DiNapoli, Sanders and Anderson Take Action to Expand Lending in Underserved Communities and Spur Economic Development

Today New York State Comptroller Thomas P. DiNapoli, State Sen. James Sanders Jr. and State Assemblymember Khaleel M. Anderson held a press conference in support of legislation that would expand lending in underserved communities and help stimulate economic development.

The two bills were developed by DiNapoli, with the assistance of Sanders, chairman of the Senate Committee on Banks, will make it easier for community and minority-owned banks to access state deposits that help provide essential banking services and increase financing for small businesses and homeowners.

"Supporting community and minority-owned banks and credit unions puts state funds to work in neighborhoods that have historically been overlooked," said DiNapoli. "These funds will help expand financial services, increase access to capital and build wealth through homeownership, entrepreneurship and job growth. It is a win-win for the state and our local communities."

"After we discovered how the state was not maximizing the participation of all communities in economic development, we knew we had to act," said Sanders. "These reforms ensure that public dollars are not just sitting on the sidelines, but actively working in the neighborhoods that need them most. By modernizing our deposit programs and removing outdated barriers, we are empowering community banks and minority-owned financial institutions to expand lending, support small businesses, and help families build wealth. This is how we create real, lasting opportunity - by making sure every community has access to the financial tools that drive growth."

"I want to thank State Comptroller DiNapoli, Senator Sanders and Assembly Member Vanel, for joining me in this united push to make banking and financing more accessible to underbanked communities across the state, specifically in my district of Southeast Queens," said Anderson. "The modernization and flexibility that these bills provide will allow community banks and minority deposit institutions to serve the public more efficiently, and to ultimately support the underserved communities that the BDD program and CBDP were designed to help."

Assemblymember Chantel Jackson, chair, New York State Black Legislative Task Force, said "At the end of the day, this is about access. For too long, our neighborhoods have been locked out of real investment while capital sat on the sidelines. These bills change that by cutting red tape and raising the cap so community banks can do what they're meant to do, invest in us. That means more mortgages for first-time homebuyers, more small business loans, and more support for local entrepreneurs. This is economic justice, not just talking about closing gaps, but redirecting resources to strengthen Black and Brown communities and keep opportunity where it belongs."

The first bill (S.8357/A.9574), authored by DiNapoli and sponsored by Sanders and Anderson, would reduce a barrier to participation in the Banking Development District (BDD) Program, which places public deposits in financial institutions serving underserved communities. The bill would allow participating banks to use reciprocal deposits to meet collateral requirements, allowing state deposits to be insured through FDIC-backed deposit placement networks, instead of requiring traditional collateral, freeing up more capital for lending.

The second bill (S.8406/A.9573), authored by Comptroller DiNapoli and sponsored by Sanders and State Assemblymember Clyde Vanel, would raise the Community Bank Deposit Program (CBDP) cap from $20 million to $30 million, expanding participating banks' ability to support mortgages, small businesses, farms and local development.

"NYBA thanks State Comptroller DiNapoli, Senator Sanders and Assemblymembers Vanel and Anderson for their recognition of the success of both the Banking Development District program and the Community Deposit Program in helping to bring more unbanked New Yorkers into the financial relationships that will ultimately support foundational wealth-building," said Clare Cusack, president & CEO of the New York Bankers Association. "These bills seek to sharpen existing tools that have proven track records of targeting funds to the communities that need it the most. Together, these modernizations remove structural barriers, increase flexibility for community banks and minority deposit institutions, and ensure that public deposits are deployed more efficiently to support small businesses, affordable housing, and local economic growth. By strengthening these programs, New York can expand access to capital while maintaining strong safeguards for public funds and taxpayers."

"IBANYS is pleased to support these necessary changes to New York's outdated requirements for the community deposit program and banking development districts," said John Witkowski, president & CEO of the Independent Bankers Association of New York State. "New York's community banks are drivers of equality in their communities and are proud to assist State Comptroller DiNapoli with these important efforts."

"The New York Credit Union Association applauds Comptroller DiNapoli and Senate Banks Committee Chair Sanders for their leadership to enhance the Banking Development District Program," said Association President & CEO William J. Mellin. "Credit unions' not-for-profit structure, member ownership, and community-focused mission align perfectly with BDD Program objectives to expand affordable and inclusive financial services in underserved areas."

"These two bills represent thoughtful, forward-looking reforms that empower mission-driven banks to do what they do best: support local economies and expand access to capital. Allowing reciprocal deposits in the BDD program removes outdated constraints, while increasing the Community Bank Deposit Program cap ensures more public funds can flow into communities to support homeownership, entrepreneurship, and long-term economic growth. Together, these measures strengthen the financial infrastructure that underpins thriving neighborhoods across New York," said Nicole Elam, Esq., president and CEO of the National Bankers Association.

"We thank State Comptroller DiNapoli for listening to stakeholders and working collaboratively to sharpen tools that have already demonstrated success," said Carlos P. Naudon, president and CEO of Ponce Bank. "We are also grateful to the Senate and Assembly sponsors for answering the call and advancing practical solutions that strengthen community banks and minority depository institutions across New York. These modernizations remove structural barriers, increase operational flexibility, and ensure public deposits can be deployed more efficiently to support foundational wealth-building. For many community banks - particularly those serving as the only banking presence in their neighborhoods - this reform enhances sustainability while preserving strong safeguards for taxpayers."

Sherri Eckles, president of the NY Mortgage Bankers Association, said "We support this legislation, which will allow for critical investment in the communities that need it most. By capitalizing community banks and minority depository institutions with state funds, we can unlock additional access to mortgage lending, small business and farm loans, and economic opportunity in underserved areas across the state. Distributing these critical resources to the institutions best positioned to deploy them will help increase affordability and stimulate economic growth across New York."

The BDD program is administered by the Department of Financial Services (DFS) to encourage participation. DiNapoli's office makes public deposits available up to $35 million to banks and credit unions to open or maintain a bank branch. DiNapoli has awarded deposits totaling approximately $505 million to 13 banking institutions that have opened or maintained branches in DFS-designated BDDs across New York State.

Banking Development District Program

*Indicates Minority Owned Institution

The CBDP offers public funds to banks to use to stimulate local economic development. Tens of millions have been awarded through the program, but there are currently no minority owned banks participating. DiNapoli, state legislators and supporters of the legislation would like to see this change.

Community Bank Deposit Program

Legislation
S.8357/A.9574
S.8406/A.9573

Banking Programs
Banking Development District
Community Bank Deposit