledge assets or furnish other security for depos-
its accepted from local governments.

Section five of the bill amends the banking law as it relates to requir-
ing community investment by credit unions that accept municipal depos-
its.

Section six of the bill amends the banking law as it relates to removing
restrictions on savings banks from accepting deposits from a local
government.

Section seven of the bill amends the banking law as it relates to
requiring savings banks to pledge assets or furnish other security for
deposits accepted from local governments.

Section eight of the bill amends the banking law as it relates to
requiring savings and loan associations to pledge assets or furnish
other security for deposits accepted from local governments.

Section nine of the bill relates to requiring a study by the department
of financial services on the impact of certain financial institutions
accepting municipal deposits.

Section ten of the bill amends the banking law as it relates to changing
the definition of a community bank institution for purposes of the
community bank deposit program.
Section eleven of the bill amends the banking law as it relates to
increase the amount of deposits allowable under the community bank
deposit program and requires an annual report on the program.

Section eleven of the bill relates to deposits held in credit unions at
expiration of the act.

Section twelve of the bill relates to the effective date.

 
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 and loan associations and credit
unions, were smaller, less secure entities that primarily served indi-
vidual investors by providing investment opportunities and offering
loans, particularly mortgages to residents of the communities they
served. However, savings banks, savings and 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 and loans and credit unions to accept
municipal deposits would be beneficial to the communities they are serv-
ing by offering a competitive alternative to commercial banks, which are
often large corporate entities with no real affiliation or commitment to
the community they serve.

 
PRIOR LEGISLATIVE HISTORY:  A7619: 2017-18, A6511: 2007-2008, A4370:
2009-2010, A3239: 2011-2012

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None to the state

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law; provided that section two, three, four, five and nine of
the act shall expire and be deemed repealed December 31, 2025.

S6079A (ACTIVE) - Bill Text download pdf


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

                                 6079--A

                       2019-2020 Regular Sessions

                            I N  S E N A T E

                              May 16, 2019
                               ___________

Introduced  by  Sens.  SANDERS,  ROBACH,  MAY,  MAYER  -- read twice and
  ordered printed, and when printed to be committed to the Committee  on
  Local  Government  --  committee discharged and said bill committed to
  the Committee on Banks -- committee discharged, bill amended,  ordered
  reprinted as amended and recommitted to said committee

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;  to  direct  the  department  of
  financial  services  to  conduct a study and issue a report concerning
  the impact of allowing certain financial institutions to accept  local
  government  public  deposits;  and providing for the repeal of certain
  provisions upon the expiration thereof

  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 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.
  § 2. Section 10 of the general municipal law is amended  by  adding  a
new subdivision 5 to read as follows:
  5.  IN  ADDITION  TO  THE  FINANCIAL INSTITUTIONS AUTHORIZED TO ACCEPT
PUBLIC DEPOSITS IN SUBDIVISION TWO OF THIS SECTION,  CREDIT  UNIONS,  AS

