BILL NUMBER: S6050
SPONSOR: PARKER
 
TITLE OF BILL:
An act to amend the general municipal law and the banking law, in
relation to the establishment of a savings bank, savings and loan asso-
ciation or credit union municipal deposit program, and limiting deposits
of public funds in such institutions to two hundred fifty thousand
dollars
 
PURPOSE:
To allow savings banks, savings and loan associations and federal
savings banks to accept deposits from municipalities.
 
SUMMARY:
Section 1 amends paragraph c of subdivision 1 of section 10 of the
general municipal law to define public deposits.
Section 2 paragraphs f, g and h of subdivision 1 of section 10 of the
general municipal law are relettered paragraphs g, h and i and three new
paragraphs f, j and k defining credit union, savings bank, and savings
and loan association.
Section 3 amends subdivisions 2 and 4 of section 10, paragraph a of
subdivision 2, paragraph c of subdivision 2, and paragraph e of subdivi-
sion 4 of the general municipal law.
Section 4 amends subdivision 2 of section 11 of the general municipal
law.
Section 5 adds a new section 454-a to the banking law.
Section 6 sets forth the effective date of 90 days.
 
JUSTIFICATION:
The current law restricting municipal deposits to commercial banks is an
anachronism, stemming from the days when commercial banks were the-most
secure option for these types of investments. At that Lime, savings,
banks, savings & loan associations and credit unions, were smaller, less
secure entities that primarily served individual investors by providing
investment opportunities and offering loans, particularly mortgages to
residents of the communities they served. However, savings banks,
savings & loan associations and credit unions are now on par with
commercial banks in many of the services they provide as well as the
security they offer to their investors. Allowing savings banks, savings
& loans and credit unions to accept municipal deposits would be benefi-
cial to the communities they are serving by offering a competitive
alternative to commercial banks, who with no real affiliation or commit-
ment are often a large corporate entity to the community they serve.
 
PRIOR LEGISLATIVE HISTORY:
2023-24: S7914 - Referred to Local Government
2021-22: S.4991 - Referred to Local Government
2019-20: S.4608 - Referred to Local Government
2017-18: S.3647 - REFERRED TO LOCAL GOVERNMENT:
2015-16: S.1510 - Referred to Local Government
2013-14: S.2641 - Referred to Local Government
2011-12: S.1186 - Local Government
2009-10: S.8296C - Referred to Rules
2007-2008: S.3664 - Local Government
2005-2006: S.639 Local Government
 
FISCAL IMPLICATIONS:
None to the State.
 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law.

Statutes affected:
S6050: 10 general municipal law, 10(1) general municipal law, 11 general municipal law, 11(2) general municipal law