What's happening
This bill allows credit unions to participate in New York's Excelsior Linked Deposit Program alongside banks and thrifts.
Why it matters
Expands access to low-interest loans for small businesses and nonprofit organizations. by allowing credit unions—often community-focused lenders—to participate in the Excelsior Linked Deposit Program, potentially increasing the availability of affordable capital in underserved areas.
Levels the playing field between credit unions and traditional banks. , recognizing credit unions as eligible deposit holders for state funds in this program, which could spur greater competition and potentially better terms for borrowers.
Explicitly defines “credit union” in state law. for the purposes of this program, clarifying eligibility and ensuring both state-chartered and federally chartered credit unions can participate.
Requires credit unions to meet the same collateral and security standards as banks and thrifts. when accepting state deposits, ensuring public funds remain protected while enabling broader participation in economic development initiatives.
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Who cares
Headline styles
Let Credit Unions Join Program
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to finance
- Referred to finance
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
436
2017-2018 Regular Sessions
IN SENATE (Prefiled)
January 4, 2017
Introduced by Sen. PERALTA -- read twice and ordered printed, and when printed to be committed to the Committee on Finance
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
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph (b) of subdivision 14 of section 213 of the state finance law, as added by chapter 25 of the laws of 1995, is amended to read as follows:
(b) any thrift or credit union which an authorized depositor determines is eligible to accept linked deposits based upon criteria applied by the authorized depositor in making determinations under section one hundred five of this chapter, and which agrees to participate in the program, provided that any linked deposit in such thrift or credit union shall be secured in the same manner as moneys deposited pursuant to section one hundred five of this chapter and such thrifts or credit unions shall pledge assets or furnish other security satisfactory in form and amount to the authorized depositor for the repayment of moneys. Until April first, nineteen hundred ninety-six, in the determination of thrifts eligible to accept linked deposits, the authorized depositor shall give priority to applications by those thrifts seeking to make linked loans in economic development regions in which fewer than ten linked loans have been made on or before April first, nineteen hundred ninety-five. Provided, however, that the granting of such priority shall in no way relieve an authorized depositor of his or her duty and obligation to review all thrift applications from all economic development regions in the state on a timely basis.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00099-01-7
S. 436 2
§ 2. The closing paragraph of subdivision 15 of section 213 of the state finance law, as amended by chapter 291 of the laws of 2004, is amended to read as follows:
This article and the related statutes that refer to this article do not grant thrifts, credit unions, farm credit system institutions or the New York business development corporation eligibility to accept public funds or public moneys from public entities for investment purposes. For farm credit system institutions, the linked deposit program is available for loans with an agricultural purpose as defined by the farm credit act of nineteen hundred seventy-one, as amended and regulations promulgated thereunder. A linked deposit is intended to enable a lender to make a linked loan to an eligible business and such deposit earns a yield lower than posted rates in order to accomplish the goals of this article.
§ 3. Section 213 of the state finance law is amended by adding a new subdivision 24 to read as follows:
24. "Credit union" means any credit union chartered under article eleven of the banking law or any federal credit union.
§ 4. Section 454 of the banking law is amended by adding a new subdivision 33-a to read as follows:
33-a. To accept moneys deposited by the commissioner of taxation and finance or the comptroller as linked deposits and make linked loans pursuant to article fifteen of the state finance law and to pledge assets or furnish other security satisfactory in form and amount to the depositor, for repayment of such moneys.
§ 5. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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
2015-2016 - S1347 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.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.