Relates to the capital access program; focuses on minority and women-owned business enterprises and small businesses located in highly distressed areas to assist them in processing and being approved for qualifying program loans; requires the engagement in outreach and marketing to financial institutions to increase awareness of the program.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6716A
SPONSOR: Hunter TITLE OF BILL:
An act to amend the banking law and the New York state urban development
corporation act, in relation to the capital access program
PURPOSE:
This bill would expand the capacity of the Pursuit, a lending corpo-
ration, so minority- and women-owned business enterprises (MBEs) have
access to more capital. Additionally, this bill would require the New
York State Department of Financial Services, the Empire State Develop-
ment Corporation and the New York Business Development Corporation (now
called the Pursuit Lending Corporation) to jointly establish underwrit-
ing standards to assist minority business enterprises and small busi-
nesses in highly distressed areas.
SUMMARY OF PROVISIONS:
Section 1: establish a program in cooperation with the empire state
development corporation that shall focus on small businesses located in
highly distressed areas and minority business enterprises as such desig-
nations are defined by the regulations of the New York state urban
development corporation act.
Section 2:
- the underwriting standards provided for in subdivision four of this
section to evaluate applications for loans pursuant to the program filed
by a minority business enterprise, or a small business whose principal
place of business is in a highly distressed area;
- provide for the development of an integrated web portal for the third-
party agent which enables access by minority business enterprises and
small businesses in highly distressed areas to obtain information on the
capital access loan program including the ability to make application
and to receive approval for such loan online; and
- provide funding for marketing to the third-party agent to be directed
to potential loan recipients and to financial institutions to increase
awareness participation and referrals to the capital access loan
program.
Section 3: the New York State Department of Financial Services, the
Empire State Development Corporation and the New York Business Develop-
ment Corporation (now called the Pursuit Lending Corporation) shall
jointly establish underwriting standards to assist minority business
enterprises and small businesses in highly distressed areas.
Section 4: Effective Date
JUSTIFICATION:
The COVID-19 Pandemic caused many New York small businesses, especially
MWBEs), to struggle. The New York Business Development Corporation and
affiliates The 504 Company and Excelsior Growth Fund rebranded as
Pursuit, a business loan lending company. The mission of Pursuit is to
provide businesses with affordable small business loans and resources so
that they can reach higher, transform and grow. Pursuit is a communi-
ty-focused small business lender. This legislation would help MWBEs get
easier access to capital to help strengthen their businesses.
LEGISLATIVE HISTORY:
2022: A6716 - referred to economic development
FISCAL IMPLICATIONS:
TBD
EFFECTIVE DATE:
This act shall take effect on the one hundred twentieth day after it
shall have become a law.
STATE OF NEW YORK
________________________________________________________________________
6716--A
2023-2024 Regular Sessions
IN ASSEMBLY
May 5, 2023
___________
Introduced by M. of A. HUNTER -- read once and referred to the Committee
on Economic Development -- reported and referred to the Committee on
Ways and Means -- reported and referred to the Committee on Rules --
again reported from said committee with amendments, ordered reprinted
as amended and recommitted to said committee
AN ACT to amend the banking law and the New York state urban development
corporation act, in relation to the capital access program
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (b) of subdivision 1 of section 212 of the bank-
2 ing law, as amended by chapter 1 of the laws of 1994, is amended to read
3 as follows:
4 (b) The corporation shall undertake the following programs in further-
5 ance of the above objectives: (i) establish regional offices at
6 locations throughout New York, with sufficient staffing to advise,
7 develop and package financial assistance for small and medium sized
8 businesses; (ii) develop a comprehensive outreach program to increase
9 the visibility and awareness of the corporation's programs, including
10 allocating budget and staff to establish and maintain an aggressive and
11 extensive marketing program of the corporation's program of assistance
12 to small and medium sized businesses, providing for specific outreach to
13 minority and women owned enterprises, and entering into cooperative
14 relationships with local chambers of commerce, local development agen-
15 cies, local development corporations and other community based financial
16 intermediaries as set forth in subdivision three of this section; (iii)
