Establishes a temporary state commission to conduct a feasibility study to evaluate and make recommendations concerning the formation and control of a state public bank; provides if such study finds that the state bank is feasible, the commission may recommend legislation to create a state public bank for New York.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2720B
SPONSOR: Peoples-Stokes TITLE OF BILL:
An act establishing a commission to determine what benefits a public
bank or network of public banks owned by the state of New York or by a
public authority constituted by the state of New York can provide; and
providing for the repeal of such provisions upon expiration thereof
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to establish a temporary commission to
determine what benefits a public bank or network of public banks owned
by the state of New York or by a public authority constituted by the
state of New York can provide.
SUMMARY OF PROVISIONS:
-Establish a temporary state commission, to be known as the New York
state commission on establishing a bank owned by New York state,
herein-after referred to as the commission, is hereby established to
hire a consultant to study the feasibility of establishing a bank owned
by the state of New York or by a public authority constituted by the
state of New York for the public interest.
-The commission shall consist of eleven members, to be appointed as
follows:
*five members shall be appointed by the governor, one of whom shall be a
representative of the New York state department of financial services,
one shall be a representative from the New York state department of
taxation and finance; the remaining three governor's appointees shall
not be employees of the executive branch and at least one member shall
represent the banking and financial industries of the state including,
but not limited to, the New York bankers association, at least one
member shall represent community banking, and no more than one member
may be a representative of any financial services firm located within
the state, including, but not limited to, the New York state small busi-
ness development center;
*three members shall be appointed by the temporary president of the
senate, one of whom shall be a member of the senate;
*three members shall be appointed by the speaker of the assembly, one of
whom shall be a member of the assembly;
-The majority of the members of the entire commission shall designate
one of the commissioners to serve as the chair of the commission.
-The members of the commission shall be appointed no later than ninety-
days after the effective date of this act.
-The commission is directed to hire a reputable consultant that has the
capacity, capability, and experience to conduct a feasibility study to
evaluate and make recommendations concerning the formation and control
of a state public bank. Consultants that have conducted a previous
feasibility study of a public bank at the request of a government entity
in the United States will be given preference. Such study shall make
recommendations, with the advice of the department of financial
services, including but not limited to, on the feasibility of establish-
ing a state bank in New York and may recommend legislation for the
legislature to consider in order to create a state public bank for New
York.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
The amended version alters the composition on the commission.
JUSTIFICATION:
A public bank is a financial institution created by the state for a
"public benefit" of the community. The Bank of North Dakota, founded in
1919, is currently the only public bank that exists in the United
States. Since 2010, 28 States in the United States have passed legis-
lation to establish a public banking taskforce or to create a public
bank in. their state. The State of California enacted a law in 2019
allowing municipalities to form a public bank.
Who benefits from a Public Bank? Taxpayers will benefit from both: (a)
the profits the bank makes that return to the general fund of the state
o hold the line on taxes; and (b) the provide banking services to
economic disadvantaged communities. The state will benefit by financing
public projects at a reduced cost. Public banks help local businesses
and MWBEs by providing them access to credit lines, loans, and other
forms of financing to help them grow and succeed. The community benefits
because the public bank could provide affordable loans for students to
attend college. Homebuyers seeking reasonable mortgage loans with
reasonable terms and rates also would benefit. This bill would estab-
lish a commission to hire a consultant to conduct a study of, a public
bank for the State of New York for the purpose of achieving cost
savings, strengthening local economies, supporting community economic
development, environmental protection, student debt, and addressing
infrastructure and housing needs.
PRIOR LEGISLATIVE HISTORY:
2022: A9711B/S8499B
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately and shall expire and be deemed
repealed one year after such effective date.
STATE OF NEW YORK
________________________________________________________________________
2720--B
2023-2024 Regular Sessions
IN ASSEMBLY
January 26, 2023
___________
Introduced by M. of A. PEOPLES-STOKES, LEVENBERG, MEEKS -- read once and
referred to the Committee on Banks -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee -- recommitted to the Committee on Banks in accordance with Assem-
bly Rule 3, sec. 2 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT establishing a commission to determine what benefits a public
bank or network of public banks owned by the state of New York or by a
public authority constituted by the state of New York can provide; and
providing for the repeal of such provisions upon expiration thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. A temporary state commission, to be known as the New York
