Latest Banking Development District Branch Opens in Bedford-Stuyvesant Area
Amalgamated Bank Opens BDD Branches in Bronx and Bedford Stuyvesant
June 4, 2008
New York, NY: On Friday, June 6 the latest branch in the New York State Banking Department’s Banking Development District (BDD) program will open in Bedford Stuyvesant, Brooklyn. This Amalgamated Bank branch will provide a full range of banking services and financial education in an area that previously had only four branches to serve more than 60,000 residents.
This is one of several BDD branches for Amalgamated Bank, which most recently opened a branch in the Bronx on May 30 and last year opened a branch in Long Island City, Queens.
“I am very pleased to see Amalgamated Bank’s continuing efforts to enter and serve underbanked communities,” said Richard H. Neiman, Superintendent of Banks for the State of New York. “I commend Amalgamated Bank, and especially CEO Derrick Cephas, a former New York State Superintendent of Banks, for recognizing the social and economic benefits of the Banking Development District program.”
The BDD program, which provides financial institutions with incentives to locate in underserved or unbanked areas, began in 1998. The goals of the program are to allow underserved and unbanked New Yorkers to enter the financial mainstream while promoting community stability, revitalization and long-term economic development. It is also designed to address concerns that banks may have about attracting enough deposits to be viable by providing a number of possible benefits, including municipal deposits at below-market rates and Community Reinvestment Act (CRA) credit. There are currently 38 approved BDD branches in New York State.
When applying for BDD designation, the bank must detail the programs and amenities it will bring to the community, including services such as multi-lingual staff, special products and services tailored to the community, and financial education and outreach. In their application, Amalgamated Bank proposed that it will provide a range of convenient and appropriate financial products that are well-suited and targeted to the neighborhood as well as will work with various community groups and businesses to further the economic development in the area. For a complete list of all approved branches please visit http://www.dfs.ny.gov.banking/bddapp.htm.
“This BDD branch will be a catalyst for local economic development,” said Derrick D. Cephas, the Bank’s President and Chief Executive Officer. “We are forming alliances in the community to provide more affordable housing, drive economic growth and create jobs by nurturing small business expansion.”
In addition to their efforts in providing banking services to underbanked communities, Amalgamated Bank has stated its commitment to working with community partners, such as Neighborhood Housing Services and Bridge Street Development Corporation, to address the growing problem of foreclosure attributable to subprime lending and predatory loans. They will also offer educational programs for first-time homebuyers.
“Many consumers who were placed in subprime or other nontraditional products when they would have qualified for a prime loan were those that did not have access to traditional banking services. That’s a tragedy for consumers and a lost opportunity for community banks. We believe that through continued economic development initiatives such as the BDD program, banks can reach out to these communities and contribute to the prevention of a similar crisis in the future,” said Superintendent Neiman.
Brooklyn had the third highest rate of foreclosure filings for the first quarter of 2008 in New York, with a total of 1,601 foreclosures or 13.1 percent of all state filings. This was an increase of 66.5 percent from the first quarter of 2007. [Insert statistics specific to Bedford-Stuyvesant]
“Amalgamated Bank’s designation as a Banking Development District will go a long way toward promoting community and economic development for Bedford-Stuyvesant residents,” New York State Comptroller Thomas P. DiNapoli said. “The collaborative effort to bring this branch to the neighborhood has given residents access to vital banking services and will enable them build a more secure future. I’m proud that my office is able to make $10 million in deposits and put the State’s capital to work in this vibrant Brooklyn community.”
To qualify for a BDD designation, the bank must clearly define the current and anticipated bank product and service needs of the community; demonstrate that these needs are not currently being met by other nearby institutions; show that by coming into the community the institution is able to meet those unmet needs; and complete the application in partnership with the local government.
The highlights of a BDD designation include:
Banks will receive highly favorable CRA consideration for branches in BDDs;
The State of New York or local governments may agree to earn interest on monies deposited in district branches at a rate which is at or below the bank's posted two-year Certificate of Deposit (CD) rate;
District branches of savings banks can receive municipal deposits from the sponsoring municipality;
Banks may receive a partial property tax exemption phased in over a 10-year period, beginning with a 50 percent exemption in the branch's first full year of operation, decreasing by five percent in the subsequent years;
NYS Banking Department will link a BDD branch with organizations providing financial education and facilitate contacts with community groups.
The New York State Banking Department is the regulator for all state-chartered banking institutions, virtually all of the United States offices of international banking institutions, all of the State’s mortgage brokers, mortgage bankers, check cashers, money transmitters and budget planners. The aggregate assets of the depository institutions supervised by the Banking Department are more than $1.8 trillion.
In addition to regulating banking institutions, the Banking Department is active in informing and educating all New Yorkers on banking matters. To contact the Banking Department, please call 1-877-BANK-NYS or visit our Web site at www.banking.state.ny.us