Add SS234-c & 378-f, rpld S237 sub 2, amd S464, Bank L; amd SS105 & 106, St Fin L; amd S2523, Ed L; amd S3-a,
Gen City L; amd SS11 & 10, Gen Muni L; amd S70, Sec Cl Cit L; amd S4-408, Vil L
Allows savings banks, savings and loan associations and credit unions to accept deposits from municipal corporations and authorizes the deposit of certain public funds of political subdivisions and school districts in savings banks, savings and loan associations and credit unions.
STATE OF NEW YORK
________________________________________________________________________
5466
2011-2012 Regular Sessions
IN ASSEMBLY
February 22, 2011
___________
Introduced by M. of A. TOWNS -- read once and referred to the Committee
on Banks
AN ACT to amend the banking law, the state finance law, the education
law, the general city law, the general municipal law, the second class
cities law and the village law, in relation to permitting savings
banks, savings and loan associations and credit unions to accept
deposits from municipal corporations and authorizing the deposit of
certain public funds of political subdivisions and school districts in
savings banks, savings and loan associations, and credit unions; and
to repeal certain provisions of the banking law relating thereto
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The banking law is amended by adding a new section 234-c
2 to read as follows:
3 § 234-c. Deposits received from political subdivisions. A savings bank
4 that receives deposits, including demand, transaction and/or time depos-
5 its, from a political subdivision of this state and acts thereby as a
6 depositary of its public moneys, may secure any portion of such deposit
7 which is not insured by the Federal Deposit Insurance Corporation or by
8 the Savings Association Insurance Fund:
9 (a) a pledge of such obligations or securities as shall lawfully be
10 required or accepted by such depositor; or
11 (b) in lieu of such pledge, by furnishing the political subdivision
12 with a good and sufficient undertaking with sufficient sureties in
13 accordance with the requirements of other provisions of law applicable
14 to the moneys of the political subdivision.
15 A savings bank is hereby authorized and empowered to receive such
16 deposits, including demand, transaction, and/or time deposits, to act as
17 such depositary (including the powers contained in section ninety-six-b
18 of this chapter), and to secure such deposits by such pledge or by such
19 undertaking. For the purposes of this section the term "political subdi-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09653-01-1
A. 5466 2
1 vision" includes a county, town, city, village, school district, fire
2 district, park district or improvement district to which article thir-
3 teen of the town law applies. The powers granted to a savings bank by
4 this section shall be in addition to, and not in limitation of, the
5 powers conferred on savings banks by other provisions of law.
6 § 2. Subdivision 2 of section 237 of the banking law is REPEALED.
7 § 3. The banking law is amended by adding a new section 378-f to read
8 as follows:
9 § 378-f. Deposits received from political subdivision. A savings and
10 loan association that receives deposits, including demand, transaction
11 and/or time deposits, from a political subdivision of this state and
12 acts thereby as a depositary of its public moneys, may secure any
13 portion of such deposit which is not insured by the Savings Association
14 Insurance Fund:
15 (a) a pledge of such obligations or securities as shall lawfully be
16 required or accepted by such depositor; or
17 (b) in lieu of such pledge, by furnishing the political subdivision
18 with a good and sufficient undertaking with sufficient sureties in
19 accordance with the requirements of other provisions of law applicable
20 to the moneys of the political subdivision.
21 A savings and loan association is hereby authorized and empowered to
22 receive such deposits, including demand, transaction and/or time depos-
23 its, to act as such depositary (including the powers contained in
24 section ninety-six-b of this chapter), and to secure such deposits by
25 such pledge or by such undertaking. For the purposes of this section,
26 the term "political subdivision" includes a county, town, city, village,
27 school district, fire district, park district or improvement district to
28 which article thirteen of the town law applies. The powers granted to a
29 savings and loan association by this section shall be in addition to,
30 and not in limitation of, the powers conferred on savings and loan asso-
31 ciations by other provisions of law.
32 Notwithstanding any other provisions of law to the contrary, any
33 deposits received from a political subdivision shall not be construed to
34 constitute membership in the savings and loan association and shall be
35 construed to be that of a creditor of the savings and loan association.
36 § 4. Section 464 of the banking law is amended by adding a new subdi-
37 vision 4 to read as follows:
38 4. A credit union that receives deposits, including demand, trans-
39 action and/or time deposits, from a political subdivision of this state
40 and acts thereby as a depositary of its public moneys, may secure any
41 portion of such deposit which is not insured by the National Credit
42 Union Administration by:
43 (a) a pledge of such obligations or securities as shall lawfully be
44 required or accepted by such depositor; or
45 (b) in lieu of such pledge by furnishing the political subdivision
46 with a good and sufficient undertaking with sufficient sureties in
47 accordance with the requirements of other provisions of law applicable
48 to the moneys of the political subdivision.
