STATE OF NEW YORK
________________________________________________________________________
4520
2013-2014 Regular Sessions
IN ASSEMBLY
February 5, 2013
___________
Introduced by M. of A. WEISENBERG, MILLER, ROBINSON, JAFFEE, SCARBOR-
OUGH, MAISEL, STEVENSON, BARRON, HEASTIE, GIBSON, LUPARDO, COOK,
LAVINE, RUSSELL, BRONSON, WEPRIN, ROBERTS, ESPINAL -- Multi-Sponsored
by -- M. of A. ABINANTI, BLANKENBUSH, CAHILL, CERETTO, COLTON, CURRAN,
GABRYSZAK, GOTTFRIED, HAWLEY, HOOPER, JOHNS, KATZ, P. LOPEZ, MARKEY,
McLAUGHLIN, MONTESANO, NOLAN, PALMESANO, PEOPLES-STOKES, PERRY, RA,
SALADINO, SIMANOWITZ, SWEENEY, TENNEY, WRIGHT -- read once and
referred to the Committee on Banks
AN ACT to amend the general municipal law and the banking law, in
relation to the establishment of a savings bank, savings and loan
association or credit union municipal deposit program, and limiting
deposits of public funds in such institutions to two hundred fifty
thousand dollars
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph c of subdivision 1 of section 10 of the general
2 municipal law, as amended by chapter 623 of the laws of 1998, is amended
3 to read as follows:
4 c. "Public deposits" shall mean deposits of public funds in a bank,
5 savings bank, savings and loan association, credit union, or trust
6 company which are available for all uses generally permitted by the
7 bank, savings bank, savings and loan association, credit union, or trust
8 company to the depositing local government for actually and finally
9 collected funds under the bank's, savings bank's, savings and loan asso-
10 ciation's, credit union's, or trust company's account agreement or poli-
11 cies.
12 § 2. Paragraphs f, g and h of subdivision 1 of section 10 of the
13 general municipal law are relettered paragraphs g, h and i and three new
14 paragraphs f, j and k are added to read as follows:
15 f. "Credit union" shall mean a state-chartered credit union as defined
16 by subdivision nine of section two of the banking law or a federally-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06885-02-3
A. 4520 2
1 chartered credit union as defined by the federal credit union act,
2 located and authorized to do business in New York.
3 j. "Savings bank" shall mean a savings bank as defined by subdivision
4 four of section two of the banking law or any federal savings bank.
5 k. "Savings and loan association" shall mean a savings and loan asso-
6 ciation as defined by subdivision eight of section two of the banking
7 law or any federal savings and loan association.
8 § 3. Subdivisions 2 and 4 of section 10 of the general municipal law,
9 as amended by chapter 623 of the laws of 1998, paragraph a of subdivi-
10 sion 2 as amended by chapter 128 of the laws of 2012, and paragraph c of
11 subdivision 2 and paragraph e of subdivision 4 as further amended by
12 section 104 of part A of chapter 62 of the laws of 2011, are amended to
13 read as follows:
14 2. a. (i) The governing board of every local government shall desig-
15 nate one or more banks, savings banks, savings and loan associations,
16 credit unions or trust companies for the deposit of public funds, the
17 disposition of which is not otherwise provided for by law, received by
18 the chief fiscal officer or any other officer authorized by law to make
19 deposits. Such designation shall be by resolution of the governing board
20 or, in the case of a city, such other body as may be authorized or
21 required by law to designate depositaries. Such resolution shall specify
22 the maximum amount which may be kept on deposit at any time in each such
23 bank, savings bank, savings and loan association, credit union or trust
24 company. Such designations and amounts may be changed at any time by
25 further resolution.
26 (ii) The governing board of a local government that has designated one
27 or more banks, savings banks, savings and loan associations, credit
28 unions or trust companies for the deposit of public funds pursuant to
29 subparagraph (i) of this paragraph may, in its discretion, authorize the
30 designated bank, savings bank, savings and loan association, credit
31 union or trust company to arrange for the redeposit of the local govern-
32 ment's funds in one or more banking institutions, as defined in section
33 nine-r of the banking law, for the account of the local government,
34 through a deposit placement program that meets all of the following
35 conditions:
36 (A) On or after the date that the local government's funds are
37 received, the designated bank, savings bank, savings and loan associ-
38 ation, credit union or trust company (I) arranges for the redeposit of
39 such funds into deposit accounts in one or more banking institutions and
40 (II) serves as custodian for the local government with respect to the
41 funds redeposited into such accounts.
