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- Referred to local government
- Referred to local government
Companion bill
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Allows credit unions, savings banks, savings and loan associations and federal savings associations to accept and secure deposits from municipal corporations
In Assembly Committee · Banks · Sponsor Carl Heastie
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S4672
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 federal savings banks 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 general powers of a credit union.
Section 3 requires credit unions to pledge assets or furnish other security 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 security 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.
Current law
Under current law, only commercial banks and trust companies are allowed to accept municipal deposits.
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 & loan associations and credit unions, were smaller, less secure entities that primarily served individual investors by providing investment opportunities and offering loans, particularly mortgages to residents of the communities they served. However, savings banks, savings & 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 & loans and credit unions to accept municipal deposits would be beneficial to the communities they are serving by offering a competitive alternative to commercial banks, who are often a large corporate entity with no real affiliation or commitment to the community they serve.
Legislative history
A6511 of the 2007-2008 legislative session., A.4370 of the laws of 2009-2010, and A3239 of the 2011-2012 legislative session.
Fiscal implications
None to the State
Effective date
Ninety days following enactment.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.