What's happening
The bill expands state banking law to require federally chartered banks to provide notice and information when closing branch offices.
Why it matters
Expands oversight to federally chartered banks. By including federally chartered banks, the law ensures that all major banking institutions—regardless of whether they are chartered at the state or federal level—must provide advance notice and information when closing a branch, closing a previous loophole.
Promotes community stability and awareness. Required notification gives customers, local businesses, and community leaders time to prepare for changes that could impact access to essential financial services, especially in underserved or rural areas.
Improves data for state regulators. The amendment gives state banking regulators a fuller picture of the banking landscape and branch closures, potentially informing broader policy decisions and community support efforts.
Enables community input and response. By authorizing meetings between banks, regulators, and community groups in affected areas, the law aims to foster dialogue and possibly mitigate negative economic impacts of branch closures.
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Who cares
Headline styles
State Oversight of Bank Closings
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to banks
- Referred to banks
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2295
2019-2020 Regular Sessions
IN SENATE
January 23, 2019
Introduced by Sen. SANDERS -- read twice and ordered printed, and when printed to be committed to the Committee on Banks
AN ACT to amend the banking law, in relation to federally chartered banking organizations
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The opening paragraph of subdivision 1 of section 28-c of the banking law, as amended by chapter 180 of the laws of 2012, is amended to read as follows:
This section is intended to provide the superintendent with detailed information concerning the planned closing of branch offices by statechartered and federally chartered banking organizations, the availability of alternative financial services within the general area served by such branch and the economic impact upon the community resulting from such closing, and to provide the superintendent with authority to conduct meetings with banking organizations and community groups in areas where a branch closing is planned. The requirements of this section shall not apply to the following:
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05842-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the banking law, in relation to federally chartered banking organizations
Purpose or general idea of bill
The purpose of this bill is to expand the authority of the superinten- dent of the New York state department of financial services to obtain detailed information and to conduct meetings concerning the planned closing of branch offices proposed not only by state-chartered banking organizations, but also federally chartered banking organizations.
Summary of provisions
Section one amends section 28-c of the banking law by authorizing the superintendent of the New York state department of financial services to obtain detailed information concerning the planned closing of branch offices by state-chartered and federally chartered banking organiza- tions, the availability of alternative financial services within the general area served by such branch and the economic impact upon the community resulting from such closing, and to provide the superintendent with authority to conduct meetings with banking organizations and commu- nity groups in areas where a branch closing is planned.
Read the full memo (638 words)
Section two sets forth an immediate effective date.
Justification
Bank branches serve an essential role in creating and maintaining an economically vibrant community. A bank branch provides a convenient and safe place for local residents to deposit their money, accumulate savings and obtain home and small business loans. In addition, a bank branch serves to attract businesses to the local neighborhood since they can deposit business earnings at the end of the day without having to drive a long distance and easily access safe and trustworthy lending services. Furthermore, a local branch plays a critical role in the lives of senior citizens and individuals with limited transportation options.
For these reasons, a branch closure can have a severe impact upon the local community. The negative impacts are even more exacerbated in low and moderate income neighborhoods.
According to a study conducted by the National Community Reinvestment Coalition, from 2007 through 2010, bank and credit union branches increased by 1,000 in middle- and upper-income neighborhoods while decreasing by 530 in low- and moderate-income neighborhoods across the country. In addition, branches increased in predominantly white neigh- borhoods by 598 while decreasing by 186 in minority neighborhoods where more than 50 percent of the residents are minority.
The disparity in branches and the negative impact resulting from a branch closure highlight the importance of ensuring that concerns and input of the local community are taken into consideration in the deci- sion making process.
Currently, federally-chartered banking organizations are required to provide advanced notice to an appropriate federal agency and its custom- ers. However, under the existing federal regulation, the community does not have the meaningful input in the decision making process and the federal notice requirement does not go far enough in addressing the concerns of the community and protecting the interest of such branch customers.
In comparison to the federal regulation, New York state banking law imposes more stringent notice requirements upon state-chartered banking organizations planning to close a branch. Specifically, state law authorizes the superintendent of the department of financial services to obtain more comprehensive information, which includes availability of alternative financial services within the general area, economic impact upon the community resulting from such closing, and a description of any planned, limited or full service banking facility to be opened within such area. In addition, it allows the superintendent to conduct meetings with banking organizations and community groups in areas where a branch closing is planned.
This legislation purports to ensure that bank branches are accessible to all communities by requiring that not only state-chartered, but feder- ally chartered bank organizations also comply with the relevant New York state banking law concerning the planned closing of branch offices.
Legislative history
2015-16: S.1140
2014: S.7610
Fiscal implication
None.
Effective date
This legislation shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.