New York State Banking Department Initiates Review Of Banking Development District (BDD) Program
Richard H. Neiman, Superintendent of Banks, and New York State Comptroller, Thomas P. DiNapoli, Host Public Hearings to Solicit Industry and Community Input Assessing the Effectiveness of the BDD Program and Areas for Improvements
March 3, 2009
New York, NY: The New York State Banking Department (NYSBD) today announced that, as part of its review of the Banking Development District (BDD) Program, it will host a series of four public hearings throughout the state during the month of April to provide the NYSBD with additional insight on the effectiveness of the Program. Superintendent of Banks Richard H. Neiman and Comptroller Thomas P. DiNapoli plan on participating in these hearings, with both scheduled to be at the first hearing in New York City on April 2.
The NYSBD is looking for suggestions from industry and local communities on how to improve the BDD Program, how to expand bank participation in the Program, and ways to better meet the needs of the unbanked and under-banked residents of New York. The NYSBD will receive testimony during the hearings and will issue aggregate findings after all of the hearings have been conducted.
“We have been pleased with the BDD Program over the past decade but believe that the economic crisis that is affecting all Americans is having an additional detrimental effect on those New Yorkers who do not have access to mainstream banking services,” said Richard H. Neiman, Superintendent of Banks. “This series of hearings will give us the information we need to take this program to the next level of providing banking services and the resultant economic development for those communities most in need.”
New York State Comptroller, Thomas P. DiNapoli, said, “I am proud that my office has been making significant deposits at those banks who participate in the BDD Program. We are eager to hear the voice of the beneficiaries of the Program to ensure that we are putting the State’s capital to work in a productive way to benefit all the players.”
The NYSBD will send a Notice of Hearing to community groups, banks and elected officials, including bank committees and all legislators that have expressed interest in the BDD Program, as well as elected and local officials in the districts where the hearings are being held. The recipients of the Notice of Hearing are encouraged to further publicize the hearings by informing interested parties and organizations so all stakeholders will be represented in the hearings. Those interested in testifying must submit a Request-to-Testify form to the NYSBD according to the timetable outlined below. The form and additional information about the BDD Program and the scheduled hearings are available on the NYSBD Web site at www.dfs.ny.gov.banking/bddrequest.pdf.
Dates and Locations of the Hearings and Testimony Submission Deadlines
- April 2, 2009, New York City, testimony due by March 25, 2009
- April 6, 2009, Syracuse, testimony due by April 1, 2009
- April 8, 2009, Saratoga, testimony due by April 1, 2009
- April 13, 2009, Buffalo, testimony due by April 7, 2009
About the Banking Development District Program
The BDD program, which provides financial institutions with incentives to locate in underserved or unbanked areas where there is a need for banking services, began in 1998. Underserved consumers may reside in urban or rural areas which may have different income levels, demographic characteristics and population densities. Regardless of an area's characteristics, it is anticipated that greater access to banking services will encourage the area's residents, who may have no banking relationships, to become part of the financial mainstream.
The BDD Program is also designed to address concerns that banks may have about attracting enough deposits to be viable by providing a number of possible incentives or benefits, including municipal deposits at below-market rates and Community Reinvestment Act (CRA) credits. There are currently 38 approved BDD branches in New York State. A complete list of all approved branches is available on the NYSBD Web site at http://www.dfs.ny.gov.banking/bddapp.htm.
The establishment of a new branch by a bank, trust company, national bank, savings bank, savings and loan association, federal savings and loan association or federal savings bank within such a BDD should enhance access by consumers to banking services. It is further anticipated that the establishment of a bank branch will provide a foundation to stimulate the local economy by enhancing access to capital for local businesses. This will promote long-term economic development, foster job creation, and promote community stability and revitalization.
When applying for BDD designation, the financial institution 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. 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.
Additional information on the BDD program is available on the Banking Department’s Web site at http://www.dfs.ny.gov/banking/bdd.htm.
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 $2.2 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.dfs.ny.gov.