New legislation proposed by New York officials aims to expand access to loans and financial services in underserved communities across the state.
State Comptroller Thomas DiNapoli joined State Sen. James Sanders Jr. and Assemblymember Khaleel Anderson on March 4 to promote the proposal.
The plan includes two bills designed to make it easier for community banks and minority-owned financial institutions to receive state deposits that can be used for lending.
Officials say the changes could increase financing for small businesses, homeowners, and local development projects in communities that have historically had limited access to banking services.
One bill would update the state’s Banking Development District program, which places public deposits in banks serving underserved neighborhoods.
The proposal would allow banks participating in the program to use reciprocal deposits to meet collateral requirements. Officials say the change would allow those deposits to be insured through FDIC-backed networks and free up more capital for loans.
The second bill would raise the cap for the Community Bank Deposit Program from $20 million to $30 million.
Supporters say the increase would allow participating banks to expand lending for mortgages, small businesses, farms, and other local economic development projects.
The state currently holds about $505 million in deposits through the Banking Development District program at financial institutions operating branches in underserved areas.
Another $80 million has been distributed through the Community Bank Deposit Program to several community banks in New York.
Supporters of the legislation say the changes would modernize the programs and direct more financial resources to neighborhoods that need investment.
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