The New York Credit Union Association has hailed new legislation that will allow credit unions access to the state’s Banking Development District program, the only available path to public deposits for credit unions in the Empire State.
The move comes as the state's legislature adjourned without moving forward any legislation that would have allowed CUs in the state to accept municipal funds, despite a hearing on the issue earlier this year on the issue in the State Assembly's Banks Committee. That legislation never made it to the floor of either chamber.
Still, once the BDD bill is signed into law, credit unions that are approved for that designation will be eligible to receive up to $10 million in subsidized public deposits and other benefits.
NYCUA said in a release last week that the new bill passed by the State Assembly was “a major legislative victory” for New York’s credit unions. The New York State Senate passed the bill earlier this month.
The BDD program was established in 1997 to encourage financial institutions to establish branches in “economically distressed” communities where there is a “demonstrated need for banking services” NYCUA said. Banks were allowed to participate, though only a modest number have applied to do so, according to a summary of the new law. Prior to the latest law being passed, credit unions weren’t allowed to utilize the program.
“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,” William Mellin, NYCUA president and CEO, said in a statement. “By expanding the Banking Development Districts program, credit unions will now be able to provide critical financial services to even more underserved New Yorkers.”
The legislation now will go to Gov. Andrew Cuomo to be signed.
This story was updated at 9:37 A.M. on June 25, 2019.
