Bill Text: NY S05565 | 2019-2020 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relates to establishing the New York public banking act; authorizes the lending of public credit to public banks and authorizes public ownership of stock in public banks for the purpose of achieving cost savings, strengthening local economies, supporting community economic development, and addressing infrastructure and housing needs for localities.

Spectrum: Partisan Bill (Democrat 17-0)

Status: (Introduced - Dead) 2020-08-07 - PRINT NUMBER 5565D [S05565 Detail]

Download: New_York-2019-S05565-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          5565
                               2019-2020 Regular Sessions
                    IN SENATE
                                       May 7, 2019
                                       ___________
        Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
          printed to be committed to the Committee on Banks
        AN ACT to amend the banking law, the state finance law and  the  general
          municipal law, in relation to the establishment of public banks
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. It is the intent of the Legislature that this  act  author-
     2  izes  the  lending of public credit to public banks and authorize public
     3  ownership of stock in public banks for the  purpose  of  achieving  cost
     4  savings,  strengthening  local  economies, supporting community economic
     5  development, and addressing infrastructure and housing needs for locali-
     6  ties.
     7    § 2. Subdivisions 1 and 11 of section 2 of the banking  law,  subdivi-
     8  sion  1 as amended by chapter 684 of the laws of 1938 and subdivision 11
     9  as amended by chapter 154 of the laws of 2007, are amended  to  read  as
    10  follows:
    11    1. Bank. The term, "bank," when used in this chapter, unless a differ-
    12  ent  meaning appears from the context, means any corporation, other than
    13  a trust company, organized under or subject to the provisions of article
    14  three or three-C of this chapter.
    15    11. Banking organizations. The  term,  "banking  organizations,"  when
    16  used  in  this  chapter,  means and includes all banks, trust companies,
    17  private bankers, savings banks, safe deposit companies, savings and loan
    18  associations,  credit  unions,  public  banks  organized  under  article
    19  three-C of this chapter, and investment companies.
    20    § 3. The banking law is amended by adding a new article 3-C to read as
    21  follows:
    22                                 ARTICLE 3-C
    23                                PUBLIC BANKS
    24  Section 156. Definitions.
    25          156-a. Public benefit corporations.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10967-01-9
        S. 5565                             2
     1          156-b. Insurance.
     2          156-c. Inconsistency with other laws.
     3          156-d. Retail services.
     4          156-e. Owners not to be considered bank holding companies.
     5    § 156. Definitions. For the purposes of this article:
     6    1.  "Local financial institution" means a certified community develop-
     7  ment financial institution, a credit union, or a small bank or an inter-
     8  mediate small bank, as defined in 12 CFR 25.12.
     9    2. "Public bank" means a corporation, organized  for  the  purpose  of
    10  engaging  in the commercial banking business or industrial banking busi-
    11  ness, that is wholly owned by a state or local authority as  defined  by
    12  this section.
    13    3.  "State  or  local authority" means a local government or agency, a
    14  group of two or more local  governments  or  agencies  acting  together,
    15  special  district,  a  group  of  two  or  more special districts acting
    16  together, state agency, or a group of two or more state agencies  acting
    17  together.
    18    4.  "Self-insurance"  means  deposits  guaranteed by the owners of the
    19  public bank in an amount approved by  the  superintendent  of  financial
    20  services.
    21    §  156-a. Public benefit corporations. 1. A public bank shall identify
    22  in its certificate of incorporation a specific public benefit,  consist-
    23  ent with the provisions of article seventeen of the business corporation
    24  law.  Examples  of specific public benefits include, but are not limited
    25  to, strengthening local economies, supporting community economic  devel-
    26  opment,  addressing infrastructure and housing needs for localities, and
    27  providing banking services to the unbanked or underbanked.
    28    2. A public bank may, but is not required to, incorporate as a benefit
    29  corporation under article seventeen of the business corporation law.
    30    3. A public bank that does not incorporate as  a  benefit  corporation
    31  shall  nevertheless  be  required to deliver an annual benefit report in
    32  compliance with section one thousand seven hundred eight of the business
    33  corporation law.
    34    § 156-b. Insurance. A public bank shall obtain  and  maintain  deposit
    35  insurance consistent with section thirty-two of this chapter.
    36    §  156-c. Inconsistency with other laws. 1. A public bank shall comply
    37  with all requirements of this chapter, the financial services law, state
    38  finance law, local finance law, general municipal  law,  and  all  other
    39  relevant  provisions  of state or local law, except to the extent that a
    40  requirement of any of those laws is inconsistent  with  a  provision  of
    41  this  article,  in  which  case  the  provisions  of  this article shall
    42  prevail.
    43    2. Notwithstanding any provision of state or local law,  a  county  or
    44  other state or local authority may lend its credit to any public bank.
    45    3.  Notwithstanding  any provision of state or local law, any state or
    46  local authority may invest in debt securities or other obligations of  a
    47  public bank.
    48    4.  Notwithstanding any provision of state or local law, a public bank
    49  shall be eligible to receive state or local authority money.
    50    § 156-d. Retail services. 1. Wherever possible, any retail services of
    51  a public bank shall be conducted in  partnership  with  local  financial
    52  institutions.
    53    2.  Notwithstanding  subdivision  one  of  this section, a public bank
    54  shall not do both of the following:
        S. 5565                             3
     1    (a) Engage in  banking  activities,  including  but  not  limited  to,
     2  infrastructure  lending,  wholesale  lending, and participating lending;
     3  and
     4    (b)  Engage in retail activities that are not provided by local finan-
     5  cial institutions in the jurisdiction of the state  or  local  authority
     6  that own the public bank.
     7    §  156-e.  Owners not to be considered bank holding companies. For the
     8  purposes of section one hundred thirty-two of this chapter,  any  person
     9  or entity, including a state or local authority, that owns, controls, or
    10  holds  an  ownership  interest  in  a  public bank is not a bank holding
    11  company by reason of that ownership interest.
    12    § 4. Section 98 of the state finance law is amended by  adding  a  new
    13  subdivision 7-a to read as follows:
    14    7-a.  Commercial  paper, debt securities, bonds, notes, or other obli-
    15  gations of a public bank, as defined in article three-C of  the  banking
    16  law.
    17    § 5. Paragraph d of subdivision 1 of section 10 of the general munici-
    18  pal  law,  as  amended by chapter 623 of the laws of 1998, is amended to
    19  read as follows:
    20    d. "Bank" shall mean a bank or public bank as defined by  the  banking
    21  law or a national banking association located and authorized to do busi-
    22  ness in New York.
    23    § 6. This act shall take effect immediately.