"These two bills modernize public deposit programs, so that banks can get more capital out to work into the communities they serve, while keeping strong safeguards in place for public funds. The proposed changes would affect the state's Banking Development District Program and its Community Bank Deposit Program."
"Launched 28 years ago, the BDD program provides state deposits to eligible banks and credit unions that open or maintain a branch in an underserved community. Supporters of the proposed changes argue that the BDD program excludes many of the banks it's supposed to help."
Two proposed bills in New York state aim to modernize public deposit programs for minority and community banks. Developed by State Comptroller Thomas DiNapoli and Democratic Senator James Sanders Jr., the measures would amend existing statutes governing the Banking Development District Program and Community Bank Deposit Program. These changes would allow reciprocal deposits to serve as collateral for state deposits, making it easier for eligible banks to access capital. The BDD program, established 28 years ago, provides state deposits to banks maintaining branches in underserved areas, though supporters argue it excludes many intended beneficiaries. The CBDP, created in 2008, currently has minimal participation. Advocates believe these modernizations will increase lending capacity in underbanked communities while maintaining safeguards for public funds, with bipartisan support expected to facilitate legislative approval.
Read at American Banker
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