A02720 Summary:

BILL NOA02720A
 
SAME ASNo Same As
 
SPONSORPeoples-Stokes
 
COSPNSRLevenberg, Meeks
 
MLTSPNSR
 
 
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.
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A02720 Actions:

BILL NOA02720A
 
01/26/2023referred to banks
05/02/2023amend and recommit to banks
05/02/2023print number 2720a
01/03/2024referred to banks
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A02720 Committee Votes:

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A02720 Floor Votes:

There are no votes for this bill in this legislative session.
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A02720 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A2720A
 
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 fourteen members, to be appointed as follows: *six 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 four 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; * one member shall be appointed by the minority leader of the senate; * three members shall be appointed by the speaker of the assembly, one of whom shall be a member of the assembly; and one member shall be appointed by the minority leader 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 removes representation on the commission from the State Comptroller.   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 law2019 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 to 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.
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A02720 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         2720--A
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 26, 2023
                                       ___________
 
        Introduced  by  M.  of  A.  PEOPLES-STOKES,  LEVENBERG  -- read once and
          referred to the Committee  on  Banks  --  committee  discharged,  bill
          amended,  ordered reprinted as amended and recommitted to said commit-
          tee
 
        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  fourteen  members,  to  be
     8  appointed as follows:(i) six members shall be appointed by the governor,
     9  one  of  whom shall be a representative of the New York state department
    10  of financial services, one shall be a representative from the  New  York
    11  state  department of taxation and finance, the remaining four governor's
    12  appointees shall not be employees of the executive branch and  at  least
    13  one  member  shall represent the banking and financial industries of the
    14  state including, but not limited to, the New York  bankers  association,
    15  at  least  one  member   shall represent community  banking, and no more
    16  than one member may be a representative of any financial  services  firm
    17  located  within  the state,  including, but not limited to, the New York
    18  state small business development center;
    19    (ii) three members shall be appointed by the  temporary  president  of
    20  the senate, one of whom shall be a member of the senate;

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02072-03-3

        A. 2720--A                          2
 
     1    (iii)  one  member  shall  be  appointed by the minority leader of the
     2  senate;
     3    (iv)  three members shall be appointed by the speaker of the assembly,
     4  one of whom shall be a member of the assembly; and
     5    (v) one member shall be appointed by the minority leader of the assem-
     6  bly.
     7    (b) The majority of the members of the entire commission  shall desig-
     8  nate one of the commissioners to serve as the chair of the commission.
     9    (c) The members of the commission shall be  appointed  no  later  than
    10  ninety days after the effective date of this act.
    11    (d) The commission is directed to hire a reputable consultant that has
    12  the  capacity, capability, and experience to conduct a feasibility study
    13  to evaluate  and  make  recommendations  concerning  the  formation  and
    14  control of a state public bank. Consultants that have conducted a previ-
    15  ous  feasibility  study  of a public bank at the request of a government
    16  entity in the United States will be given preference. Such  study  shall
    17  make  recommendations,  with  the  advice of the department of financial
    18  services, including but not limited to, on the feasibility of establish-
    19  ing a state bank in New York  and  may  recommend  legislation  for  the
    20  legislature  to  consider in order to create a state public bank for New
    21  York.
    22    § 3. The scope of such study shall include, but shall not  be  limited
    23  to:
    24    (a) the purposes of such public bank in the public interest;
    25    (b)  an  analysis  of  cost  savings, impacts on the state's finances,
    26  economic development and infrastructure, housing and additional needs of
    27  the state, including but not limited to:
    28    (i) appropriate governance structures;
    29    (ii) minimum capitalization requirements;
    30    (iii) appropriate insurance and risk management tools;
    31    (iv) charter requirements;
    32    (v) financial and operations framework;
    33    (vi) deposits;
    34    (vii) permitted activities;
    35    (viii) benefits;
    36    (ix) potential challenges that such public banks may encounter;
    37    (x) how the lack of accessible financial services contributes  to  the
    38  cycle of poverty;
    39    (xi) barriers to small business formation and growth;
    40    (xii)  impacts  of  such  public  banks on small businesses, including
    41  minority- and women-owned business enterprises;
    42    (xiii) impacts of such public banks on the unbanked,  the  underbanked
    43  and banking deserts; and
    44    (xiv)  how  a  state  public  bank may provide banking to the cannabis
    45  industry;
    46    (c) a fiscal analysis of costs associated with formation;
    47    (d) an analysis that considers the effects of an economic recession on
    48  the financial results of such public banks;
    49    (e) a legal analysis of whether the proposed structure  and  operation
    50  of such public bank complies with the New York state constitution;
    51    (f)  an  analysis  of  how  the  proposed governance structure of such
    52  public bank would protect such public bank from unlawful insider  trans-
    53  actions and apparent conflicts of interest;
    54    (g)  a fiscal analysis of the benefits associated with the creation of
    55  such public bank, including, but not  limited  to,  cost  savings,  jobs

        A. 2720--A                          3
 
     1  created,  jobs retained, economic activity generated and private capital
     2  leveraged;
     3    (h)  a  qualitative assessment of social and environmental benefits of
     4  such public bank;
     5    (i) a review of feasibility studies on public banking,  including  the
     6  city  of  Philadelphia public bank feasibility study and the city of San
     7  Francisco public bank feasibility study; and
     8    (j) a review of AB-857 (2019 Cal. Stats. Ch. 442).
     9    § 4. No earlier than six months and no later than seven  months  after
    10  the  effective date of this act, the commission shall submit a report to
    11  the governor, the temporary president of the senate, the speaker of  the
    12  assembly,  the  chair of the senate banks committee and the chair of the
    13  assembly banks committee on the findings and conclusions  of  the  study
    14  conducted  pursuant  to  sections  two  and  three of this act and shall
    15  submit any legislative recommendations deemed to  be  necessary.    Such
    16  report  shall  be contemporaneously published on the official website of
    17  the department of financial services.
    18    § 5. This act shall take effect immediately and shall  expire  and  be
    19  deemed repealed one year after such effective date.
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