Legislation (S.191/A.5459) authorizes credit unions to participate in program to help borrowers obtain reduced rate financing on loans
Gov. Kathy Hochul recently signed legislation (S.191/A.5459) authorizing credit unions to participate in the Excelsior Linked Deposit. Her team said, “In the past 35 years as New York has shifted from a manufacturing to a service economy, some of the largest companies in the state have downsized, forcing many individuals to become self-employed. Credit unions have responded to the needs of their members and communities by offering business loans.”
Hochul added, "Small businesses have long been the backbone of our state's economy. This legislation is yet another sign of our commitment to boosting Main Street businesses and fostering New Yorkers' unparalleled entrepreneurial spirit."
A press release noted, “New York state places a deposit for the same amount as the loan taken out at Linked Deposit Program participants and earns less interest on the deposit, allowing the lender to transfer the interest rate savings on to the borrower. At the end of the four-year term of Linked Deposit assistance, the credit union returns the deposit to New York state.
“With the state's economic and employment fortunes resting on the success of small business, it is increasingly evident that small businesses must have greater access to capital through a wider range of lenders. Since their inception, credit unions have filled an important niche in serving communities that are underserved by commercial banks. Over 700 credit unions across the state play an integral role in serving the financial needs of 3.5 million New Yorkers. Credit unions were created as a not- or-profit alternative to other financial institutions primarily because working-class individuals were being denied business through the ELDP, which is a natural extension of the credit union mission.”
New York State Sen. James Sanders Jr. said, "For far too long, too many places in NYS were banking deserts, longing for proper attention to help them grow. By signing this bill, the governor is unleashing the power of credit unions to aid the unbanked. Thank you, Gov. Hochul, for signing this bill, which supports worthy, but unbanked communities."
Assembly Member Taylor Darling said, "I would like to thank my colleague and Senate sponsor, Sen. Sanders, for recognizing the need for this important legislation. Traditional banking institutions still possess many equity gaps, especially when it pertains to individuals obtaining business loans. Allowing credit unions to now participate in the Excelsior Link program makes the program more accessible to our hard-working New Yorkers – especially our small business owners, who need our support now more than ever. Thank you, Gov. Hochul, for leveling the playing field more by signing this bill into law. Ever upward."