Bill Text: NY S01510 | 2015-2016 | General Assembly | Introduced


Bill Title: Establishes the savings bank, savings and loan association or credit union municipal deposit program.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2016-01-06 - REFERRED TO LOCAL GOVERNMENT [S01510 Detail]

Download: New_York-2015-S01510-Introduced.html
                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         1510
                              2015-2016 Regular Sessions
                                   I N  S E N A T E
                                   January 13, 2015
                                      ___________
       Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
         printed to be committed to the Committee on Local Government
       AN ACT to amend the general  municipal  law  and  the  banking  law,  in
         relation  to  the  establishment  of  a savings bank, savings and loan
         association or credit union municipal deposit  program,  and  limiting
         deposits  of  public  funds  in such institutions to two hundred fifty
         thousand dollars
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  Paragraph c of subdivision 1 of section 10 of the general
    2  municipal law, as amended by chapter 623 of the laws of 1998, is amended
    3  to read as follows:
    4    c. "Public deposits" shall mean deposits of public funds  in  a  bank,
    5  SAVINGS  BANK,  SAVINGS  AND  LOAN  ASSOCIATION,  CREDIT UNION, or trust
    6  company which are available for all  uses  generally  permitted  by  the
    7  bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, or trust
    8  company  to  the  depositing  local  government for actually and finally
    9  collected funds under the bank's, SAVINGS BANK'S, SAVINGS AND LOAN ASSO-
   10  CIATION'S, CREDIT UNION'S, or trust company's account agreement or poli-
   11  cies.
   12    S 2.  Paragraphs f, g and h of subdivision 1  of  section  10  of  the
   13  general municipal law are relettered paragraphs g, h and i and three new
   14  paragraphs f, j and k are added to read as follows:
   15    F. "CREDIT UNION" SHALL MEAN A STATE-CHARTERED CREDIT UNION AS DEFINED
   16  BY   SUBDIVISION   NINE   OF  SECTION  TWO  OF  THE  BANKING  LAW  OR  A
   17  FEDERALLY-CHARTERED CREDIT UNION AS DEFINED BY THE FEDERAL CREDIT  UNION
   18  ACT, LOCATED AND AUTHORIZED TO DO BUSINESS IN NEW YORK.
   19    J.  "SAVINGS BANK" SHALL MEAN A SAVINGS BANK AS DEFINED BY SUBDIVISION
   20  FOUR OF SECTION TWO OF THE BANKING LAW OR ANY FEDERAL SAVINGS BANK.
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD06796-01-5
       S. 1510                             2
    1    K. "SAVINGS AND LOAN ASSOCIATION" SHALL MEAN A SAVINGS AND LOAN  ASSO-
    2  CIATION  AS  DEFINED  BY SUBDIVISION EIGHT OF SECTION TWO OF THE BANKING
    3  LAW OR ANY FEDERAL SAVINGS AND LOAN ASSOCIATION.
    4    S  3. Subdivisions 2 and 4 of section 10 of the general municipal law,
    5  as amended by chapter 623 of the laws of 1998, paragraph a  of  subdivi-
    6  sion  2 as amended by chapter 128 of the laws of 2012 and paragraph c of
    7  subdivision 2 and paragraph (e) of subdivision 4 as further  amended  by
    8  section  104 of part A of chapter 62 of the laws of 2011, are amended to
    9  read as follows:
   10    2. a. (i) The governing board of every local government  shall  desig-
   11  nate  one  or  more banks, SAVINGS BANKS, SAVINGS AND LOAN ASSOCIATIONS,
   12  CREDIT UNIONS or trust companies for the deposit of  public  funds,  the
   13  disposition  of  which is not otherwise provided for by law, received by
   14  the chief fiscal officer or any other officer authorized by law to  make
   15  deposits. Such designation shall be by resolution of the governing board
   16  or,  in  the  case  of  a  city, such other body as may be authorized or
   17  required by law to designate depositaries. Such resolution shall specify
   18  the maximum amount which may be kept on deposit at any time in each such
   19  bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or  trust
   20  company.  Such  designations  and  amounts may be changed at any time by
   21  further resolution.
   22    (ii) The governing board of a local government that has designated one
   23  or more banks or trust companies for the deposit of public funds  pursu-
   24  ant  to  subparagraph  (i)  of  this  paragraph  may, in its discretion,
   25  authorize the designated bank or trust company to arrange for the  rede-
   26  posit  of  the  local  government's  funds in one or more banking insti-
   27  tutions, as defined in section  nine-r  of  the  banking  law,  for  the
   28  account  of  the  local  government, through a deposit placement program
   29  that meets all of the following conditions:
   30    (A) On or after  the  date  that  the  local  government's  funds  are
   31  received,  the  designated  bank  or  trust company (I) arranges for the
   32  redeposit of such funds into deposit accounts in  one  or  more  banking
   33  institutions  and (II) serves as custodian for the local government with
   34  respect to the funds redeposited into such accounts.