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

                                                           LBD02132-05-9

S. 6079--A                          2

DEFINED BY THE BANKING LAW OR A FEDERAL CREDIT UNION LOCATED AND AUTHOR-
IZED  TO  DO  BUSINESS  IN  NEW YORK WHICH HAS ITS PRINCIPAL OFFICE IN A
LOCATION DESCRIBED IN  PARAGRAPH  (A)  OF  SUBDIVISION  THIRTY-EIGHT  OF
SECTION  FOUR  HUNDRED FIFTY-FOUR OF THE BANKING LAW, OR A BRANCH OFFICE
IN A LOCATION DESCRIBED IN PARAGRAPH (B) OF SUBDIVISION THIRTY-EIGHT  OF
SECTION  FOUR  HUNDRED  FIFTY-FOUR OF THE BANKING LAW, MAY ACCEPT PUBLIC
DEPOSITS BY A LOCAL GOVERNMENT SUBJECT  TO  THE  LIMITATIONS  SET  FORTH
HEREIN.  FOR  THE  CALENDAR  YEAR  BEGINNING JANUARY FIRST, TWO THOUSAND
TWENTY, THE GOVERNING BOARD OF A LOCAL GOVERNMENT MAY DESIGNATE  ONE  OR
MORE  CREDIT UNIONS, FOR THE DEPOSIT OF PUBLIC FUNDS IN AN AMOUNT NOT TO
EXCEED FIVE HUNDRED THOUSAND DOLLARS  IN  EACH  INSTITUTION.    FOR  THE
CALENDAR  YEAR  BEGINNING  JANUARY  FIRST,  TWO THOUSAND TWENTY-ONE, THE
GOVERNING BOARD OF A LOCAL GOVERNMENT MAY DESIGNATE ONE OR  MORE  CREDIT
UNIONS  FOR  THE  DEPOSIT OF PUBLIC FUNDS IN AN AMOUNT NOT TO EXCEED ONE
MILLION DOLLARS IN EACH INSTITUTION. FOR  THE  CALENDAR  YEAR  BEGINNING
JANUARY  FIRST,  TWO THOUSAND TWENTY-TWO, THE GOVERNING BOARD OF A LOCAL
GOVERNMENT MAY DESIGNATE ONE OR MORE CREDIT UNIONS FOR  THE  DEPOSIT  OF
PUBLIC  FUNDS  IN  AN  AMOUNT  NOT TO EXCEED TWO MILLION DOLLARS IN EACH
INSTITUTION.  FOR THE CALENDAR YEAR BEGINNING JANUARY FIRST,  TWO  THOU-
SAND  TWENTY-THREE, THE GOVERNING BOARD OF A LOCAL GOVERNMENT MAY DESIG-
NATE ONE OR MORE CREDIT UNIONS FOR THE DEPOSIT OF  PUBLIC  FUNDS  IN  AN
AMOUNT  NOT TO EXCEED THREE MILLION DOLLARS IN EACH INSTITUTION. FOR THE
CALENDAR YEAR BEGINNING JANUARY FIRST,  TWO  THOUSAND  TWENTY-FOUR,  THE
GOVERNING  BOARD  OF A LOCAL GOVERNMENT MAY DESIGNATE ONE OR MORE CREDIT
UNIONS FOR THE DEPOSIT OF PUBLIC FUNDS IN AN AMOUNT NOT TO  EXCEED  FOUR
MILLION  DOLLARS  IN  EACH  INSTITUTION. FOR THE CALENDAR YEAR BEGINNING
JANUARY FIRST, TWO THOUSAND TWENTY-FIVE, THE GOVERNING BOARD OF A  LOCAL
GOVERNMENT  MAY  DESIGNATE  ONE OR MORE CREDIT UNIONS FOR THE DEPOSIT OF
PUBLIC FUNDS IN AN AMOUNT NOT TO EXCEED FIVE  MILLION  DOLLARS  IN  EACH
INSTITUTION.  FOR  THE  PURPOSES  OF THIS SECTION, A DEPOSIT LIMIT SHALL
MEAN THE MAXIMUM AMOUNT OF ALL FUNDS OF A LOCAL GOVERNMENT IN AN  INSTI-
TUTION BASED ON A DAILY ACCOUNT BALANCE EXCLUDING ANY ACCRUED INTEREST.
  §  3. Section 454 of the banking law is amended by adding a new subdi-
vision 38 to read as follows:
  38. (A) 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 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.
  § 4. 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; SECURITY.  A
CREDIT UNION MAY ACCEPT DEPOSITS OF PUBLIC MONEY SUBJECT TO THE  LIMITA-
TIONS  PROVIDED  IN  SUBDIVISION  THIRTY-EIGHT  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.
  § 5. The banking law is amended by adding a new section 454-b to  read
as follows:
  §  454-B. COMMUNITY INVESTMENT BY CREDIT UNION; CONDITION OF ACCEPTING
MUNICIPAL DEPOSITS.  1. IF THE AVERAGE DAILY BALANCE  OF  THE  MUNICIPAL
FUNDS ON DEPOSIT AT THE CREDIT UNION FOR THE PRECEDING YEAR IS IN EXCESS

