Amd §212, Bank L; amd §16-k, UDC Act (as proposed in S.1690-A & A.6716-A)
Relates to the capital access program; focuses on minority and women-owned business enterprises and small businesses located in highly distressed areas to assist them in processing and being approved for qualifying program loans; requires the engagement in outreach and marketing to financial institutions to increase awareness of the program.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8537
SPONSOR: Hunter TITLE OF BILL:
An act to amend the banking law and the New York state urban development
corporation act, in relation to the capital access program
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to further ensure the effectiveness of chap-
ter 699 of the laws of 2023 (Approval message 45) relating to the Capi-
tal Access Program to better support MWBEs and small businesses in high-
ly distressed areas through marketing and outreach efforts.
SUMMARY OF PROVISIONS:
This chapter amendment makes the following changes to chapter 699 of the
laws of 2023:
*In Section 2, the requirement for the creation of an integrated web
portal for third party agents has been struck. This section also elimi-
nates the provision that would have provided funding to third parties
for marketing purposes.
*In Section 3, ESD and Pursuit would collaborate on marketing the Capi-
tal Access program within their means and to the extent practicable.
*In Section 4, "Underwriting standards" to benefit MWBEs and distressed
communities have been replaced with "guidelines." These guidelines are
to be jointly established by the Department of Financial Services, New
York Business Development Corporation and the Empire State Development
Corporation.
Section 5 is the effective date.
JUSTIFICATION:
The COVID-19 Pandemic caused many New York small businesses, especially
MWBEs, to struggle. The New York Business Development Corporation and
affiliates, The 504 Company and Excelsior Growth Fund, rebranded as
Pursuit, a business loan lending company. The mission of Pursuit is to
provide businesses with affordable small business loans and resources so
that they can reach higher, transform, and grow. Pursuit is a communi-
ty-focused small business lender. Chapter 699 of the laws of 2023 helps
MWBEs get easier access to capital to help strengthen their businesses
through marketing and outreach efforts. This legislation makes changes
to chapter 699 of the laws of 2023 to ensure it can be implemented
effectively.
PRIOR LEGISLATIVE HISTORY:
This bill is a chapter amendment to chapter 699 of the laws of 2023.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None to the State.
EFFECTIVE DATE:
This act shall take effect on the same date and in the same manner as a
chapter of the laws of 2023 amending the banking law and the New York
state urban development corporation act relating to the capital access
program, as proposed in legislative bills numbers S. 1690-A and A.
6716-A, takes effect.
STATE OF NEW YORK
________________________________________________________________________
8537
IN ASSEMBLY
January 8, 2024
___________
Introduced by M. of A. HUNTER -- read once and referred to the Committee
on Banks
AN ACT to amend the banking law and the New York state urban development
corporation act, in relation to the capital access program
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (b) of subdivision 1 of section 212 of the bank-
2 ing law, as amended by a chapter of the laws of 2023 amending the bank-
3 ing law and the New York state urban development corporation act relat-
4 ing to the capital access program, as proposed in legislative bills
5 numbers S. 1690-A and A. 6716-A, is amended to read as follows:
6 (b) The corporation shall undertake the following programs in further-
7 ance of the above objectives: (i) establish regional offices at
8 locations throughout New York, with sufficient staffing to advise,
9 develop and package financial assistance for small and medium sized
10 businesses; (ii) develop a comprehensive outreach program to increase
11 the visibility and awareness of the corporation's programs, including
12 allocating budget and staff to establish and maintain an aggressive and
13 extensive marketing program of the corporation's program of assistance
14 to small and medium sized businesses, providing for specific outreach to
15 minority and [women owned] women-owned enterprises, and entering into
16 cooperative relationships with local chambers of commerce, local devel-
17 opment agencies, local development corporations and other community
18 based financial intermediaries as set forth in subdivision three of this
19 section; (iii) establish and operate, or affiliate with a small business
20 investment company and a specialized small business investment company;
21 (iv) establish a pilot export financing program, using personnel from
22 the private sector, to evaluate whether the corporation can play a
23 significant role in the growth of the export industry in the state and
24 (v) establish a program in cooperation with the empire state development
25 corporation that shall focus on small businesses located in highly
26 distressed areas and minority and women-owned business enterprises
27 (MWBEs) as such designations are defined by [the regulations of] the New
28 York state urban development corporation act, through which the corpo-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05985-04-4
A. 8537 2
1 ration shall be authorized to: (A) act as third-party agent for the
2 capital access program established by section sixteen-k of section one
3 of chapter one hundred seventy-four of the laws of nineteen hundred
4 sixty-eight, constituting the urban development corporation act; (B)
5 process, fund and approve qualifying program loans made by the corpo-
6 ration or a participating financial institution pursuant to section
7 sixteen-k of section one of chapter one hundred seventy-four of the laws
8 of nineteen hundred sixty-eight, constituting the urban development
9 corporation act; (C) maintain and service a portfolio of qualifying
10 loans made pursuant to the capital access program; and (D) engage in
11 outreach and marketing to financial institutions to increase awareness
12 of the program established under this subparagraph. The corporation
13 shall undertake the programs enumerated herein at such times as its
14 board of directors determines that the corporation's capital base and
15 available funds are adequate to support the operation of such program.