   35    (B) Local government funds deposited in a  designated  bank  or  trust
   36  company  in accordance with this subparagraph and held in the designated
   37  bank or trust company in excess of the amount  insured  by  the  federal
   38  deposit insurance corporation pending redeposit of the funds pursuant to
   39  this  subparagraph shall be secured in accordance with subdivision three
   40  of this section.
   41    (C) The full amount of  local  government  funds  redeposited  by  the
   42  designated bank or trust company into deposit accounts in banking insti-
   43  tutions  pursuant  to  this subparagraph (plus accrued interest, if any)
   44  shall be insured by the federal deposit insurance corporation.
   45    (D) At the same time that the money of the local government  is  rede-
   46  posited  pursuant to this subparagraph, the selected depository receives
   47  an amount of deposits from customers  of  other  financial  institutions
   48  pursuant to the deposit placement program that are at least equal to the
   49  amount  of  the  local  government's funds redeposited by the designated
   50  bank or trust company.  THE GOVERNING BOARD OF  EVERY  LOCAL  GOVERNMENT
   51  SHALL FORWARD A COPY OF SUCH RESOLUTION TO THE OFFICE OF THE STATE COMP-
   52  TROLLER  WHO  SHALL RETAIN SUCH COPY UNTIL SUCH RESOLUTION IS AMENDED OR
   53  DISSOLVED. A COPY OF SUCH RESOLUTION SHALL  BE  RETAINED  BY  THE  STATE
   54  COMPTROLLER FOR RECORD KEEPING PURPOSES ONLY.
   55    b.  PUBLIC  FUNDS DEPOSITED INTO A SAVINGS BANK, FEDERAL SAVINGS BANK,
   56  CREDIT UNION, FEDERAL CREDIT UNION,  SAVINGS  AND  LOAN  ASSOCIATION  OR
       S. 1510                             3
    1  FEDERAL  SAVINGS  AND  LOAN  ASSOCIATION SHALL BE LIMITED TO TWO HUNDRED
    2  FIFTY THOUSAND DOLLARS.
    3    C.  Except as otherwise provided by law, all deposits shall be made to
    4  the credit of the local government.  The deposit of public funds  pursu-
    5  ant to this subdivision shall release the officer making the deposit and
    6  his  or  her  surety from any liability for loss of such public funds by
    7  reason of the default or insolvency of  any  such  bank,  SAVINGS  BANK,
    8  SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company.
    9    [c.]  D. The governing board of a local government, in which a banking
   10  development district has been designated by the superintendent of finan-
   11  cial services pursuant to section ninety-six-d of the banking  law,  may
   12  designate  a  bank,  trust  company  or  national  bank  located in such
   13  district for the deposit of public funds, the disposition  of  which  is
   14  not  otherwise provided for by law, received by the chief fiscal officer
   15  or other officer authorized by law to make such  deposits.  Such  desig-
   16  nation  shall be by resolution of the governing board or, in the case of
   17  a city, such other body as may be  authorized  or  required  by  law  to
   18  designate depositories. Such resolution shall specify the maximum amount
   19  which  may  be kept on deposit at any time with such bank, trust company
   20  or national bank located in  such  district.  Subject  to  an  agreement
   21  between  such governing board and such banking institution, public funds
   22  deposited in such banking institution may earn  a  fixed  interest  rate
   23  which  is at or below such banking institution's posted two year certif-
   24  icate of deposit rate. In those instances where there is such an  agree-
   25  ment,  its  terms  and  conditions shall also be specified in the resol-
   26  ution. Any such designation, amount,  or  agreement  provisions  may  be
   27  changed at any time by further resolution.
   28    4. (a) Notwithstanding any other provision of law to the contrary, the
   29  chief  fiscal officer, or other officer authorized by law to make depos-
   30  its, may, subject to the approval of  the  governing  body  of  a  local
   31  government,  by resolution, enter into a contract with a courier service
   32  for the purpose of causing the deposit of  public  funds  with  a  bank,
   33  SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
   34  ny as provided in this section.
   35    (b)  The  entrusting of public funds for deposit pursuant to paragraph
   36  (a) of this subdivision shall release the officer entrusting the  public
   37  funds  to  the  courier service and his or her surety from any liability
   38  for loss of such public funds by the courier service in the  process  of
   39  delivering  such  public  funds  to  the  designated bank, SAVINGS BANK,
   40  SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company.
   41    (c) The local government authorizing the deposit of public funds by  a
   42  courier  service  pursuant  to  paragraph  (a) of this subdivision shall
   43  require the courier service to obtain a surety bond for the full  amount
   44  entrusted  to  the courier, payable to the local government and executed
   45  by an insurance company authorized to do business  in  this  state,  the
   46  claims  paying  ability of which is rated in the highest rating category
   47  by at least two nationally recognized statistical rating  organizations,
   48  to  insure  against  any  loss  of public funds entrusted to the courier
   49  service for deposit or failure to deposit the full amount  entrusted  to
   50  the courier.