2 state commission on establishing a bank owned by New York state, herein-
3 after referred to as the commission, is hereby established to hire a
4 consultant to study the feasibility of establishing a bank owned by the
5 state of New York or by a public authority constituted by the state of
6 New York for the public interest.
7 § 2. (a) The commission shall consist of eleven members, to be
8 appointed as follows:(i) five members shall be appointed by the gover-
9 nor, one of whom shall be a representative of the New York state depart-
10 ment of financial services, one shall be a representative from the New
11 York state department of taxation and finance, the remaining three
12 governor's appointees shall not be employees of the executive branch and
13 at least one member shall represent the banking and financial industries
14 of the state including, but not limited to, the New York bankers associ-
15 ation, at least one member shall represent community banking, and no
16 more than one member may be a representative of any financial services
17 firm located within the state, including, but not limited to, the New
18 York state small business development center;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02072-07-4
A. 2720--B 2
1 (ii) three members shall be appointed by the temporary president of
2 the senate, one of whom shall be a member of the senate;
3 (iii) three members shall be appointed by the speaker of the assembly,
4 one of whom shall be a member of the assembly.
5 (b) The majority of the members of the entire commission shall desig-
6 nate one of the commissioners to serve as the chair of the commission.
7 (c) The members of the commission shall be appointed no later than
8 ninety days after the effective date of this act.
9 (d) The commission is directed to hire a reputable consultant that has
10 the capacity, capability, and experience to conduct a feasibility study
11 to evaluate and make recommendations concerning the formation and
12 control of a state public bank. Consultants that have conducted a previ-
13 ous feasibility study of a public bank at the request of a government
14 entity in the United States will be given preference. Such study shall
15 make recommendations, with the advice of the department of financial
16 services, including but not limited to, on the feasibility of establish-
17 ing a state bank in New York and may recommend legislation for the
18 legislature to consider in order to create a state public bank for New
19 York.
20 § 3. The scope of such study shall include, but shall not be limited
21 to:
22 (a) the purposes of such public bank in the public interest;
23 (b) an analysis of cost savings, impacts on the state's finances,
24 economic development and infrastructure, housing and additional needs of
25 the state, including but not limited to:
26 (i) appropriate governance structures;
27 (ii) minimum capitalization requirements;
28 (iii) appropriate insurance and risk management tools;
29 (iv) charter requirements;
30 (v) financial and operations framework;
31 (vi) deposits;
32 (vii) permitted activities;
33 (viii) benefits;
34 (ix) potential challenges that such public banks may encounter;
35 (x) how the lack of accessible financial services contributes to the
36 cycle of poverty;
37 (xi) barriers to small business formation and growth;
38 (xii) impacts of such public banks on small businesses, including
39 minority- and women-owned business enterprises;
40 (xiii) impacts of such public banks on the unbanked, the underbanked
41 and banking deserts; and
42 (xiv) how a state public bank may provide banking to the cannabis
43 industry;
44 (c) a fiscal analysis of costs associated with formation;
45 (d) an analysis that considers the effects of an economic recession on
46 the financial results of such public banks;
47 (e) a legal analysis of whether the proposed structure and operation
48 of such public bank complies with the New York state constitution;
49 (f) an analysis of how the proposed governance structure of such
50 public bank would protect such public bank from unlawful insider trans-
51 actions and apparent conflicts of interest;
52 (g) a fiscal analysis of the benefits associated with the creation of
53 such public bank, including, but not limited to, cost savings, jobs
54 created, jobs retained, economic activity generated and private capital
55 leveraged;
A. 2720--B 3
1 (h) a qualitative assessment of social and environmental benefits of
2 such public bank;
3 (i) a review of feasibility studies on public banking, including the
4 city of Philadelphia public bank feasibility study and the city of San
5 Francisco public bank feasibility study; and
6 (j) a review of AB-857 (2019 Cal. Stats. Ch. 442).
7 § 4. No earlier than six months and no later than seven months after
8 the effective date of this act, the commission shall submit a report to
9 the governor, the temporary president of the senate, the speaker of the
10 assembly, the chair of the senate banks committee and the chair of the
11 assembly banks committee on the findings and conclusions of the study
12 conducted pursuant to sections two and three of this act and shall
13 submit any legislative recommendations deemed to be necessary. Such
14 report shall be contemporaneously published on the official website of
15 the department of financial services.
16 § 5. This act shall take effect immediately and shall expire and be
17 deemed repealed one year after such effective date.
