Authorizes credit unions to participate in the excelsior linked deposit program and raises the limit on the amount permitted to be on deposit at any given time

BILL NUMBER:S1347

Title of bill

An act to amend the state finance law and the banking law, in relation to authorizing credit unions to participate in the excelsior linked deposit program

Purpose

This legislation authorizes credit unions to participate in the Excelsior Linked Deposit Program and raises the limit on the amount permitted to be on deposit at any given time.

Summary of provisions

Sections 1 and 2 amend subdivisions 14 and 15 of § 213 of the State Finance Law to include state and federal credit unions.

Section 3 amends § 213 of the State Finance Law by adding a new subdivision 24 defining the term "credit union."

Section 4 amends § 454 of the Banking Law to allow state chartered credit unions to accept deposits and make loans pursuant to the Excelsior Linked Deposit Program and pledge assets or other security to repay such moneys.

Section 5 states that this act shall take effect immediately.

Justification

In the past 35 years as New York has shifted from a manufacturing to a service economy, some of the largest companies in the state (many of which sponsor a credit union for the benefit of their employees) have downsized, forcing thousands of credit union members to become self-employed. Credit unions have responded to the needs of their members by offering business loans. In most instances, members have sought assistance from their credit union for business loans primarily for the same reason they joined the credit union; because they were denied a loan (in this example, a business loan) at another financial institution.

With the State's economic and employment fortunes resting on the success of small business, it is increasingly evident that small businesses must have greater access to capital through a wider range of lenders. Since their inception, credit unions have filled an important niche in serving communities underserved by commercial banks and thrifts. Over 700 credit unions across the State play an integral role in serving the financial needs of 3.5 million New Yorkers. Credit unions were created as a not-for-profit alternative to other financial institutions primarily because working-class individuals were being denied business through the ELDP which is a natural extension of the credit union mission.

Legislative history

2013-2014 -S.58 2011-12: S.359 2010: S.7908/A.26130A

2008: A.3205 - Passed Assembly 2005: A.4070 - Passed Assembly 2004: A.2078 - Passed Assembly 2001: A.9809B - Passed Assembly 2000: A.2565 - Passed Assembly 1998: A.10024 - Passed Assembly

Fiscal implications

None.

Effective date

This act shall take effect immediately.