Bill Text: NY S07914 | 2023-2024 | 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) 2024-02-13 - REFERENCE CHANGED TO BANKS [S07914 Detail]
Download: New_York-2023-S07914-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 7914 IN SENATE January 3, 2024 ___________ 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 § 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. 21 k. "Savings and loan association" shall mean a savings and loan asso- 22 ciation as defined by subdivision eight of section two of the banking 23 law or any federal savings and loan association. 24 § 3. Subdivisions 2 and 4 of section 10 of the general municipal law, 25 as amended by chapter 623 of the laws of 1998, paragraph a of subdivi- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD07565-01-3S. 7914 2 1 sion 2 as amended by chapter 128 of the laws of 2012 and paragraph c of 2 subdivision 2 and paragraph (e) of subdivision 4 as further amended by 3 section 104 of part A of chapter 62 of the laws of 2011, are amended to 4 read as follows: 5 2. a. (i) The governing board of every local government shall desig- 6 nate one or more banks, savings banks, savings and loan associations, 7 credit unions or trust companies for the deposit of public funds, the 8 disposition of which is not otherwise provided for by law, received by 9 the chief fiscal officer or any other officer authorized by law to make 10 deposits. Such designation shall be by resolution of the governing board 11 or, in the case of a city, such other body as may be authorized or 12 required by law to designate depositaries. Such resolution shall specify 13 the maximum amount which may be kept on deposit at any time in each such 14 bank, savings bank, savings and loan association, credit union or trust 15 company. Such designations and amounts may be changed at any time by 16 further resolution. 17 (ii) The governing board of a local government that has designated one 18 or more banks or trust companies for the deposit of public funds pursu- 19 ant to subparagraph (i) of this paragraph may, in its discretion, 20 authorize the designated bank or trust company to arrange for the rede- 21 posit of the local government's funds in one or more banking insti- 22 tutions, as defined in section nine-r of the banking law, for the 23 account of the local government, through a deposit placement program 24 that meets all of the following conditions: 25 (A) On or after the date that the local government's funds are 26 received, the designated bank or trust company (I) arranges for the 27 redeposit of such funds into deposit accounts in one or more banking 28 institutions and (II) serves as custodian for the local government with 29 respect to the funds redeposited into such accounts. 30 (B) Local government funds deposited in a designated bank or trust 31 company in accordance with this subparagraph and held in the designated 32 bank or trust company in excess of the amount insured by the federal 33 deposit insurance corporation pending redeposit of the funds pursuant to 34 this subparagraph shall be secured in accordance with subdivision three 35 of this section. 36 (C) The full amount of local government funds redeposited by the 37 designated bank or trust company into deposit accounts in banking insti- 38 tutions pursuant to this subparagraph (plus accrued interest, if any) 39 shall be insured by the federal deposit insurance corporation. 40 (D) At the same time that the money of the local government is rede- 41 posited pursuant to this subparagraph, the selected depository receives 42 an amount of deposits from customers of other financial institutions 43 pursuant to the deposit placement program that are at least equal to the 44 amount of the local government's funds redeposited by the designated 45 bank or trust company. The governing board of every local government 46 shall forward a copy of such resolution to the office of the state comp- 47 troller who shall retain such copy until such resolution is amended or 48 dissolved. A copy of such resolution shall be retained by the state 49 comptroller for record keeping purposes only. 50 b. Public funds deposited into a savings bank, federal savings bank, 51 credit union, federal credit union, savings and loan association or 52 federal savings and loan association shall be limited to two hundred 53 fifty thousand dollars. 54 c. Except as otherwise provided by law, all deposits shall be made to 55 the credit of the local government. The deposit of public funds pursu- 56 ant to this subdivision shall release the officer making the deposit andS. 7914 3 1 his or her surety from any liability for loss of such public funds by 2 reason of the default or insolvency of any such bank, savings bank, 3 savings and loan association, credit union or trust company. 4 [c.] d. The governing board of a local government, in which a banking 5 development district has been designated by the superintendent of finan- 6 cial services pursuant to section ninety-six-d of the banking law, may 7 designate a bank, trust company or national bank located in such 8 district for the deposit of public funds, the disposition of which is 9 not otherwise provided for by law, received by the chief fiscal officer 10 or other officer authorized by law to make such deposits. Such desig- 11 nation shall be by resolution of the governing board or, in the case of 12 a city, such other body as may be authorized or required by law to 13 designate depositories. Such resolution shall specify the maximum amount 14 which may be kept on deposit at any time with such bank, trust company 15 or national bank located in such district. Subject to an agreement 16 between such governing board and such banking institution, public funds 17 deposited in such banking institution may earn a fixed interest rate 18 which is at or below such banking institution's posted two year certif- 19 icate of deposit rate. In those instances where there is such an agree- 20 ment, its terms and conditions shall also be specified in the resol- 21 ution. Any such designation, amount, or agreement provisions may be 22 changed at any time by further resolution. 