16 The programs enumerated herein may be modified by the corporation as may
17 be necessary to meet the changing needs of the state's economy, as
18 determined by the board of directors.
19 § 2. Paragraph (b) of subdivision 3 of section 16-k of section 1 of
20 chapter 174 of the laws of 1968, constituting the New York state urban
21 development corporation act, as amended by a chapter of the laws of 2023
22 amending the banking law and the New York state urban development corpo-
23 ration act relating to the capital access program, as proposed in legis-
24 lative bills numbers S. 1690-A and A. 6716-A, is amended to read as
25 follows:
26 (b) Any contract entered into pursuant to subparagraph (i) of para-
27 graph (a) of this subdivision shall:
28 (i) be for a period of two years and shall be renewed for an addi-
29 tional two year period subject to requirements of subparagraph (ii) of
30 paragraph (a) of this subdivision;
31 (ii) provide for compensation for expenses incurred by the third party
32 agent in connection with its services as agent and for such other
33 services as the New York business development corporation may deem
34 appropriate including, but not limited to the use of the premises,
35 personnel and personal property of the third party agent; and
36 (iii) notwithstanding any law, rule or regulation to the contrary, use
37 the guidelines, related to, but not limited to underwriting standards
38 provided for in subdivision four of this section to evaluate applica-
39 tions for loans pursuant to the program filed by a minority and women-
40 owned business [enterprise] enterprises, or a small business whose prin-
41 cipal place of business is in a highly distressed area[;
42 (iv) provide for the development of an integrated web portal for the
43 third-party agent which enables access by minority and women-owned busi-
44 ness enterprises and small businesses in highly distressed areas to
45 obtain information on the capital access loan program including the
46 ability to make application and to receive approval for such loan
47 online; and
48 (v) provide funding for marketing to the third-party agent to be
49 directed to potential loan recipients and to financial institutions to
50 increase awareness participation and referrals to the capital access
51 loan program].
52 § 3. Subdivision 3 of section 16-k of section 1 of chapter 174 of the
53 laws of 1968, constituting the New York state urban development corpo-
54 ration act, is amended by adding a new paragraph (c) to read as follows:
55 (c) The corporation, and any third party it contracts with pursuant to
56 paragraph (a) of this subdivision, shall collaborate, to the extent
A. 8537 3
1 practicable, to increase minority and women-owned businesses' and small
2 businesses' whose principal place of business is in a highly distressed
3 area, awareness of, participation in, and referrals to the capital
4 access loan program.
5 § 4. Subdivision 4 of section 16-k of section 1 of chapter 174 of the
6 laws of 1968, constituting the New York state urban development corpo-
7 ration act, as added by a chapter of the laws of 2023 amending the bank-
8 ing law and the New York state urban development corporation act relat-
9 ing to the capital access program, as proposed in legislative bills
10 numbers S. 1690-A and A. 6716-A, is amended to read as follows:
11 4. Notwithstanding any law, rule or regulation to the contrary, the
12 department of financial services, the empire state development corpo-
13 ration and the New York business development corporation, in consulta-
14 tion with relevant stakeholders, shall jointly establish [underwriting
15 standards] guidelines relating to, but not limited to, underwriting
16 standards to assist minority and women-owned business enterprises and
17 small businesses in highly distressed areas in accessing and participat-
18 ing in the capital access program. In addition to other factors, such
19 [standards] guidelines should incorporate verifiable alternative indi-
20 cations and best practices of creditworthiness presented or made avail-
21 able by the applicant.
22 § 5. This act shall take effect on the same date and in the same
23 manner as a chapter of the laws of 2023 amending the banking law and the
24 New York state urban development corporation act relating to the capital
25 access program, as proposed in legislative bills numbers S. 1690-A and
26 A. 6716-A, takes effect.