17 establish and operate, or affiliate with a small business investment
18 company and a specialized small business investment company; [and] (iv)
19 establish a pilot export financing program, using personnel from the
20 private sector, to evaluate whether the corporation can play a signif-
21 icant role in the growth of the export industry in the state and (v)
22 establish a program in cooperation with the empire state development
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05985-03-3
A. 6716--A 2
1 corporation that shall focus on small businesses located in highly
2 distressed areas and minority and women-owned business enterprises
3 (MWBEs) as such designations are defined by the regulations of the New
4 York state urban development corporation act, through which the corpo-
5 ration shall be authorized to: (A) act as third-party agent for the
6 capital access program established by section sixteen-k of section one
7 of chapter one hundred seventy-four of the laws of nineteen hundred
8 sixty-eight, constituting the urban development corporation act; (B)
9 process, fund and approve qualifying program loans made by the corpo-
10 ration or a participating financial institution pursuant to section
11 sixteen-k of section one of chapter one hundred seventy-four of the laws
12 of nineteen hundred sixty-eight, constituting the urban development
13 corporation act; (C) maintain and service a portfolio of qualifying
14 loans made pursuant to the capital access program; and (D) engage in
15 outreach and marketing to financial institutions to increase awareness
16 of the program established under this subparagraph. The corporation
17 shall undertake the programs enumerated herein at such times as its
18 board of directors determines that the corporation's capital base and
19 available funds are adequate to support the operation of such program.
20 The programs enumerated herein may be modified by the corporation as may
21 be necessary to meet the changing needs of the state's economy, as
22 determined by the board of directors.
23 § 2. Paragraph (b) of subdivision 3 of section 16-k of section 1 of
24 chapter 174 of the laws of 1968, constituting the New York state urban
25 development corporation act, as amended by chapter 103 of the laws of
26 2011, is amended to read as follows:
27 (b) Any contract entered into pursuant to subparagraph (i) of para-
28 graph (a) of this subdivision shall:
29 (i) be for a period of two years and shall be renewed for an addi-
30 tional two year period subject to requirements of subparagraph (ii) of
31 paragraph (a) of this subdivision; [and]
32 (ii) provide for compensation for expenses incurred by the third party
33 agent in connection with its services as agent and for such other
34 services as the corporation may deem appropriate including, but not
35 limited to the use of the premises, personnel and personal property of
36 the third party agent;
37 (iii) notwithstanding any law, rule or regulation to the contrary, use
38 the underwriting standards provided for in subdivision four of this
39 section to evaluate applications for loans pursuant to the program filed
40 by a minority and women-owned business enterprise, or a small business
41 whose principal place of business is in a highly distressed area;
42 (iv) provide for the development of an integrated web portal for the
43 third-party agent which enables access by minority and women-owned busi-
44 ness enterprises and small businesses in highly distressed areas to
45 obtain information on the capital access loan program including the
46 ability to make application and to receive approval for such loan
47 online; and
48 (v) provide funding for marketing to the third-party agent to be
49 directed to potential loan recipients and to financial institutions to
50 increase awareness participation and referrals to the capital access
51 loan program.
52 § 3. Section 16-k of section 1 of chapter 174 of the laws of 1968,
53 constituting the New York state urban development corporation act, is
54 amended by adding two new subdivisions 4 and 5 to read as follows:
55 4. Notwithstanding any law, rule or regulation to the contrary, the
56 department of financial services, the empire state development corpo-
A. 6716--A 3
1 ration and the New York business development corporation shall jointly
2 establish underwriting standards to assist minority and women-owned
3 business enterprises and small businesses in highly distressed areas. In
4 addition to other factors, such standards should incorporate verifiable
5 alternative indications of creditworthiness presented or made available
6 by the applicant.
7 5. Pursuant to subparagraph (v) of paragraph (b) of subdivision 1 of
8 section 212 of the banking law, the New York business development corpo-
9 ration and the empire state development corporation shall enter into an
10 agreement pursuant to which the New York business development corpo-
11 ration shall authorize, maintain and administer the program established
12 in such subparagraph.
13 § 4. This act shall take effect on the one hundred twentieth day after
14 it shall have become a law.