23 4. (a) Notwithstanding any other provision of law to the contrary, the 24 chief fiscal officer, or other officer authorized by law to make depos- 25 its, may, subject to the approval of the governing body of a local 26 government, by resolution, enter into a contract with a courier service 27 for the purpose of causing the deposit of public funds with a bank, 28 savings bank, savings and loan association, credit union or trust compa- 29 ny as provided in this section. 30 (b) The entrusting of public funds for deposit pursuant to paragraph 31 (a) of this subdivision shall release the officer entrusting the public 32 funds to the courier service and his or her surety from any liability 33 for loss of such public funds by the courier service in the process of 34 delivering such public funds to the designated bank, savings bank, 35 savings and loan association, credit union or trust company. 36 (c) The local government authorizing the deposit of public funds by a 37 courier service pursuant to paragraph (a) of this subdivision shall 38 require the courier service to obtain a surety bond for the full amount 39 entrusted to the courier, payable to the local government and executed 40 by an insurance company authorized to do business in this state, the 41 claims paying ability of which is rated in the highest rating category 42 by at least two nationally recognized statistical rating organizations, 43 to insure against any loss of public funds entrusted to the courier 44 service for deposit or failure to deposit the full amount entrusted to 45 the courier. 46 (d) A deposit made by a courier on behalf of a local government shall 47 be deemed to be a deposit made by the chief fiscal officer or other 48 officer entrusting such funds for purposes of the requirements contained 49 in this section for securing public deposits. 50 (e) A bank, savings bank, savings and loan association, credit union 51 or trust company may, from time to time and as agreed upon with a local 52 government, reimburse all or part of, but not more than, the actual cost 53 incurred by the local government in transporting cash, negotiable 54 instruments or other items for deposit through a courier service. Any 55 such reimbursement agreement shall apply only to a specified deposit 56 transaction, and may be subject to such terms, conditions and limita-S. 7914 4 1 tions as the bank, savings bank, savings and loan association, credit 2 union or trust company deems necessary to ensure sound banking prac- 3 tices, including, but not limited to, any terms, conditions or limita- 4 tions that may be required by the department of financial services or 5 other federal or state authority. 6 § 4. Subdivision 2 of section 11 of the general municipal law, as 7 amended by chapter 128 of the laws of 2012, is amended to read as 8 follows: 9 2. a. The governing board of any local government or, if the governing 10 board so delegates, the chief fiscal officer or other officer having 11 custody of the moneys may temporarily invest moneys not required for 12 immediate expenditure, except moneys the investment of which is other- 13 wise provided for by law, either: (1) in special time interest-bearing 14 deposit accounts in, or certificates of deposit issued by, a bank, 15 savings bank, savings and loan association, or share certificates issued 16 by a credit union or trust company located and authorized to do business 17 in this state; or (2) in accordance with all of the following condi- 18 tions: 19 (i) the moneys are invested through a bank or trust company located 20 and authorized to do business in this state; 21 (ii) the bank or trust company arranges for the deposit of the moneys 22 in certificates of deposit or share certificates in one or more banking 23 institutions, as defined in section nine-r of the banking law, for the 24 account of the local government; 25 (iii) the full amount of principal and accrued interest of each such 26 certificate of deposit or share certificate must be insured by the 27 federal deposit insurance corporation; 28 (iv) the bank or trust company acts as custodian for the local govern- 29 ment with respect to such certificates of deposit issued for the local 30 government's account; and 31 (v) at the same time that the local government's moneys are deposited 32 and the certificates of deposit or share certificates are issued for the 33 account of the local government, the bank or trust company receives an 34 amount of deposits from customers of other financial institutions equal 35 to or greater than the amount of the moneys invested by the local 36 government through the bank or trust company. 37 b. For any investment made pursuant to paragraph a of this subdivi- 38 sion, such time deposit account or certificate of deposit or share 39 certificates shall be payable within such time as the proceeds shall be 40 needed to meet expenditures for which such moneys were obtained and 41 provided further that such time deposit account or certificate of depos- 42 it or share certificates be secured in the same manner as is provided 43 for securing deposits of public funds by subdivision three of section 44 ten of this article. 45 § 5. The banking law is amended by adding a new section 454-a to read 46 as follows: 47 § 454-a. Deposits of public money with credit unions; security. A 48 credit union may accept deposits of public money subject to the limita- 49 tions provided in section ten of the general municipal law. Such credit 50 union shall pledge assets or furnish other security satisfactory in form 51 and amount to the depositor, for the repayment of monies held in the 52 name of such depositor, when required to be secured by applicable law, 53 decree or regulation. 54 § 6. This act shall take effect on the ninetieth day after it shall 55 have become a law.