   51    (d)  A deposit made by a courier on behalf of a local government shall
   52  be deemed to be a deposit made by the  chief  fiscal  officer  or  other
   53  officer entrusting such funds for purposes of the requirements contained
   54  in this section for securing public deposits.
   55    (e)  A  bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION
   56  or trust company may, from time to time and as agreed upon with a  local
       S. 1510                             4
    1  government, reimburse all or part of, but not more than, the actual cost
    2  incurred  by  the  local  government  in  transporting  cash, negotiable
    3  instruments or other items for deposit through a  courier  service.  Any
    4  such  reimbursement  agreement  shall  apply only to a specified deposit
    5  transaction, and may be subject to such terms,  conditions  and  limita-
    6  tions  as  the  bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT
    7  UNION or trust company deems necessary to  ensure  sound  banking  prac-
    8  tices,  including,  but not limited to, any terms, conditions or limita-
    9  tions that may be required by the department of  financial  services  or
   10  other federal or state authority.
   11    S  4.  Subdivision  2  of  section 11 of the general municipal law, as
   12  amended by chapter 128 of the laws  of  2012,  is  amended  to  read  as
   13  follows:
   14    2. a. The governing board of any local government or, if the governing
   15  board  so  delegates,  the  chief fiscal officer or other officer having
   16  custody of the moneys may temporarily invest  moneys  not  required  for
   17  immediate  expenditure,  except moneys the investment of which is other-
   18  wise provided for by law, either: (1) in special  time  INTEREST-BEARING
   19  deposit  accounts  in,  or  certificates  of  deposit issued by, a bank,
   20  SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, OR SHARE CERTIFICATES ISSUED
   21  BY A CREDIT UNION or trust company located and authorized to do business
   22  in this state; or (2) in accordance with all  of  the  following  condi-
   23  tions:
   24    (i)  the  moneys  are invested through a bank or trust company located
   25  and authorized to do business in this state;
   26    (ii) the bank or trust company arranges for the deposit of the  moneys
   27  in  certificates of deposit OR SHARE CERTIFICATES in one or more banking
   28  institutions, as defined in section nine-r of the banking law,  for  the
   29  account of the local government;
   30    (iii)  the  full amount of principal and accrued interest of each such
   31  certificate of deposit OR SHARE  CERTIFICATE  must  be  insured  by  the
   32  federal deposit insurance corporation;
   33    (iv) the bank or trust company acts as custodian for the local govern-
   34  ment  with  respect to such certificates of deposit issued for the local
   35  government's account; and
   36    (v) at the same time that the local government's moneys are  deposited
   37  and the certificates of deposit OR SHARE CERTIFICATES are issued for the
   38  account  of  the local government, the bank or trust company receives an
   39  amount of deposits from customers of other financial institutions  equal
   40  to  or  greater  than  the  amount  of  the moneys invested by the local
   41  government through the bank or trust company.
   42    b. For any investment made pursuant to paragraph a  of  this  subdivi-
   43  sion,  such  time  deposit  account  or  certificate of deposit OR SHARE
   44  CERTIFICATES shall be payable within such time as the proceeds shall  be
   45  needed  to  meet  expenditures  for  which such moneys were obtained and
   46  provided further that such time deposit account or certificate of depos-
   47  it OR SHARE CERTIFICATES be secured in the same manner  as  is  provided
   48  for  securing  deposits  of public funds by subdivision three of section
   49  ten of this article.
   50    S 5. The banking law is amended by adding a new section 454-a to  read
   51  as follows:
   52    S  454-A.  DEPOSITS  OF  PUBLIC MONEY WITH CREDIT UNIONS; SECURITY.  A
   53  CREDIT UNION MAY ACCEPT DEPOSITS OF PUBLIC MONEY SUBJECT TO THE  LIMITA-
   54  TIONS PROVIDED IN SECTION TEN OF THE GENERAL MUNICIPAL LAW.  SUCH CREDIT
   55  UNION SHALL PLEDGE ASSETS OR FURNISH OTHER SECURITY SATISFACTORY IN FORM
   56  AND  AMOUNT  TO  THE  DEPOSITOR, FOR THE REPAYMENT OF MONIES HELD IN THE
       S. 1510                             5
    1  NAME OF SUCH DEPOSITOR, WHEN REQUIRED TO BE SECURED BY  APPLICABLE  LAW,
    2  DECREE OR REGULATION.
    3    S  6.  This  act shall take effect on the ninetieth day after it shall
    4  have become a law.
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