49 A credit union is hereby authorized and empowered to receive such
50 deposits, including demand, transaction and/or time deposits, to act as
51 such depositary (including the powers contained in section ninety-six-b
52 of this chapter), and to secure such deposits by such pledge or by such
53 undertaking. For the purpose of this section the term "political subdi-
54 vision" includes a county, town, city, village, school district, fire
55 district, park district or improvement district to which article thir-
56 teen of the town law applies. The powers granted to a credit union by
A. 5466 3
1 this section shall be in addition to, and not in limitation of, the
2 powers conferred on a credit union by other provisions of law.
3 Notwithstanding any other provision of law to the contrary, any depos-
4 its received from a political subdivision shall not be construed to
5 constitute membership in the credit union and shall be construed to be
6 that of a creditor of the credit union.
7 § 5. Subdivision 1 and the opening paragraph of subdivision 2 of
8 section 105 of the state finance law, subdivision 1 as amended by chap-
9 ter 204 of the laws of 2002 and the opening paragraph of subdivision 2
10 as amended by chapter 154 of the laws of 1953, are amended to read as
11 follows:
12 1. All moneys received by the commissioner of taxation and finance on
13 account of the state, excepting such moneys as are required by law to be
14 deposited to the credit of the comptroller, but including such moneys as
15 are thereafter paid into the state treasury by the comptroller, shall be
16 deposited by the commissioner of taxation and finance within three days
17 after the receipt thereof, either as a demand deposit or an interest-
18 bearing [time] deposit (other than a time certificate of deposit), as he
19 and the comptroller may determine, in such banks, trust companies [and
20 industrial banks], credit unions, savings banks and savings and loan
21 associations as in his opinion and the opinion of the comptroller are
22 secure. The moneys so deposited shall be placed to the account of the
23 commissioner of taxation and finance. He shall keep a bankbook in which
24 shall be entered his account of deposit in and moneys drawn from the
25 banks and trust companies [and industrial banks], credit unions, savings
26 banks and savings and loan associations in which deposits are made by
27 him, which he shall exhibit to the comptroller for his inspection on the
28 first Tuesday of every month and oftener if required. He shall not draw
29 any moneys from such banks, trust companies [or industrial banks], cred-
30 it unions, savings banks or savings and loan associations unless by
31 checks signed and countersigned in the manner prescribed by section one
32 hundred one of this chapter, unless otherwise provided by law. No moneys
33 shall be paid by any such bank, trust company [or industrial bank],
34 credit union, savings bank or savings and loan association out of any
35 such deposit except upon such checks. Moneys may be paid through elec-
36 tronic transfer in accordance with procedures developed by the commis-
37 sioner of taxation and finance and the comptroller and consistent with
38 the requirements of this section for recording payments. Such payments
39 through electronic transfer shall be considered, for purposes of this
40 chapter, to be moneys drawn by check. Every such bank, trust company
41 [or industrial bank], credit union, savings bank or savings and loan
42 association shall transmit to the comptroller monthly statements of all
43 moneys received and paid by it on account of the commissioner of taxa-
44 tion and finance.
45 Every bank, trust company [and industrial bank], credit union, savings
46 bank or savings and loan association designated for the deposit of state
47 moneys under the provisions of this section shall, before deposits are
48 made:
49 § 6. The opening, second and third undesignated paragraphs of section
50 106 of the state finance law, the second undesignated paragraph as
51 amended by chapter 293 of the laws of 1992, are amended to read as
52 follows:
53 Such moneys received by the commissioner of taxation and finance as
54 are now deposited to the credit of the comptroller pursuant to statute,
55 and thereafter paid into the state treasury, shall be deposited by him
56 to the credit of the comptroller in such bank [or], trust company,
A. 5466 4
1 savings bank, credit union or savings and loan association as shall be
2 designated by the comptroller at such rate of interest, if any, as shall
3 be agreed upon by the depositary and the comptroller.
4 All other moneys received by the commissioner of taxation and finance
5 except as provided in section one hundred five of this article and all
6 moneys received by any other state officer or other person receiving
7 moneys belonging to the state, or for which such state officer or other
8 person may be responsible in his official capacity, and all moneys
9 received by any state institution, except for moneys received pursuant
10 to a clinical practice plan established pursuant to subdivision fourteen
11 of section two hundred six of the public health law and all moneys
12 received from the state by any charitable or benevolent institution
13 supported in whole or in part by the state, shall be deposited to his or
14 its credit in such bank [or], trust company, savings bank, credit union
15 or savings and loan association as shall be designated by the comp-
16 troller at such rate of interest, if any, as shall be agreed upon by the
17 depositary and the comptroller.
