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A03320 Summary:

BILL NOA03320
 
SAME ASSAME AS S00727-A
 
SPONSORZebrowski
 
COSPNSRBlake, Lupardo, Colton, Wallace, Jones, Richardson, Walsh, Brabenec, Niou, Wright, Reyes
 
MLTSPNSR
 
Amd §96-d, Bank L; amd §4, Chap 526 of 1998
 
Relates to the banking development districts program.
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A03320 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A3320
 
SPONSOR: Zebrowski
  TITLE OF BILL: An act to amend the banking law, in relation to the banking development district program; to amend chapter 526 of the laws of 1998, amending the banking law relating to participation in the bank- ing development districts program, in relation to the effectiveness thereof   PURPOSE OF THE BILL: This bill would amend the Banking Law to expand access to banking services in communities where there is a demonstrated need for addi- tional products and services.   SUMMARY OF PROVISIONS: Section 1 of the bill would limit the designation of a banking develop- ment district to fourteen years, yet allow for additional extensions in 5 or 10 year increments. Section 3 of the bill would amend Banking Law § 96-d(5) to allow federal and state credit unions to participate in the banking development district program. Sections 2 and 4 of the bill would set forth the effective dates.   JUSTIFICATION: Many communities in New York State lack consumer banking services. In 1997, the Banking Development District (BDD) program was enacted to incentive banks to locate branches in communities designated as under- served by the Department of Financial. Services. Such communities either have no available financial service options, or only offer alternative (and often problematic) financial service options like check cashers and pawn shops. Under the BDD program, banks that open branches in underserved communi- ties are eligible to receive below market-rate deposits. Such deposits lower the financial risk the branches may incur when opening in an underserved community. Currently, however, credit unions are currently ineligible to partic- ipate in the BDD program. Because banks and other eligible financial institutions have submitted a modest number of applications over the past twenty years, the program should be expanded to include credit unions to encourage additional banking services in underserved communi- ties. At the same time, it is also appropriate to restrict the unlimited dura- tion of a BDD designation. Once a banking deficit in an underserved community is corrected, the incentives provided under the BDD program are no longer needed. A fourteen year designation limit (with unlimited extensions as necessary) would make the BDD program more efficient and allow for the allocation of resources to other communities.   LEGISLATIVE HISTORY: A.6949-B of 2017-18   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: Immediately.
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