Governor Kathy Hochul today signed a law (S.191 / A.5459) allowing credit unions to participate in the Excelsior linked deposit. Over the past 35 years, as New York City has shifted from a manufacturing economy to a service economy, some of the state’s largest companies have downsized, forcing many to become self-employed. Credit unions have responded to the needs of their members and communities by providing loans to businesses.
“Small businesses have long been the backbone of our state’s economy,” Governor Hochul said. “This legislation is another sign of our commitment to boosting Main Street businesses and fostering unprecedented entrepreneurship among New Yorkers.”
New York State places a deposit of the same amount as the loan taken with participants in the linked deposit program and earns less interest on the deposit, allowing the lender to pass the interest rate savings to the lender. ‘borrower. At the end of the four-year term of the tied deposit assistance, the credit union returns the deposit to New York State.
With economic fortunes and government employment built on the success of small businesses, it is increasingly clear that small businesses need better access to capital through a wider range of lenders. Since their inception, credit unions have occupied an important niche serving communities underserved by commercial banks. More than 700 credit unions across the state play a vital role in meeting the financial needs of 3.5 million New Yorkers. Credit unions were created as a nonprofit alternative to other financial institutions, primarily because working class individuals were denied business through ELDP, which is a natural extension of the mission of credit unions.
“For too long, too many places in NYS were banking deserts, yearning for proper attention to help them grow,” said Senator James Sanders Jr. “By signing this bill, the governor unleashes power credit unions to help the unbanked. Thank you Governor Hochul for signing this bill that supports dignified but unbanked communities. “
“I would like to thank my colleague and Senate sponsor, Senator Sanders, for recognizing the need for this important legislation,” said Taylor Darling, member of the Assembly. “Traditional banking institutions still have a lot of capital gaps, especially when it comes to individuals getting commercial loans. Allowing credit unions to participate in the Excelsior Link program now makes the program more accessible to our New York workers – especially our small business owners, who we need our support more than ever before. Thank you, Governor Hochul, for leveling the playing field by signing this bill. Always on the rise. ”