18 Every [bank or trust company] depositary designated by the comptroller
19 for the deposit of any such moneys
20 § 7. Subdivision 1 of section 2523 of the education law, as amended by
21 chapter 794 of the laws of 1951, is amended to read as follows:
22 1. The treasurer of each city school district shall demand, collect,
23 receive and have the care and custody of moneys belonging to or due the
24 district from every source. On the business day next following the day
25 of their receipt the treasurer shall deposit in his name, as treasurer
26 of the city school district, all such moneys in or with one or more or
27 any combination of such banks [or], trust companies, savings banks,
28 credit unions or savings and loan associations as shall have been desig-
29 nated as depositaries of the moneys of such district. Where the board
30 of education with the written consent of the city authorities, has
31 appointed a city officer as city school district treasurer, such treas-
32 urer may not commingle school district funds with city funds.
33 § 8. Section 3-a of the general city law, as added by chapter 519 of
34 the laws of 1936, is amended to read as follows:
35 § 3-a. Liability of city officials. No official of any city of this
36 state who shall deposit any moneys coming into his hands by virtue of
37 his office in any bank, savings bank, national banking association,
38 credit union, trust company, savings and loan association, or with any
39 private banker, in accordance with the provisions of any general or
40 local law or charter, or in accordance with the official action taken by
41 the governing body or board of any such city, shall be liable for the
42 loss of any such moneys resulting from the default or insolvency of any
43 such depositary.
44 § 9. Subdivision 2 of section 11 of the general municipal law, as
45 amended by chapter 708 of the laws of 1992, is amended to read as
46 follows:
47 2. The governing board of any local government or, if the governing
48 board so delegates, the chief fiscal officer or other officer having
49 custody of the moneys may temporarily invest moneys not required for
50 immediate expenditure, except moneys the investment of which is other-
51 wise provided for by law, in [special time] interest-bearing deposit
52 accounts in, or certificates of deposit issued by, a bank or trust
53 company, savings bank, savings and loan association, or credit union
54 located and authorized to do business in this state, provided however,
55 that such [time] deposit account or certificate of deposit shall be
56 payable within such time as the proceeds shall be needed to meet expend-
A. 5466 5
1 itures for which such moneys were obtained and provided further that
2 such [time] deposit account or certificate of deposit be secured in the
3 same manner as is provided for securing deposits of public funds by
4 subdivision three of section ten of this article. Notwithstanding the
5 above, a city of one million or more shall not be required to deposit or
6 invest moneys not required for immediate expenditure in interest-bearing
7 deposit accounts or certificates of deposit.
8 § 10. Section 70 of the second class cities law is amended to read as
9 follows:
10 § 70. Deposits and accounts. All moneys deposited by the treasurer,
11 as provided herein, shall be placed to the credit of the city. The
12 treasurer shall keep bank books in which shall be entered his accounts
13 or deposits in, and moneys drawn from, the [banks or trust companies]
14 depositaries in which such deposits shall be made. He shall exhibit
15 such books to the comptroller for his inspection at least once each
16 month, and oftener if required. The [banks or trust companies] deposi-
17 taries in which such deposits are made[,] shall respectively transmit to
18 the comptroller monthly statements of the moneys which shall have been
19 received and paid out by them on account of the city.
20 § 11. Subdivision b of section 4-408 of the village law is amended to
21 read as follows:
22 b. deposit, within ten days after receipt thereof, in the name of the
23 village, in [a bank or trust company] depositaries designated by the
24 board of trustees, all monies received by him;
25 § 12. Paragraph d of subdivision 1 of section 10 of the general munic-
26 ipal law, as amended by chapter 623 of the laws of 1998, is amended to
27 read as follows:
28 d. "Bank" shall mean a bank, or savings bank or savings and loan asso-
29 ciation as defined by the banking law or a national banking association
30 located and authorized to do business in New York.
31 § 13. Subdivision 1 of section 10 of the general municipal law is
32 amended by adding a new paragraph i to read as follows:
33 i. "Credit union" shall mean a credit union as defined by the banking
34 law and authorized to do business in New York.
35 § 14. Severability. If any clause, sentence, paragraph, section or
36 part of this act shall be adjudged by any court of competent jurisdic-
37 tion to be invalid, such judgment shall not affect, impair or invalidate
38 the remainder thereof, but shall be confined in its operation to the
39 clause, sentence, paragraph, section or part thereof directly involved
40 in the controversy in which such judgment shall have been rendered.
41 § 15. This act shall take effect immediately.
REPEAL NOTE.--Subdivision 2 of section 237 of the banking law,
repealed by section two of this act, prohibits a savings bank from
accepting the deposits of a municipal corporation.