42 (B) Local government funds deposited in a designated bank, savings
43 bank, savings and loan association, credit union or trust company in
44 accordance with this subparagraph and held in the designated bank,
45 savings bank, savings and loan association, credit union or trust compa-
46 ny in excess of the amount insured by the federal deposit insurance
47 corporation pending redeposit of the funds pursuant to this subparagraph
48 shall be secured in accordance with subdivision three of this section.
49 (C) The full amount of local government funds redeposited by the
50 designated bank, savings bank, savings and loan association, credit
51 union or trust company into deposit accounts in banking institutions
52 pursuant to this subparagraph (plus accrued interest, if any) shall be
53 insured by the federal deposit insurance corporation.
54 (D) At the same time that the money of the local government is rede-
55 posited pursuant to this subparagraph, the selected depository receives
56 an amount of deposits from customers of other financial institutions
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1 pursuant to the deposit placement program that are at least equal to the
2 amount of the local government's funds redeposited by the designated
3 bank, savings bank, savings and loan association, credit union or trust
4 company.
5 (iii) The governing board of every local government shall forward a
6 copy of such resolution to the office of the state comptroller who shall
7 retain such copy until such resolution is amended or dissolved. A copy
8 of such resolution shall be retained by the state comptroller for record
9 keeping purposes only.
10 b. Public funds deposited into a savings bank, federal savings bank,
11 credit union, federal credit union, savings and loan association or
12 federal savings and loan association shall be limited to two hundred
13 fifty thousand dollars.
14 c. Except as otherwise provided by law, all deposits shall be made to
15 the credit of the local government. The deposit of public funds pursu-
16 ant to this subdivision shall release the officer making the deposit and
17 his or her surety from any liability for loss of such public funds by
18 reason of the default or insolvency of any such bank, savings bank,
19 savings and loan association, credit union or trust company.
20 [c.] d. The governing board of a local government, in which a banking
21 development district has been designated by the superintendent of finan-
22 cial services pursuant to section ninety-six-d of the banking law, may
23 designate a bank, trust company or national bank located in such
24 district for the deposit of public funds, the disposition of which is
25 not otherwise provided for by law, received by the chief fiscal officer
26 or other officer authorized by law to make such deposits. Such desig-
27 nation shall be by resolution of the governing board or, in the case of
28 a city, such other body as may be authorized or required by law to
29 designate depositories. Such resolution shall specify the maximum amount
30 which may be kept on deposit at any time with such bank, trust company
31 or national bank located in such district. Subject to an agreement
32 between such governing board and such banking institution, public funds
33 deposited in such banking institution may earn a fixed interest rate
34 which is at or below such banking institution's posted two year certif-
35 icate of deposit rate. In those instances where there is such an agree-
36 ment, its terms and conditions shall also be specified in the resol-
37 ution. Any such designation, amount, or agreement provisions may be
38 changed at any time by further resolution.
39 4. (a) Notwithstanding any other provision of law to the contrary, the
40 chief fiscal officer, or other officer authorized by law to make depos-
41 its, may, subject to the approval of the governing body of a local
42 government, by resolution, enter into a contract with a courier service
43 for the purpose of causing the deposit of public funds with a bank,
44 savings bank, savings and loan association, credit union or trust compa-
45 ny as provided in this section.
46 (b) The entrusting of public funds for deposit pursuant to paragraph
47 (a) of this subdivision shall release the officer entrusting the public
48 funds to the courier service and his or her surety from any liability
49 for loss of such public funds by the courier service in the process of
50 delivering such public funds to the designated bank, savings bank,
51 savings and loan association, credit union or trust company.
