New York A 1605: Establishes the savings bank, savings and loan association or credit union municipal deposit program

Bill Text

STATE OF NEW YORK
________________________________________________________________________
1605
2025-2026 Regular Sessions
IN ASSEMBLY
January 10, 2025
___________
Introduced by M. of A. TAYLOR -- read once and referred to the Committee
on Banks
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 or trustsavings bank, savings and loan association, credit union,
6 company which are available for all uses generally permitted by the
7 bank or trust, savings bank, savings and loan association, credit union,
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 or trust company's account agreement or poli-ciation's, credit union's,
11 cies.
12 § 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 federally-
17 chartered credit union as defined by the federal credit union act,
18 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 (underscored) is new; matter in bracketsitalics
[ ] is old law to be omitted.
LBD03400-01-5

A. 1605 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 § 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 or trust companies for the deposit of public funds, thecredit unions
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 or trust, savings bank, savings and loan association, credit union
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