On Thursday, Senator Montgomery’s Credit Union Bill (S727-A/A3320-Zebrowski) passed the New York State Senate and now awaits a vote in the Assembly. It would allow credit unions to receive the same economic incentives as banks to operate in underserved communities through the Banking Development District (BDD) program.
The BDD program was enacted to incentivize banks to locate branches in communities designated as underserved by the Department of Financial Services. Participating banks are eligible to receive up to $10 million in subsidized deposits from the State of New York to lower financial risk and encourage lending in these communities. Many of these areas have few to no banking institutions and instead have to rely on alternative, costly and sometimes predatory options to fill in the gaps.
“There are entire communities across our state where major banking institutions are nowhere to be found to provide financial services. This leaves residents, many of whom are already low-income, to deal with operations that charge exorbitant fees and interest rates,” said state Senator Velmanette Montgomery. “I believe in credit unions and I believe in the role they can play in making sure more New Yorkers have access to quality, local financial institutions that reinvest in communities.”
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