CDFIs, DFS Among the Winners In State Budget

April 11, 2022 at 9:23 am Leave a comment

With one eye on the final round of the Masters, yours truly did an initial review of the legislation included in New York’s budget plan for this fiscal year and my initial take is that CDFIs and the Department of Financial Services are among the biggest winners.  This is of course good news for those New York State chartered credit unions which have CDFI designations. 

Last year the Association was successful in getting legislation passed allowing credit unions to participate in the Excelsior Linked Deposit program.  This program allows participating lenders to receive state deposits in return for making subsidized low interest loans to eligible small businesses.  Language included in the budget makes any loan involving a CDFI eligible for the program.  The budget also makes CDFIs eligible to receive loans.  This is a huge incentive for CDFI credit unions to get qualified to participate in the program.  Give me a call if you want to further discuss potential opportunities. 

As Washington dithers over how best to regulate crypto currencies, New York moved decisively to give DFS regulatory power over those portions of the industry based in New York.  The budget amends the Financial Services Law to authorize the DFS to examine “persons engaged in the virtual currency business” and to make the industry pay for the cost of such examinations, just like other state regulated institutions currently do. 

What is also striking about this new power is that DFS is also given the authority to promulgate regulations defining what entities are going to be subject to this new framework.  While this type of regulatory handoff is normal in Washington, it is unusual in New York where a new authority such as this would typically be accompanied with a detailed statute. 

Finally, the legislature approved the creation of a $250M public/private fund for the purpose of providing money for social equity licensees who are seeking to open retail cannabis businesses.  This is a smartly drafted piece of legislation since it permits the state to enter into subleases with cannabis retail businesses.  One of the key challenges for businesses where cannabis has been legalized is acquiring retail space. 

Of course, this just underscores yet again why the federal government must act on the SAFE Act, but you folks already know how I feel about that.   

Perhaps Masters winner Scottie Scheffler would be interested in contributing to the state cannabis fund.  His Masters win is his fourth tournament victory in six weeks, a feat that has been worth approximately $8.6M.  Not bad for a 25 year old.   

Entry filed under: New York State, Regulatory, Technology. Tags: , , , , , , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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