STATE OF NEW YORK
________________________________________________________________________
6355--A
2023-2024 Regular Sessions
IN SENATE
April 17, 2023
___________
Introduced by Sen. ADDABBO -- read twice and ordered printed, and when
printed to be committed to the Committee on Banks -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the banking law and the state finance law, in relation
to credit unions
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 article 2-D to
2 read as follows:
3 ARTICLE 2-D
4 CREDIT UNION DEPOSIT PROGRAM
5 Section 89. Credit union deposit program; purpose.
6 90. Eligibility.
7 91. Deposits.
8 § 89. Credit union deposit program; purpose. In recognition of the
9 economic benefits and stimulus which result from the placement of depos-
10 its in local credit unions, the credit union deposit program is hereby
11 created to authorize and encourage the state comptroller and the commis-
12 sioner of taxation and finance to deposit a portion of the funds under
13 their control into credit unions.
14 § 90. Eligibility. 1. To be eligible to receive deposits, or to renew
15 existing deposits under this program, a credit union must be chartered
16 under the provisions of this chapter and must have a current examination
17 rating of satisfactory or better. The superintendent shall, if requested
18 by the state comptroller or the commissioner of taxation and finance,
19 confirm whether a particular credit union meets the criteria specified
20 in this section.
21 2. A federal credit union may also be eligible to receive deposits, or
22 to renew existing deposits, under this program if: (a) its principal
23 office is located in this state; (b) it has a current examination rating
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10868-02-3
S. 6355--A 2
1 of satisfactory or better; and (c) it meets any additional criteria
2 established by the comptroller and the commissioner of taxation and
3 finance to determine eligibility for participation in the program. Such
4 criteria may include a credit union's loan to deposit ratio, its record
5 of small business lending, and the impact such deposits would have on an
6 area's economic activity.
7 § 91. Deposits. 1. Notwithstanding any provisions of law to the
8 contrary, the state comptroller and the commissioner of taxation and
9 finance shall, for the purposes of administering moneys in accordance
10 with the provisions of sections ninety-eight-a and one hundred five of
11 the state finance law, give consideration to depositing funds into those
12 credit unions which are deemed eligible to receive deposits pursuant to
13 section ninety of this article.
14 2. The maximum amount of funds which the state comptroller and the
15 commissioner of taxation and finance may deposit under this program
16 shall not exceed two hundred fifty million dollars in aggregate for each
17 eligible credit union pursuant to this section.
18 3. Notwithstanding any provision of law to the contrary, any deposits
19 made pursuant to this article shall be made at rates, and for such peri-
20 ods of time, as may be agreed to by the state comptroller or the commis-
21 sioner of taxation and finance and the eligible credit union.
22 4. Any deposits made pursuant to this article may be secured by an
23 irrevocable letter of credit issued by a federal home loan bank.
24 § 2. The banking law is amended by adding a new section 454-a to read
25 as follows:
26 § 454-a. Deposits of public money with credit unions. A credit union
27 may accept deposits of public money in accordance with the provisions of
28 section ninety-one of this chapter and sections ninety-eight-a and one
29 hundred five of the state finance law.
30 § 3. The opening paragraph of subdivision 1 of section 98-a of the
31 state finance law, as amended by chapter 545 of the laws of 2005, is
32 amended to read as follows:
33 Except as otherwise provided in subdivision two of this section, any
34 moneys in the general fund of the state or moneys received from the sale
35 of any bonds or notes issued by the state, any moneys in any fund or
36 account of the state, heretofore or hereafter established, the invest-
37 ment of which is not otherwise authorized and which are not immediately
38 required may be invested by the comptroller. Such moneys may be
39 invested only in obligations of the categories specified in subdivisions
40 one to five, both inclusive, and subdivision seven, subdivision four-
41 teen, as added by chapters seven hundred ninety-seven and nine hundred
42 thirty-two of the laws of nineteen hundred sixty-three, respectively,
43 subdivisions fifteen, sixteen and seventeen of section ninety-eight of
44 this article, maturing or redeemable at the option of the holder within
45 twelve years of the date of such investment, subdivisions two-a, eigh-
46 teen, nineteen and twenty of section ninety-eight of this article or in
47 a certificate of deposit of a bank [or], trust company or credit union
48 in this state. Any certificate of deposit shall be fully secured by the
49 issuer thereof depositing with the comptroller stocks, bonds, or notes
50 of any county, town, city, village, fire district or school district of
51 this state issued pursuant to law and maturing within five years from
52 the date of issuance of such certificate of deposit, bonds or notes or
53 direct or guaranteed obligation of the United States of America or its
54 agencies or of the state of New York or bonds and notes issued for any
55 of the corporate purposes of the municipal assistance corporation for
56 the city of New York in an amount equal to the amount of such certif-
S. 6355--A 3
1 icate of deposit. Any bonds, notes or certificates of deposit purchased
2 with moneys of the general fund shall be available always to pay any
3 lawful appropriation in force. Any bonds, notes or certificates of
4 deposit purchased with moneys received from the sale of any bonds or
5 notes issued by the state shall be available always for the purposes or
6 purpose for which such bonds or notes were issued. Any bonds, notes or
7 certificates of deposit purchased with moneys of any other funds shall
8 be available always for the purpose for which such fund was created.
