ALBANY, N.Y. – In what this state’s credit unions are calling a “major victory,” the New York State Assembly has passed a bill allowing credit unions access to the state Banking Development Districts Program for the first time, allowing CUs to receive up to $10 million in subsidized public deposits and other benefits.
The BDD Program was created in 1997 to encourage financial institutions to establish branches in economically distressed communities throughout the Empire State where there is a demonstrated need for banking services. The below market-rate deposits from the state for which CUs would be eligible are intended to lower the financial risk that the branch may incur when opening in an underserved community, usually comprised of low- and moderate-income households, according to the New York Credit Union Association,.
“Banks and trust companies have continually declined to participate in the program, yet credit unions remained unable to participate, largely because of opposition from the bank lobby,” the New York CU Association said. “NYCUA has consistently maintained that credit unions are, by their very nature and structure, well-positioned to participate in the BDD Program and serve these communities.”
The legislation, A.3320, which was introduced by Assembly Banks Committee Chairman Kenneth Zebrowski (D-Westchester-Rockland), will now head to Gov. Andrew Cuomo’s office to be signed into law. The Senate bill, S.727-A, introduced by Sen. Velmanette Montgomery (D-Metropolitan), was passed in the upper chamber last week.
A Major Priority
The NYCUA said passage of the legislation was among its priorities for 2019 and represents a major legislative victory for the state’s credit unions. More than 100 credit union advocates called for the bill’s passage during NYCUA’s 2019 State Governmental Affairs Conference, and dozens more penned letters to lawmakers in support of the legislation, the association said.
“Since their founding, credit unions have consistently sought out opportunities to serve low-income and underbanked communities – it’s simply what we do and who we are,” said NYCUA President/CEO William J. Mellin. “By expanding the Banking Development Districts Program, credit unions will now be able to provide critical financial services to even more underserved New Yorkers. I applaud and thank Majority Leader Andrea Stewart-Cousins; Speaker Carl Heastie; Sen. Velmanette Montgomery; Chairmen James Sanders, Jr. and Kenneth Zebrowski; and all the dedicated lawmakers who worked to oversee this bill’s passage. Thanks to their efforts, we are now one step closer to ensuring every New Yorker has access to the financial system and a shot at a better financial future.”