Relates to banking development districts; requires renewal of certain branches within banking development districts.
TITLE OF BILL: An act to amend the banking law, in relation to banking development districts
PURPOSE: This bill would strengthen the Banking Development District (BDD) program by clarifying the goals of the program and the criteria by which a branch's effectiveness should be measured.
SUMMARY OF PROVISIONS: This bill amends Section 96-d of the Banking Law by adding a new subdivision 7 (a) and (b);
(a) would require BDD branch's to provide affordable products and services, which include financial educational services within their community, and (b), would require participating BDD branch's to meet certain criteria in order to qualify for renewal of their deposit.
JUSTIFICATION: The Banking Development District (BDD) Program was created in 1997 to provide an incentive to banks to promote the establishment of new bank branches in communities with. no or few branches and thereby stimulate the opening of bank accounts by community residents. The incentive of public deposits and other benefits provided to those banks that open a BDD branch in under served communities is to better ensure that the new branch will have sufficient deposits to provide loans and other services.
The Banking Department conducted a study of the BDD Program that was published in 2010 which identified "next steps" to be taken to improve the program based on feedback collected from the banks, community groups and other stakeholders involved in the BDD Program. This bill is based on the results of that study as well as on a Roundtable held by the Assembly Banks Committee in October 2011 on the BDD Program. While the BDD Program has been very effective, both the Banking Department study and the Assembly Roundtable identified several features of the Program where legislative clarification would be appropriate. Specifically, the findings included a need to clarify the goals of the program; provide standards by which renewals of deposits could better be measured: and, require branches participating in the program to provide financial education to members of the district in which it is located. This bill seeks to address those findings.
LEGISLATIVE HISTORY: 2012 - S. 6692 Banks Committee/A. 9296 Reported to Calendar.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect on the ninetieth day after is shall have become law.
STATE OF NEW YORK ________________________________________________________________________ 2495 2013-2014 Regular Sessions IN SENATE January 17, 2013 ___________Introduced by Sen. GRIFFO -- 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 banking development districts THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 96-d of the banking law is amended by adding a new subdivision 7 to read as follows: 7. (A) IN ORDER TO MEET THE DEMONSTRATED NEED FOR BANKING SERVICES IN A BANKING DEVELOPMENT DISTRICT, ANY BANK, TRUST COMPANY OR NATIONAL BANK THAT HAS ESTABLISHED A BRANCH WITHIN A BANKING DEVELOPMENT DISTRICT SHALL OFFER AFFORDABLE PRODUCTS AND SERVICES, INCLUDING FINANCIAL EDUCA- TION SERVICES, TAILORED TO THE BANKING NEEDS OF THE COMMUNITY IN WHICH THE BRANCH IS LOCATED. (B) ANY BANK, TRUST COMPANY OR NATIONAL BANK THAT HAS ESTABLISHED A BRANCH IN A BANKING DEVELOPMENT DISTRICT THAT SEEKS TO REMAIN IN THE BANKING DEVELOPMENT DISTRICT PROGRAM SHALL APPLY FOR RENEWAL OF AUTHORI- ZATION TO PARTICIPATE IN THE BANKING DEVELOPMENT DISTRICT PROGRAM IN A FORM AND MANNER DETERMINED BY THE SUPERINTENDENT. THE SUPERINTENDENT SHALL DETERMINE THE CRITERIA TO BE USED IN EVALUATING WHETHER TO GRANT SUCH RENEWAL REQUEST. SUCH CRITERIA SHALL INCLUDE, AT A MINIMUM, THE EXTENT TO WHICH THE BRANCH HAS MET ITS GOALS AS STATED IN ITS ORIGINAL BANKING DEVELOPMENT DISTRICT APPLICATION; THE EXTENT TO WHICH THE GOALS STATED IN ITS ORIGINAL APPLICATION CONTINUE TO BE RESPONSIVE TO THE BANKING NEEDS OF THE BANKING DEVELOPMENT DISTRICT IN WHICH THE BRANCH IS LOCATED; THE EXTENT TO WHICH THE BRANCH HAS BEEN RESPONSIVE TO THE BANK- ING NEEDS OF, AND ENJOYS THE SUPPORT OF, THE COMMUNITY IN WHICH IT IS LOCATED; THE QUALITY OF AFFORDABLE PRODUCTS AND SERVICES OFFERED BY THE BRANCH; THE EXTENT OF FINANCIAL EDUCATION ACTIVITIES IN WHICH THE BRANCH HAS PARTICIPATED; OTHER INFORMATION REGARDING THE BRANCH, INCLUDING ITS PROFITABILITY, LENDING ACTIVITIES AND EMPLOYMENT LEVELS. S 2. This act shall take effect on the ninetieth day after it shall have become a law.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00177-01-3