9 Unless otherwise required by law, income received on any moneys invested
10 pursuant to this section shall be credited to the fund or funds from
11 which such moneys were invested, provided, however, the comptroller is
12 hereby precluded from crediting interest earnings to funds/accounts
13 which:
14 § 4. Subdivisions 1 and 2 of section 105 of the state finance law,
15 subdivision 1 as amended by section 1 of part W of chapter 59 of the
16 laws of 2023, subdivision 2 as amended by chapter 154 of the laws of
17 1953, and paragraph b of subdivision 2 as amended by chapter 345 of the
18 laws of 2005, are amended to read as follows:
19 1. All moneys received by the commissioner of taxation and finance on
20 account of the state, excepting such moneys as are required by law to be
21 deposited to the credit of the comptroller, but including such moneys as
22 are thereafter paid into the state treasury by the comptroller, shall be
23 deposited by the commissioner of taxation and finance within three busi-
24 ness days after the receipt thereof, either as a demand deposit or an
25 interest-bearing time deposit (other than a time certificate of depos-
26 it), as the commissioner and the comptroller may determine, in such
27 banks, trust companies [and], industrial banks and credit unions as in
28 the opinion of the commissioner and the opinion of the comptroller are
29 secure. The moneys so deposited shall be placed to the account of the
30 commissioner of taxation and finance. The commissioner shall keep a
31 bankbook in which shall be entered their account of deposit in and
32 moneys drawn from the banks [and], trust companies [and], industrial
33 banks and credit unions in which deposits are made by the commissioner,
34 which they shall exhibit to the comptroller for inspection on the first
35 Tuesday of every month and oftener if required. The commissioner shall
36 not draw any moneys from such banks, trust companies [or], industrial
37 banks or credit unions unless by checks signed and countersigned in the
38 manner prescribed by section one hundred one, unless otherwise provided
39 by law. No moneys shall be paid by any such bank, trust company [or],
40 industrial bank or credit union out of any such deposit except upon such
41 checks. Moneys may be paid through electronic transfer in accordance
42 with procedures developed by the commissioner of taxation and finance
43 and the comptroller and consistent with the requirements of this section
44 for recording payments. Such payments through electronic transfer shall
45 be considered, for purposes of this chapter, to be moneys drawn by
46 check. Every such bank, trust company [or], industrial bank or credit
47 union shall transmit to the comptroller monthly statements of all moneys
48 received and paid by it on account of the commissioner of taxation and
49 finance.
50 2. Every bank, trust company [and], industrial bank and credit union
51 designated for the deposit of state moneys under the provisions of this
52 section shall, before deposits are made:
53 a. Execute and file with the commissioner of taxation and finance a
54 bond to the state in such form and with such surety or sureties for such
55 sums as may be prescribed and approved by the commissioner of taxation
S. 6355--A 4
1 and finance and comptroller, for the safekeeping and prompt payment of
2 such moneys on legal demand therefor with interest, if any; or
3 b. In lieu of such surety bond, with the permission of the comptroller
4 and the commissioner of taxation and finance, deposit with the comp-
5 troller outstanding unmatured:
6 (1) bonds or notes of the United States of America, or obligations,
7 the payment of which is guaranteed by the United States of America,
8 (2) bonds or notes of the state of New York,
9 (3) bonds or notes of any county, town, city, village, fire district
10 or school districts in the state of New York authorized to be issued by
11 law,
12 (4) bonds of the Port of New York Authority of any year,
13 (5) bonds of the Buffalo and Fort Erie Public Bridge Authority,
14 (6) bonds of the Triborough bridge and tunnel authority,
15 (7) bonds or notes of the New York state thruway authority,
16 (8) bonds, notes or other obligations of any municipal housing author-
17 ity in the state of New York authorized to be issued by law, provided
18 such bonds, notes or other obligations qualify under the provisions of
19 section forty-nine of the public housing law,
20 (9) bonds or notes of the Power Authority of the state of New York,
21 (10) bonds or notes of the Niagara Frontier Port Authority,
22 (11) bonds or notes of the Dormitory Authority of the state of New
23 York,
24 (12) bonds or notes of the New York state bridge authority,
25 (13) bonds or notes issued for any of the corporate purposes of the
26 New York state housing finance agency,
27 (14) bonds or notes of the Metropolitan Commuter Transportation
28 Authority,
29 (15) bonds or notes of the New York State Pure Waters Authority, for
30 which the commissioner of taxation and finance and the comptroller shall
31 deliver a certificate of deposit containing the conditions of such
32 deposit,
33 (16) bonds or notes of the Niagara Frontier Transportation Authority,
34 (17) bonds or notes of the Rochester-Genesee Regional Transportation
35 Authority,
36 (18) bonds or notes of the Capital District Transportation Authority,
37 (19) bonds or notes of the Central New York Regional Transportation
38 Authority,
39 [20] (20) Bonds or notes of the New York state project finance agency,
40 (21) Bonds or notes of the municipal assistance corporation for the
41 city of New York,
42 (22) bonds or notes issued for any of the corporate purposes of the
43 New York state medical care facilities finance agency, for which the
44 commissioner of taxation and finance and the comptroller shall deliver a
45 certificate of deposit containing the conditions of such deposit, or
46 (23) irrevocable letters of credit issued by a federal home loan bank.
47 c. With the permission of the comptroller and commissioner of taxation
48 and finance execute and file with the commissioner of taxation and
49 finance an undertaking to the effect that such bank, trust company [or],
50 industrial bank or credit union will safely keep and promptly pay over
51 all such deposits on legal demand therefor with interest, if any, and as
52 collateral to such undertaking deposit with the comptroller a certified
53 check or checks drawn on and certified by the federal reserve bank with-
54 in the state payable to his order in such amount or amounts as shall be
55 agreed upon by the comptroller and the depositary.
56 § 5. This act shall take effect immediately.
