Establishes a temporary state commission to conduct a feasibility study to evaluate and make recommendations concerning the formation and control of a state public bank; provides if such study finds that the state bank is feasible, the commission may recommend legislation to create a state public bank for New York.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2720B
SPONSOR: Peoples-Stokes TITLE OF BILL:
An act establishing a commission to determine what benefits a public
bank or network of public banks owned by the state of New York or by a
public authority constituted by the state of New York can provide; and
providing for the repeal of such provisions upon expiration thereof
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to establish a temporary commission to
determine what benefits a public bank or network of public banks owned
by the state of New York or by a public authority constituted by the
state of New York can provide.
SUMMARY OF PROVISIONS:
-Establish a temporary state commission, to be known as the New York
state commission on establishing a bank owned by New York state,
herein-after referred to as the commission, is hereby established to
hire a consultant to study the feasibility of establishing a bank owned
by the state of New York or by a public authority constituted by the
state of New York for the public interest.
-The commission shall consist of eleven members, to be appointed as
follows:
*five members shall be appointed by the governor, one of whom shall be a
representative of the New York state department of financial services,
one shall be a representative from the New York state department of
taxation and finance; the remaining three governor's appointees shall
not be employees of the executive branch and at least one member shall
represent the banking and financial industries of the state including,
but not limited to, the New York bankers association, at least one
member shall represent community banking, and no more than one member
may be a representative of any financial services firm located within
the state, including, but not limited to, the New York state small busi-
ness development center;
*three members shall be appointed by the temporary president of the
senate, one of whom shall be a member of the senate;
*three members shall be appointed by the speaker of the assembly, one of
whom shall be a member of the assembly;
-The majority of the members of the entire commission shall designate
one of the commissioners to serve as the chair of the commission.
-The members of the commission shall be appointed no later than ninety-
days after the effective date of this act.
-The commission is directed to hire a reputable consultant that has the
capacity, capability, and experience to conduct a feasibility study to
evaluate and make recommendations concerning the formation and control
of a state public bank. Consultants that have conducted a previous
feasibility study of a public bank at the request of a government entity
in the United States will be given preference. Such study shall make
recommendations, with the advice of the department of financial
services, including but not limited to, on the feasibility of establish-
ing a state bank in New York and may recommend legislation for the
legislature to consider in order to create a state public bank for New
York.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
The amended version alters the composition on the commission.
JUSTIFICATION:
A public bank is a financial institution created by the state for a
"public benefit" of the community. The Bank of North Dakota, founded in
1919, is currently the only public bank that exists in the United
States. Since 2010, 28 States in the United States have passed legis-
lation to establish a public banking taskforce or to create a public
bank in. their state. The State of California enacted a law in 2019
allowing municipalities to form a public bank.
Who benefits from a Public Bank? Taxpayers will benefit from both: (a)
the profits the bank makes that return to the general fund of the state
o hold the line on taxes; and (b) the provide banking services to
economic disadvantaged communities. The state will benefit by financing
public projects at a reduced cost. Public banks help local businesses
and MWBEs by providing them access to credit lines, loans, and other
forms of financing to help them grow and succeed. The community benefits
because the public bank could provide affordable loans for students to
attend college. Homebuyers seeking reasonable mortgage loans with
reasonable terms and rates also would benefit. This bill would estab-
lish a commission to hire a consultant to conduct a study of, a public
bank for the State of New York for the purpose of achieving cost
savings, strengthening local economies, supporting community economic
development, environmental protection, student debt, and addressing
infrastructure and housing needs.
PRIOR LEGISLATIVE HISTORY:
2022: A9711B/S8499B
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately and shall expire and be deemed
repealed one year after such effective date.