52 (c) The local government authorizing the deposit of public funds by a
53 courier service pursuant to paragraph (a) of this subdivision shall
54 require the courier service to obtain a surety bond for the full amount
55 entrusted to the courier, payable to the local government and executed
56 by an insurance company authorized to do business in this state, the
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1 claims paying ability of which is rated in the highest rating category
2 by at least two nationally recognized statistical rating organizations,
3 to insure against any loss of public funds entrusted to the courier
4 service for deposit or failure to deposit the full amount entrusted to
5 the courier.
6 (d) A deposit made by a courier on behalf of a local government shall
7 be deemed to be a deposit made by the chief fiscal officer or other
8 officer entrusting such funds for purposes of the requirements contained
9 in this section for securing public deposits.
10 (e) A bank, savings bank, savings and loan association, credit union
11 or trust company may, from time to time and as agreed upon with a local
12 government, reimburse all or part of, but not more than, the actual cost
13 incurred by the local government in transporting cash, negotiable
14 instruments or other items for deposit through a courier service. Any
15 such reimbursement agreement shall apply only to a specified deposit
16 transaction, and may be subject to such terms, conditions and limita-
17 tions as the bank, savings bank, savings and loan association, credit
18 union or trust company deems necessary to ensure sound banking prac-
19 tices, including, but not limited to, any terms, conditions or limita-
20 tions that may be required by the department of financial services or
21 other federal or state authority.
22 § 4. Subdivision 2 of section 11 of the general municipal law, as
23 amended by chapter 128 of the laws of 2012, is amended to read as
24 follows:
25 2. a. The governing board of any local government or, if the governing
26 board so delegates, the chief fiscal officer or other officer having
27 custody of the moneys may temporarily invest moneys not required for
28 immediate expenditure, except moneys the investment of which is other-
29 wise provided for by law, either: (1) in special time interest-bearing
30 deposit accounts in, or certificates of deposit or share certificates
31 issued by, a bank, savings bank, savings and loan association, or share
32 certificates issued by a credit union or trust company located and
33 authorized to do business in this state; or (2) in accordance with all
34 of the following conditions:
35 (i) the moneys are invested through a bank, savings bank, savings and
36 loan association, credit union or trust company located and authorized
37 to do business in this state;
38 (ii) the bank, savings bank, savings and loan association, credit
39 union or trust company arranges for the deposit of the moneys in certif-
40 icates of deposit or share certificates in one or more banking insti-
41 tutions, as defined in section nine-r of the banking law, for the
42 account of the local government;
43 (iii) the full amount of principal and accrued interest of each such
44 certificate of deposit or share certificate must be insured by the
45 federal deposit insurance corporation;
46 (iv) the bank, savings bank, savings and loan association, credit
47 union or trust company acts as custodian for the local government with
48 respect to such certificates of deposit or share certificates issued for
49 the local government's account; and
50 (v) at the same time that the local government's moneys are deposited
51 and the certificates of deposit or share certificates are issued for the
52 account of the local government, the bank, savings bank, savings and
53 loan association, credit union or trust company receives an amount of
54 deposits from customers of other financial institutions equal to or
55 greater than the amount of the moneys invested by the local government
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1 through the bank, savings bank, savings and loan association, credit
2 union or trust company.
3 b. For any investment made pursuant to paragraph a of this subdivi-
4 sion, such time interest-bearing deposit account or certificate of
5 deposit or share certificate shall be payable within such time as the
6 proceeds shall be needed to meet expenditures for which such moneys were
7 obtained and provided further that such time interest-bearing deposit
8 account or certificate of deposit or share certificate be secured in the
9 same manner as is provided for securing deposits of public funds by
10 subdivision three of section ten of this article.
11 § 5. The banking law is amended by adding a new section 454-a to read
12 as follows:
13 § 454-a. Deposits of public money with credit unions; security. A
14 credit union may accept deposits of public money subject to the limita-
15 tions provided in section ten of the general municipal law. Such credit
16 union shall pledge assets or furnish other security satisfactory in form
17 and amount to the depositor, for the repayment of monies held in the
18 name of such depositor, when required to be secured by applicable law,
19 decree or regulation.
20 § 6. This act shall take effect on the sixtieth day after it shall
21 have become a law.