S. 6079--A                          3

OF  THREE  HUNDRED THOUSAND DOLLARS, THE CHIEF FINANCIAL OFFICER, OR THE
SENIOR OFFICIAL IN THE CREDIT UNION WITH RESPONSIBILITY  FOR  PERFORMING
THE FUNCTIONS OF A CHIEF FINANCIAL OFFICER OF A CREDIT UNION THAT CHOOS-
ES  TO  ACCEPT MUNICIPAL DEPOSITS PURSUANT TO SECTION TEN OF THE GENERAL
MUNICIPAL LAW, SHALL, CONSISTENT WITH SAFETY AND SOUNDNESS, TRANSMIT  TO
THE  DEPARTMENT  BY  DECEMBER  THIRTY-FIRST EACH YEAR, A WRITTEN CERTIF-
ICATION, IN A FORM SPECIFIED BY THE SUPERINTENDENT  AND  POSTED  ON  THE
DEPARTMENT'S WEBSITE, THAT THE CREDIT UNION HAS INVESTED INTO THE COMMU-
NITY,  PURSUANT  TO  THIS  SECTION,  A  SUM  EQUAL  TO THE AVERAGE DAILY
BALANCE, MULTIPLIED BY A FACTOR  OF  .0035,  PROVIDED,  HOWEVER,  IN  NO
EVENT, SHALL A CREDIT UNION BE REQUIRED TO CONTRIBUTE A SUM IN EXCESS OF
ONE HUNDRED THOUSAND DOLLARS IN ANY ONE YEAR.
  2.  THE  COMMUNITY  INVESTMENT  DESCRIBED  IN  SUBDIVISION ONE OF THIS
SECTION SHALL BE USED TO SUPPORT  ANY  OF  THE  FOLLOWING  PURPOSES,  AS
DETERMINED BY THE CREDIT UNION, IN ANY COMMUNITY WHERE SUCH CREDIT UNION
HAS  AUTHORITY  TO  PROVIDE  SERVICES,  PROVIDED  THE CREDIT UNION SHALL
PRIORITIZE LOW-INCOME COMMUNITIES WHEN CHOOSING WHERE TO INVEST:
  (A) MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISES IN THE COMMUNITY; OR
  (B) AFFORDABLE HOUSING (INCLUDING MULTIFAMILY RENTAL HOUSING) FOR LOW-
AND MODERATE-INCOME INDIVIDUALS IN THE COMMUNITY; OR
  (C) COMMUNITY SERVICES TARGETED TO LOW- AND  MODERATE-INCOME  INDIVID-
UALS IN THE COMMUNITY; OR
  (D)  ACTIVITIES  THAT  REVITALIZE OR STABILIZE THE COMMUNITY INCLUDING
LOW- OR MODERATE-INCOME GEOGRAPHIES, OR DESIGNATED DISASTER AREAS; OR
  (E) FINANCIAL LITERACY.
  3. FOR PURPOSES OF THE COMMUNITY  INVESTMENT  PURSUANT  TO  THIS  THIS
SECTION, FIELD OF MEMBERSHIP RESTRICTIONS SHALL NOT APPLY.
  §  6.  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  THE  JURISDICTION  OF  A LOCAL GOVERNMENT, AS DEFINED IN
PARAGRAPH A OF SUBDIVISION ONE OF SECTION TEN OF THE  GENERAL  MUNICIPAL
LAW,  MAY  ACCEPT  DEPOSITS  AT SUCH PRINCIPAL OFFICE FOR CREDIT TO SUCH
LOCAL GOVERNMENT.
  (B) A SAVINGS BANK WHICH MAINTAINS A BRANCH OFFICE WITHIN  THE  JURIS-
DICTION  OF 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.
  §  7. Section 234 of the banking law is amended by adding a new subdi-
vision 27 to read as follows:
  27. 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.
  §  8. Section 383 of the banking law is amended by adding a new subdi-
vision 18 to read as follows:
  18. 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. 6079--A                          4

