Last year, New York Sen. James Sanders introduced the “New York Public Banking Act," which would make it easier for public banks to operate in New York. It failed to pass, but he’s advocating for the act again this year (S1762B/A8290A).
Public banks are controlled by a government body rather than by private investors (it’s not a bank where you go to open up a checking account). They can also be institutional lenders — banks that other banks turn to for loans.
Credit unions across the state could benefit if the legislation is passed.
Melissa Marquez, CEO of the 40-year-old Genesee Co-op Federal Credit Union of Rochester, told Capital Tonight that a public bank would make a great partner to assist the credit union with community investments.
“One of the reasons we are so invested in trying to get this legislation passed is that we are really seeking a partner to do financing on projects,” Marquez explained. “There (are not) enough financing vehicles. No community lenders, no big banks are doing the kind of projects that we envision are needed, especially in minority neighborhoods and low-income neighborhoods.”
The economic development initiatives Marquez is referring to could be anything from an affordable housing tract to a venture that might support a local worker co-op.
“These are seen as higher risk. Typical mainstream lenders are not going to want to invest in something like that,” Marquez explained.
Sanders’ “New York Public Banking Act” currently sits in the Senate Banking Committee.