Legislative Wrap-Up | By Stephen W. Rice
The 2013 session of the New York State Legislature ended in late June in yet another late-night wrap-up. When the dust cleared, IBANYS had succeeded in obtaining passage of a number of our priority issues, and in opposing and fending off a number of other proposals that would have had a negative impact on community banks.
By way of brief summary, IBANYS succeeded this session in getting a number of our legislative agenda bills passed, including legislation that will double the amount of state funds community banks can hold under the community bank deposit program, from $10 million to $20 million. We also succeeded in gaining passage of the bill to conform New York’s state law to federal changes enacted last winter, eliminating the requirement that banks post duplicate fee disclosure signage at ATM facilities, which already display disclosures on-screen. And, we also succeeded in persuading the Legislature to cut in half the proposed increase regarding the ATM safety reporting requirement, from the proposed quarterly reports down to twice a year.
As in most years, considerable effort was expended in opposing and stopping a number of proposals that would have had a negative impact on community banks. More than a few involved credit unions, including legislation that would have allowed them to accept municipal deposits; another proposal that would have allowed them to accept state deposits under a proposed new program modeled after the Community Banks Deposit Program; and one that would have allowed low-income credit unions into the Banking Development District Program, among many others.
The Legislature did approve legislation sponsored by the two Banks Committee chairs, Sen. Joseph Griffo and Assemblywoman Annette Robinson, that will benefit a small number of credit unions (only those with state charters) by seeking to expand membership fields and some powers. However, IBANYS will continue to make our arguments as to why this would be bad public policy, and seek a gubernatorial veto of this bill.
Another bill that passed the Legislature was sponsored by Sen. Jeffery Klein and Assemblywoman Helene Weinstein, and was introduced at the request of the Office of Court Administration and the attorney general. It requires a complaint on a foreclosure against residential property to be accompanied by certification by the plaintiff’s attorney that there is a reasonable basis for the action.
We also succeeded in helping to stop the proposed “whistleblower bill” that would have provided for payment of a bounty to bank employees who reported violations of the Banking Law. Other initiatives stopped included one that would have significantly increased the paperwork burden related to requiring renewal of certain branches within banking development districts.
Finally, the 2013 session was also highlighted by the release of the Community Bank Report by the State Department of Financial Services. The study found community banks provide most of the loans for New York’s small businesses and farms and are thus essential to job growth and the strength of the state economy. Even though community banks have less than a quarter of all bank assets in New York and are competing against much larger national banks, they generate more than half of all small business loans and almost all the small farm loans in the state. It also noted that New York’s community banks grew during the financial crisis by continuing to lend to small businesses and homeowners.
In releasing the study, Gov. Andrew Cuomo noted: “Community banks represent a strong economic engine that drives growth in New York and their performance is remarkable. Small business is the engine of job growth and most small business loans come not from the big national banks, but from community banks.”
State DFS Superintendent Lawsky commented: “Community banks focus on the unique needs of their communities. They build strong customer relationships, which help attract local retail deposits. These banks take deposits from their communities and then typically recycle them back into their communities in the form of loans.”
We applaud the findings of the study, and the sentiments expressed by the governor and superintendent. We believe they hit the nail right on the head! ■
Stephen Rice is vice president, director of government relations and communications, for the Independent Bankers Association of New York State.