Directs department of economic development to make available to the public a list of banks committed to community reinvestment and emerging domestic markets

BILL NUMBER:S5322

Title of bill

An act to amend the economic development law, in relation to directing the department of economic development to provide information to developers and financial institutions on banks which have made commitments to community reinvestment and emerging domestic markets

Purpose or general idea of bill

Directs the department of economic development to identify and make available to the public a list of banks committed to community reinvestment.

Specific provisions

To amend Section 1. Section 100 of the economic development law by adding a new subdivision 44-a to identify, in consultation with the division of housing and community renewal and the banking department, those state or federally chartered banking organizations which have made significant commitments to community reinvestment. The department shall make such information available to the public in written form and on its department internet website. The department shall conduct an outreach program to proactively provide such information to regional and local economic developers and financial institutions.

Existing provisions

Section 1. Section 100 of the economic development law.

Justification

Incorporating a new subdivision to the current economic development law which would allow for State Agencies to direct prospective emerging domestic markets candidates to state or federally charted banking organizations with proven significant commitments to community reinvestment will streamline the process of identifying these markets and the likelihood of funding of prospective EDM's by streamlining access to proven capital flows. Making existing capital funding opportunities more readily understood and available to entrepreneurs would benefit the State, as well as local businesses.

In the last 10 years, there has been a renewed interest by institutional investors in identifying businesses and real estate opportunities in emerging domestic markets. This growth in investor interest is driven, in part, by the recognition that changing demographics in the United States has resulted in a significant increase in minority purchasing power and business development by minority owned firms. Over the next 40 years, 85% of the U.S. population growth will come from non-white ethnic groups. In addition The current size of the United States Hispanic and African-American consumer market is larger than the GDP of all but nine countries in the world. Minority firms' sales are growing 34% per year more than twice the rate of all other firms.

In 2006, $130 billion was raised by private equity venture funds; approximately $25.5 billion was invested in 3,416 deals. The composition of EDM venture portfolios differ from mainstream portfolios. EDM venture portfolios are typically comprised of retailers, financial and business service entities, makers and distributors of consumer products, and computer software companies. These types of companies comprise only 10% of mainstream venture capita.l investments. NYS must act now to capitalize on the EDM or risk losing these future revenues to other states.

Prior legislative history

2009-2010: A.8416- Referred to Economic Development

Fiscal impact

None.

Effective date

This act shall take effect immediately.