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.

---

S58-2013 Actions

• Jan 9, 2013: REFERRED TO FINANCE

S58-2013 Memo

BILL NUMBER:S58

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:
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.

S58-2013 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                     58

                         2013-2014 Regular Sessions

                              I N  SENATE

                                 (PREFILED)

                               January 9, 2013
                                 ___________

  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  ASSEM-
  BLY, 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  deter-
  mines  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  obli-
  gation  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.
                                                             LBD01097-01-3

 S. 58                               2

    S 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.
    S  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.
    S  4. Section 454 of the banking law is amended by adding a new subdi-
  vision 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.
    S 5. This act shall take effect immediately.