NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9057A
SPONSOR: Lee TITLE OF BILL:
An act to amend the banking law, in relation to mandating acceptance of
the New York city identity card as a primary form of identification at
all banking organizations
PURPOSE:
This bill adds a new section 13 to the banking law to mandate acceptance
of the New York city identity card as a primary form of identification
at all banking organizations.
SUMMARY OF PROVISIONS:
Section 1. Sets forth legislative findings. Section 2. Sets forth defi-
nitions.
Section 3. Amends the banking law by adding a new section 13 that
mandates acceptance of the New York city identity card as a primary
source of identification at all banking institutions, and clarifies that
receipt of a New York City identity card shall be deemed to satisfy
their minimum customer identification program requirements.
Section 4. Sets forth the effective date.
JUSTIFICATION:
Local Law No. 35 for the year 2014 amended subchapter 1 of chapter 1 of
title 3 of the Administrative Code of the City of New York by adding a
section 3-115, creating the New York city identity card program. One of
the main objectives of the program was to expand access to bank-approved
identification cards, thereby reducing the number of unbanked residents
across the city. In 2015, federal regulatory authorities notified the
city agencies in charge of administering the program that banks could
use the New York city identity card to satisfy the minimum requirements
of federal anti-money laundering laws. In 2016, the New York State
Department of Financial Services further "encouraged New York state-
chartered and licensed financial institutions to accept the Municipal ID
as a form of acceptable identification card."
Despite authorization by federal and state regulatory authorities, only
approximately one-third of city banks accept the New York city identity
card, leaving many city residents on the margins of the financial
system. As of 2017, 11.2 percent of households in New York city had no
bank account and ten neighborhoods accounted for nearly 35 percent of
those households. Residents of color, undocumented residents, and resi-
dents living below the poverty line are disproportionately impacted and
are at greater risk of falling victim to predatory financial services,
imperiling their financial futures and aggravating economic inequality
across the state.
The purpose of this legislation is to ensure that our most vulnerable
residents are not cut off from traditional banking services. Mandating
acceptance of the New York city identity card at state-chartered finan-
cial institutions will allow all residents to build their financial
futures and advance the state's goal of facilitating broader financial
inclusion.
FISCAL IMPACT:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
