Governor signs legislation ‘unleashing the power of credit unions to aid the unbanked’
Press Release, Gov. Kathy Hochul’s Office
Governor Kathy Hochul today signed legislation (S.191/A.5459) authorizing credit unions to participate in the Excelsior Linked Deposit. In the past 35 years as New York has shifted from a manufacturing to a service economy, some of the largest companies in the state have downsized, forcing many individuals to become self-employed. Credit unions have responded to the needs of their members and communities by offering business loans.
“Small businesses have long been the backbone of our state’s economy,” Governor Hochul said. “This legislation is yet another sign of our commitment to boosting Main Street businesses and fostering New Yorkers’ unparalleled entrepreneurial spirit.’
New York State places a deposit for the same amount as the loan taken out at Linked Deposit Program participants and earns less interest on the deposit, allowing the lender to transfer the interest rate savings on to the borrower. At the end of the four-year term of Linked Deposit assistance, the credit union returns the deposit to New York State.
With the State’s economic and employment fortunes resting on the success of small business, it is increasingly evident that small businesses must have greater access to capital through a wider range of lenders. Since their inception, credit unions have filled an important niche in serving communities that are underserved by commercial banks.
Over 700 credit unions across the state play an integral role in serving the financial needs of 3.5 million New Yorkers. Credit unions were created as a not- for-profit alternative to other financial institutions primarily because working-class individuals were being denied business through the ELDP which is a natural extension of the credit union mission.
“For far too long too many places in NYS were banking deserts, longing for proper attention to help them grow,” said Senator James Sanders Jr. “By signing this bill, the Governor is unleashing the power of credit unions to aid the unbanked. Thank you Governor Hochul for signing this bill which supports worthy but unbanked communities.”
“I would like to thank my colleague and Senate Sponsor, Senator Sanders for recognizing the need for this important legislation,” said Assembly Member Taylor Darling. “Traditional banking institutions still possess many equity gaps especially when it pertains to individuals obtaining business loans. Allowing credit unions to now participate in the Excelsior Link program makes the program more accessible to our hard-working New Yorkers – especially our small business owners, who need our support now more than ever.”