Senator James Sanders Jr. and Comptroller Thomas P. DiNapoli Announce Legislation to Expand Lending in Underserved Communities

Albany, NY — New York State Senator James Sanders Jr., joined by New York State Comptroller Thomas P. DiNapoli and Assemblymember Khaleel M. Anderson, held a press conference today at the State Capitol to announce new legislation aimed at expanding access to capital in underserved communities and stimulating local economic development across New York State.

The proposed legislation focuses on strengthening programs that support community banks and minority-owned financial institutions, making it easier for them to access state deposits and increase lending to small businesses, homeowners, and local entrepreneurs.

“Access to capital should not depend on ZIP code,” said Senator James Sanders Jr. “These bills represent meaningful progress in strengthening our community banks and minority financial institutions so they can better serve neighborhoods that have historically been overlooked. But let me be clear—this is not the end of the work. We must continue pushing for more banking access in areas that remain financial deserts, including The Rockaways and many other underserved communities across New York. It is encouraging that we are all on the same page and share the same vision as we continue working to ensure our communities have optimal access to financial services.”

The two bills were developed and advanced by State Comptroller Thomas P. DiNapoli and are designed to modernize and expand existing programs that deploy public deposits to financial institutions serving underserved neighborhoods.

“Supporting community and minority-owned banks and credit unions puts state funds to work in neighborhoods that have historically been overlooked,” said Comptroller Thomas P. DiNapoli. “These funds will help expand financial services, increase access to capital and build wealth through homeownership, entrepreneurship and job growth. It is a win-win for the state and our local communities.”

Assemblymember Khaleel M. Anderson, who co-sponsors one of the bills, emphasized the importance of expanding financial access in Southeast Queens and other underserved communities.

“I want to thank State Comptroller DiNapoli, Senator Sanders and Assembly Member Vanel for joining me in this united push to make banking and financing more accessible to underbanked communities across the state, specifically in my district of Southeast Queens,” said Assemblymember Khaleel Anderson. “The modernization and flexibility these bills provide will allow community banks and minority depository institutions to serve the public more efficiently and ultimately support the communities that the Banking Development District and Community Bank Deposit programs were designed to help.”

Legislation Overview

Banking Development District Modernization (S.8357/A.9574)
Authored by Comptroller DiNapoli and sponsored by Senator Sanders Jr. and Assemblymember Anderson, this legislation reduces a key barrier to participation in the Banking Development District (BDD) Program, which places public deposits in financial institutions serving underserved communities. The bill allows participating banks to use reciprocal deposits to meet collateral requirements. This change enables state deposits to be insured through FDIC-backed deposit placement networks rather than requiring traditional collateral, freeing up more capital for lending.

Community Bank Deposit Program Expansion (S.8406/A.9573)
Authored by Comptroller DiNapoli and sponsored by Senator Sanders Jr. and Assemblymember Clyde Vanel, this bill raises the Community Bank Deposit Program (CBDP) cap from $20 million to $30 million. The increase expands the ability of participating banks to support mortgages, small businesses, farms, and local development projects.

Support from Banking and Financial Leaders

Industry leaders and financial institutions also voiced strong support for the legislation.

“NYBA thanks State Comptroller DiNapoli, Senator Sanders and Assemblymembers Vanel and Anderson for their recognition of the success of both the Banking Development District program and the Community Deposit Program in helping to bring more unbanked New Yorkers into the financial relationships that will ultimately support foundational wealth-building,” said Clare Cusack, President & CEO of the New York Bankers Association. “These bills sharpen existing tools that have proven track records of targeting funds to the communities that need them the most.”

“The New York Credit Union Association applauds Comptroller DiNapoli and Senate Banks Committee Chair Sanders for their leadership to enhance the Banking Development District Program,” said William J. Mellin, President & CEO of the New York Credit Union Association. “Credit unions’ not-for-profit structure, member ownership, and community-focused mission align perfectly with the goals of expanding affordable financial services in underserved areas.”

“IBANYS is pleased to support these necessary changes to New York’s outdated requirements for the community deposit program and banking development districts,” said John Witkowski, President & CEO of the Independent Bankers Association of New York State. “New York’s community banks are drivers of economic equality in their communities.”

“The National Bankers Association strongly supports these legislative updates, which will strengthen minority depository institutions and expand access to responsible credit in communities that have long faced structural barriers,” said Nicole Elam, President & CEO of the National Bankers Association. “By modernizing these programs, New York is demonstrating a national model for how public funds can advance economic equity and community wealth-building.”

Background on the Banking Development District Program

The Banking Development District (BDD) Program, administered by the New York State Department of Financial Services, encourages banks and credit unions to establish or maintain branches in underserved communities. The Comptroller’s Office supports these branches by making up to $35 million in public deposits available to participating institutions.

To date, Comptroller DiNapoli has awarded approximately $505 million in deposits to 13 banking institutions operating in DFS-designated Banking Development Districts across New York State.

Speakers at Today’s Press Conference

The press conference featured remarks from a broad coalition of elected officials and financial leaders who support expanding access to banking and lending in underserved communities.

Speakers, in order of appearance, included:

• Senator James Sanders Jr.
• New York State Comptroller Thomas P. DiNapoli
• Assemblymember Brian Cunningham
• Assemblymember Noah Burroughs
• Senator Lea Webb
• Assemblymember Stefani Zinerman
• Assemblymember Khaleel Anderson
• Clare Cusack, President & CEO, New York Bankers Association
• Thomas L. Amell, President & CEO, Pioneer Bank and Chair of the NYBA Board of Directors
• Carlos P. Naudon, President, Ponce Bank
• John Witkowski, President & CEO, Independent Bankers Association of New York State
• Sherri Eckles, President, New York Mortgage Bankers Association

Together, the coalition emphasized the importance of modernizing financial tools and expanding access to capital so communities across New York State can benefit from increased economic opportunity.