Requires a study of the utilization of state government payments as an opportunity to transition unbanked and underbanked state residents into the banking system; requires a report shall be compiled and provided on the findings no later than eighteen months after the effective date of this act.
STATE OF NEW YORK
________________________________________________________________________
5669
2023-2024 Regular Sessions
IN SENATE
March 13, 2023
___________
Introduced by Sen. SANDERS -- read twice and ordered printed, and when
printed to be committed to the Committee on Banks
AN ACT in relation to the study of the utilization of state government
payments as an opportunity to transition unbanked and underbanked
state residents into the banking system
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The superintendent of the department of financial services,
2 in conjunction with the director of the state budget, the director of
3 state operations and the commissioner of the department of taxation and
4 finance, and in consultation with the state comptroller, shall study and
5 issue a comprehensive report on methods and opportunities to transition
6 unbanked and underbanked state residents entitled to state government
7 payments into the banking system.
8 1. For purposes of this section, the following terms shall have the
9 following meanings:
10 a. "unbanked" shall mean an individual not served by an insured insti-
11 tution in any capacity;
12 b. "underbanked" shall mean an individual with an account at an
13 insured institution but who has obtained alternative, nonbank financial
14 services in the past twelve months; and
15 c. "state agency" shall mean any agency, department, bureau, commis-
16 sion, board, task force, committee, public benefit corporation, or
17 public authority, where a member is appointed by the governor.
18 2. Such study shall:
19 a. examine the types of payments made by state agencies to state resi-
20 dents including but not limited to tax returns, benefits, credits, unem-
21 ployment insurance, and the lottery, which are made in a sufficient
22 amount to the unbanked and underbanked;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10095-01-3
S. 5669 2
1 b. examine what methods of payment are used by state agencies and
2 whether direct deposit and debit cards are included as options for
3 recipients of such state payments;
4 c. determine whether opportunities exist when state payments are made
5 to enable state agencies to provide financial education as it relates to
6 the value of participation in the banking system;
7 d. examine any barriers to choice of direct deposit and the use of the
8 banking system based on contact with state agencies;
9 e. examine the use of debit cards of other new financial technologies
10 as a method for disbursement of state payments to the unbanked and
11 underbanked as a bridge to the banking system;
12 f. examine whether a contractual relationship with a minority bank or
13 banks that define specific terms of financial service would be an effec-
14 tive measure in encouraging use of direct deposit;
15 g. determine in which, if any, circumstances state payments should be
16 exempted from an execution of judgment to encourage use of the banking
17 system for the unbanked and the underbanked;
18 h. examine barriers and opportunities to charter minority-owned banks
19 in unbanked or underbanked communities including capital availability
20 and use of state deposits to incentivize their formation; and
21 i. include any concerns or recommendations that the superintendent of
22 the department of financial services deems necessary.
23 3. A comprehensive report summarizing all of the findings from subdi-
24 vision two of this section shall be sent to the governor, the speaker of
25 the assembly and the temporary president of the senate no later than
26 eighteen months after the effective date of this act.
27 4. The superintendent of the department of financial services may
28 request and is authorized to receive any information from any state
29 agencies that is relevant and material to the completion of this study
30 and report. Such information received by the superintendent of the
31 department of financial services shall be subject to the same require-
32 ments for confidentiality and limitations on use, if any, as are appli-
33 cable to such state agency's use of such information.
34 § 2. This act shall take effect immediately.