  §  9. 1. The department of financial services is hereby authorized and
directed to study  and  issue  a  public  report  with  recommendations,
concerning  the impact of allowing credit unions, savings banks, savings
and loan associations or federal savings associations  to  accept  local
government  public  deposits. This report shall be prepared in consulta-
tion with  stakeholders,  including  local  governments,  banks,  credit
unions, savings banks, savings and loan associations and federal savings
associations.
  2.  On  or  before  January  1,  2025, the superintendent of financial
services shall submit to the governor, the temporary  president  of  the
senate,  the  speaker  of the assembly, the chair of the senate standing
committee on banks, and the chair of the assembly standing committee  on
banks,  a  written  report detailing the findings and recommendations on
the department's study performed in accordance with subdivision  one  of
this section. The superintendent shall use reasonable efforts to identi-
fy  any  impacts  by  expanding  the  financial institutions eligible to
accept municipal deposits and shall include the following information in
the report:
  (a) An analysis of deposits held in banks including the  size  of  the
bank's  assets,  location of banks, type of bank charter, changes in the
amount of commercial bank held deposits from the effective date  of  the
chapter  of  the laws of 2019 that added this section and overall impact
on banking industry, in particular small community banks.
  (b) The growth of municipal deposits held in  credit  unions,  savings
banks,  savings  and  loan  associations or federal savings associations
after the effective date of the chapter of the laws of 2019  that  added
this section.
  §  10. Section 86 of the banking law, as amended by chapter 274 of the
laws of 2007, is amended to read as follows:
  § 86. Eligibility. 1. FOR THE  PURPOSES  OF  THIS  ARTICLE,  THE  TERM
"COMMUNITY BANK INSTITUTION" SHALL MEAN ANY STATE OR FEDERALLY CHARTERED
BANKING  INSTITUTION  AND SHALL INCLUDE ANY BANK, TRUST COMPANY, SAVINGS
BANK OR SAVINGS AND LOAN ASSOCIATION WITH LESS THAN TEN BILLION  DOLLARS
IN  ASSETS  THAT  IS  HEADQUARTERED  IN THIS STATE AND WHOSE PREDOMINANT
RETAIL AND COMMERCIAL BANKING OPERATIONS SERVE RESIDENTS AND  BUSINESSES
OF  THIS  STATE,  AS DETERMINED BY THE SUPERINTENDENT IN HIS OR HER SOLE
DISCRETION AND PURSUANT TO SUCH RULES AND REGULATIONS AS THE SUPERINTEN-
DENT DEEMS NECESSARY TO IMPLEMENT AND ADMINISTER THESE PROVISIONS.
  2. To be eligible to receive deposits, or to renew  existing  deposits
under  this program[, a bank, trust company, savings bank or savings and
loan association: (a) must be chartered under  the  provisions  of  this
chapter and (b)] A COMMUNITY BANK INSTITUTION:
  (A)  must  have  a  current  CRA 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 bank-
ing institution meets the criteria specified in this section; AND
  (B)  MEET  ANY  ADDITIONAL CRITERIA ESTABLISHED BY THE COMPTROLLER AND
THE COMMISSIONER OF TAXATION AND FINANCE TO  DETERMINE  ELIGIBILITY  FOR
PARTICIPATION IN THE PROGRAM. SUCH CRITERIA MAY INCLUDE AN INSTITUTION'S
LOAN  TO  DEPOSIT  RATIO,  ITS RECORD OF SMALL BUSINESS LENDING, AND THE
IMPACT SUCH DEPOSITS WOULD HAVE ON AN AREA'S ECONOMIC ACTIVITY.
  [2. A federal bank, trust company, savings bank or  savings  and  loan
association may also be eligible to receive deposits, or to renew exist-
ing deposits, under this program if: (a) its principal office is located
in  this  state;  (b)  it  has  a  current CRA rating of satisfactory or
better; and (c) it meets any  additional  criteria  established  by  the

S. 6079--A                          5

comptroller  and  the  commissioner of taxation and finance to determine
eligibility for participation in the program. Such criteria may  include
an  institution's  loan  to  deposit ratio, its record of small business
lending,  and  the impact such deposits would have on an area's economic
activity.]
  § 11. Section 87 of the banking law, as amended by chapter 274 of  the
laws  of  2007,  subdivision  2 as amended by chapter 495 of the laws of
2013, is amended to read as follows:
  § 87. 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
community banking institutions which  are  deemed  eligible  to  receive
deposits pursuant to section eighty-six 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] THREE hundred [fifty] million dollars each. [The
maximum amount of funds on deposit at a  community  banking  institution
shall not exceed twenty million dollars.]
  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 community banking insti-
tution.
  4. Any deposits made pursuant to this article may  be  secured  by  an
irrevocable letter of credit issued by a federal home loan bank.
  5.  THE COMPTROLLER AND THE COMMISSIONER OF TAXATION AND FINANCE SHALL
ANNUALLY SUBMIT A JOINT REPORT TO THE GOVERNOR, THE TEMPORARY  PRESIDENT
OF  THE  SENATE,  THE  SPEAKER  OF THE ASSEMBLY, THE CHAIR OF THE SENATE
FINANCE COMMITTEE, THE CHAIR OF THE ASSEMBLY WAYS AND  MEANS  COMMITTEE,
THE  CHAIR  OF  THE SENATE STANDING COMMITTEE ON BANKS, AND THE CHAIR OF
THE ASSEMBLY STANDING COMMITTEE ON BANKS ON THE EFFICACY OF THE COMMUNI-
TY BANK DEPOSIT PROGRAM, INCLUDING INFORMATION ON THE NUMBER  OF  QUALI-
FIED  COMMUNITY  BANKING  INSTITUTIONS,  THE NUMBER OF COMMUNITY BANKING
INSTITUTIONS WHICH HAVE RECEIVED DEPOSITS, THE SIZE OF EACH  PARTICIPAT-
ING  COMMUNITY  BANK,  THE  NUMBER  AND  AMOUNT OF SUCH DEPOSITS AND THE
PERCENTAGE OF TOTAL STATE FUNDS DEPOSITED  IN  SUCH  INSTITUTIONS  UNDER
THIS PROGRAM.
  § 12. No municipal deposits held in credit unions by local governments
on  December 31, 2025 shall be required to be withdrawn upon the expira-
tion of this act.
  § 13. This act shall take effect on the ninetieth day after  it  shall
have  become  a  law;  provided that sections two, three, four, five and
nine of this act shall expire and be deemed repealed December 31, 2025.

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