Will The State Be Able To Deposit Funds In CUs?
Legislation that would authorize up to $200 million in state funds to be deposited in credit unions (S.3616-Funke) took an important step down the legislative road yesterday when it was scheduled to be voted on at next Tuesday’s Finance Committee, If the committee votes in favor of the bill, it goes out to the Senate floor where it could be voted on by the full chamber, A companion piece of legislation-A 774 Rodriguez- is awaiting action in the Assembly Banks Committee. The bill would authorize the state Comptroller and the Commissioner of Taxation and Finance to deposit up to $200 million in state funds in credit unions. It is modeled after a similar program for community banks.
Lest we all get too excited and banking lobbyists go apoplectic on a beautiful Friday, the bill is not a municipal deposit bill. It does not authorize municipalities in New York State to accept municipal deposits and get the best rates available (God Forbid!). It also would not decrease the amount of state funds going to banks. It simply puts credit unions on an equal footing with their banking counterparts.
One more point. A faithful reader of this blog was chatting with me about this bill the other day and she correctly pointed out that, in urging legislators to act on this and similar legislation it’s always important to point out that federal law already permits credit unions to accept federal funds. New York has made a public policy decision to block its government and localities from accessing credit unions.
This isn’t all that fair to New York State’s citizens. The fact that the Senate is seriously considering S3616 is an incremental but important step in the right direction.
Senate moves to crackdown on subprime car lending
The Senate Banks committee will take up a series of bills next week designed to crackdown on subprime auto lending activities.
At a hearing earlier this year Ben Lawsky, the former Superintendent of the Department of Financial Services, suggested that his Department needed more authority to crack down on nonbank actors that offer car loans.
In a wonderfully concise piece of legislative drafting, S. 5489 sponsored by Senator Klein stipulates that “Every sale of a motor vehicle that involves financing, whether originated at a motor vehicle dealer or at a lending institution, shall be deemed to be a “financial product or service” within the jurisdiction of the department.”
A second, potentially more controversial bill (S.5490A Savino), imposes new restrictions on the ability of car dealers to repossess vehicles. It provides that when a dealer signs a retail installment contract with a car buyer and the buyer drives the car off the lot the buyer is the owner of the vehicle and has the right to keep the vehicle except for reasons of non-payment of the contract. As a result dealers could no longer give themselves the right to repossess a vehicle for which they are unable to secure financing through indirect lending networks.